FPIC Insurance Group, Inc. Reports Second Quarter 2005 Results.

JACKSONVILLE, Fla. -- FPIC Insurance Group, Inc. ("FPIC") (Nasdaq:FPIC) today reported net income of $10.3 million, or $0.97 per diluted share, for the second quarter 2005, up from net income of $6.5 million, or $0.62 per diluted share, for the second quarter 2004. Operating earnings increased to $8.5 million, or $0.80 per diluted share, for the second quarter 2005, up from operating earnings of $5.6 million, or $0.54 per diluted share, for the second quarter 2004.

For the six months ended June 30, 2005, net income was $17.1 million, or $1.61 per diluted share, up from net income of $13.5 million, or $1.30 per diluted share, for the six months ended June 30, 2004. For the six months ended June 30, 2005, operating earnings increased to $15.0 million, or $1.41 per diluted share, up from operating earnings of $10.8 million, or $1.05 per diluted share, for the six months ended June 30, 2004.

Operating earnings is a non-GAAP measure widely used in the insurance industry to evaluate financial performance over time. Operating earnings is also an often-used tool of investors and analysts in our sector to facilitate understanding of results by excluding the net effects of realized capital gains and losses, which are tied to the financial markets, and the cumulative effects of accounting changes and other infrequent or non-recurring items, which can affect comparability across reporting periods. The table below reconciles net income to operating earnings.

Three Months Ended    Six Months Ended
Reconciliation of Net Income   ------------------   ------------------
to Operating Earnings          June 30,  June 30,   June 30,  June 30,
(In Thousands)                   2005      2004       2005      2004
----------------------------   --------  --------   --------  --------

Net Income                     $ 10,310    6,457     17,125    13,467
----------------------------------------------------------------------

 Adjustments to reconcile net
  income to operating earnings:
   Less: Net realized
    investment (losses) gains,
    net of income taxes(a)         (107)     410        (24)    2,133
   Less: Discontinued
    operations, net of income
    taxes                         1,913      408      2,102       506
----------------------------------------------------------------------
     Total adjustments            1,806      818      2,078     2,639

       Operating earnings      $  8,504    5,639     15,047    10,828
======================================================================
(a) All net realized investment gains, net of income taxes, for the
    periods reported relate to the insurance segment.

"The second quarter was a strong quarter for us," said John Byers, President and Chief Executive Officer. "We delivered significant growth in revenue and profits, while continuing to grow our balance sheet. We have successfully sustained in 2005 the strong momentum that we achieved in 2004."

Financial Highlights: Second Quarter 2005 (as compared to second quarter 2004 unless otherwise indicated)

- Consolidated operating earnings up 51%;

- Fourteen consecutive quarters of positive consolidated operating earnings;

- Net premiums earned up 70% as the result of reduction of reinsurance and pricing improvements;

- Combined ratio down 1% to 89% from 90%; overall underwriting margin improved $2.9 million, or 95%;

- Twenty-six consecutive quarters of positive operating earnings from insurance management operations;

- Insurance management fees up 14% due to revenue growth of managed carriers;

- Increase in assets, reserves, shareholders' equity and statutory surplus since year-end;

- Book value per share and tangible book value per share increased since year-end;

- 15% return on average equity for the trailing twelve months.

Operational Highlights: Second Quarter 2005

- Continued targeted market focus;

- Policyholder retention in Florida remained strong at over 90%;

- Built-in revenue growth resulting from reduction of reinsurance;

- Solid underwriting results;

- Overall claims results consistent with expectations; continued favorable trends in the number of newly reported claims and incidents;

- Over $34 million of cash flow generated by operations;

- Completed divestiture of third party administration operations.

"Our business strategy drives our performance," continued Mr. Byers. "Our two business segments, insurance underwriting and insurance management, continue to complement one another and together create a distinct competitive advantage for us. Throughout 2005, our focus will continue to be on performance throughout our organization and on delivering long-term value for our shareholders."

