US-based specialty insurer ProAssurance has finalised an agreement to acquire medical professional liability insurer Norcal Group for a consideration of $450m.
The deal has been unanimously approved by the board of directors of both the firms.
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The acquisition will follow the conversion of Norcal’s controlling arm Norcal Mutual insurance into a public company.
The Norcal Group of companies offer medical professional liability insurance, and risk management solutions.
Its clients include physicians, healthcare extenders, medical groups, hospitals, community clinics, and allied healthcare facilities across the US.
ProAssurance president and CEO Ned Rand said: “Much like ProAssurance’s predecessors, Norcal was founded by physicians in the 1970’s to serve the professional liability insurance needs of physicians.
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By GlobalData“Norcal’s history and physician-focused culture make it a perfect fit for the ProAssurance family.”
Based on 2019 estimated statutory data, the merger will lead to the creation of the third-largest medical professional liability (MPL) insurance carrier in the US.
Under the arrangement, Norcal will get seats on the ProAssurance Board.
Norcal president and CEO Scott Diener said: “Combining with ProAssurance brings tremendous strategic value to Norcal through increased financial strength, access to new and innovative products for policyholders, and the increased scale of our core services and data analytics.
“The completion of this transaction will enhance and expand Norcal’s ability to serve its customers in the highly competitive MPL industry as we strive to carry out our mission.”
Subject to receipt of regulatory and policyholder approvals, the transaction is expected to be completed by end of 2020.
