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VENTUREWIRE Monday, October 02, 2006 Medicus Raises $15M Toward $100M Series A Funding Austin -- Medicus Insurance Holdings Inc., a provider of malpractice insurance for the state of Texas, said it has secured $15 million in Series A preferred stock for an equity credit line of up to $100 million. Private equity investor The Cypress Group served as the lead investor for the funding, investing $10 million while CHL Medical Partners invested $5 million toward the round. The round's investors will also include Medicus' management team. Medicus Insurance Holding provides regulated medical malpractice insurance coverage to health care providers through subsidiary Medicus Insurance Co. The company provides coverage in all disciplines to physicians and medical providers ranging from individual practices to large group practices. The company plans to use this funding as capital and surplus for its insurance company, Medicus Chairman and Chief Executive Howard Lamb said. The company plans to expand its insurance offerings and expand into up to seven to 10 states, he said. Funded in August, the company was licensed this month, so far, to provide malpractice only in Texas. The rest of the line of credit is expected to come into the company as needed, with the total investment expected to fully fund the company's Texas operations, Cypress Group Principal Walter Keenan said. As the company expands its offerings or geographic locations into 2007, the investors expect to fund Medicus as the developments are executed, Keenan said. This is the first investment in the medical malpractice insurance area for The Cypress Group, Keenan said. The firm, which has been looking at the sector for several years, decided to invest in Medicus because of the potential market and the company's skill set in this area, he said. The Cypress Group has invested more than 25% of its total investments in the insurance space. Based in Austin, Medicus currently has 11 employees. Receive daily e-mail news about the universe of venture capital, private equity, and high-tech startups -- subscribe to VentureWire at: ©2006 Technologic Partners
Medicus jumps into malpractice business Austin Business Journal - 12:18 PM CDT Monday An Austin insurer is diving headlong into the newly lucrative medical malpractice insurance market. Medicus Insurance Co. says it is offering lower-priced, fully regulated medical malpractice coverage to Texas health care providers. Medicus' parent company has set aside the possibility of funding the new venture to the tune of $100 million. The company's launch comes shortly after the three-year anniversary of the passage of Proposition 12, which created a constitutional amendment cementing the Texas' legislature's $250,000 noneconomic damage awards cap for physicians and hospital systems in malpractice suits. "Medicus is the payoff from tort reform, in terms of less expensive coverage for doctors, by an insurance company dedicated to promoting more accessible and affordable health care in Texas," says Dr. Charles Bailey, former president of the Texas Medical Association and a founding principal of Medicus. "We promised this would happen when Proposition 12 was adopted and Medicus is delivering on that promise." Medicus was founded by insurance veterans and Texas medical professionals. The company says it offers comprehensive malpractice coverage, including entity coverage, ancillary staff coverages, locum tenens policies and other options, to all specialties of Texas doctors, surgeons and related medical providers. Coverage is available for nurse practitioners, nurses and physician assistants. The company intends to focus on individual physicians and small groups with up to 25 in a practice. However, Medicus says it has the experience and capabilities to cover much larger groups. Medicus Insurance Holdings Inc., the parent company of Medicus Insurance Co., has entered into a financing arrangement with institutional investors for up to $100 million of Series A Preferred Stock. In the initial round of funding, $10 million has been contributed to Medicus Insurance Co. Up to an additional $85 million of Series A Preferred may be issued to support future growth. Texas' longtime medical malpractice insurers report doing well since tort reform. In its 2005 annual report, Texas' largest medical malpractice insurer, the Texas Medical Liability Trust, detailed how, in just five years since 2001, its surplus has gone from $22.9 million to $203.4 million -- an increase of almost 800 percent. Over the same period, its assets almost doubled, going from $333.9 million in 2001 to $588.7 million last year. During the same time, however, its insurance losses went down by almost half, from $137.2 million in 2001 to $73.2 million last year. "The passage of tort reform was a major victory for TMLT in 2003," TMLT Chief Financial Officer Ray Demel wrote in the report. "We are seeing the impact of this in our financial statements."