Conference Call

FPIC will host a conference call at 11:00 a.m., Eastern Time, Tuesday, August 9, 2005, to review second quarter 2005 results. Mr. Byers and Kim D. Thorpe, Executive Vice President and Chief Financial Officer, will host the call. Messrs. Byers and Thorpe, together with Robert E. White, Jr., the leader of FPIC's insurance operations, will answer questions from analysts and investors. To access the conference call, please dial [phone] (USA) or [phone] (International) and use the access code 35933826.

The conference call will also be broadcast live over the Internet in a listen-only format via FPIC's 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 listeners to the broadcast.

Questions can be submitted in advance of the call until 10:00 a.m., Eastern Time, Tuesday, August 9, 2005 via e-mail at [e-mail] or through FPIC's 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, Tuesday, August 9, 2005 and ending at 11:59 p.m., Eastern Time, Thursday, August 11, 2005. To access the telephone replay, dial [phone] (USA) or [phone] (International) and use the access code 21633612. A replay of the conference call webcast will also be available beginning at 1:00 p.m., Eastern Time, Tuesday, August 9, 2005 on FPIC's website.

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.

Caution Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Any written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. These forward-looking statements can be identified by such words as, but not limited to, "believe," "expect," "intend," "anticipate," "estimate," "project," "plan," "foresee," "hope," "should," "will," "will likely result" or "will continue" and other similar expressions. These forward-looking statements are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from such statements. These risks, uncertainties and other factors that could adversely affect our operations or cause actual results to differ materially from anticipated results include, but are not limited to, the following:

i)     Risk factors, including the effect on reserves and underwriting
       results, associated with changing market conditions that result
       from fluctuating cyclical patterns of the property and casualty
       insurance business;

ii)    The uncertainties of the loss reserving process;

iii)   The occurrence of insured or reinsured events with a
       frequency or severity exceeding our estimates;

iv)    The impact of surplus constraints on growth;

v)     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;

vi)    The actual amount of new and renewal business;

vii)   Business risks that result from our size and geographic
       concentration;

viii)  Developments in reinsurance markets that could affect our
       reinsurance programs;

ix)    The ability to collect reinsurance recoverables;

x)     The dependence of our insurance management segment upon a major
       customer, Physicians' Reciprocal Insurers ("PRI"), for its
       revenue, and consequently, the effects of PRI's premium rate
       adequacy, claims experience, policyholder retention, and
       overall financial position on its ability to maintain or grow
       its premium base;

xi)    Developments in financial and securities markets that could
       affect our investment portfolio and financing plans;

xii)   Risk factors associated with the impact of rising interest
       rates on the market value of our investments;

xiii)  Risk factors associated with the impact of rising interest
       rates on our interest costs associated with our long-term debt;

xiv)   Rates being subject to or mandated by legal requirements and
       regulatory approval, which could affect our business or
       reinsurance arrangements;

xv)    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);

xvi)   Legal developments, including claims for extra-contractual
       obligations or in excess of policy limits in connection with
       the administration of insurance claims;

xvii)  Business and financial risks associated with the
       unpredictability of court decisions;

xviii) The loss of the services of any of our executive officers;

xix)   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;

xx)    General economic conditions, either nationally or in our
       market areas, that are worse than expected;

xxi)   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; and

xxii)  Other risk factors discussed elsewhere within FPIC's Form
       10-Q for the quarter ended June 30, 2005, filed with the United
       States Securities and Exchange Commission ("SEC") on August 8,
       2005; and within FPIC's Annual Report on Form 10-K for the year
       ended December 31, 2004, filed with the SEC on March 15, 2005.

Readers are cautioned not to place undue reliance on these 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.

