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.
AM Best Upgrades Issuer Credit Rating of Texas Hospital Insurance Exchange
November 26, 2019
AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Texas Hospital Insurance Exchange (THIE) (Austin, TX). The outlook of the Long Term ICR has been revised to stable from positive, while the outlook of the FSR remains stable.
These Credit Ratings (ratings) reflect THIE’s balance sheet strength, which AM Best categorizes as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The Long-Term ICR upgrade reflects AM Best’s opinion that THIE’s management has demonstrated improved balance sheet strength through consistent and positive growth in policyholder surplus, favorable loss reserve development, and the implementation of risk-mitigation strategies that address tail-risk events related to potential man-made catastrophes. The company’s strong operating performance was a major contributor to the growth in policyholder surplus.
The strong balance sheet strength assessment also considers THIE’s strongest level of risk-adjusted capitalization, partially offset by its limited scale and financial flexibility. In addition, a significant percentage of policyholder surplus pertains to subscriber savings, which are earmarked to be repaid to the company’s members, beginning five years after a subscriber leaves THIE.
Partially offsetting these positive rating factors is THIE’s limited business profile and narrow spread of risk due to its focus on writing workers’ compensation and medical professional liability insurance for small rural hospitals in Texas
A.M. Best Affirms Superior Rating for the Cooperative of American Physicians’ Mutual Protection Trust
November 26, 2019
The Cooperative of American Physicians, Inc. (CAP) today announced that the Mutual Protection Trust (MPT), the organization’s core product, has again earned an A+ (Superior) Rating with a Stable Outlook from A.M. Best Company, a global full-service credit rating agency dedicated to serving the financial and healthcare service industries. This marks 13 consecutive years that MPT has achieved this rating.
“We are pleased to have received this affirmation of the exceptional quality of our organization,” said Sarah E. Scher, JD, CAP chief executive officer. “Our member physicians rely on the financial strength of MPT in order to conduct their business with peace of mind, which in turn allows them to focus their efforts first and foremost on patient care.”
A.M. Best also acknowledged the financial strength of the Cooperative of American Physicians Insurance Company, Inc. (CAPIC), which earned a rating of A- (Excellent) and was also listed as having a Stable Outlook. CAPIC is a wholly owned subsidiary of CAP and provides reinsurance and other benefits to CAP and its primary medical professional liability partner, MPT.
As part of its grading report, A.M. Best acknowledged MPT for its sound invested asset base and the financial flexibility and capital strength that it maintains. The report also highlights CAP’s “favorable market position in California as the second-largest provider of MPL coverage in the state.”
The Doctors Company Appoints Chief Financial Officer, Chief Risk Officer
November 20, 2019
The Doctors Company announced today the promotion of longtime company executive Marco Vanderlaan to chief financial officer (CFO) and chief risk officer.
Vanderlaan has held a variety of senior leadership positions with The Doctors Company over 18 years. He most recently served as senior vice president, business assessment, a role he has held since 2010. He has also held executive positions in finance, reinsurance and strategic planning.
Vanderlaan succeeds David Preimesberger, who assumes new roles as senior vice president for strategic planning and chief ethics officer.
“I am pleased to welcome Marco to his new role,” said Richard E. Anderson, MD, FACP, chairman and chief executive officer of The Doctors Company. “He has demonstrated vision and foresight in mergers and acquisitions, enterprise risk management, internal audits and our ethics program, and has been instrumental in the growth of the Tribute Plan — an unrivaled financial benefit for our members. I am confident that expanding Marco’s role will help accelerate our next phase of growth as we meet the complex insurance, risk management and risk financing needs of physicians, large groups, hospitals and healthcare systems.”
“I am honored to take on this position and drive key priorities to build upon our market leadership position,” said Vanderlaan. “I look forward to growing the financial success, risk intelligence and conservative business philosophy that empowers our mission to advance, protect and reward the practice of good medicine.”
CMIC Group Announces Appointment of Edmund Schiavoni, MD, to CMIC Board
November 20, 2019
CMIC Group announced that Edmund Schiavoni, MD, has joined the CMIC Board of Directors. Since 2014, Schiavoni has served on the CMIC RRG Board of Directors and was elected president and chairman of the CMIC RRG Board in 2017.
