MedPro Group credit ratings affirmed with stable outlook

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MedPro Group ratings affirmed

Highlights

AM Best affirms MedPro Group’s A++ Financial Strength and aa+ Long-Term Issuer Credit Ratings with a stable outlook for all key affiliates.
MedPro maintains strongest-level risk-adjusted capitalization and consistently outperforms peers in return on equity, operating ratios, and underwriting income, supported by Berkshire Hathaway Inc.
MedPro reduces its historically large equity allocation in the past two years, shifting toward cash and short-term instruments amid sector competition and investment volatility.

Rating affirmation and key strengths

As reported by AM Best, MedPro Group’s members keep their Financial Strength Rating of A++ and Long-Term Issuer Credit Ratings of aa+, with a stable outlook. The affirmation applies to The Medical Protective Company and its affiliates, Princeton Insurance Company, PLICO, Inc., Wellfleet Insurance Company and Wellfleet New York Insurance Company, as well as the group’s two reinsured affiliates, MedPro RRG Risk Retention Group and AttPro RRG Reciprocal Risk Retention Group.

AM Best says the ratings reflect balance sheet strength it assesses at the strongest level, alongside strong operating performance, a favorable business profile and appropriate enterprise risk management. The agency also points to MedPro’s risk-adjusted capitalization at the strongest level under Best’s Capital Adequacy Ratio, its long-term profitable operating record and its leading position in the medical professional liability sector.

The assessment also incorporates MedPro’s distribution capabilities, claims-handling approach and broader risk management culture. AM Best says the group consistently outperforms peers on measures including return on equity, operating ratios and underwriting income, while also benefiting from explicit and implicit financial support from affiliate National Indemnity Company and ultimate parent Berkshire Hathaway Inc.

Sector risks and investment exposure

Offsetting factors remain tied to the structure of the medical professional liability business, where insurers face intense price competition, erosion of tort reform laws in some jurisdictions, rising loss cost trends and regulatory risk. AM Best also notes changing market dynamics, including competitor consolidation and continued consolidation across the health care industry.

MedPro also remains exposed to equity market volatility because of its historically large allocation to common stocks. AM Best says the group demonstrates an ability to absorb that volatility and preserve its strongest risk-adjusted capitalization because of low underwriting leverage, supported by its affiliated reinsurance agreement with National Indemnity Company and its substantial capital base.

Over the last two years, MedPro reduces its equity allocation as it shifts more investments into cash and short-term instruments, although it still keeps meaningful exposure to a narrower group of equities. That portfolio repositioning comes as insurers across the sector weigh capital preservation against investment return in a still-competitive underwriting environment.

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