PIC Wisconsin, ProAssurance To Merge

Physicians Insurance Company of Wisconsin Inc. will merge with ProAssurance Corporation in an all stock deal worth $100 million.

The companies said the transaction is expected to be completed as early as mid-2006, subject to the approval of PIC Wisconsin's shareholders and other regulatory requirements.

PIC Wisconsin is a medical liability insurer based in Madison, Wis., founded 20 years ago by the Wisconsin Medical Society. According to National Underwriter's HighlineData Service, the company reported net written premium of more than $57 million in 2004, with total assets of $278 million.

ProAssurance, based in Birmingham, Ala., is a specialty writer of insurance, primarily medical liability. In 2004, according to HighlineData Service figure, the company reported net written premium of $715 million and assets of $2.6 billion.

The companies said the deal would allow ProAssurance to extend its business in Wisconsin, the upper Midwest and Western states.

"ProAssurance has a demonstrated history of successfully identifying and integrating companies that strengthen and expand our existing business and provide an entry into attractive markets where we can serve new customers and meet our goals for profitable growth," said Dr. A. Derrill Crowe, chairman and chief executive officer of ProAssurance, in a statement.

Under the agreement, each share of PIC Wisconsin would be converted into shares of ProAssurance, with a value of $5,000. The exchange ratio is based on the average closing price ten trading days preceding the close of the merger.

The companies said the final amount could fluctuate, depending on the closing price. The total value of the deal of $100 million is based upon the 19,741 shares expected to be outstanding at the closing.

Both The ProAssurance Group and PIC Wisconsin have an A.M. Best rating of "A-minus," with stable outlook.

Standard & Poor's said that its rating of the two was unaffected by the news of the merger.