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Filed by: ProAssurance Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Professionals Group, Inc.
Commission File No. 333-49378
April 12, 2001
Dear Professionals Group Shareholder:
We are pleased to provide you with a copy of Professionals Group's
summary 2000 Annual Report to Shareholders. We hope that you find it of
interest.
The enclosed annual report contains a brief history of Professionals
Group and selected financial information that has been excerpted from our most
recent Annual Report on Form 10-K. You may obtain a complete copy of our Form
10-K in one of three convenient ways:
- At the SEC web site: www.sec.gov
- At the Professionals Group web site: www.ProfessionalsGroup.com
- By calling the Professionals Group Shareholder Services line at
(800)338-7343
If you should have any questions or desire additional information about
Professionals Group, please call our Shareholder Services line at (800) 338-7343
or visit our web site at www.ProfessionalsGroup.com.
Thank you for your continuing support of Professionals Group.
William H. Woodhams, M.D. Victor T. Adamo
Chairman President & CEO
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A REGISTRATION STATEMENT ON FORM S-4 (REGISTRATION NO. 333-49378) HAS BEEN FILED
WITH THE SEC REGARDING THE PROPOSED CONSOLIDATION OF PROFESSIONALS GROUP AND
MEDICAL ASSURANCE. YOU ARE URGED TO READ THE REGISTRATION STATEMENT AND THE
DOCUMENTS INCLUDED OR INCORPORATED BY REFERENCE THEREIN (INCLUDING THE
RESPECTIVE ANNUAL REPORTS ON FORM 10-K OF PROFESSIONALS GROUP AND MEDICAL
ASSURANCE) BECAUSE THEY CONTAIN IMPORTANT INFORMATION REGARDING THE
CONSOLIDATION AND THE LEGAL RIGHTS OF SECURITY HOLDERS. YOU CAN OBTAIN A FREE
COPY OF THE REGISTRATION STATEMENT AND THE OTHER DOCUMENTS FILED BY
PROFESSIONALS GROUP AND MEDICAL ASSURANCE WITH THE SEC AT THE SEC'S WEBSITE AT
http://www.sec.gov. THESE DOCUMENTS ARE ALSO AVAILABLE WITHOUT CHARGE UPON
REQUEST TO EITHER:
PROFESSIONALS GROUP, INC. MEDICAL ASSURANCE, INC.
2600 PROFESSIONALS DRIVE 100 BROOKWOOD PLACE
OKEMOS, MI 48864 BIRMINGHAM, AL 35209
ATTENTION: LORI A. BEACHNAU ATTENTION: FRANK B. O'NEIL
(800) 292-1036 (800) 282-6242
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[PROFESSIONALS
GROUP LOGO]
YEARS OF SERVICE
TO PROFESSIONALS
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QUIET IMPACT
RESOUNDING TRUST
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[PROFESSIONALS GROUP LOGO]
THE YEAR 2000 marked two milestones for the companies of Professionals Group.
For 25 years, ProNational Insurance Company has provided medical professional
liability insurance to physicians and other members of the health care community
based on a mission of service to its insureds and the strong defense of their
claims. For 50 years, MEEMIC Insurance Company has provided personal automobile
and homeowners coverages to teachers and the educational community by focusing
on the individual needs of its insureds through a "teacher-to-teacher" sales
force. Both insurance companies are rated A- (Excellent) by A.M. Best.
Professionals Group is traded under the symbol "PICM" on the Nasdaq National
Market.
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| PROUDLY RECOGNIZED FOR 25 YEARS
| of leadership in providing
| professional liability insurance
| through ProNational Insurance Company.
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| CELEBRATING 50 YEARS
|---------- [MEEMIC LOGO] of service and reliability
to Michigan educators and their
families through MEEMIC
Insurance Company.
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TO THE SHAREHOLDERS OF PROFESSIONALS GROUP...
DURING 2000 the Professionals Group companies celebrated very significant
milestones in their corporate lives. On a combined basis, the Professionals
Group companies have provided insurance services to their customers for over
one-half century. In this letter, we would like to highlight and celebrate the
growth of our insurance group.
