FPIC Insurance Group, Inc. Reports Supplemental Information for Year-End and Fourth Quarter 2000.Business Editors JACKSONVILLE Jacksonville. 1 City (1990 pop. 29,101), Pulaski co., central Ark., inc. 1941. The city has varied industries, including printing and publishing and the manufacture of electronic equipment, ordnance, and plastic and metal products. , Fla.--(BUSINESS WIRE)--March 2, 2001 Update: FPIC FPIC First Professionals Insurance Company (Jacksonville, FL) FPIC Field Programmable Interconnect FPIC Federal Partnership for Interoperable Communications FPIC Field Programmable Interconnect Chip releases additional supplemental information for year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. and fourth quarter 2000. Some, but not all, of the information contained in the Company's February February: see month. 20, 2001 earnings release, including consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: earnings, is also presented in this release. The additional information contained in this press release is supplemental to, and does not change in any way, the information contained in the Company's earlier earnings release. FPIC Insurance Group, Inc. (Nasdaq: FPIC) today released supplemental segment and other information for year-end and fourth quarter 2000, following its previous earnings release on February 20, 2001. The Company previously reported its year-end and fourth quarter 2000 financial results on February 20, 2001 announcing operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $0.7 million or $.07 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the year ended December December: see month. 31, 2000, which includes an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $13.7 million to strengthen loss and loss adjustment expense ("LAE") reserves during the fourth quarter. Excluding the effects of non-recurring charges taken for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , the Company's operating earnings were reported as $2.2 million, or $.23 per diluted share, for the year ended December 31, 2000.
FPIC Insurance Group, Inc.
Consolidated Earnings Per Share
Unaudited
-------------------------------------
Three Months Ended Twelve months Ended
12/31/00 12/31/99 12/31/00 12/31/99
-------- ---- ---- ----
Basic earnings per common
share $ (1.49) 0.47 0.06 2.24
Diluted earnings per common
share $ (1.49) 0.45 0.06 2.19
Operating earnings per common
share $ (1.49) 0.45 0.07 2.16
Operating earnings per common
share, excluding special
charges(a) $ (1.45) 0.45 0.23 2.32
Pro-forma operating earnings
per common share, excluding
special charges and
amortization $ (1.40) 0.50 0.49 2.55
(a) Special charges consist of non-recurring severance and
restructuring charges.
Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness D. Thorpe Thorpe , James Francis Known as "Jim." 1888-1953. American athlete. An outstanding collegiate football player, he later played professional football and baseball. , FPIC's Executive Vice President and Chief Financial Officer, stated, " While we are operating in challenging market conditions, our Company remains financially strong and profitable. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the significant reserve charges we took in the fourth quarter, the consolidated statutory surplus of our companies declined by only 7.4%, and we produced consolidated net operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of nearly $15 million for the year 2000. Our insurance companies produced combined operating cash flows of $6.5 million for the year." Mr. Thorpe further stated, "We believe our stock, which has been under pressure from shorts for more than a year now, is a solid value almost any way you slice it." SUPPLEMENTAL INFORMATION ABOUT SEGMENTS The Company has three predominate lines of business. The Company, through its four insurance subsidiaries, specializes in professional liability insurance products and services for physicians, dentists Dentists can refer to one of the following:
TPA - Transient Program Area "), through its subsidiaries that market and administer To give an oath, as to administer the oath of office to the president at the inauguration. To direct the transactions of business or government. Immigration laws are administered largely by the Immigration and Naturalization Service. self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance and fully insured plans Insured plans Defined benefit pension plans that are guaranteed by life insurance products. Related: Non-insured plans for both large and small employers, including group accident and health ("A&H") insurance, workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. and general liability and property insurance. The Company also provides reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. management services ("RM"), through its New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of subsidiary, for Physicians' Reciprocal Insurers ("PRI PRI: see Institutional Revolutionary party. (Primary Rate Interface) An ISDN service that provides 23 64 Kbps B (Bearer) channels and one 64 Kbps D (Data) channel (23B+D), which is equivalent to the 24 channels of a T1 line. "), a New York medical professional liability insurance reciprocal.
