S&P assigned its preliminary “BBB-” senior debt and “BB” preferred stock ratings to ProAssurance Corp.’s recently filed $250 million shelf registration. The rating reflects the good regional niche position of group members ProNational Insurance Co. “A-” (negative) and Medical Assurance Co. “A-” (negative) within the historically volatile medical malpractice insurance business. The ratings are also based on PRA’s very strong earnings performance in its Michigan-based personal lines business, which constituted 27.5 percent of premiums through September 2003, and very strong capital.
These positive factors are somewhat offset by PRA’s marginal, but improving, earnings performance in the core med-mal segment, as demonstrated by a 3.4 percent pretax ROR in this segment through September 2003.
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