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.

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