Information by Industry Segment
($ in millions)
Three Months Ended Twelve Months Ended
---------------- -------------------
12/31/00 12/31/99 12/31/00 12/31/99
----- ----- ------ -----
Revenues:
Insurance $ 36.0 35.7 $ 147.9 138.9
TPA 4.0 3.8 16.7 13.6
RM 5.1 6.3 25.2 20.8
Intersegment (1.9) (1.7) (7.8) (2.8)
----- ----- ------ -----
Total Revenues $ 43.2 44.1 $ 182.0 170.5
===== ===== ====== =====
Three Months Ended Twelve Months Ended
---------------- -------------------
12/31/00 12/31/99 12/31/00 12/31/99
----- ----- ------ -----
Net income:
Insurance $(13.2) 3.9 $ (2.9) 19.8
TPA (1.1) (0.6) (0.8) (0.2)
RM 0.1 1.3 4.3 2.3
----- ----- ------ -----
Total Net Income $(14.2) 4.6 $ 0.6 21.9
===== ===== ====== =====
-0- Insurance Segment The Company's insurance segment is made up of its four insurance subsidiaries, Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and Physicians Insurance Company, Inc. ("FPIC"), Anesthesiologists' Professional Assurance Company ("APAC APAC Australian Partnership for Advanced Computing APAC Agricultural Policy Analysis Center APAC Asia and Pacific APAC Asian Pacific American Coalition APAC Adapted Physical Activity Council (American Alliance for Health) "), Intermed Insurance Company ("Intermed") and Interlex Insurance Company ("Interlex"). The insurance segment reported a net loss for the year 2000 of $2.9 million and a net loss of $13.2 million for the fourth quarter of 2000, as compared with net income for year 1999 of $19.8 million and net income for the fourth quarter of 1999 of $3.9 million. The net losses reported for the year and fourth quarter of 2000 were primarily the result of the reserve strengthening taken in the fourth quarter following the reserve study undertaken by the Company at year end. Excluding the after tax effects of intercompany eliminations, the insurance segment contributed approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. break-even results for the year 2000, as compared with net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of approximately $20.7 million for the year 1999. Net premiums earned increased $2.3 million for the year, primarily as a result of growth at three of the Company's subsidiaries, APAC, Intermed and Interlex. Net premiums earned on FPIC's core medical professional liability ("MPL 1. (language) MPL - An early possible name for PL/I. [Sammet 1969, p.542]. 2. MPL - MasPar data-parallel version of C. See also ampl. Compiler version 3.1. 3. MPL - Motorola Programming Language. ") business declined $9.0 million for the year due to the intensely competitive environment in our home state of Florida and our decision not to seek volume growth by matching predatory predatory pertaining to predator. predatory behavior the hunting of birds, mice and small reptiles by cats and the hunting and herding behavior of dogs, often facilitated in a pack. prices. At the same time, the Company has continued to focus on the retention of our quality customer base and profitable new business by leveraging our outstanding service to policyholders and distributors, and our strong brand recognition while maintaining appropriate pricing. This decline was offset by increases in group A&H premiums of $5.8 million and assumed reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. premiums of $1.1 million. Although group A&H premiums increased in 2000, the Company announced its decision to exit this line of business; therefore, the Company began non-renewing group A&H policies in December 2000. Group A&H premiums should begin to decline dramatically beginning April 1, 2001, which is the largest renewal month for the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. health insurance program, the Company's largest group A&H program. Professional liability policyholders served by the Company's insurance subsidiaries totaled 12,141 as of December 31, 2000 as compared to 11,262 as of December 31, 1999. Net premiums earned in the fourth quarter were $28.0 million, down $2.9 million, or 9%, from $30.9 million reported for the fourth quarter of 1999. In addition to the trends for the year regarding FPIC's core MPL business discussed above, the net decrease in net premiums earned for the quarter was effected by charges taken for experience adjustments of $2.4 million under two assumed reinsurance contracts. Net investment income increased to $24.5 million in 2000, up $5.7 million, or 30%, from $18.8 million in 1999. The increase is primarily due to an increase in invested assets related to the quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). reinsurance agreement with PRI. On a consolidated basis, the Company's total investment portfolio grew to $404.9 million in 2000, up $58.3 million or 16%, from $346.6 million in 1999. Net loss and LAE expense increased to $122.8 million for the twelve months ended December 31, 2000, as compared to $81.0 million for the same period in 1999, an increase of $41.8 million or approximately 52%. In addition