MEEMIC
Although it is the newest member of Professionals Group, MEEMIC is actually
the oldest of our insurance companies. MEEMIC was founded in 1950 by a group of
Detroit teachers who were interested in providing low cost, high quality
automobile insurance to their fellow teachers. Over these past 50 years, MEEMIC
has remained dedicated to the educator market in Michigan. MEEMIC now boasts
over 132,000 policies in force and has expanded its coverages beyond personal
auto protection to include homeowners, personal watercraft and umbrella
policies.
[VICTOR T. ADAMO AND WILLIAM H. WOODHAMS PHOTO]
MEEMIC became affiliated with Professionals Group in 1997 and has clearly
benefited by this association. MEEMIC completed a successful demutualization in
1999 and has increased its capital base to over $145 million, thus providing it
with the resources to expand and grow. In 1999, MEEMIC entered the ranks of the
100 largest writers of personal auto coverage in the United States.
PRONATIONAL
ProNational Insurance Company is actually the combination of five
predecessor insurance entities, all sharing a common heritage and mission of
service to the medical profession.
In 1975, physicians throughout the country were drawn into the "malpractice
crisis." After a sudden escalation of malpractice lawsuits, the commercial
carriers that were the primary source of medical malpractice insurance abruptly
ceased offering malpractice coverage. Different solutions were fashioned at the
state level to solve the crisis and provide affordable malpractice insurance
protection for practicing physicians.
In Michigan, a group of Detroit-area physicians formed the Physicians Crisis
Committee to advocate for tort reform. As a result of this effort, the Michigan
legislature enacted a state-sponsored fund known as the Brown-McNeely Fund as a
temporary source of malpractice insurance. The Brown-McNeely Fund was launched
in 1975 and existed for five years.
In 1980 the state decided to return this insurance product to the private
sector. The Physicians Crisis Committee, with the assistance of a doctor-owned
insurance company from Ohio, was selected to convert the Fund into a
stock-insurance company owned by its insured physicians. This company,
Physicians Insurance Company of Michigan (also known as "PICOM"), began offering
policies under its own name in the
1950 1975 1980 1995
MEEMIC was founded Brown-McNeely Fund was PICOM was formed to PICOM expanded outside of
by a group of Detroit teachers launched to provide assume the business of the Michigan. PICOM assumed
to provide auto insurance. malpractice insurance. Brown-McNeely Fund. the business of APIC.
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[MEEMIC LOGO] [BROWN-MCNEELY FUND LOGO] [PICOM INSURANCE COMPANY [ASSOCIATED PHYSICIANS INSURANCE COMPANY
LOGO] LOGO]
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summer of 1980. PICOM focused on customer service and providing its
policyholders with a strong claims defense. Over time, PICOM expanded its
professional liability coverages to include clinics, dentists, hospitals,
podiatrists, and a number of other health care providers and institutions, as
well as lawyers and law firms.
PICOM diversified outside of Michigan in 1995, when it assumed the book of
business of Associated Physicians Insurance Company. Similarly, in 1996, PICOM
absorbed the insureds of Indiana-based American Medical Insurance Exchange. Both
of these medical malpractice insurers were founded in the mid-1980s through the
cooperative efforts of physicians and insurance professionals to serve doctors
in their home states.
While PICOM was serving physicians in the Midwest, a similar story was
developing in Florida. The State of Florida reacted to the malpractice crisis of
1975 by allowing physicians to band together to form self-insured trusts. Using
the trust mechanism, a group of southeastern Florida doctors established
Physicians Protective Trust Fund. Known for its customer focus and tough claims
defense, Physicians Protective Trust Fund went on to become the largest
malpractice insurance provider in Florida.
In July of 1998, PICOM and Physicians Protective Trust Fund came together to
form ProNational Insurance Company. ProNational is now the fourteenth largest
medical malpractice insurer in the United States. It actively writes malpractice
coverage in nine states for over 15,000 policyholders and has a solid economic
base with over $200 million in statutory surplus. And, while it has grown in
scope and size, ProNational has remained dedicated to the principles of customer
service, physician involvement, and the strong defense of claims that had been
the hallmark of its predecessor organizations.
PROFESSIONALS GROUP
Professionals Group came into existence in 1996 to serve as the upstream
holding company for the group. Its roots as a publicly owned company trace back
to PICOM, which started trading as an over-the-counter public company in the
early 1980s and joined the Nasdaq Stock Market in 1993.
