Brimingham,Alabanama-based medcial malpractice insurer ProAssurance Corporation (NYSE: PRA) and NCRIC Group, Inc., our of Washington, D.C., (NASDAQ: NCRI) announced an agreement to merge NCRIC into ProAssurance in a $69.6 million, all-stock transaction which values NCRIC at $10.10 per share based on the closing price of ProAssurance common stock on February 25, 2005.
The transaction will expand ProAssurance’s mid-Atlantic operations in key states that it said meet its growth and return goals. ProAssurance expects the transaction to be accretive to both book value and earnings per share in 2005.
The transaction is subject to required regulatory approvals and a vote of NCRIC stockholders and is expected to close early in the third quarter of 2005.
“The foundation of ProAssurance and our successor organizations is built on identifying and successfully integrating companies that strengthen our ability to expand our existing business,” said A. Derrill Crowe, M.D., chairman and cife executive officer of ProAssurance. He praised NCRIC’s dominant market position and successful operations in its home market of Washington, D.C., and added that NCRIC’s presence in Delaware and Virginia will make it a valuable addition to the ProAssurance family of insurance companies.
“NCRIC is the largest writer in Delaware and one of the top four writers in Virginia. ProAssurance had already targeted both states for growth, so we have an understanding of the market and we think this transaction will give us an important boost,” Crowe said.
ProAssurance President Victor T. Adamo said the company would take action to strengthen NCRIC’s loss reserves.
The proposed transaction would add $87.2 million in gross written premiums to ProAssurance’s Professional Liability segment and increase ProAssurance’s assets by $292.9 million, based on NCRIC’s unaudited 2004 results.
ProAssurance is a specialty insurer with more than $3.2 billion in assets and almost $790 million in gross written premiums. It is the nation’s fourth largest writer of medical professional liability insurance, with its principal professional liability subsidiaries being The Medical Assurance Company, Inc., ProNational Insurance Company, and Red Mountain Casualty Insurance Company, Inc. It is also the tenth largest writer of personal auto coverage in Michigan through its subsidiary, MEEMIC Insurance Company.
NCRIC iprovides medical professional liability insurance, practice management and financial services, and employee benefits plan design and pension administration. In addition to its headquarters in Washington, D.C., NCRIC has offices in Wilmington, Delaware; Greensboro, North Carolina; Richmond and Lynchburg, Virginia; and Charleston, West Virginia. NCRIC provides services to more than 4,700 physician clients.
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