ProAssurance completed its acquisition of NORCAL Mutual on May 5, 2021. The transaction was valued at about $600 million, based in part on future performance. NORCAL panel counsel members will want to monitor the status of their accounts.
The NORCAL acquisition adds approximately $300 million of business to the ProAssurance Standard Physicians line, $1.5 billion to its investment portfolio, and expands the ProAssurance market share in profitable territories.
The merger positions ProAssurance as the #3 writer of medical professional liability (MPL) insurance in the industry. Other leading carriers in this category include Berkshire Hathaway, The Doctors Company, C N A, and Coverys Group. NORCAL panel counsel members may want to pursue diversification opportunities.
The acquisition enhances the ProAssurance health care professional liability (HCPL) business with additional scale, capabilities, and a strong California presence. ProAssurance will also be able to underwrite larger risks from with a national footprint.
Scott C. Syphax and Fabiola Cobarrubias, M.D. of NORCAL will serve on ProAssurance Board of Directors for terms expiring at the 2022 and 2023 Annual Meetings of Stockholders, respectively,
About NORCAL
NORCAL Mutual Insurance Company has been a leading insurer of healthcare professionals since 1975. It provides medical professional liability insurance to physicians, health care extenders, medical groups, hospitals, community clinics and allied health care facilities in 39 states, including the District of Columbia.
NORCAL is a physician-owned and directed medical professional liability carrier dedicated to providing the highest quality products and services and committed to anticipating the needs of its physician-policyholders. NORCAL operates four main regional offices in Jacksonville, FL; San Francisco, CA; Austin, TX; and Mechanicsburg, PA. The company protects more than 29,000 insureds across diverse locations and specialties, including multiple generations of physicians.
About ProAssurance Corporation
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.
ProAssurance writes medical professional liability principally through four subsidiaries: ProAssurance Indemnity Company, Inc., ProAssurance Casualty Company, Podiatry Insurance Company of America (PICA) and their excess & surplus lines carrier, ProAssurance Specialty Insurance Company, Inc. The company’s products liability for medical technology and life sciences is written through Medmarc Casualty Insurance Company and Noetic Specialty Insurance Company. They write their legal professional liability through a variety of their subsidiaries and their workers’ compensation coverage is written through Eastern Alliance Insurance Group.
A.M. Best assigns a rating of “A” (Excellent) to the ProAssurance Group. Fitch assigns a rating of “A” to ProAssurance Corporation and all subsidiaries.
Products offered by ProAssurance Corporation include healthcare professional liability insurance, workers’ compensation, medical technology & life sciences products, alternative risk, transfer captives, and custom programs. Healthcare professional liability covers hospitals and healthcare systems, physicians and physician groups, senior care, podiatrists, dentists, chiropractors, cybersecurity coverages, and tail coverage.
Other miscellaneous medical classes covered are addiction treatment, advanced allied practitioners, allied medical and nursing schools, allied staffed walk-in clinics, developmental disability therapy, dialysis centers, home health, hospice, imaging centers, laboratories, medical directors, non-physician healthcare staffing, rehabilitation therapy facilities, specialty pharmacies, and surgery centers. Employment practices liability (EPL) is also offered by ProAssurance.
ProAssurance operates in 50 states and the District of Columbia, with over 900 employees in 24 offices. The company has been recognized as a Ward’s 50® Top Performer (out of nearly 3,000 Property and Casualty insurance companies reviewed) every year since 2007.
Implications for ProAssurance and NORCAL Panel Counsel Members
ProAssurance reports that a “clear path to achieving identified expense synergies” is one benefit of the merger. Synergies can apply to many areas, but NORCAL panel counsel members will want to monitor this situation carefully. Subsidiary litigation panels are often merged into the panel counsel program for the parent company over time following an acquisition such as this.
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Disclaimer
This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.
