Proassurance Corp. has a market cap of $1.84 billion; its shares were traded at around $58.29 with a P/E ratio of 9 and P/S ratio of 2.7. Proassurance Corp. had an annual average earning growth of 38.4% over the past 10 years.PRA is in the portfolios of Chuck Royce of Royce& Associates, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: loss exists but the entity does not intend to sell the debt security and it is not more likely than not that the entity will be required to sell the debt security before the anticipated recovery of its remaining amortized cost basis an impairment is to be separated into (a) the amount of the total impairment related to the credit loss and (b) the amount of total impairment related to all other factors. The credit loss component of the impairment is to be recognized in income of the current period. The non-credit component is to be recognized as a part of other comprehensive income (OCI). Transition provisions require a cumulative effect adjustment to reclassify the non-credit component of a previously recognized other-than-temporary impairment from retained earnings to accumulated other comprehensive income ...if an entity does not intend to sell and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis. We adopted the revised guidance as of the beginning of the quarter ended June 30, 2009. As of April 1, 2009, our debt securities included non-credit impairment losses previously recognized in earnings of approximately $5.4 million. In accordance with the transition provisions of the revised guidance, we reclassified these non-credit losses, net of tax, from retained earnings to accumulated other comprehensive income as of April 1, 2009 (a $3.5 million increase to retained earnings; a $3.5 million decrease to accumulated other comprehensive income).
ProAssurance Corporation is a holding company and is a legal entity separate and distinct from its subsidiaries. Because it has no other business operations, dividends from its operating subsidiaries represent a significant source of funds for its obligations, including debt service. Our insurance subsidiaries, in aggregate, are permitted to pay dividends of approximately $228 million during 2010 without prior approval. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile and the regulator may prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the surplus of the insurance subsidiary. Through the nine months ended September 30, 2010, $214 million of the permitted dividends have been paid, and one of our insurance subsidiaries after receiving the necessary regulatory approvals, has paid an additional dividend of $17 million. At September 30, 2010, we held cash and investments of approximately $351.1 million outside of our insurance subsidiaries that are available for use without regulatory approval, the majority of which we intend to use to finance the acquisition of American Physicians Service Group, Inc., as more fully discussed below.
On April 1, 2009 we acquired Podiatry Insurance Company of America and subsidiaries (PICA) through a cash sponsored demutualization as a means of expanding our professional liability insurance operations. PICA provides professional liability insurance primarily to podiatric physicians, chiropractors and other healthcare providers throughout the United States. We purchased all of PICAs outstanding stock created in the demutualization for $135 million in cash, of which $15 million was a surplus contribution to be used to provide renewal premium credits to eligible policyholders over a three year period beginning in 2010.
On August 31, 2010, we entered into a definitive agreement with American Physicians Service Group, Inc. (NASDAQ: AMPH) (APS), whereby ProAssurance will acquire all outstanding shares of APS for $32.50 per share. The transaction is expected to close in the fourth quarter of 2010 and to require cash outlays of approximately $250 million. APS primarily provides medical professional liability insurance in Texas and reported gross written premium of $65 million for the year ended December 31, 2009 and $33 million for the six months ended June 30, 2010. APS net assets totaled $167 million at June 30, 2010. The transaction is subject to customary conditions, including regulatory and APS shareholder approval. The APS shareholder vote is scheduled for November 29, 2010.
Our operating activities provided positive cash flows of approximately $108.6 million and $15.9 million for the nine months ended September 30, 2010 and 2009, respectively. Operating cash flows for 2010 and 2009 compare as follows:
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