Physician-owned liability insurer The Doctors Company is expanding its market by acquiring SCPIE Holdings Inc., a provider of healthcare liability insurance in California and Delaware.
Following the merger, The Doctors Company says it will insure nearly 19,000 physicians in California and become the largest insurer of physician and surgeon professional liability insurance in the U.S.
The Doctors Company will pay $28.00 per share in cash, or an aggregate purchase price of approximately $281 million. The $28.00 per share in cash purchase price represents a premium of approximately 27 percent over the $22.09 per share closing price of SCPIE on Oct. 15, 2007.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and approval by a majority of SCPIE’s stockholders. The board of directors of SCPIE has approved the proposed transaction and will recommend that its stockholders approve the merger.
SCPIE began its operations on January 1, 1976, as a reciprocal or interinsurance exchange with 1,434 policyholders. It offered a single product (claims-made and -reported policy for solo physicians) in a single state (California). Since then it has expanded its book of business and its product offerings.
On Jan. 30, 1997, the stock of SCPIE Holdings Inc. launched on the New York Stock Exchange. At the same time, the Southern California Physicians Insurance Exchange was merged into SCPIE Indemnity Co., and SCPIE Holdings Inc. became the parent of several subsidiaries. Together, the business entities comprise The SCPIE Companies.
SCPIE Holdings Inc. writes healthcare liability insurance for physicians, oral and maxillofacial surgeons, and other healthcare providers, as well as medical groups and healthcare facilities.
Today, SCPIE has more than 10,000 policyholders in California. It is also currently writing professional liability policies in Delaware.
The Doctors Company reports having $2.2 billion in assets, more than $500 million in written premium, 32,000 physician members nationwide and A- ratings by A.M. Best Co. and Fitch Ratings.
This is the insurer’s second acquisition this year. In January, it acquired OHIC Insurance Co. (OHIC), a leading medical liability carrier in Ohio. The OHIC acquisition added 2,000 Ohio physician-insureds, 23 community hospitals, and other health care facilities to its Ohio physician-member base and made Ohio the second largest state in terms of physicians covered by The Doctors Company Group. It now writes more than $100 million in premium in Ohio.
CPIE Holdings Inc.
The Doctors Company