Schiavoni received his medical degree from the Georgetown University and has practiced primary care internal medicine for more than 25 years. He is the president of Southern New Hampshire Internal Medicine Associates, a physician-owned practice with three locations and 22 providers. He has previously held many hospital leadership roles including chief of medicine, chair of credentials and chair of the Board of Trustees. Schiavoni currently serves on the Board of Directors of Village MD of New Hampshire, a partnership focused on enhancing the role of primary care practices in a value-based healthcare environment.
“We are pleased to have Dr. Schiavoni expand his role to the CMIC Board of Directors,” said Stephen J. Gallant, chief executive officer of CMIC Group. “He has been a great asset to the CMIC RRG Board and we look forward to his contributions on the CMIC Board as well.”
ACS NSQIP recognizes 88 participating hospitals for achieving meritorious surgical patient care outcomes
November 11, 2019
The American College of Surgeons National Surgical Quality Improvement Program (ACS NSQIP) has recognized 88 of an eligible 592 hospitals participating in the adult program for achieving meritorious outcomes for surgical patient care in 2018. ACS NSQIP participating hospitals are required to track the outcomes of inpatient and outpatient surgical procedures; these outcomes are then analyzed by ACS and reported back to hospitals. These results direct patient safety initiatives within the hospital and impact the quality of surgical care.
The ACS NSQIP recognition program commends a select group of hospitals for achieving a meritorious composite score in either an “All Cases” category or a category which includes only “High Risk” cases. Each composite score was determined through a different weighted formula combining eight outcomes. Outcomes in the following eight clinical areas were evaluated:
- Cardiac: cardiac arrest and myocardial infarction
- Unplanned Intubation
- Ventilator > 48 hours
- Renal Failure
- SSI: superficial incisional SSI, deep incisional SSI, and organ/space SSI
- UTI: urinary tract infection
To be eligible for either list, the hospital must have submitted at least one case in each of the calendar years, 2016, 2017, and 2018, though only performance in calendar year 2018 was evaluated for the 2018 meritorious lists. Five hundred and ninety-two of the 722 NSQIP hospitals participating in 2018 met the 3-year criteria to be eligible for Meritorious consideration.
The 88 hospitals achieved the distinction based on an outstanding composite quality score. Risk-adjusted data from the July 2019 ACS NSQIP Semiannual Report, which presents data from the 2018 calendar year, were used to determine which hospitals demonstrated meritorious outcomes. Seventy-two hospitals were recognized on the “All Cases” list and 72 hospitals were recognized on the “High Risk” list; the 72 hospitals represent ten percent of the 722 calendar-year 2018 ACS NSQIP hospitals. Fifty-six hospitals were recognized on both the “All Cases” and “High Risk” lists, 16 other hospitals were on just the “All Cases” list, and 16 other hospitals were on the “High Risk” list only – yielding 88 hospitals in total. These meritorious hospitals are also eligible to display these achievements amongst their staff and within their institutions.
A listing of the recognized hospitals is available here
ACS NSQIP is the only nationally validated quality improvement program that measures and enhances the care of surgical patients. This program measures the actual surgical results 30 days postoperatively as well as risk adjusts patient characteristics to compensate for differences among patient populations and acuity levels. The goal of ACS NSQIP is to reduce surgical morbidity (infection or illness related to a surgical procedure) and surgical mortality (death related to a surgical procedure) and to provide a firm foundation for surgeons to apply what is known as the “best scientific evidence” to the practice of surgery. Furthermore, when adverse effects from surgical procedures are reduced and/or eliminated, a reduction in health care costs follows. ACS NSQIP is a major program of the ACS and is currently used in nearly 850 adult or pediatric hospitals.
Hub International Acquires Certain Assets of California-Based Newsura Insurance Services, Inc.
November 5, 2019
Hub International Limited announced today that it has acquired the medical professional liability and associated property and casualty lines of insurance brokerage business of Newsura Insurance Services, Inc. Terms of the transaction were not disclosed.
Located in Roseville, Calif., Newsura provides insurance and risk management services to the healthcare industry, specializing in medical professional liability insurance for medical groups. Its focus on the healthcare industry supports Hub's Specialty Practices by complementing and strengthening Hub's existing capabilities. Newsura vice president-Healthcare Industry, David Hulsebus, will join Hub California as part of the transaction.