BIRMINGHAM, Ala., Dec. 15 ProAssuranceCorporation (NYSE: PRA) announced today that it will acquire Mid-ContinentGeneral Agency for an undisclosed price. Mid-Continent is a Managing GeneralAgent, based in Houston, producing about $25 million a year in premiums fromancillary healthcare providers and other professional liability coverages.Through the third quarter of 2008, Mid-Continent has underwrittenapproximately $1.5 million of premium for ProAssurance. The transaction isexpected to close in January 2009.
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"We have worked with Mid-Continent for a number of years, and have beenimpressed by the quality of the people and the business they have produced forus," said Stan Starnes, the Chief Executive Officer of ProAssurance. He added,"Bringing Mid-Continent into our organization will not only provide a steadystream of well underwritten, profitable business, it will expand our presencein the growing market for ancillary healthcare providers. This is a segment ofthe medical professional liability market that we think will continue toexperience significant expansion as healthcare evolves in the coming years."
"We're excited about the opportunity to become part of ProAssurance," saidPhilip G. Cabaud, the President of Mid-Continent. He said ProAssurance'sexpansion into this segment of the healthcare market will fill an importantniche. "The market we serve is looking for a stable, high-quality specialtyinsurer such as ProAssurance. There are a number of opportunities that webelieve we can capitalize on with the backing of ProAssurance and itsfinancial strength," Cabaud said.
Mid-Continent will produce business for ProAssurance's Excess & SurplusLines subsidiary, Red Mountain Casualty, but will continue to place somebusiness into other established markets with which it is already doingbusiness. ProAssurance will derive commission income from business Mid-Continent places with other companies.
ProAssurance Corporation is the nation's fifth largest writer of medicalprofessional liability insurance and is growing its legal professionalliability business. ProAssurance is recognized as one of the top performinginsurance companies in America by virtue of its inclusion in the Ward's 50 forthe past two years.
Caution Regarding Forward-Looking Statements
Any statements in this news release that are not historical facts arespecifically identified as forward-looking statements. These statements arebased upon our estimates and anticipation of future events and are subject tocertain risks and uncertainties that could cause actual results to varymaterially from the expected results described in the forward-lookingstatements.
Forward-looking statements are identified by words such as, but notlimited to, "anticipate," "believe," "estimate," "expect," "hope," "hopeful,""intend," "may," "optimistic," "potential," "preliminary," "project,""should," "will," and other analogous expressions. There are numerousimportant factors that could cause our actual results to differ materiallyfrom those in the forward-looking statements. Thus, sentences and phrases thatwe use to convey our view of future events and trends are expressly designatedas forward-looking statements as are sections of this news release clearlyidentified as giving our outlook on future business.
Forward-looking statements relating to our business include, among otherthings: statements concerning liquidity and capital requirements, return onequity, financial ratios, net income, premiums, losses and loss reserves,premium rates and retention of current business, competition and marketconditions, the expansion of product lines, the development or acquisition ofbusiness in new geographical areas, the availability of acceptablereinsurance, actions by regulators and rating agencies, court actions,legislative actions, payment or performance of obligations under indebtedness,payment of dividends, and other matters.
These forward-looking statements highlight significant risks, assumptionsand uncertainties, including, among other things, the following importantfactors that could affect the actual outcome of future events:
-- general economic conditions, either nationally or in our market area,that are different than anticipated;
-- regulatory and legislative actions or decisions that adversely affectour business plans or operations;
-- inflation, particularly in loss costs trends;
-- changes in the interest rate environment;
-- performance of financial markets affecting the fair value of ourinvestments or making it difficult to determine the value of our investments;
-- changes in laws or government regulations affecting medicalprofessional liability insurance;
-- changes to our ratings assigned by rating agencies;
-- the effects of changes in the healthcare delivery system;
-- uncertainties inherent in the estimate of loss and loss adjustmentexpense reserves and reinsurance, and changes in the availability, cost,quality, or collectability of insurance/reinsurance;
-- the results of litigation, including pre-or-post-trial motions, trialsand/or appeals we undertake;
-- bad faith litigation which may arise from our handling of anyparticular claim, including failure to settle;
-- changes in competition among insurance providers and related pricingweaknesses in some markets;
-- loss of independent agents;
-- our ability to purchase reinsurance and collect payments from ourreinsurers;
-- increases in guaranty fund assessments;
-- our ability to achieve continued growth through expansion into otherstates or through acquisitions or business combinations;
-- the expected benefits from acquisitions may not be achieved or may bedelayed longer than expected due to, among other reasons, business disruption,loss of customers and employees, increased operating costs or inability toachieve cost savings, and assumption of greater than expected liabilities;
-- changes in accounting policies and practices that may be adopted by ourregulatory agencies and the Financial Accounting Standards Board;
-- changes in our organization, compensation and benefit plans;
-- our ability to recruit and retain senior management; and
-- our proposed transaction with PICA may not be approved by PICA's mutualpolicyholder or regulators.
Investors should not place undue reliance on any such forward-lookingstatements, which speak only as of the date made. The factors listed abovecould affect our financial performance and could cause actual results forfuture periods to differ materially from any opinions or statements expressedwith respect to future periods in any current statements. Except as requiredby law or regulations, we do not undertake and specifically decline anyobligation to publicly release the result of any revisions that may be made toany forward-looking statements to reflect events or circumstances after thedate of such statements or to reflect the occurrence of anticipated orunanticipated events.
Our results may differ materially from those we expect and discuss in anyforward-looking statements. The principal risk factors that may cause thesedifferences are described in various documents we file with the Securities andExchange Commission, such as our current reports on Form 8-K, and our regularreports on Forms 10-Q and 10-K, particularly in "Item 1A, Risk Factors.
SOURCE ProAssurance Corporation