ProAssurance to Aquire Podiatrists’ PICA Group

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ProAssurance has obtained permission to acquire PICA Group, a Mutual which provides Medical Malpractice Insurance for podiatrists in 47 states as well as the D.C., through a Sponsored Demutualization. The acquisition now goes to a shareholders’ vote on March 31, 2009. If they approve it, they’ll receive some $120 million for the new stock, as well as $15 million in premium credits over the next 3 years, commencing in 2010. The likelihood is that the aquisition will go through.

In all, PICA insures about 9,800 podiatrists, giving them a 70% market share which amounted to $104.2 million in net premiums for 2007; they’re a major player. ProAssurance looks forward to the acquisition as they expand their involvements in professional liability for medical professionals.

This isn’t the only iron ProAssurance has in the fire. They’ve also just acquired Mid-Continent General Agency, which writes $25 million a year for ancillary health care providers and other professional liability products. They’ve also gained the go-ahead to purchase Georgia Lawyers Insurance Company, which provides E&0 policies for some 2700 attorneys within ProAssurance’s home state of Georgia. GLIC is nowhere near the heavy hitter that the other two are, producing only $2.3 million in net premiums during 2007. Perhaps they hope to gain some good will with the legal prong of the profession.

ProAssurance Group’s A- rating apparently already has them well bolstered, as the announcement brought their stock up less than half of one percent on February 3rd, 2009. Of course, the reward may be seen when PICA’s shareholders ratify the acquisition.

When a strong entity like PICA is acquired in this fashion, there is little gain for the policy holder. In fact, it can sometimes result in a net loss for them, as the acquiring company’s interests may not be as dedicated in their practices as were those running the Mutual. Given ProAssurance’s track record, and the Malpractice rate crunch, though, the ProAssurance acquisition may well equate to lower costs for the podiatrists and their patients alike.

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