to the effects of the reserve strengthening taken in the fourth quarter, during 2000 the Company also reduced to $1.9 million the amount of reserves released from prior report years, which accounted for approximately $17.0 million of the net increase in net loss and LAE expense from 1999 to 2000. The net loss and LAE expense for the fourth quarter of 2000 was $48.9 million as compared to $21.5 million for the fourth quarter of 1999, while the loss and LAE ratio for the fourth quarter of 2000 was 175%, 105 percentage points higher than the fourth quarter 1999 ratio of 70%. Reserve Study The Company completed a comprehensive study of its reserves in February 2001, which culminated with the receipt and consideration of detailed reports and analysis from its independent actuaries. As previously reported, on a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern basis, the charge to increase reserves in the fourth quarter was approximately $21.0 million. Approximately $15.0 million of the pretax reserve charge related to the MPL business written by three of the Company's insurance subsidiaries. Approximately $8.4 million of the MPL related charges were made to set aside additional MPL reserves related to prior accident years and reflects a 10% increase in the average severity of claims expected to be closed with indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. payment for report years between 1997 and 1999. This amount was partially offset by an increase in reinsurance recoverables for the same period of approximately $1.2 million. The remaining $7.8 million of the MPL charge related to the year 2000 and primarily reflects the projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. of this assumption for increased severity and, to a lesser extent, a small increase in frequency over amounts projected earlier in 2000. The remaining $6.0 million of the total strengthening was primarily comprised of $3.2 million related to additional claims costs and reserves in the group A&H line and approximately $2.6 million on other small, discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: programs. The following table presents a summary of net premiums earned, ultimate losses and LAE and ultimate loss ratios for report years 1991 through 2000.
FPIC Insurance Group, Inc. Insurers Combined
Direct and Assumed MPL
Ultimate Losses and LAE(1), Net of Ceded Reinsurance, By Report Year
($ in millions)
Unaudited
--------------------------------------------------------------------
1999 2000
-------------------- -------------------
Net Ultimate Ultimate Ultimate Ultimate
Report Premiums Losses & Loss Losses & Loss
Years Earned LAE Ratio LAE Ratio
------------- ---------- ---------- -------- --------- --------
1991-1996 $ 389.9 $ 305.3 78.3% $ 298.7 76.6%
1997 71.1 82.2 115.6% 87.3 122.7%
1998 83.3 84.3 101.2% 89.2 107.0%
1999 93.6 82.0 87.6% 86.6 92.6%
2000 87.0 -- -- 89.5 102.8%
(1) Ultimate losses and LAE represent the estimated totals of all
losses and loss adjustment expenses, including both allocated and
unallocated loss adjustment expenses, that the Company anticipates
it will pay when all claims are finally settled and closed, either
with or without payment. These estimates, in turn, serve as the
basis for the Company's estimated reserves. They are also subject
to the same uncertainties associated with loss reserves, in
general.
As indicated in the above table, the Company increased its estimated ultimate MPL loss and LAE for 1997, 1998 and 1999 by $5.1 million, $4.9 million, and $4.6 million, respectively. These increases relate to the direct MPL business and result in an increase of approximately 10% in the ultimate amounts previously estimated for the three years combined. Substantially all this increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to an increase in severity as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to frequency, as the substantial portion of this business is claims-made, and therefore, not subject to long term development in reported claims. The increases attributed to years 1997 through 1999 were offset to some extent by an aggregate net reduction for years 1996 and prior of approximately $6.6 million. The estimated ultimate MPL loss and LAE for the report year 2000 was also adjusted during the fourth quarter reflecting in part, a projection of the increase in prior year ultimates, and to a lesser extent, an increase in frequency above that originally projected for the year 2000. Other underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. expenses for the quarter were $7.0 million, up $2.5 million, or 56%, from $4.5 million for the fourth quarter of 1999. The increase was primarily due to additional administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. over the prior year's quarter and $0.8 million established for an uncollectible Adj. 1. uncollectible - not capable of being collected; "a bad (or uncollectible) debt" bad invalid - having no cogency or legal