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OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has downgraded the Financial Strength Rating (FSR) to A (Excellent) from A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a+” from “aa-” for the members of ProAssurance Group. The outlook of the FSR has been revised to stable from negative whilst the outlook for the Long-Term ICR remains negative. Concurrently, AM Best has downgraded the Long-Term ICR to “bbb+” from “a-” of ProAssurance Corporation (PRA) (headquartered in Birmingham, AL), as well as all associated Long-Term Issue Credit Ratings (Long-Term IRs). The outlook of these Credit Ratings (ratings) remain negative. All companies are indirect subsidiaries of PRA. (See below for a detailed listing of the companies’ ratings.)

The ratings of ProAssurance Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings downgrade reflects AM Best’s view that ProAssurance Group’s medical professional liability (MPL) operating performance has deteriorated in recent accident years and calendar years with results more in line with industry averages. The company reported a $30.4 million adverse loss reserve development in the fourth quarter of 2019, driven by a single large national MPL account and a full-year 2019 combined ratio of 118.9%. Prospective results also are expected to be challenged in 2020 and again in 2021 with its planned acquisition of NORCAL Group (NORCAL). As ProAssurance Group continues to face challenges of declining MPL premium levels in competitive markets and increasing MPL loss severity, AM Best does not expect the group to materially out-perform the MPL industry in the near future.

While the group’s balance sheet strength continues to be assessed at strongest, the negative outlook reflects the decreasing trend of its capital adequacy, as measured by Best’s Capital Adequacy Ratio (BCAR), driven by lower underwriting profits and reduced embedded equity in loss reserves. The planned acquisition of NORCAL in 2020 is likely to place some additional strain on the group’s consolidated risk-adjusted capitalization. The ratings also consider the ProAssurance Group’s market position as one of the leading MPL insurers in the United States, as well as its diversification across multiple disciplines, geographic areas and in its other lines of business. The planned NORCAL acquisition will likely increase the group’s operational scale and strengthen its market position in the long term. These ratings also acknowledge the depth and breadth of the group’s ERM programs and policies. In addressing challenges in a prolonged soft MPL market, management has leveraged its talent, knowledge base and market position to introduce innovative alternatives.

The FSR has been downgraded to A (Excellent) from A+ (Superior) and the outlook revised to stable from negative while the Long-Term ICRs have been downgraded to “a+” from “aa-” with that outlook remaining negative for the following members of the ProAssurance Group:

  • ProAssurance Casualty Company
  • ProAssurance Indemnity Company, Inc.
  • ProAssurance Specialty Insurance Company, Inc.
  • Medmarc Casualty Insurance Company
  • Noetic Specialty Insurance Company
  • Podiatry Insurance Company of America
  • ProAssurance American Mutual, A Risk Retention Group
  • Allied Eastern Indemnity Company
  • Eastern Advantage Assurance Company
  • Eastern Alliance Insurance Company

The following Long-Term IRs have been downgraded with the outlook remaining negative for:

ProAssurance Corporation:

–to “bbb+” from “a-” on $250.0 million 5.30% 10-year senior unsecured notes, due 2023

The following indicative Long-Term IRs under the shelf registration have been downgraded with the outlooks remaining negative:

ProAssurance Corporation:

–to “bbb+” from “a-” on senior unsecured debt

–to “bbb” from “bbb+” on senior subordinated debt

–to “bbb-” from “bbb” on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Jieqiu Fan
Senior Financial Analyst
+1 908 439 2200, ext. 5372
[email protected]

Sharon Marks
Associate Director
+1 908 439 2200, ext. 5477
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
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Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
[email protected]