A.M. Best Affirms Ratings of ProAssurance Corporation; Physicians Insurance Company of Wisconsin, Inc. Remains Under Review.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of ProAssurance Group (ProAssurance) and its group rated members. A.M. Best has also affirmed the ICR of "bbb-" and the senior debt rating of "bbb-" on the $107 million 3.9% senior unsecured convertible debentures, due 2023 of ProAssurance's parent holding company, ProAssurance Corporation (PRA) [NYSE: PRA]. Concurrently, A.M. Best has affirmed the FSR of B++ (Good) and ICR of "bbb" of NCRIC, Inc. (NCRIC) (Washington, DC) and the FSR of B (Fair) and ICR of "bb" of Woodbrook Casualty Insurance, Inc. (Woodbrook) (Birmingham, AL), both subsidiaries of PRA. The outlook for all the above ratings is stable.

Additionally, the FSR of A- (Excellent) of Physicians Insurance Company of Wisconsin, Inc. (PIC Wisconsin) (Madison, WI) remains under review with negative implications based on a level of risk-adjusted capitalization, which is not commensurate with its current rating. PRA is addressing A.M. Best's concern about capitalization by securing an inter-company reinsurance agreement. (See below for a detailed list of the companies and ratings.)

These rating actions recognize PRA's fourth quarter earnings announcement and takes into consideration the continued benefits to be gained from price firming and improved claim trends in the medical malpractice sector, as well as PRA's favorable earnings prospects for 2007.

In particular, the ratings of ProAssurance reflect its excellent risk-adjusted capitalization, strong operating performance, specialty expertise and leading business position within the medical professional liability insurance sector and the financial flexibility afforded by PRA, whose financial leverage (total debt and preferred stock/total capital) is a modest 13.8%. PRA's interest coverage is also within the range for its ratings. Furthermore, PRA holds an extensive amount of cash and short-term investments outside of its insurance subsidiaries that is available for use without regulatory approval.

A.M. Best also recognizes PRA's historically successful growth strategy in expanding its geographic footprint via mergers and acquisitions. Some of the more recent acquisitions are NCRIC (2005) and PIC Wisconsin (2006).

Offsetting these rating strengths are the inherent challenges associated with the medical professional liability insurance sector as they relate to price competition, legislative (tort) reform, loss cost trends and regulatory challenges, and the moderate fluctuations in ProAssurance's operating results in the early portion of the most recent five-year period. The exposure to these market risks was heightened with the January 1, 2006 sale of PRA's highly profitable personal lines insurance operations, MEEMIC Insurance Company. The stable outlook is based upon ProAssurance's proven cycle management capabilities and pricing and underwriting discipline.

The under review status of PIC Wisconsin's FSR reflects its risk-adjusted capital, which no longer supports its current rating. However, PRA recently contributed $20 million of capital to PIC Wisconsin and is currently working to secure an inter-company reinsurance agreement with its affiliate, The Medical Assurance Company, Inc., which would address the remaining capital shortfall.

The FSR will remain under review pending the successful implementation of the reinsurance agreement, which currently awaits regulatory approval. If the reinsurance agreement is approved and duly executed in accordance with the preliminary terms shared with A.M. Best, the FSR of PIC Wisconsin is likely to be affirmed.

The FSRs of A- (Excellent) and ICRs of "a-" have been affirmed for ProAssurance Group and its following members:

    -- Medical Assurance Company, Inc.
    -- ProNational Insurance Company
    -- Red Mountain Casualty Insurance Company, Inc.

    The FSR of B++ (Good) and ICR of "bbb" have been affirmed for
     NCRIC, Inc.

    The FSR of B (Fair) and ICR of "bb" have been affirmed for
     Woodbrook Casualty Insurance, Inc.

    The ICR of "bbb-" has been affirmed for ProAssurance Corporation.

    The following debt rating has been affirmed:

    ProAssurance Corporation--
    -- "bbb-" on $107 million 3.9% senior unsecured convertible
     debentures, due 2023

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.