Fitch Affirms FSR for ProAssurance

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Fitch Ratings has affirmed the ‘A-‘ insurer financial strength (IFS) ratings of ProAssurance Corporation’s (PRA) primary insurance operating companies (listed below) and has revised the Outlook to Positive from Stable.

Additionally, Fitch has assigned an ‘A-‘ IFS rating to recently acquired National Capital Reciprocal Insurance Company (NCRIC). Furthermore, Fitch has affirmed the ‘BBB-‘ long-term issuer rating assigned to ProAssurance’s debt obligations and has revised the Outlook on that rating to Positive from Stable. NCRIC’s Rating Outlook is also Positive.

PRA’s ratings are based on the solid financial condition of its operating subsidiaries, above-average profitability relative to peers, financial and operating flexibility, and highly experienced management team. PRA has an established reputation for providing quality service and expertise in risk management as well as a strong track record of aggressively defending nonmeritorious claims, which enhances customer loyalty and reduces fraud.

Operating performance has improved in recent years, in part, as a result of the improved pricing environment in medical malpractice business and the continued profitability at its personal lines subsidiary, Michigan Educators Employee Mutual Insurance Company (MEEMIC).

ProAssurance reported a 99.3% statutory combined ratio for full-year 2004 compared with 104.7% for full-year 2003. Return on equity was 15.5% for the first half of 2005 compared with 11.6% for first-half 2004. Fitch notes that PRA’s current ratings are based, in part, on the successful income diversification provided by MEEMIC. Fitch also notes that ProAssurance’s results should benefit, in the near term, from an overall improvement in the medical malpractice market.

PRA’s medical malpractice segment reported a combined ratio of 98.2% for second-quarter 2005. Fitch views PRA’s loss reserve position as adequate and notes that the company does have a history of favorable reserve development. Fitch does not anticipate reserve development in excess of 5% of prior year’s surplus for any period.

PRA maintains good financial flexibility. PRA’s debt to total capital ratio was a modest 19% at June 30, 2005. Last year the company demonstrated its ability to access the capital markets when it tapped the capital markets for $45 million in trust-preferred securities.

The following rating actions by Fitch have a Positive Rating Outlook:

* ProAssurance Corp.

Long-term issuer affirmed at ‘BBB-‘;

Senior debt affirmed at ‘BBB-‘;

$105 million, 3.9%, convertible debt due June 30, 2023 ‘BBB-‘.

* Michigan Educators Employee Mutual Insurance Company (MEEMIC)

Insurer financial strength affirmed at ‘A-‘.

* The Medical Assurance Company Inc.

Insurer financial strength affirmed at ‘A-‘.

* Pronational Insurance Company

Insurer financial strength affirmed at ‘A-‘.

* National Capital Reciprocal Insurance Company (NCRIC)