force; "invalid reasoning"; "an invalid driver's license" receivable. Other underwriting expenses for the year were $20.8 million, compared to $20.5 million in the prior year. With respect to loss and LAE trends, Mr. Thorpe stated, "While we do not diminish the issues facing us and our sector, we are encouraged by some positive signs. As we previously discussed, we see a definite downward trend in FPIC's MPL frequency statistics since report year 1997. The number of newly reported physicians' claims and incidents for report year 2000 at FPIC came in somewhat higher than we expected, but is still lower than 1997 and 1998. We also enter 2001 with significant additional confidence in our balance sheet, which is already very strong, having now significantly strengthened our reserves." Mr. Thorpe went on to state, "A key financial goal of ours for 2001 is to manage the business conservatively with a view towards maintaining our reserve strength. While we recognize this means our insurance margins will be lower in 2001 than in years prior to 2000, we believe we can accomplish this goal and remain profitable." Third-Party Administration and Reciprocal Management Segments The Company's third-party administration segment is made up of McCreary McCreary can refer to a number of things: People
The reciprocal management segment reported net income for the year 2000 of $4.3 million, and net income of $.1 million for the fourth quarter of 2000, as compared with net income for the year 1999 of $2.3 million, and net income for the fourth quarter of 1999 of $1.3 million. The increase in 2000 income for this segment resulted primarily from increased intercompany reinsurance brokerage fees, which benefited this segment, but are eliminated in consolidation. The decrease in net income for the fourth quarter of 2000, as compared with the fourth quarter of 1999, is the result of intercompany charges by the parent for allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of corporate costs, which were made for the first time in the fourth quarter of 2000. After elimination of the after-tax effects of these intercompany items, net operating income contributed by the reciprocal management segment was level at approximately $1.4 million for both 2000 and 1999. The third party administration segment reported a net loss of $0.8 million for the year as compared with a net loss of $0.2 million for 1999. The TPA segment reported a net loss of $1.1 million for the fourth quarter of 2000, as compared with a net loss of $0.6 million for the fourth quarter of 1999. The net loss for 2000 was primarily attributable to the operating results of the Company's most recent acquisition by EMI in Albuquerque, New Mexico “Albuquerque” redirects here. For other uses, see Albuquerque (disambiguation). Albuquerque (pronounced [ˈæl.bə.kɚ.kiː], Spanish: [al.βu. . The Company began its consolidation of the TPA operations and reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of EMI's division in Albuquerque Albuquerque (ăl`bəkûr'kē), city (1990 pop. 384,736), seat of Bernalillo co., W central N.Mex., on the upper Rio Grande; inc. 1890. during the fourth quarter of 2000 in order to improve operating performance. The Company incurred a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of approximately $.5 million pre tax during the fourth quarter of 2000 as a result of the restructuring. The net loss reported for the fourth quarter of 2000 includes the after tax effects of a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $0.3 million, and intercompany charges by the parent for allocation of corporate costs which were made for the first time in the fourth quarter of 2000. Excluding the effects of the restructuring charge and after elimination of the effects of the intercompany items, the TPA segment contributed a net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of approximately $0.2 million for the year 2000, which is comparable to the net operating loss of $0.2 million for 1999. Claims administration and management fees for the year 2000 were $29.9 million, up $3.1 million, or 12%, from $26.8 million in 1999. The growth in claims administration and management fees is attributable to an acquisition of assets Acquisition of assets A merger or consolidation in which an acquirer purchases the selling firm's assets. by EMI during the third quarter of 1999. Claims administration and management fees for the fourth quarter of 2000 were $7.5 million essentially level with the comparable amount for 1999's fourth quarter. For the year, commission income was $3.2 million, up $0.7 million, or 28%, from $2.5 million in 1999. The increase is attributable to growth related to the placement of insurance and reinsurance with external parties during 2000. Commission income for the fourth quarter of 2000 was $0.2 million, which is comparable to the amount reported for the fourth quarter of 1999. Claims administration and management expenses were $30.0 million, up 