By Michael Loney

March 20 - (The Insurer) - The Doctors Company’s agreed acquisition of ProAssurance aligns with its strategy and core business while the acquiring company’s leading position in the medical professional liability insurance market allows for further M&A, Fitch Ratings has said.

Inter-insurance The Doctors Company on Wednesday announced that it will buy ProAssurance for $25 a share, valuing the New York-listed medical liability insurer at $1.3 billion.

ProAssurance’s share price jumped almost 50% to around $23 as of 9:45 a.m. EST on Thursday, up from the $15.54 close on Wednesday before the deal was announced.

Fitch affirmed The Doctors Company’s A insurer financial strength ratings, as well as its surplus note at 'BBB', with stable outlooks.

“Fitch believes the acquisition of (ProAssurance) aligns with TDC's operating strategy and core business,” the rating agency said.

ProAssurance primarily provides medical professional liability insurance but also offers workers' compensation insurance.

“The acquisition will increase TDC's scale and strengthen its position as a leading medical professional liability insurance (MPLI) carrier,” Fitch said.

Fitch noted that the $1.3 billion deal value is roughly the book value of ProAssurance's equity adjusted for unrealised bond losses.

The transaction, which is expected to close in the first half of 2026, will be financed by the sale of invested assets at The Doctors Company.

Fitch noted that monoline specialty insurers operating with limited geographic scope hold substantial market share in the MPLI segment.

“These companies tend to have strong capital positions and limited options to write business outside of MPLI. This market dynamic hinders a return to segment rate adequacy and underwriting profits,” it said.

Fitch added: “Excess capital among MPLI specialists is likely to be remedied by underwriting losses and, ultimately, market consolidation. TDC's MPLI market position provides a platform for future acquisitions.”

As previously reported, AM Best responded to the deal announcement by stating that The Doctors Company’s financial strength rating of A and the long-term issuer credit ratings of a-plus are unchanged, with stable outlooks.

The rating agency noted the group is the second-largest writer of MPLI in the U.S. based on direct premiums written, while ProAssurance is the fourth-largest MPLI insurer.

AM Best also does not expect the deal to have any material effect on ProAssurance’s A financial strength rating.