FPIC Insurance Group, Inc.
                  Unaudited Selected Financial Data
                (In Thousands, Except per Share Data)


                               Three Months Ended    Six Months Ended
                               ------------------    ----------------
Consolidated Statements of     June 30,  June 30,   June 30,  June 30,
 Income                          2005      2004       2005      2004
--------------------------     --------  --------   --------  --------

Revenues
 Net premiums earned           $53,882    31,668    104,076    66,680
 Insurance management fees      10,294     9,027     20,568    17,492
 Net investment income           6,316     4,571     12,021    10,185
 Commission income                 449     1,854      1,114     3,342
 Net realized investment
  (losses) gains                  (175)      667        (39)    3,473
 Other income                      172       164        362       362
----------------------------------------------------------------------
    Total revenues              70,938    47,951    138,102   101,534
----------------------------------------------------------------------

Expenses
 Net losses and loss adjustment
  expenses ("LAE")              40,955    27,258     79,526    56,632
 Other underwriting expenses     6,974     1,356     15,606     4,218
 Insurance management expenses   7,737     7,485     15,136    14,772
 Interest expense on debt          841       605      1,596     1,196
 Other expenses                  1,825     1,934      3,707     3,636
----------------------------------------------------------------------
    Total expenses              58,332    38,638    115,571    80,454
----------------------------------------------------------------------

Income from continuing
 operations before income
 taxes and minority interest    12,606     9,313     22,531    21,080
 Less: Income tax expense        4,283     3,125      7,580     7,842
----------------------------------------------------------------------
Income from continuing
 operations before
 minority interest               8,323     6,188     14,951    13,238
 Less: Minority interest           (74)      139        (72)      277
----------------------------------------------------------------------
Income from continuing
 operations                      8,397     6,049     15,023    12,961
----------------------------------------------------------------------
Discontinued Operations
 Income from discontinued
  operations (net of income
  tax expense)                     180       408        369       506
 Gain on disposal of
  discontinued operations
  (net of income tax expense)    1,733         -      1,733         -
----------------------------------------------------------------------
 Discontinued operations         1,913       408      2,102       506

Net income                     $10,310     6,457     17,125    13,467
======================================================================

Basic earnings per common
 share:
Income from continuing
 operations                    $  0.82      0.61       1.48      1.31
Discontinued operations           0.19      0.04       0.21      0.05
----------------------------------------------------------------------
Basic earnings per common
 share                         $  1.01      0.65       1.69      1.36
======================================================================

Diluted earnings per common
 share:
Income from continuing
 operations                    $  0.79      0.58       1.41      1.25
Discontinued operations           0.18      0.04       0.20      0.05
----------------------------------------------------------------------
Diluted earnings per common
 share                         $  0.97      0.62       1.61      1.30
======================================================================

Basic weighted average common
 shares outstanding             10,192     9,979     10,151     9,929
----------------------------------------------------------------------

Diluted weighted average
 common shares outstanding      10,672    10,394     10,663    10,360
======================================================================


                      FPIC Insurance Group, Inc.
                  Unaudited Selected Financial Data
                (In Thousands, Except per Share Data)
                             (continued)

                                                         As of
                                                ----------------------
Selected Consolidated Statements of Financial    June 30,     Dec 31,
 Position Information                               2005       2004
---------------------------------------------   ----------  ----------
Total cash and investments                      $  808,443    683,968
Total assets                                    $1,346,563  1,271,306
Liability for losses and LAE                    $  641,038    635,118
Liability for losses and LAE, net of
 reinsurance                                    $  336,871    301,699
Long term debt                                  $   46,083     46,083
Total shareholders' equity                      $  237,114    217,120
Total shareholders' equity, excluding
 FAS 115 (a)                                    $  235,816    214,510
Book value per common share                     $    22.94      21.56
Book value per common share, excluding
 FAS 115 (a)                                    $    22.81      21.30
Tangible book value per common
 share (b)                                      $    21.07      19.63
Tangible book value per common share,
 excluding FAS 115 (a,b)                        $    20.94      19.37
Common shares outstanding                           10,338     10,070
Statutory surplus of insurance
 subsidiaries                                   $  171,941    160,242

(a) Excludes the after-tax effect of unrealized gains/losses
relating to our fixed maturity securities. These amounts are non-GAAP
measures commonly used by analysts to gauge stockholders' equity and
book values excluding the effects of unrealized gains/losses on fixed
maturity securities generated by fluctuations in the investment
markets.

