FPIC Insurance Group, Inc. Reports Second Quarter Earnings.

JACKSONVILLE, Fla.--(BUSINESS WIRE)--Aug. 10, 1999--

FPIC Insurance Group, Inc. (Nasdaq:FPIC) today reported operating earnings per share of $0.71 for the second quarter ended June 30, 1999, up 37% from the $0.52 per share reported for the second quarter of 1998. Net income for the second quarter of 1999 increased 48%, from $5.0 million for the second quarter of 1998 to $7.4 million.

Total revenues for the second quarter of 1999 were $39.4 million, an increase of 29% from the $30.5 million reported for the second quarter of 1998. This revenue growth included a 16% increase in net premiums earned and an 11% increase in net investment income. The revenue growth also included a 170% increase in fee-based income, primarily due to an acquisition. Total expenses for the second quarter of 1999 increased 25% from the second quarter of 1998, from $23.4 million for the second quarter of 1998 to $29.3 million. For the quarter, loss and loss adjustment expenses decreased 19%, from $18.2 million for the second quarter of 1998 to $14.7 million, due to a change in the mix of the Company's business, assumed reinsurance premium, a rate increase on Florida Physicians Insurance Company, Inc.'s MPL business, a decline in the frequency of claims and the release of loss reserves for periods prior to the 1997 report year. The decline in the frequency of reported MPL claims, coupled with the rate increase, has permitted Florida Physicians Insurance Company to record losses in the current year at a loss ratio of 90%. Florida Physicians Insurance Company released reserves related to prior years experience of approximately $8.1 million during the second quarter of 1999 compared to $4.0 million in the second quarter of 1998. These developments were partially offset by adverse development in the Florida Dental Association ("FDA") health plan. The Company has fully utilized a $2.2 million rate stabilization fund that was assumed with the FDA health plan. In addition, the Company has expended an additional $1.0 million to cover such adverse development. Other underwriting expenses for the quarter increased from $2.6 million for the second quarter of 1998 to $6.5 million due to acquisitions and an increase in assumed reinsurance premium, which has a higher expense load. Claims administration and management expenses for the quarter increased from $2.4 million in the second quarter of 1998 to $6.2 million, primarily due to an acquisition.

William R. Russell, FPIC's President and CEO, stated "we are continuing our focus on efficiently operating and integrating our existing operations and to seek strategic acquisition opportunities."

FPIC also announced that its subsidiary, Employers Mutual, Inc. ("EMI"), has completed the acquisition of the assets of Brokerage Services, Inc. ("BSI") and Group Brokerage, Inc. ("GBI"), related corporations headquartered in Albuquerque, New Mexico that provide third party administration services for self-insured and fully insured health plans. The consideration paid by EMI for such assets aggregated approximately $1.0 million. In connection with the acquisition, the senior management of BSI and GBI were retained by EMI and will continue to operate out of Albuquerque, New Mexico offices. William R. Russell, FPIC's President and CEO, stated "While this constitutes a small acquisition, it is an important step in our previously announced strategy of acquiring and consolidating the operations of small to medium sized third party administrators."

As of June 30, 1999, there were 9,868,797 shares of FPIC common stock outstanding. Book value was $17.51 per share, excluding the effects of unrealized gains on investments (SFAS 115).

FPIC Insurance Group, Inc., through its subsidiary companies, is a leading provider of professional liability and health insurance for physicians, dentists, hospitals and other healthcare providers. In addition, FPIC provides third-party administration services both within and outside the healthcare marketplace. Its largest insurance subsidiary, Florida Physicians Insurance Company, Inc., is rated A- (Excellent) by A.M. Best.

