San Francisco — NORCAL Group and ProAssurance Corporation (NYSE: PRA), both specialty insurers with extensive expertise in healthcare professional liability, announced today the signing of a definitive agreement to combine the companies. The transaction, when completed, will result in the creation of the nation’s third largest medical professional liability (MPL) insurance carrier, based on 2019 estimated statutory data.
“Bringing together these two great organizations provides ProAssurance and NORCAL Group with a transformational opportunity to enhance the services we can deliver to our customers and distribution partners, while creating significant long-term value for ProAssurance shareholders,” said Ned Rand, President and Chief Executive Officer of ProAssurance. “Much like the predecessors to ProAssurance, NORCAL was founded by physicians in the 1970s to serve the professional liability insurance needs of physicians. NORCAL Group’s history and physician-focused culture make it a perfect fit for the ProAssurance family.”
Scott Diener, President and CEO of NORCAL, said, “We are thrilled to be partnering with ProAssurance. Given today’s challenging healthcare environment, both organizations will benefit significantly from the formation of this enhanced company. Combining with ProAssurance brings tremendous strategic value to NORCAL through increased financial strength, access to new and innovative products for policyholders, and the increased scale of our core services and data analytics. The completion of this transaction will enhance and expand NORCAL’s ability to serve its customers in the highly competitive MPL industry as we strive to carry out our mission.
“ProAssurance is the perfect partner for us,” Diener continued. “They serve as a strong advocate of doctors. Importantly, in addition to the strength and stability they bring to our policyholders, they also offer a proven track record of successful integrations for our employees.
“We’ve grown and evolved over the last 40 years to meet the changing needs of the industry, becoming a national company serving multiple generations of physicians, while still holding true to our roots,” Diener said. “This transaction is a tremendous opportunity to expand our national footprint and is a great win for both companies.”
Headquartered in Birmingham, Alabama, ProAssurance serves more than 54,000 healthcare providers in 49 states. The company had annualized medical professional liability gross written premium of approximately $475 million and assets of more than $4.8 billion at September 30, 2019. NORCAL Group and ProAssurance will work together to ensure all policyholders continue to receive industry-leading products and service and to assimilate the operations in the best interests of customers, employees, agents, and other key constituents.
The transaction is subject to customary conditions, including regulatory and NORCAL’s policyholder approval. While there is no specific timetable for completion of the transaction, it is anticipated that the deal will close at the end of 2020.
The NORCAL Board of Directors has determined that the transaction is in the best interests of NORCAL’s policyholders and, thus, has approved the transaction and resolved to recommend that NORCAL policyholders vote in favor of the transaction. There is no financing condition to consummate the transaction. Shareholder approval is not required for ProAssurance.
NORCAL is being advised in this transaction by Waller Helms Advisors and the law firms of McDermott Will & Emery LLP as transaction counsel and Mayer Brown LLP as California regulatory counsel. Piper Sandler & Co. provided a fairness opinion to the Board of Directors of NORCAL Mutual Insurance Company in connection with the transaction.
About NORCAL Group
The NORCAL Group of companies provide medical professional liability insurance, risk management solutions and provider wellness resources to physicians, healthcare extenders, medical groups, hospitals, community clinics, and allied healthcare facilities throughout the country. They share an A.M. Best “A” (Excellent) rating for their financial strength and stability. NORCAL Group includes NORCAL Mutual Insurance Company and its affiliated insurance companies. Please visit norcal- group.com/companies for more information.
ProAssurance Corporation is an industry-leading specialty insurer with extensive expertise in healthcare professional liability, products liability for medical technology and life sciences, legal professional liability, and workers’ compensation insurance. The company is recognized as one of the top performing insurance companies in America by virtue of its inclusion in the Ward’s 50 for the past 13 years. ProAssurance Group is rated “A+” (Superior) by A.M. Best; ProAssurance and its operating subsidiaries are rated “A” (Strong) by Fitch Ratings. Please visit www.proassurance.com for more information.