(b) Excludes goodwill of $18,870 and $18,870 and intangible assets
of $450 and $561 as of June 30, 2005 and December 31, 2004,
respectively. Tangible book value is a non-GAAP measure used by
analysts and investors to gauge book values excluding the effects of
goodwill and other intangible assets.




                      FPIC Insurance Group, Inc.
                  Unaudited Selected Financial Data
                        (Dollars in Thousands)



                                  Three Months Ended Six Months Ended
                                  ------------------ -----------------
                                  June 30,  June 30, June 30, June 30,
                                    2005      2004     2005     2004
                                  --------- -------- -------- --------
Selected Consolidated Cash Flow
 Information
-------------------------------
Net cash provided by operating
 activities                       $ 34,042    6,915   61,269    4,207
Net cash used in investing
 activities                       $(40,993) (26,335) (52,156) (25,862)
Net cash provided by financing
 activities                       $  1,711      407    2,985    2,248

Segment Reconciliation of Total
 Revenues
-------------------------------
Insurance                         $ 60,148   37,095  116,338   80,739
Insurance management                11,040   11,790   22,125   22,809
Third party administration               -        -        -        -
Intersegment eliminations             (250)    (934)    (361)  (2,014)
----------------------------------------------------------------------
 Total revenues                   $ 70,938   47,951  138,102  101,534
======================================================================

Segment Reconciliation of Net
 Income
-----------------------------
Insurance                         $  6,596    3,735   11,142    8,637
Insurance management                 1,844    2,399    3,983    4,492
Third party administration           1,870      323    2,000      338
----------------------------------------------------------------------
 Net income                       $ 10,310    6,457   17,125   13,467
======================================================================

Selected Insurance Segment
 Information
--------------------------
GAAP combined ratio:
--------------------
 Loss ratio                           76.0%    86.1%    76.4%    84.9%
 Underwriting expense ratio           12.9%     4.3%    15.0%     6.3%
----------------------------------------------------------------------
 Combined ratio                       88.9%    90.4%    91.4%    91.2%
======================================================================

Direct and assumed premiums
 written                          $ 67,160   77,102  151,297  175,705
======================================================================

Net premiums written              $ 58,280   33,327  132,392   76,930
======================================================================

Net paid losses and LAE on
 professional liability
 claims (1)                       $ 30,820   30,584   52,582   62,523
======================================================================

Total professional liability
 claims with indemnity payment         106       88      184      189
======================================================================

Total professional liability claims
 and incidents closed without
 indemnity payment                     452      585      926    1,077
======================================================================

Total professional liability
 claims reported                       253      318      503      590
Total professional liability
 incidents reported                    232      347      497      618
----------------------------------------------------------------------
Total professional liability
 claims and incidents reported         485      665    1,000    1,208
======================================================================

                                                           As of
                                                     -----------------
                                                     June 30, June 30,
                                                       2005     2004
                                                     -------- --------
Total professional liability claims and
 incidents that remained open                          5,091    5,441
======================================================================

Professional liability policyholders
 (excluding fronting arrangements) (2)                14,016   13,433
======================================================================

Professional liability policyholders under
 fronting arrangements(2)                                  -      137
======================================================================

(1) For the purpose of period over period comparison, net paid
losses do not take into account $10,180 received in connection with
the American Professional Assurance, Ltd. (APAL) ceded reinsurance
commutation during the second quarter of 2005, which would be a
reduction to reported net paid losses.

(2) Professional liability policyholders (excluding fronting
arrangements) includes policyholders whose individual insurance is 90%
reinsured under facultative reinsurance agreements. For the period
ended June 30, 2004, 92 such policyholders previously reported under
fronting arrangements have been reclassified to professional liability
policyholders (excluding fronting arrangements).