Copies of the Company's Form 10-Q Report for the second quarter 1999 will be made available upon request after the report is filed with the Securities and Exchange Commission.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This news release contains historical information, as well as forward-looking statements, that are based on FPIC Insurance Group, Inc.'s estimates and expectations of future events. Associated with this are certain risks and uncertainties that could cause actual results to materially differ from those reflected in the forward-looking statements. FPIC's financial position and results of operations are subject to fluctuations due to a variety of factors. Unexpected changes in loss trends in any period could have a materially adverse effect on the company. Reevaluations of loss and loss adjustment expense (LAE) reserves could result in an increase or decrease in reserves and a corresponding adjustment to earnings. (LAE reserves are costs associated with the settlement of claims.) In light of the many uncertainties associated with the forward-looking statement information, historical results of operations are not necessarily indicative of future earnings nor should such information be regarded as a representation by FPIC, or any person associated with FPIC, that FPIC's objectives will be met. -0-

                   Consolidated Statements of Income
                              (Unaudited)

                         3 mos.      3 mos.      6 mos.      6 mos.
                         ended       ended       ended       ended
                        6/30/99     6/30/98     6/30/99     6/30/98
                      =========== =========== =========== ===========

Gross premiums
 written and
 assumed              $38,159,865 $25,662,544 $75,681,788 $55,514,036
Net premiums
 written and
 assumed              $32,019,874 $23,194,511 $64,288,254 $49,779,573
Revenues
 Net premiums
  earned              $26,549,586 $22,954,687 $54,133,175 $40,809,986
 Net investment
  income                4,880,776   4,372,425   9,332,524   8,712,179
 Net realized
  investment
  gains (losses)            9,298     (32,497)    313,356     (47,219)
 Claims
  administration
  and management
  fees                  6,205,022   2,513,422  12,439,337   5,103,421
 Commission
  income                1,230,607     242,839   1,977,360     468,943
 Other income             482,778     408,995   1,170,692     899,241
                      ----------- ----------- ----------- -----------
 Total revenues        39,358,067  30,459,871  79,366,444  55,946,551
                      ----------- ----------- ----------- -----------
Expenses
 Net losses
  and loss
  adjustment
  expenses             14,725,790  18,164,209  33,374,912  32,682,159
 Other
  underwriting
  expenses              6,491,780   2,584,922  10,494,491   4,369,929
 Claims
  administration
  and management
  expenses              6,159,814   2,365,344  12,078,484   4,657,084
 Interest
  expense                 911,898      71,374   1,754,939      71,374
 Amortization
  expense                 825,964      92,394   1,634,390     204,379
 Other expenses           218,617     146,475     499,468     223,056
                      ----------- ----------- ----------- -----------
 Total expenses        29,333,863  23,424,718  59,836,684  42,207,981
                      ----------- ----------- ----------- -----------
 Income before
  income taxes         10,024,204  7,035,153   19,529,760  13,738,570
 Income taxes           2,621,939  1,988,666    4,893,061   3,906,975
                      ----------- ----------- ----------- -----------
 Net income           $ 7,402,265 $ 5,046,487 $14,636,699 $ 9,831,595
                      ----------- ----------- ----------- -----------
 Basic earnings
  per common
  share               $      0.75 $      0.55 $      1.50 $      1.07
                      ----------- ----------- ----------- -----------
 Diluted
  earnings per
  common share        $      0.71 $      0.52 $      1.41 $      1.01
                      ----------- ----------- ----------- -----------
 Weighted
  average shares
  outstanding          10,453,430   9,719,184  10,412,983   9,713,251
                      ----------- ----------- ----------- -----------
 Operating
  income
  per share           $      0.71 $      0.52 $      1.39 $      1.02
                      ----------- ----------- ----------- -----------


                                     June 30         December 31
                                      1999              1998

Cash and Investments,
 at market                         $356,187,896      $352,103,167
Cash and Investments
 (excluding SFAS 115)               356,714,478       343,409,541
Total Assets                        576,069,913       479,143,920
Total Assets
 (excluding SFAS 115)               576,596,495       470,450,024
Reserves for
 Losses and LAE -Statutory          211,593,451       200,766,583
Reserves for
 Losses and LAE - GAAP              266,989,000       242,377,463
Net Paid Losses and LAE              43,720,533        59,528,023
Total Claims Closed with
 Payment                                    148               225
Total Liabilities                   403,648,840       328,176,904
Total Shareholders' Equity          172,421,073       150,967,016
Net Unrealized (Loss) Gain
 included in Shareholders'
 Equity                                (342,278)        5,658,014
Book Value per Share
 (excluding SFAS 115)              $      17.51     $       15.27
Common Shares Outstanding             9,868,797         9,518,679
Statutory Surplus
 (all companies)                    121,829,071       117,277,880

SOURCE: FPIC Insurance Group, Inc.

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