NORCAL Group, a San Francisco-based carrier focused on medical professional liability, has signed a definitive agreement to be acquired by ProAssurance Corporation (NYSE: PRA), a Birmingham, AL-based specialty insurer with extensive expertise in healthcare professional liability. ProAssurance will pay a base consideration of $450 million in cash, with a contingent consideration of up to $150 million should ultimate loss estimates as of the acquisition date develop favorably. The transaction, when completed, will result in the creation of the nation's third largest medical professional liability insurance carrier, based on 2019 estimated statutory data.
Created by physicians during California's medical malpractice crisis in 1975, NORCAL has been committed to healthcare providers and their insurance needs for more than 40 years. Today, NORCAL continues to provide medical professional liability insurance and risk management solutions to more than 35,000 physicians, healthcare extenders, medical groups, hospitals, community clinics and allied healthcare facilities throughout the country, representing approximately $370 million of annualized direct written premium. The Company is rated "A" (Excellent) by A.M. Best for their financial strength and stability. NORCAL Group includes NORCAL Mutual Insurance Company and its affiliated insurance companies.
This transaction will bring tremendous strategic value to NORCAL through increased financial strength, access to new and innovative products for policyholders, and increased scale of core services and data analytics. The combination also provides ProAssurance and NORCAL with a transformational opportunity to enhance the services they can deliver to customers and distribution partners, while creating significant long-term value for ProAssurance shareholders.
Waller Helms Advisors brings more than two decades of experience advising leading specialty insurance carriers on transformative transactions. In addition to NORCAL, Waller Helms has recently advised The Doctors Company on its acquisition of Hospitals Insurance Company and FOJP Service Corporation, CopperPoint Insurance Companies on its acquisition of Alaska National Insurance Company, Safety National Casualty Corporation on its acquisition of Midlands Management Company, and PPM Services on its sale to NORCAL.