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Professional and products liability insurer ProAssurance Corp. announced Tuesday that it is expanding into the workers compensation insurance market by acquiring Lancaster, Pa.-based Eastern Insurance Holdings Inc.
Birmingham, Ala.-based ProAssurance is a specialty insurer focusing on medical professional liability and products liability for medical technology and life sciences companies. It also provides legal professional liability coverage.
Eastern subsidiaries include Eastern Alliance Insurance Group, a specialty workers comp underwriter, and Cayman Island-domiciled Eastern Re Ltd., a segregated portfolio cell company offering alternative market workers comp programs. Eastern also is the parent of Employers Alliance Inc., a property casualty claims administrator and consulting unit.
The purchase, valued at about $205 million, will result in Eastern becoming a wholly owned unit of ProAssurance, the companies said in a joint statement.
It will allow ProAssurance to diversify and “broaden its medically focused product lines,” W. Stancil Starnes, ProAssurance chairman and CEO, said in the statement.
"We have evaluated the workers compensation market for some time and believe that a targeted strategy in this large sector will prove equally attractive for ProAssurance shareholders and policyholders, who will have access to the unmatched expertise of Eastern,” Mr. Starnes said.
Michael Boguski, Eastern's president and CEO, called ProAssurance an ideal partner.
“They share our vision for profitably growing our workers compensation business through targeted geographic expansion and value-added relationships with agency partners,” Mr. Boguski said in the statement.
ProAssurance said it will maintain Eastern's corporate office in Lancaster and its existing regional and satellite offices, which will operate under Mr. Boguski and his management team with Eastern senior executives entering long-term employment contracts in conjunction with the transaction.
The all-cash deal is expected to close by Jan. 1, 2014, subject to regulatory and shareholder approval.