A.M. Best Places Credit Ratings of NORCAL Group’s Members Under Review With Negative Implications

December 10, 2019 by matray

A.M. Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of the members of NORCAL Group (NORCAL). (See below for a detailed listing of the companies.)

The under review status follows NORCAL’s third-quarter 2019 results, which included $30 million of adverse loss reserve development, significantly deviating from projections. These reserve charges predominantly impact accident years 2016 through 2018, and reflect significantly higher claim settlements following operational process changes initiated by the group in 2017, which is also causing an increase in the 2019 accident-year loss ratio relative to expectations.

Following the reserve increases and the resultant decline in policyholders’ surplus, NORCAL’s risk-adjusted capitalization declined but remained in the strongest category. However, these actions raise questions regarding internal controls and oversight of operational processes, as well as price adequacy, underwriting practices and the potential for future reserve strengthening. A review of full-year 2019 results, including the associated reserve analysis, as well as a number of management’s operational and strategic initiatives, is necessary to provide AM Best with sufficient information to resolve the under review status. The FSR of A (Excellent) and the Long-Term ICRs of “a” have been placed under review with negative implications for the following members of NORCAL Group:

• NORCAL Mutual Insurance Company
• NORCAL Specialty Insurance Company
• Medicus Insurance Company
• FD Insurance Company
• Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company

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ProAssurance Declares Quarterly Dividend, Announces Annual Shareholder Meeting Date

December 10, 2019 by matray

The Board of Directors of ProAssurance Corp. declared a cash dividend of $0.31 per common share, payable on Jan. 14, 2020, to shareholders who own our stock as of Dec. 27, 2019.

“The dividend declared today reflects our ongoing commitment to our customers and shareholders,” said Edward L. Rand, Jr., president and chief executive officer. “It is our responsibility and privilege to be good stewards of the trust they’ve placed in us, as we maintain a disciplined capital management strategy that protects the integrity of our balance sheet. That discipline becomes ever more important as the property & casualty insurance market faces an evolving claims environment, which will test companies unprepared for the challenges ahead. Our view of claims severity in the broader healthcare professional liability market, and the potential for strategic opportunities therein, has led our Board to conclude that we should maintain a higher level of capital.”

ProAssurance’s dividend policy anticipates a total annual dividend of $1.24 per share, to be paid in equal quarterly installments. However, any decision to pay future cash dividends will be subject to the Board’s final determination after a comprehensive review of the company’s financial performance, future expectations and other factors deemed relevant by the Board.

The ProAssurance Board also set May 20, 2020, as the date of the 2020 Annual Meeting of Shareholders to be held at its headquarters in Birmingham, Ala. The record date for the meeting is March 27, 2020.

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