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Business Combinations
 12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Business Combinations
Business Combinations
All entities acquired in 2014 and 2013 were accounted for in accordance with GAAP relating to Business Combinations. No entities were acquired during 2015.
On January 1, 2014, ProAssurance completed the acquisition of Eastern by purchasing 100% of its outstanding common shares for cash of $205 million. Eastern is based in Lancaster, Pennsylvania and specializes in workers' compensation insurance and reinsurance products and services, including alternative market solutions. ProAssurance incurred a nominal amount of expenses related to the purchase during the year ended December 31, 2015 and approximately $2.2 million and $0.9 million during the years ended December 31, 2014 and 2013, respectively. These expenses were included as a part of operating expenses in the periods incurred.
On January 1, 2013, ProAssurance completed the acquisition of Medmarc Mutual Insurance Company, now Medmarc Casualty Insurance Company (Medmarc), through a sponsored demutualization. Medmarc is based in Chantilly, Virginia and provides medical technology liability insurance for medical technology and life sciences companies and also provides legal professional liability insurance. ProAssurance acquired Medmarc for cash of $153.7 million, including the funding of future policy credits for eligible members of $7.5 million. ProAssurance incurred expenses related to the purchase of approximately $2.6 million during the year ended December 31, 2013. These expenses were included as a part of 2013 operating expenses.
For the Medmarc acquisition, the purchase consideration was less than the estimated fair value of the net assets acquired resulting in a gain on the acquisition of $32.3 million. ProAssurance believes it was able to acquire Medmarc for less than the fair value of its net assets due to Medmarc's declining premium base and its small capital position relative to other insurers in the medical technology and life sciences products liability market.
The following table provides Pro Forma Consolidated Results for the years ended December 31, 2014 and 2013 as if the Eastern transaction had occurred on January 1, 2013. ProAssurance Actual Consolidated Results have been adjusted by the following, including tax effects, to reflect the Pro Forma Consolidated Results below. Medmarc actual results are included in ProAssurance consolidated results for 2014 and 2013; accordingly, the Pro Forma Consolidated Results below do not include any adjustments associated with the Medmarc acquisition.
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For the year ended December 31, 2013, ProAssurance 2013 Actual Consolidated Results, which did not include Eastern, have been adjusted to include Eastern's 2013 operating results. ProAssurance Actual Consolidated Results for the year ended December 31, 2014 included Eastern's operating results (Revenue of $202.2 million and Net income of $9.1 million).
•
Certain costs included in ProAssurance Actual Consolidated Results for the year ended December 31, 2014 have been reported in the Pro Forma Consolidated Results as if the costs had been incurred for the year ended December 31, 2013. Such costs include direct transaction costs and certain compensation costs directly related to the integration of Eastern operations. There was a nominal amount of compensation costs related to the acquisition of Eastern in 2015.
•
Net income for the year ended December 31, 2013 was reduced to reflect the net effect from amortization of intangible assets and debt security premiums and accretion of discounts recorded as a part of the Eastern purchase price allocation. No such adjustments were necessary for the period ended December 31, 2014 as actual results already include amortization and accretion associated with the Eastern transaction.
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
(In thousands)
ProAssurance
Pro Forma
Consolidated
Results
 
ProAssurance
Actual
Consolidated Results
 
ProAssurance
Pro Forma
Consolidated
Results
 
ProAssurance
Actual
Consolidated Results
Revenue
$852,326
 
$852,326
 
$926,873
 
$740,178
Net income
$197,527
*
$196,565
 
$297,149
*
$297,523

* Includes adjustments related to Eastern of $1.0 million in 2014 and $0.4 million in 2013.