Professionals Group is now the 125th largest insurance group in the United
States with written premiums in excess of $265 million and assets of $1.1
billion. In addition to the insurance services that its member companies provide
to their policy-holders, Professionals Group has worked diligently to provide
economic value for its shareholders. Over the long term, which is the nature of
our insurance products, Professionals Group has provided an excellent return. An
investment of $100 in 1985 in Professionals Group (PICOM) was worth $8,278 at
the end of 2000. This is an annual growth rate of 32%, which was more than twice
the annual growth rate of the S&P 500 over this same period.
It is with pride that we at Professionals Group celebrate these important
anniversaries in 2000. While we definitely look forward to our future as a part
of a larger and stronger insurance group, we take this opportunity to celebrate
our past. We thank those men and women who used their skills and talents to
found our companies. We also thank the boards, committees and staff members who
have devoted their energy and careers over the past fifty years to assist the
Professionals Group companies in successfully serving our policyholders and
shareholders.
/s/ William H. Woodhams /s/ Victor T. Adamo
William H. Woodhams, M.D., Chairman Victor T. Adamo, President and CEO
1996 1997 1998 1999 2000
Professionals Group was formed to Professionals Group PICOM and PPTF MEEMIC completes its Professionals Group
serve as the holding company. PICOM became affiliated consolidate, forming demutualization into a celebrates these important
assumed the business of AMIE. with MEEMIC. ProNational. stock company. anniversaries.
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[AMIE LOGO] [PHYSICIANS [PRONATIONAL LOGO] [PROFESSIONALS GROUP LOGO]
PROTECTIVE LOGO]
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FINANCIAL HIGHLIGHTS
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 1999 2000
(Dollars in thousands, except per share data)
Total investments $758,268 $780,941
Total assets 1,072,089 1,136,753
Loss and loss adjustment expense reserves 631,981 683,113
Total liabilities 855,273 893,177
Total shareholders' equity 216,816 243,576
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 2000
(Dollars in thousands, except per share data)
Premiums earned, net $195,169 $226,390
Net investment income 41,142 46,232
Total revenues 243,571 273,425
Total expenses 208,549 263,178
Net income 27,188 11,699
Net income per share $2.90 $1.27
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[TOTAL ASSETS GRAPH] [TOTAL REVENUES GRAPH]
[MARKET VALUE COMPARISON OF $100 INVESTED IN 1985
PROFESSIONALS GROUP VS. S&P 500 GRAPH]
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BOARD OF DIRECTORS
PROFESSIONALS GROUP, INC.
BOARD OF DIRECTORS
VICTOR T. ADAMO, ESQ., C.P.C.U.
President & Chief Executive Officer
Professionals Group, Inc.
ELIOT H. BERG, M.D.
Co-Vice Chair, Professionals Group, Inc.
Physician, General Surgery
Segal & Berg, PA
JOSEPH C. CAUTHEN, M.D.
Physician, Neurosurgery
Private Practice
R. KEVIN CLINTON, F.C.A.S., M.A.A.A.
President & Chief Executive Officer
MEEMIC Holdings, Inc.
JOHN F. DODGE, JR., ESQ.
Attorney, Private Practice
H. HARVEY GASS, M.D.
Physician, Neurosurgery
Private Practice
RICHARD P. HORSCH, M.D.
Physician, Anesthesiology
Retired
ISAAC J. POWELL, M.D.
Physician, Chief of Urology
Veterans Hospital
Associate Professor, Wayne State
University School of Medicine
ANN F. PUTALLAZ, PH.D.
Co-Vice Chair, Professionals Group, Inc.
Vice President, Munder Capital Management
WILLIAM H. WOODHAMS, M.D.
Chairman, Professionals Group, Inc.
Physician, Family Practice
Westside Family Medical Center
DONALD S. YOUNG, ESQ.
Principal, Dykema Gossett PLLC
PROFESSIONALS GROUP, INC.
OFFICERS
(who are not directors)
JOHN F. LANG, C.P.A.
Vice President, Treasurer,
Chief Financial Officer & Secretary
WILLIAM P. SABADOS
Chief Information Officer
PRONATIONAL INSURANCE
REGIONAL ADVISORY BOARDS
MICHIGAN
JERRY D. CAMPBELL
DAVID W. HEEKE, D.D.S.
JOHN F. MCCAFFREY
ROBERT E. PAXTON, M.D.
SHARON S. SMITH, M.D.
