OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Preferred Physicians Medical Risk Retention Group, Inc. (PPMRRG) (Kansas City, MO).
The ratings action follows the announcement that NORCAL Mutual Insurance Company (NORCAL) has entered into a definitive agreement to acquire PPM Services, Inc., in an all cash transaction expected to close in early 2017. PPM Services would become a wholly owned subsidiary of NORCAL, geographically expand PPMRRG’s footprint in the specialty area covering anesthesiologists, and establish a Midwest presence to further support NORCAL’s national expansion. In addition, it would allow PPMRRG to leverage the resources of NORCAL to further expand its anesthesiologists brand, respond to changes in the health care environment and bring additional value to policyholders.
The negative implications are due to the negative outlook on NORCAL’s ratings and the company’s plans to financially integrate PPMRRG into the NORCAL organization. Management does expect that the financial integration of Preferred Physicians into NORCAL will further improve consolidated prospective operating performance. A.M. Best is continuing to analyze the details of the acquisition and anticipates taking the ratings out from under review following the close of the transaction, which needs the approval of PPM Services’ shareholders and regulatory bodies.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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