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A.M. Best Comments On ProAssurance’s Planned Acquisition Of American Physicians Service Group, Inc.

A.M. Best Co. has commented that the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a” of ProAssurance Group (ProAssurance) and its members and the ICR of “bbb” of its parent holding company, ProAssurance Corporation (PRA) (Birmingham, AL) [NYSE: PRA] are unchanged following the announcement of PRA’s proposed acquisition of American Physicians Service Group, Inc. (APS) (Austin, TX) [NASDAQ: AMPH].

Pursuant to the agreement, PRA will acquire all of the outstanding shares of APS in an all-cash transaction for $32.50 per share. The transaction is not subject to financing contingencies and is not expected to materially impact ProAssurance’s risk-adjusted capitalization. The acquisition, which is expected to close by year end, will enhance PRA’s geographic diversification efforts, as PRA will immediately gain a strong market presence in Texas. While execution risk is always a concern, it is mitigated somewhat by PRA’s proven track record of smoothly integrating new acquisitions into the organization.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition , which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “ Rating Members of Insurance Groups”; and “ A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.



Copyright Business Wire 2010

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