FLORIDA
RICHARD G. ALPER, M.D.
LOUIS P. BRADY, M.D.
HUBERT G. MARTINEZ, M.D.
KERRY M. SCHWARTZ, M.D.
GEORGE A. SEGAL, M.D.
ROBERT S. TOLMACH, M.D.
EDWARD S. TRUPPMAN, M.D.
JACK WOLFSDORF, M.D.
ILLINOIS
RONALD B. FISCELLA, M.D.
JAMES J. SMITH, M.D.
RAYMOND K. WEBER, M.D.
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PRONATIONAL INSURANCE
COMPANY OFFICERS
VICTOR T. ADAMO, ESQ., C.P.C.U.
Chairman, President & Chief
Executive Officer
JOHN O. BASHANT, C.P.C.U.
Senior Vice President,
Operations & Underwriting
WILLIAM D. BAXTER, C.P.A.
Chief Financial Officer & Treasurer
JEFFREY L. BOWLBY, A.R.M.
Senior Vice President, Marketing & Sales
LIZABETH F. BROTT, ESQ.
Vice President, Risk Management
GARY R. DOWLING, C.P.C.U.
Vice President, Sales
North Central Region
DAVID R. GOSS
Vice President, Sales
Southern Region
JOHN F. LANG, C.P.A.
Senior Vice President, Finance
JOSEPH O. MARKER, F.C.A.S., M.A.A.A.
Senior Vice President, Actuarial
KATHRYN A. NEVILLE, ESQ., C.P.C.U.
Secretary
VALERIE G. PURDY
Vice President, Claims
Illinois
WILLIAM P. SABADOS
Chief Information Officer
DARRYL K. THOMAS, ESQ.
Senior Vice President, Claims
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INVESTOR RELATIONS
PRINCIPAL OFFICE:
Professionals Group, Inc.
2600 Professionals Drive
P.O. Box 150
Okemos, MI 48805-0150
(517) 349-6500
(800) 292-1036
SHAREHOLDER SERVICES:
(800) 338-7343
TRANSFER AGENT AND
REGISTRAR:
Mellon Investor Services LLC
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
(888) 632-5998
www.mellon-investor.com
AUDITORS:
PricewaterhouseCoopers LLP
Grand Rapids, MI
CORPORATE SECURITIES
COUNSEL:
Miller, Canfield, Paddock & Stone, P.L.C.
Troy, MI
MARKET FOR THE COMPANY'S COMMON STOCK AND
RELATED SHAREHOLDER MATTERS:
The Company's Common Stock is traded on the Nasdaq Stock Market(R) under the
symbol "PICM." On March 1, 2001, there were 3,940 shareholders on record of the
Company's Common Stock.
SHAREHOLDER RELATIONS
AND FORM 10-K:
Information about Professionals Group, Inc., including the Form 10-K filed with
the Securities and Exchange Commission (www.sec.gov), may be obtained without
charge upon request to Lori Beachnau, Shareholder Relations Manager, at the
Company's principal office or by accessing the Professionals Group web site.
COMPANY WEB SITES:
www.ProfessionalsGroup.com
www.ProNational.com
www.meemic.com
PRESS RELEASE FAX SERVICE:
PR Newswire: "Company News On Call"
(800) 758-5804 ext. 115602
SHARE PRICE AND DIVIDEND INFORMATION:
The following table sets forth the high and low sale prices for Professionals
Group, Inc., Common Stock on the Nasdaq Stock Market(R). In each case the
quotations have been adjusted as if the 10% stock dividend, paid by
Professionals Group, Inc., on December 13, 1999, had occurred prior to such
quarters.
2000 High Low
1st quarter $24.56 $14.00
2nd quarter 24.63 12.63
3rd quarter 24.23 20.69
4th quarter 24.50 20.75
1999 High Low
1st quarter $28.86 $22.96
2nd quarter 32.27 21.36
3rd quarter 31.82 21.59
4th quarter 27.00 20.00
The Company did not declare or pay any cash dividends (except for cash paid in
lieu of fractional shares on stock dividends) in 2000 or 1999.
[PROFESSIONALS GROUP LOGO] WWW.PROFESSIONALSGROUP.COM
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Professionals Group, Inc.
2600 Professionals Drive
P.O. Box 150
Okemos, MI 48805-0150
www.ProfessionalsGroup.com