FPIC Insurance Group, Inc. Reports First Quarter 2006 Results.

JACKSONVILLE, Fla. -- FPIC Insurance Group, Inc. ("FPIC") (Nasdaq:FPIC) reported consolidated income from continuing operations of $9.5 million, or $0.88 per diluted common share, for first quarter 2006, up from $6.6 million, or $0.62 per diluted common share, for first quarter 2005. Operating earnings increased to $9.4 million, or $0.87 per diluted common share, for first quarter 2006, up from $6.5 million, or $0.61 per diluted common share, for first quarter 2005.

For additional information regarding the use of operating earnings as a financial measure, see the discussion provided later in this release captioned "Non-GAAP Financial Measures."

"We delivered record top and bottom-line results in 2005, and we continued to see the positive results of our business strategy in the first quarter of 2006," said John R. Byers, President and Chief Executive Officer. "Higher revenues and underwriting profits at our insurance underwriting operation, along with continued good profitability of our insurance management business, drove our results for the quarter. I have a lot of confidence in our team and believe we are well positioned to continue providing value to our shareholders."

Unaudited Financial and Operational Highlights for First Quarter 2006
(as compared to first quarter 2005 unless otherwise indicated)

--  Consolidated operating earnings up 43%

--  16% return on average equity for the trailing 12 months

--  Net premiums earned up 17% as the result of reduced reinsurance
    and pricing improvements

--  Continued targeted market focus; policyholder retention in
    Florida remained strong at 92%

--  Net premiums written declined 9% primarily due to a 3% decline
    in professional liability policyholders and changes in
    business mix

--  90% combined ratio; overall underwriting margin grew $3.1 million,
    or 105%

--  Improved loss ratio due to favorable loss experience

--  Frequency and severity of claims continued to be within
    expectations

--  Net investment income increased 25% on portfolio growth and
    higher overall yield

--  Shareholders' equity and statutory surplus at the highest
    levels in FPIC's history as of March 31, 2006

--  Renewal of primary reinsurance program with improved terms and
    a 5% overall rate reduction

--  Incurred total share-based compensation expense of $0.6 million
    pre-tax, $0.3 million of which was the result of the adoption of
    Financial Accounting Standard No. 123 R, effective January 1,
    2006

--  Repurchased 72,040 shares of FPIC common stock during the quarter
    and settled the repurchase of 33,550 shares that had a trade date
    during December 2005; 194,732 shares remain available for
    repurchase under the current stock repurchase program

FPIC also reported the extension of the management agreement, between its subsidiary, Administrators For The Professions, Inc., and Physicians' Reciprocal Insurers through December 31, 2011.

Conference Call Information

We will host a conference call at 11:00 a.m., Eastern Time, Thursday, May 11, 2006, to review first quarter 2006 results. To access the conference call, please dial [phone] (USA) or [phone] (International) and use the access code 27310037.

The conference call will also be broadcast live over the Internet in a listen-only format via our corporate website at http://www.fpic.com. To access the call from FPIC's home page, click on "Investor Relations" and a conference call link will be provided to connect to the broadcast.

Questions can be submitted in advance of the call until 10:00 a.m., Eastern Time, Thursday, May 11, 2006, via e-mail at [e-mail] or through our corporate website at http://www.fpic.com, where a link on the "Investor Relations" page has been provided.

For individuals unable to participate in the conference call, a telephone replay will be available beginning at 1:00 p.m., Eastern Time, Thursday, May 11, 2006, and ending at 11:59 p.m., Eastern Time, Saturday, May 13, 2006. To access the telephone replay, dial [phone] (USA) or [phone] (International) and use the access code 88041234. A replay of the conference call webcast will also be available beginning at 1:00 p.m., Eastern Time, Thursday, May 11, 2006, on FPIC's website.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such statements are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements: of our plans, strategies and objectives for future operations; concerning new products, services or developments; regarding future economic conditions, performance or outlook; as to the outcome of contingencies; as to the value of our contract awards and programs; of beliefs or expectations; and of assumptions underlying any of the foregoing. Forward-looking statements may be identified by their use of forward-looking terminology, such as "believes," "expects," "may," "should," "would," "will," "intends," "plans," "estimates," "anticipates," "projects" and similar words or expressions. You should not place undue reliance on these forward-looking statements, which reflect our management's opinions only as of the date of this press release. Factors that might cause our results to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to:

i)     The effect on our insurance subsidiaries of changing market
       conditions that result from fluctuating cyclical patterns of
       the medical professional liability insurance business;
ii)    The competitive environment in which we operate, including
       reliance on agents to place insurance, physicians electing to
       practice without insurance coverage, related trends and
       associated pricing pressures and developments;
iii)   Business risks that result from our size, products, and
       geographic concentration;
iv)    Uncertainties relating to government and regulatory policies
       (such as subjecting us to insurance regulation or taxation in
       additional jurisdictions or amending, revoking or enacting any
       laws, regulations or treaties affecting our current
       operations);
v)     General economic conditions, either nationally or in our market
       areas, that are worse than expected;
vi)    The rates we charge for our products and services being subject
       to or mandated by legal requirements and regulatory approval,
       which could affect our business or reinsurance arrangements;
vii)   The actual amount of new and renewal business;
viii)  The uncertainties of the loss reserving process, including the
       occurrence of insured or reinsured events with a frequency or
       severity exceeding our estimates;
ix)    Business and financial risks associated with the
       unpredictability of court decisions;
x)     Legal developments, including claims for extra-contractual
       obligations or in excess of policy limits, in connection with
       the administration of insurance claims;
xi)    The dependence of our insurance management segment upon a major
       customer, Physicians' Reciprocal Insurers ("PRI"), for its
       revenue;
xii)   The effects of PRI's premium rate adequacy, claims experience,
       policyholder retention, financial position and overall market
       and regulatory environment on its ability to maintain or grow
       its premium base;
xiii)  Developments in reinsurance markets that could affect our
       reinsurance programs or our ability to collect reinsurance
       recoverables;
xiv)   Developments in financial and securities markets that could
       affect our investment portfolio;
xv)    The impact of rising interest rates on the market value of our
       investments and our interest costs associated with our long-
       term debt;
xvi)   The loss of the services of any key members of senior
       management;
xvii)  Risks of impairment of assets, generally, including the risk of
       impairment or inability to continue to recognize deferred
       acquisition costs, deferred tax assets, goodwill and other
       deferred or intangible assets;
xviii) Changes in our financial ratings resulting from one or more of
       these uncertainties or other factors and the potential impact
       on our agents' ability to place insurance business on our
       behalf;
xvix)  Other factors discussed in our Annual Report on Form 10-K for
       the year ended December 31, 2005, including Item 1A. Risk
       Factors, and Item 7. Management's Discussion and Analysis of
       Financial Condition and Results of Operations, filed with the
       Securities and Exchange Commission ("SEC") on March 16, 2006;
       and
xx)    Other factors discussed elsewhere within FPIC's Form 10-Q for
       the quarter ended March 31, 2006, filed with the SEC on May 10,
       2006.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

To supplement the consolidated financial information presented herein in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we report non-GAAP financial measures widely used in the insurance industry to evaluate financial performance over time. Operating earnings is a non-GAAP financial measure widely used by investors and analysts in the insurance sector to facilitate understanding of results by excluding: (i) the net effects of realized capital gains and losses, which are more closely tied to the financial markets; (ii) the cumulative effects of accounting changes and other infrequent or non-recurring items, which can affect comparability across reporting periods; and (iii) discontinued operations. Tangible book value is a further non-GAAP financial measure used by investors and analysts to gauge book values excluding goodwill and other intangible assets.

The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, see the table captioned "Reconciliation of Non-GAAP Measures to the Nearest Comparable GAAP Measures," provided later in this release. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and allows for greater transparency with respect to supplemental information used by us in our financial and operational decision making.

Corporate Profile

FPIC Insurance Group, Inc., through its subsidiary companies, is a leading provider of medical professional liability insurance for physicians, dentists and other healthcare providers, and a provider of insurance management services to other medical professional liability insurance carriers.

For all your investor needs, FPIC is on the Internet at http://www.fpic.com. You can also e-mail us at [e-mail].

