The program has expanded torecognize business leaders in over 135 cities in 50 countries throughout theworld As a Greater Washington award winner, Mr. The Ernst & Young Entrepreneur of the Year awards program celebrates its 23rdanniversary this year and continues to honor entrepreneurs who have demonstratedexcellence in such areas as innovation, financial performance, and personalcommitment to their businesses and communities. The rating upgradesfurther reflect ProAssurance`s excellent risk adjusted capitalization,conservative reserving and investing practices and its business position as oneof the leading writers of medical professional liability insurance in the UnitedStates A.M. Best also recognizes the additional geographical and line of businessdiversification that PRA has achieved through three acquisitions in 2009. Withthe additions of The PICA Group, Georgia Lawyers Insurance Company andMid-Continent General Agency, PRA has added to the number of states in which itwrites, while considerably expanding its reach into the medical professionalliability, lawyer professional liability and ancillary healthcare lines.
PRA`sstrong management team has extensive experience in the merger and acquisitionarena, which largely mitigates any integration concerns. Furthermore, theintegration risk of The PICA Group is minimal, as it will operate as astand-alone subsidiary. Additionally, the ratings consider the financial flexibility that PRA providesto the operating companies. PRA`s financial leverage (total debt/total capital)was a modest 2.4% at year-end 2008, following the redemption of over $107million in convertible senior debentures in July 2008 and the reacquisition of$23 million in outstanding notes in December 2008. PRA`s interest coverageremains exceptionally strong, and it currently holds a substantial amount ofcash and short-term investments outside of its insurance subsidiaries, which isavailable for use without regulatory approval. Partially offsetting these rating strengths are the inherent challengesassociated with the medical professional liability insurance sector as itrelates to price competition, legislative (tort) reform, loss cost trends andregulatory challenges.
An additional factor is the history of moderatefluctuations in ProAssurance`s earlier operating results, driven by adversereserve development in older accident years. However, more recent reservedevelopment has been favorable, reflecting management`s corrective actions andgeneral market conditions. The FSR has been upgraded to A (Excellent) from A- (Excellent) and the ICRs to"a" from "a-"for ProAssurance Group and its following members:* ProAssurance Indemnity Company, Inc.* ProAssurance Casualty Company* ProAssurance Specialty Insurance Company, IncorporatedThe FSR of A- (Excellent) and ICRs of "a-" have been affirmed for The PICA Groupand its member, Podiatry Insurance Company of America. For Best`s Credit Ratings, an overview of the rating process and ratingmethodologies, please visit The principal methodologies used in determining these ratings, including anyadditional methodologies and factors that may have been considered, can be foundat Founded in 1899, A.M. Best Company is a global full-service credit ratingorganization dedicated to serving the financial and health care serviceindustries, including insurance companies, banks, hospitals and health caresystem providers. For more information, visit A.M Best Co.AnalystsGreg Williams, 908-439-2200, ext. orHenry Witmer, 908-439-2200, ext.