Press Release Source: Medicus Insurance Holdings, Inc. Medicus Insurance Holdings, Inc. Secures Funding From The Cypress Group and CHL Medical Partners Monday October 2, 11:03 am ET New Insurance Company to Target Professional Medical Liability Market AUSTIN, Texas, Oct. 2 /PRNewswire/ -- Medicus Insurance Holdings, Inc. announced today that it has entered into a financing arrangement with institutional investors for the issuance of up to $100 million of Series A Preferred Stock. Medicus and its operating subsidiary, Medicus Insurance Company, were formed in order to provide a new source of professional medical liability insurance coverage to physicians in Texas and other states. In the first round of funding Medicus Insurance Holdings, Inc. received $15 million, with subsequent rounds to support growth expected over the next three years. Sponsoring investors of Medicus are affiliates of The Cypress Group and CHL Medical Partners. The Medicus management team, led by Howard H. Lamb and Sheldon Davidow, has also made a significant investment in the company. The Medicus management team has extensive industry experience and local roots in the Texas market. Over the course of his 50-year career in the insurance industry, Medicus CEO Howard Lamb served as CEO of The Doctors Company and held other senior leadership positions in the insurance industry. Medicus President and Chief Operating Officer Sheldon Davidow has over 25 years of insurance industry experience and has worked with Mr. Lamb previously as Executive Vice President of The Doctors Company. Charles W. Bailey, Jr., M.D., J.D., former President of the Texas Medical Association, will serve as the company's Vice President of Medical Relations. "Medicus offers the medical community a compelling combination of a highly experienced management team supported by a substantial capital base," said Howard Lamb. "We look forward to becoming the insurer of choice for physicians in Texas and plan to earn their confidence by delivering quality, service and value in our product offerings." Speaking on behalf of the investor group, Walter Keenan of The Cypress Group, said, "We congratulate Howard and Sheldon for assembling an extraordinary team of industry professionals at Medicus and for becoming a fully licensed and admitted carrier in the state of Texas. We are grateful for the encouraging response to Medicus' startup from doctors and their agents, and look forward to supporting the company's future growth." The shares of common stock and Series A Preferred Stock of Medicus Insurance Holdings, Inc. have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful. About The Cypress Group The Cypress Group is a New York-based private equity sponsor managing two private equity funds with over $3 billion of invested capital. Cypress insurance industry investments have included Montpelier Re Holdings, Ltd.; Catlin Group Limited.; Financial Guaranty Insurance Company (FGIC); Lancashire Holdings Limited; and Scottish Re Group Limited. More information about Cypress may be found at http://www.cypressgp.com . About CHL Medical Partners CHL Medical Partners is a Stamford, Conn.-based venture capital firm founded in 1990, managing funds with combined committed capital of more than $300 million. CHL has made over 70 early-stage private investments in the healthcare sector. More information about CHL may be found at http://www.chlmedical.com . About Medicus Insurance Company Medicus Insurance Holdings, Inc. is a Delaware holding company whose sole subsidiary, Medicus Insurance Company, offers malpractice insurance to physicians, surgeons and related medical service providers in the state of Texas. The Medicus leadership team is comprised of insurance and medical leaders dedicated to providing lower-priced malpractice coverage that supports and protects medical practitioners in today's complex health care environment. Source: Medicus Insurance Holdings, Inc.
Medicus Insurance Holdings, Inc. Secures Funding From The Cypress Group and CHL Medical Partners Medicus Insurance Holdings, Inc. announced today that it has entered into a financing arrangement with institutional investors for the issuance of up to $100 million of Series A Preferred Stock. Medicus and its operating subsidiary, Medicus Insurance Company, were formed in order to provide a new source of professional medical liability insurance coverage to physicians in Texas and other states. In the first round of funding Medicus Insurance Holdings, Inc. received $15 million, with subsequent rounds to support growth expected over the next three years. Sponsoring investors of Medicus are affiliates of The Cypress Group and CHL Medical Partners. The Medicus management team, led by Howard H. Lamb and Sheldon Davidow, has also made a significant investment in the company. The Medicus management team has extensive industry experience and local roots in the Texas market. Over the course of his 50-year career in the insurance industry, Medicus CEO Howard Lamb served as CEO of The Doctors Company and held other senior leadership positions in the insurance industry. Medicus President and Chief Operating Officer Sheldon Davidow has over 25 years of insurance industry experience and has worked with Mr. Lamb previously as Executive Vice President of The Doctors Company. Charles W. Bailey, Jr., M.D., J.D., former President of the Texas Medical Association, will serve as the company's Vice President of Medical Relations. "Medicus offers the medical community a compelling combination of a highly experienced management team supported by a substantial capital base," said Howard Lamb. "We look forward to becoming the insurer of choice for physicians in Texas and plan to earn their confidence by delivering quality, service and value in our product offerings." Speaking on behalf of the investor group, Walter Keenan of The Cypress Group, said, "We congratulate Howard and Sheldon for assembling an extraordinary team of industry professionals at Medicus and for becoming a fully licensed and admitted carrier in the state of Texas. We are grateful for the encouraging response to Medicus' startup from doctors and their agents, and look forward to supporting the company's future growth." The shares of common stock and Series A Preferred Stock of Medicus Insurance Holdings, Inc. have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.
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