FPIC Insurance Group, Inc.
Unaudited Selected Financial Data
(In thousands, except per common share data)
                                                       Three Months
                                                           Ended
Consolidated Statements of Income                    Mar 31,  Mar 31,
                                                       2006     2005
----------------------------------------------------------------------

Revenues
 Net premiums earned                                $ 58,878   50,195
 Insurance management fees                            11,281   10,274
 Net investment income                                 7,107    5,705
 Commission income                                       342      665
 Net realized investment gains                           185      136
 Other income                                            140      189
----------------------------------------------------------------------
  Total revenues                                      77,933   67,164
----------------------------------------------------------------------

Expenses
 Net losses and loss adjustment expenses ("LAE")      43,006   38,571
 Other underwriting expenses                           9,731    8,632
 Insurance management expenses                         8,158    7,399
 Interest expense                                      1,043      755
 Other expenses                                        1,810    1,882
----------------------------------------------------------------------
  Total expenses                                      63,748   57,239
----------------------------------------------------------------------

Income from continuing operations before income
 taxes and minority interest                          14,185    9,925
 Less: Income tax expense                              4,704    3,297
----------------------------------------------------------------------
Income from continuing operations before minority
 interest                                              9,481    6,628
 Less: Minority interest in income of consolidated
  subsidiary                                               4        1
----------------------------------------------------------------------
Income from continuing operations                      9,477    6,627

Discontinued Operations
Income from discontinued operations (net of income
 taxes)                                                   --      189
----------------------------------------------------------------------
Net income                                          $  9,477    6,816
======================================================================

Basic earnings per common share:
Income from continuing operations                   $   0.92     0.65
Discontinued operations                                   --     0.02
----------------------------------------------------------------------
Basic earnings per common share                     $   0.92     0.67
======================================================================

Diluted earnings per common share:
Income from continuing operations                   $   0.88     0.62
Discontinued operations                                   --     0.02
----------------------------------------------------------------------
Diluted earnings per common share                   $   0.88     0.64
======================================================================

Basic weighted average common shares outstanding      10,256   10,110
======================================================================

Diluted weighted average common shares outstanding    10,760   10,656
======================================================================
FPIC Insurance Group, Inc.
Unaudited Selected Financial Data, continued
(In thousands, except per common share data)

Selected Consolidated Statements of Financial
 Position Information
-----------------------------------------------        As of
                                                 Mar 31,     Dec 31,
                                                  2006        2005
                                               -----------------------
Total cash and investments                     $  789,069     773,803
Total assets                                   $1,308,188   1,308,541
Liability for losses and LAE                   $  665,747     663,466
Liability for losses and LAE, net of
 reinsurance                                   $  376,173     359,619
Long-term debt                                 $   46,083      46,083
Accumulated other comprehensive loss, net      $   (7,622)     (4,231)
Total shareholders' equity                     $  255,566     249,590
Book value per common share                    $    24.51       24.14
Tangible book value per common share (a,b)     $    22.70       22.32
Common shares outstanding                      $   10,428      10,339
Consolidated statutory surplus of insurance
 subsidiaries                                  $  201,023     193,584

(a) Excludes goodwill of $18,870 as of March 31, 2006 and December 31,
    2005.
(b) For additional information regarding the use of non-GAAP financial
    measures, see the discussion provided earlier in this release
    captioned "Non-GAAP Financial Measures" and the "Reconciliation of
    Non-GAAP Measures to the Nearest Comparable GAAP Measures" found
    later in this release.
Three Months Ended
                                                    Mar 31,   Mar 31,
                                                     2006      2005
                                                   -------------------
Selected Consolidated Cash Flow Information
---------------------------------------------------
Net cash provided by operating activities           $22,255    27,227
Net cash provided by (used in) investing activities $34,218   (11,163)
Net cash (used in) provided by financing activities $  (452)    1,274

Segment Reconciliation of Consolidated Revenues
---------------------------------------------------
Insurance                                           $66,203    56,191
Insurance management                                 11,781    11,085
Intersegment eliminations                               (51)     (112)
----------------------------------------------------------------------
  Consolidated revenues                             $77,933    67,164
======================================================================

