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[Medical Assurance Letterhead] NEWS RELEASE
Frank B. O'Neil
Senior Vice President, Corporate Communications
205-877-4460 - 800-282-6242 - [email protected]
MEDICAL ASSURANCE AND PROFESSIONALS GROUP TO CONSOLIDATE
BIRMINGHAM, AL and OKEMOS, MI - (BUSINESS WIRE) - June 23, 2000 - Medical
Assurance, Inc. (NYSE: MAI) and Professionals Group, Inc. (NASDAQ: PICM) 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 lines 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.
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.
-more-
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[Medical Assurance Letterhead] NEWS RELEASE CONTINUES
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.
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- 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.
This news release contains historical information as well as forward-looking
statements that are based upon estimates and anticipation of future events by
Medical Assurance, Inc. and/or Professionals Group, 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 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 Medical Assurance, Inc. and/or Professionals Group, Inc.
will be realized.
Company Contacts
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MEDICAL ASSURANCE PROFESSIONALS GROUP
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<C> <C>
Frank B. O'Neil John F. Lang
Senior Vice President, Corporate Communications Treasurer and Chief Financial Officer
205-877-4460 - 800-282-6242 517-347-6207 - 800-292-1036
[email protected] [email protected]
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