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EXHIBIT 99.1
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Professionals Group and Medical Assurance to Consolidate
OKEMOS, Mich. and BIRMINGHAM, Ala., June 23 /PRNewswire/ --
Professionals Group, Inc. (Nasdaq: PICM) and Medical Assurance, Inc. (NYSE: MAI)
today jointly announced that they have signed a definitive agreement to
consolidate the two companies. The agreement is subject to required regulatory
and shareholder approvals and is expected to be completed in early 2001.
"Both Medical Assurance and Professionals Group have met the unique
challenges required to expand and succeed in a very competitive segment of the
insurance industry, and each brings a track record of experience and commitment
to this merger. We are confident this combination will enhance the financial
security our policyholders count on, and produce the long-term value our
shareholders are seeking," said Medical Assurance's President, Chairman and CEO,
A. Derrill Crowe, M.D. He added, "the inclusion of the successful personal line
insurance operations of MEEMIC Holdings, Inc., a subsidiary of Professionals
Group, provides an attractive and proven element of diversification for our
shareholders."
Victor T. Adamo, President and CEO of Professionals Group, said the two
companies' shared history and commitment to policyholders makes the
consolidation a strong fit. Mr. Adamo said, "Medical Assurance and ProNational,
the medical liability insurance company of Professionals Group, share a
significant presence in key markets such as Ohio, Indiana, and Florida, and the
geographic distribution of remaining business will make the emerging company a
leader throughout the South, Midwest and East." William H. Woodhams, M.D., the
Chairman of Professionals Group, added, "We expect this consolidation to produce
a management team with a shared vision of excellence and a commitment to success
that will make our new company even stronger as we move forward."
Under terms of the definitive agreement the two parties will form a new
holding company, Medical and Professionals Assurance, Inc., that will own all of
the stock of Medical Assurance and Professionals Group. Dr. Crowe will serve as
Chairman of the new holding company and Mr. Adamo will be Vice-Chairman. Medical
Assurance, ProNational and MEEMIC will continue to serve policyholders under the
umbrella of the new holding company.
Medical and Professionals Assurance, Inc., will have combined total
premium writings of $426 million and combined medical liability premiums of $281
million, based on 1999 data, making it the nation's third largest writer of
liability insurance for health care professionals and facilities. The resulting
group will have assets of approximately $2 billion, making it one of the
strongest company groups focusing primarily on health care liability.
Medical Assurance shareholders will exchange their shares on a
one-for-one basis; Professionals Group shareholders will receive their choice of
$12.00 in cash and $14.00 in shares of stock in the new holding company (based
on the value of Medical Assurance stock during a period preceding closing), or
$26.00 in cash, for each share of Professionals Group stock they own.
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Medical Assurance's Board is being advised by First Union Securities,
Inc., and the Board of Professionals Group is being advised by Cochran, Caronia
& Co.: both Boards have approved the transaction and recommend that their
respective shareholders approve the consolidation. Because of the substantial
length of time prior to the projected closing of the transaction, each Company's
Board of Directors has reserved the right to review alternatives to the
consolidation, should either Board determine such an alternative to be in the
best interest of its shareholders.
ABOUT PROFESSIONALS GROUP, INC.
Professionals Group is an insurance holding company traded under the
symbol "PICM" on the NASDAQ National Market. Professionals Group provides
medical professional liability insurance and related services through its wholly
owned subsidiary, ProNational Insurance Company. ProNational is among the top
twenty writers of medical malpractice insurance in the United States with
approximately 15,000 policyholders, including physicians, dentists, hospitals,
and other health care providers and institutions in eight states including
Michigan, Illinois, Indiana, Ohio, and Florida. ProNational is rated A-
(Excellent) by A.M. Best and A- (Excellent) by Standard and Poor's.
Professionals Group owns 77% of MEEMIC Holdings, Inc. (Nasdaq: MEMH)
which provides personal auto and homeowners coverages to approximately 120,000
educational employees and other Michigan based policyholders through MEEMIC
Insurance Company. MEEMIC is rated A- (Excellent) by A.M. Best.
ABOUT MEDICAL ASSURANCE, INC.
Medical Assurance's financial strength is recognized by Standard and
Poor's, which rates Medical Assurance's Claims Paying Ability as A+, and by A.M.
Best, which awards Medical Assurance a rating of A (Excellent), the highest
rating given to insurance groups specializing in health care liability.
Medical Assurance is a leader in providing excellent customer service
and innovative, cost-effective malpractice protection to physicians, hospitals,
dentists, and health care organizations. The Company serves more than 22,000
insureds from a national headquarters in Birmingham, Alabama and regional
offices in Indianapolis, Indiana; Charleston, West Virginia; and Springfield and
St. Louis, Missouri; as well as satellite offices throughout the Southeast and
Midwest. The Company is expanding its insurance operations in response to the
ever-changing needs of health care professionals and facilities, and continues
to investigate the feasibility of growth through acquisition or other business
combinations.
This news release contains historical information as well as
forward-looking statements that are based upon estimates and anticipation of
future events by Professionals Group, Inc. and/or Medical Assurance, Inc. that
are subject to certain risks and uncertainties that could cause actual results
to vary materially from the expected results described in the forward-looking
statements. The expectations of either or both companies regarding losses, the
retention of current business, expansion of product lines, and development of
business in new geographical
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areas depend on a variety of factors, including economic, legal, competitive,
and market conditions which may be beyond either company's control and are thus
difficult or impossible to predict. In view of the many uncertainties inherent
in the forward-looking statements made in this document, the inclusion of such
information should not be taken as representation by either or both Companies or
any other person, that the objectives or plans of Professionals Group, Inc.
and/or Medical Assurance, Inc. will be realized.
SOURCE Professionals Group, Inc.
/CONTACT: John F. Lang, Treasurer and Chief Financial Officer of
Professionals Group, Inc., 517-347-6207, 800-292-1036, jlang@pronational.com; or
Frank B. O'Neil, Senior Vice President, Corporate Communications of Medical
Assurance, Inc., 205-877-4460, 800-282-6242, foneil@maih.com/
/Company News On-Call: http://www.prnewswire.com/comp/115602.html or
fax, 800-758-5804, ext. 115602/
/Web site: http://www.ProfesisonalsGroup.com/
(PICM MAI)