Segment Reconciliation of Consolidated Income from
 Continuing Operations
----------------------------------------------------------------------
Insurance                                           $ 7,347     4,546
Insurance management                                  2,130     2,140
Intersegment eliminations                                --       (59)
----------------------------------------------------------------------
  Consolidated income from continuing operations    $ 9,477     6,627
======================================================================
FPIC Insurance Group, Inc.
Unaudited Selected Financial Data, continued
(Dollars in thousands)
                                                   Three Months Ended
                                                    Mar 31,   Mar 31,
                                                     2006      2005
                                                   -------------------
Selected Insurance Segment Information
---------------------------------------------------
GAAP Combined Ratio:
 Loss ratio                                          73.1 %    76.8 %
 Underwriting expense ratio                          16.5 %    17.2 %
----------------------------------------------------------------------
  Combined ratio                                     89.6 %    94.0 %
======================================================================

Direct and assumed premiums written                 $75,790    84,138
======================================================================

Net premiums written                                $67,243    74,113
======================================================================

Net Paid Losses and LAE on Professional Liability
 Claims:
 Net paid losses on professional liability claims   $13,604    10,916
 Net paid LAE on professional liability claims       12,620    10,846
----------------------------------------------------------------------
  Total net paid losses and LAE on professional
   liability claims                                 $26,224    21,762
======================================================================

Total professional liability claims with indemnity
 payment                                                 79        78
======================================================================

Professional Liability Claims and Incidents Closed
 Without Indemnity Payment:
 Total professional liability claims closed without
  indemnity payment                                     222       165
 Total professional liability incidents closed
  without indemnity payment                             249       309
----------------------------------------------------------------------
  Total professional liability claims and
   incidents closed without indemnity payment           471       474
======================================================================

Professional Liability Claims and Incidents
 Reported During the Period:
 Total professional liability claims reported           224       242
 Total professional liability incidents reported        245       273
----------------------------------------------------------------------
 Total professional liability claims and incidents
  reported                                              469       515
======================================================================


Total professional liability claims and incidents
 that remained open                                   4,482     5,134
======================================================================

Professional liability policyholders (1)             13,721    14,076
======================================================================

(1) Professional liability policyholders includes policyholders whose
 individual insurance is 90% reinsured under facultative reinsurance
 agreements. For the period ended March 31, 2005, 106 such
 policyholders previously reported under fronting arrangements have
 been reclassified to professional liability policyholders.
FPIC Insurance Group, Inc.
Reconciliation of Non-GAAP Measures to the Nearest Comparable GAAP
 Measures
(Dollars in thousands, except per share data)

Reconciliation of net income to operating earnings:
                                                       Three Months
                                                           Ended
                                                     Mar 31,  Mar 31,
                                                       2006     2005
                                                     -----------------

Net income                                           $ 9,477    6,816
----------------------------------------------------------------------

Adjustments to reconcile net income to operating
 earnings:
  Less: Net realized investment gains, net of income
   taxes (a)                                             114       84
  Less: Discontinued operations, net of income taxes      --      189
----------------------------------------------------------------------
    Total adjustments                                    114      273
----------------------------------------------------------------------

Operating earnings                                   $ 9,363    6,543
======================================================================

Diluted earnings per share:
Net income                                           $  0.88     0.64
Adjustments to reconcile net income to operating
 earnings                                              (0.01)   (0.03)
----------------------------------------------------------------------
Operating earnings                                   $  0.87     0.61
======================================================================

(a) All net realized investment gains, net of income taxes, for the
 periods reported relate to the insurance segment.



Reconciliation of shareholders' equity to tangible shareholders'
equity:
                                                         As of
                                                  Mar 31,    Dec 31,
                                                    2006       2005
                                                 ---------------------
Total shareholders' equity                       $ 255,566    249,590
Adjustments to reconcile total shareholders'
 equity to tangible shareholders' equity:
  Less: Goodwill                                    18,870     18,870

----------------------------------------------------------------------
Tangible shareholders' equity                    $ 236,696    230,720
======================================================================

Book value per common share                      $   24.51      24.14
======================================================================
Tangible book value per common share             $   22.70      22.32
======================================================================