Exhibit 99.1
ProAssurance Announces Closing of Merger with PIC Wisconsin;
PIC Wisconsin Executive Announces Retirement
BIRMINGHAM, Ala.--(BUSINESS WIRE)--Aug. 1, 2006--ProAssurance
Corporation (NYSE: PRA) announced that the transaction merging
Physicians Insurance Company of Wisconsin, Inc. ("PIC Wisconsin") into
ProAssurance closed as expected on July 31, 2006. The Articles of
Merger call for the transaction to be effective today. PIC Wisconsin
will continue to operate as a subsidiary of ProAssurance.
The next step in the transaction calls for PIC Wisconsin
shareholders to surrender their PIC Wisconsin stock certificate for
shares of ProAssurance Common stock. Under the terms of the merger
agreement, each share of PIC Wisconsin common stock will be converted
into 102.75 shares of ProAssurance common stock, with cash paid in
lieu of fractional shares. The merger agreement valued PIC Wisconsin
shares at $5,000 each. The value of a share of ProAssurance stock, for
purposes of determining the exchange ratio, was determined using the
average NYSE closing price for a ten day period that ended with the
close of trading on July 31, 2006. Instructions for surrendering PIC
Wisconsin shares for conversion will be mailed to PIC Wisconsin
shareholders no later than August 14, 2006.
ProAssurance expects to issue approximately two million new shares
to complete the transaction, and believes it will be immediately
accretive to Book Value per Share.
PIC Wisconsin Executive Changes
Subsequent to the completion of the merger, William T. Montei, the
President and CEO of PIC Wisconsin announced his plans to resign
effective September 1, 2006. PIC Wisconsin's Chief Operating Officer,
David L. Maurer, will assume responsibility for ongoing operations at
PIC.
Montei said, "The past twenty years have been an extraordinary
journey, from an office of two people to one of the finest companies
in our industry. We have built a unique culture over the years, with
people who truly understand the values and mission of PIC. I'm
confident ProAssurance will enhance those qualities and make PIC even
more valuable to our policyholders. While ProAssurance offered a very
attractive position, my wife, Ellen, and I decided that there was no
better time to look for a new adventure."
ProAssurance Corporation's Chairman, A. Derrill Crowe, M.D., said,
"We wish Bill well in whatever he pursues, knowing that he will bring
the same leadership qualities to whatever venture he embarks upon.
Despite losing Bill's leadership, we're delighted to be the
beneficiaries of the talent and creativity he fostered in his twenty
years leading the company."
About ProAssurance
ProAssurance Corporation is the nation's fourth largest writer of
medical professional liability insurance through our principal
subsidiaries The Medical Assurance Company, Inc., ProNational
Insurance Company, NCRIC, Inc., PIC Wisconsin and Red Mountain
Casualty Insurance Company, Inc. We also write professional liability
coverage through Woodbrook Casualty Insurance Company, Inc.
A.M. Best assigns a rating of "A-" (Excellent) to the ProAssurance
Group and our principal professional liability subsidiaries, except
NCRIC, Inc., which is rated B++ (Very Good). Standard & Poor's assigns
our principal professional liability carriers a rating of "A-"
("Strong"), with the exception of NCRIC, Inc. which is rated "BBB+."
Fitch assigns a rating of "A-" to ProAssurance.
Caution Regarding Forward-Looking Statements
This news release contains historical information as well as
forward-looking statements that are based upon our estimates and
anticipation of future events 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.
Forward-looking statements are identified by words such as, but not
limited to, "anticipate", "believe", "estimate", "expect", "hope"
"hopeful", "intend", "may", "optimistic", "preliminary", "project",
"should", "will" and other analogous expressions. There are numerous
important factors that could cause our actual results to differ
materially from those in the forward-looking statements. Thus,
sentences and phrases that we use to convey our view of future events
and trends are expressly designated as forward-looking statements as
are sections of this news release clearly identified as giving our
outlook on future business.
Forward-looking statements relating to our business include among
other things: statements concerning: liquidity and capital
requirements, return on equity, financial ratios, net income,
premiums, losses and loss reserves, premium rates and retention of
current business, competition and market conditions, the expansion of
product lines, the development or acquisition of business in new
geographical areas, the availability of acceptable reinsurance,
actions by regulators and rating agencies, payment or performance of
obligations under indebtedness, payment of dividends, and other
matters.
In addition, forward-looking statements may also relate to the
merger between ProAssurance and PIC Wisconsin, Inc. as well as the
goals, plans, objectives, intentions, expectations, financial
condition, results of operations, future performance and business of
the combined company including, without limitation, statements
relating to the benefits of the merger, such as future financial and
operating results, cost savings, enhanced revenues and the accretion
to reported earnings that may be realized from the merger and
statements regarding certain of ProAssurance's and/or PIC Wisconsin's
goals and expectations with respect to earnings, earnings per share,
revenue, expenses and the growth rate in such items, as well as other
measures of economic performance.
These forward-looking statements are subject to significant risks,
assumptions and uncertainties, including, among other things, the
following important factors that could affect the actual outcome of
future events:
-- General economic conditions, either nationally or in our
market area, that are worse than anticipated;
-- regulatory and legislative actions or decisions that adversely
affect our business plans or operations;
-- price competition;
-- inflation and changes in the interest rate environment;
-- performance of financial markets and/or changes in the
securities markets that adversely affect the fair value of our
investments or operations;
-- changes in laws or government regulations affecting medical
professional liability insurance;
-- changes to our ratings assigned by rating agencies;
-- the effects of health care changes, including managed care;
-- uncertainties inherent in the estimate of loss and loss
adjustment expense reserves and reinsurance, and changes in
the availability, cost, quality, or collectibility of
reinsurance;
-- significantly increased competition among insurance providers
and related pricing weaknesses in some markets;
-- our ability to achieve continued growth through expansion into
other states or through acquisitions or business combinations;
-- changes in accounting policies and practices that may be
adopted by our regulatory agencies and the Financial
Accounting Standards Board;
-- changes in our organization, compensation and benefit plans;
and
-- any other factors listed or discussed in the reports we file
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
Factors relating to the proposed transaction with PIC Wisconsin:
-- The business of ProAssurance and PIC Wisconsin may not be
combined successfully, or such combination may take longer to
accomplish than expected;
-- the cost savings from the merger may not be fully realized or
may take longer to realize than expected; and
-- operating costs, customer loss and business disruption
following the merger, including adverse effects on
relationships with employees, may be greater than expected.
Our results may differ materially from those we expect and discuss
in any forward-looking statements. The principal risk factors that may
cause these differences are described in various documents we file
with the Securities and Exchange Commission, including the
Registration Statement filed on February 15, 2006 and updated on June
2, 2006, as well as our most recent Forms 10K and 10Q.
We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and
wish to advise readers that the factors listed above could affect our
financial performance and could cause actual results for future
periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements. We do not
undertake and specifically decline any obligation to publicly release
the result of any revisions that may be made to any forward-looking
statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or
unanticipated events.
CONTACT: ProAssurance Corporation
Sr. Vice President, Corporate Communications &
Investor Relations
Frank B. O'Neil, 800-282-6242 or 205-877-4461
foneil@ProAssurance.com