12%, in 2000 from $26.8 million in 1999. The increase in claims administration and management expenses is primarily due to an acquisition of assets by EMI during the third quarter of 1999. Claims administration and management expenses were $7.8 million for the fourth quarter of 2000, up $0.7 million, or 10%, from $7.1 million for the fourth quarter of 1999. The increase is attributable to additional costs associated with the servicing of new clients. Conference Call FPIC will host a conference call at 10:00 a.m., Eastern Time, Tuesday Tuesday: see week. , March 6, 2001, to discuss supplemental information pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to its year-end and fourth quarter 2000. To access the conference call, please dial (800) 450-0821. John R. Byers Byers may refer to any of the following places:
The Company will also broadcast its conference call live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the in a listen-only format via its Investor Relations Investor relations The process by which the corporation communicates with its investors. website at http://www.fpic.com. From the Company's home page, click on "Investor Relations," a conference call link will be provided to connect you to the call. If you are unable to participate in the conference call, a 48-hour telephone replay will be available beginning at 1:30 p.m., Eastern Time, March 6, 2001 and ending at 11:59 p.m., Eastern Time, March 8, 2001. To access the telephone replay, please dial (800) 475-6701 and use the access code 575096. A replay of the conference call webcast will also be available beginning at 1 p.m., Eastern Time, Tuesday, March 6, 2001 and ending at 1 p.m., Eastern Time, Tuesday, March 13, 2001 on the Company's website. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Investors are cautioned that certain statements contained in this press release, as well as oral statements of FPIC officials during presentations about the Company, may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are identified by words such as, but not limited to, "believe," "expect," "intend," "anticipate," "estimate," and other analogous analogous /anal·o·gous/ (ah-nal´ah-gus) resembling or similar in some respects, as in function or appearance, but not in origin or development. a·nal·o·gous adj. expressions and are based upon the Company's estimates and anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of future events that are subject to certain risks and uncertainties that could cause actual results to vary materially from the expected results described in the forward-looking statements. The Company's expectations regarding earnings, losses, the retention of current business, expansion of product lines, and development of business in new geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge areas depend on a variety of factors, including economic, competitive and market conditions that may be beyond the Company's control and are thus difficult or impossible to predict. In view of the many uncertainties inherent in the forward-looking statements, the inclusion of such information should not be taken as a representation by the Company or any other person that the Company's objectives or plans will be realized. The assumptions underlying certain forward-looking statements are that the Company will continue to: (i) profitably price its insurance products; (ii) maintain its underwriting standards; (iii) market its insurance products competitively; (iv) maintain its successful handling of claims; (v) retain existing agents and key management personnel; and (vi) reserve adequately for losses and LAE. Additionally, the primary risk in maintaining adequate reserves is unexpected changes in the frequency or severity of reported claims, particularly adverse development that may occur during the last three report years. Corporate Profile FPIC Insurance Group, Inc., through its subsidiary companies, is a leading provider of professional liability insurance for physicians, dentists and other healthcare providers, and for attorneys, primarily in Florida and Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. . In addition, it provides management and
administrative services to Physicians' Reciprocal Insurers, a New
York medical professional liability insurance reciprocal, and third
party administrative services both within and outside the healthcare
industry. The Company's insurance subsidiaries, Florida Physicians
Insurance Company, Inc., Anesthesiologists' Professional Assurance
Company, Intermed Insurance Company and Interlex Insurance Company, are
rated A- (Excellent) by A.M. Best.For all of your investor information needs please visit our Company Web site: http://www.fpic.com. Electronic distribution of materials is now available.
SUPPLEMENTAL INFORMATION ABOUT SEGMENTS(b)
($ in millions)
Consolidated Insurance Operations(a)
Unaudited
Three Months Ended Twelve Months Ended
12/31/00 12/31/99 12/31/00 12/31/99
