A.M. Best Places Credit Ratings of NORCAL Group’s Members Under Review With Negative Implications
December 10, 2019
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
ProAssurance Declares Quarterly Dividend, Announces Annual Shareholder Meeting Date
December 10, 2019
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.
Hub International Acquires Nebraska-based SilverStone Group
December 5, 2019
Hub International Ltd. announced that it has acquired SilverStone Group. Terms of the transaction were not disclosed. With SilverStone, the company creates a new regional hub to be called Hub Great Plains, which will include and cover existing operations in Omaha, Neb.; Sioux Falls, S.D.; and St. Paul, Minn.
Headquartered in Omaha, Neb., with additional offices in Council Bluffs, Iowa, and Sioux Falls, S.D., SilverStone specializes in insurance and surety, risk management, employee benefit services, retirement plans, wealth management and estate planning. SilverStone was founded in 1945 and has more than 4,600 employer clients and more than 3,700 individual clients, located across the United States and around the world.
“Hub remains bullish on the growth we are experiencing, and it’s opening new M&A opportunities for us with various product, distribution and geographic channels. The differentiating value we can deliver to the staff of our new partners has helped us to attract larger firms such as SilverStone,” said Marc Cohen, Hub’s president and chief executive officer. “Those that have joined Hub brought us talent, leadership, expertise, specialization and new geographies.”
According to Hub, it has completed 66 acquisitions in 2018, accounting for more than $200 million in additional revenue over the past year. To date, Hub has completed 60 deals in 2019.
“SilverStone’s employees and clients will immediately have full access to a broad range of resources, tools and specialists that are part of Hub’s value and differentiating proposal,” Cohen said. “We have invested significantly to meet the needs and priorities of our clients and look forward to sharing those with SilverStone. As is the case with all of our individual Hub offices, we eagerly anticipate becoming an even bigger part of this community.”
The Hub Great Plains leadership team will include Mr. Nelson as president, Todd Rogge as CFO/COO, Grant Matthies as chief sales officer, Brett Sesker as group benefits practice leader, Jeff Sharp as wealth management practice leader, Glen Gahan as retirement practice leader and John Sutton as managing director - Dakota Territories. The leadership team will work with Trey Biggs, Hub president of U.S. West.
ISMIE Mutual Announces Completion of SEMPIC Merger
December 2, 2019
The ISMIE Mutual Insurance Company is pleased to announce the completion of a merger with the Southeast Michigan Physicians’ Insurance Company (SEMPIC) after receiving all required regulatory approvals.
SEMPIC has been providing comprehensive medical professional liability insurance for Detroit Medical Center (DMC) physicians for more than 10 years with high-quality risk management and claims services. Under the terms of the merger, SEMPIC will continue to operate under the same name, but as a division of ISMIE Mutual. Global professional services firm Marsh will continue to operate as the SEMPIC administrator under the new structure.
“I extend a warm welcome to the Detroit Medical Center’s medical professionals, who will now receive their medical professional liability coverage from ISMIE Mutual,” said Paul H. DeHaan, MD, ISMIE chairman. “We expect a very seamless transition for our new policyholders.
“ISMIE is always looking for strategic opportunities to offer our tailored coverages to markets nationwide. Through our due diligence process we found that SEMPIC and ISMIE align well in many areas. This addition is a great business fit with the benefit of helping to significantly grow ISMIE’s presence in Southeast Michigan.”
The merger was approved by the Illinois Department of Insurance and the Michigan Department of Insurance and Financial Services. Access to coverage through SEMPIC will remain limited to DMC health professionals.