-------- ------ ------- -------
Direct and assumed
premiums written $ 31.6(1) 26.7 197.3 148.1
======== ====== ======= =======
Net premiums written $ 25.8(1) 19.9 161.9 122.4
======== ====== ======= =======
Net premiums earned $ 28.0 30.9 120.5 118.2
Net investment income 6.1 4.6 24.5 18.8
Finance charges and
other income 1.7 0.2 2.6 1.5
Realized investment gains 0.2 -- 0.3 0.4
-------- ------ ------- -------
Total revenues $ 36.0 35.7 147.9 138.9
-------- ------ ------- -------
Net loss and loss
adjustment expenses $ 48.9 21.5 122.8 81.0
Other underwriting expenses 7.8 6.3 27.2 23.6
Interest expense 1.1 1.2 4.3 4.0
Amortization expense 0.2 0.2 1.0 0.9
Other expenses 0.1 0.1 1.9 2.0
-------- ------ ------- -------
Total expenses $ 58.1 29.3 157.2 111.5
-------- ------ ------- -------
(Loss) income before taxes $ (22.1) 6.4 (9.3) 27.4
-------- ------ ------- -------
Net (loss) income $ (13.2) 3.9 (2.9) 19.8
======== ====== ======= =======
GAAP loss ratio 175% 70% 102% 69%
GAAP expense ratio 28% 20% 23% 20%
GAAP combined ratio 203% 90% 125% 89%
Insurance Operations,
excluding All Accident
and Health Programs
("A&H")(a)
Direct and assumed
premiums written $ 25.3(1) 20.2 172.9 128.9
======== ====== ======= =======
Net premiums written $ 19.7(1) 13.7 138.8 104.2
======== ====== ======= =======
Net premiums earned $ 21.9 25.6 96.4 99.9
Net investment income 6.1 4.6 24.5 18.8
Finance charges and
other income 1.7 0.2 2.6 1.5
Realized investment gains 0.2 -- 0.3 0.4
-------- ------- ----- -----
Total revenues $ 29.9 30.4 123.8 120.6
-------- ------- ----- -----
Unaudited
-------------------------------------
Three Months Ended Twelve Months Ended
12/31/00 12/31/99 12/31/00 12/31/99
------ ----- -------- -------
Net loss and loss
adjustment expenses $ 40.0 16.7 98.8 61.5
Other underwriting expenses 7.1 5.2 23.7 20.5
Interest expense 1.1 1.2 4.3 4.0
Amortization expense 0.2 0.2 1.0 0.9
Other expenses 0.1 0.1 1.9 2.0
------ ----- -------- -------
Total expenses $ 48.5 23.4 129.7 88.9
------ ----- -------- -------
(Loss) income before
taxes $ (18.6) 7.0 (5.9) 31.7
====== ===== ======== =======
GAAP loss ratio 183% 65% 102% 62%
GAAP expense ratio 32% 20% 25% 21%
GAAP combined ratio 215% 85% 127% 83%
Professional liability
policyholders -- -- 12,141 11,262
A&H Programs Only(2)
Net premiums earned $ 6.1 5.3 24.1 18.3
------ ----- -------- -------
Net loss and loss
adjustment expenses $ 8.9 4.8 24.0 19.5
Other underwriting expenses 0.7 1.1 3.5 3.1
------ ----- -------- -------
Total expenses $ 9.6 5.9 27.5 22.6
------ ----- -------- -------
(Loss) before taxes $ (3.5) (0.6) (3.4) (4.3)
====== ===== ======== =======
GAAP loss ratio 146% 91% 100% 107%
GAAP expense ratio 11% 21% 15% 17%
GAAP combined ratio 157% 112% 115% 124%
Covered lives under
A&H programs -- -- 59,374 49,089
(a) Includes operating results of the holding company.
(b) For purposes of evaluating a segment's performance, the Company
accounts for intersegment sales and transfers as if the sales and
transfers were to third parties.
(1) Excludes the effect of the reclassification of a portion of the
statutory assumed reinsurance premiums written in the amount of
$13.2 million related to the 100% Quota Share reinsurance
agreement with PRI. This amount was finalized, reclassified and
reported directly as a deferred credit in the balance sheet
account, "Goodwill and other intangibles" during the second
quarter of 2000, after the initial reporting of the contract in
the first quarter. This reclassification had no effect on revenues
or income previously reported.
(2) The Company participates in a small pool with other insurers
comprised of a medical malpractice component and an A&H component.
For purposes of the presentation above, the A&H component has been
broken out and combined with other A&H programs. The A&H component
of this pool was terminated as of December 31, 2000.
Unaudited
Three Months Ended Twelve Months Ended
-------------------------------------
12/31/00 12/31/99 12/31/00 12/31/99
------ ----- ------- -------
TPA Operations
Revenues $ 4.0 3.8 16.7 13.6
Expenses 5.7 4.7 18.0 13.9
Net loss $ (1.1) (0.6) (0.8) (0.2)
Covered lives under employee
benefit programs -- -- 108,174 111,606
Covered lives under workers
compensation programs -- -- 35,600 32,600
RM Operations
Revenues $ 5.1 6.3 25.2 20.8
Expenses 4.8 3.8 17.8 16.6
Net income $ 0.1 1.3 4.3 2.3
Professional liability
policyholders under
management -- -- 8,210 7,987
Reciprocal assets under
management (in millions) $-- -- 811.8 897.4
Reciprocal premiums under
management (in millions) $-- -- 134.3 130.4
OTHER SUPPLEMENTAL INFORMATION
Selected professional liability
claim information
Total professional liability
claims reported during
period 478 385 1,976 1,552(3)
Total professional liability
claims closed with payment 101 74 330 272(3)
Net paid loss and LAE on
professional liability claims
only (in millions) $24.9 23.8 88.9 79.0
Average net paid loss per
professional liability claim
closed with payment
(in thousands) $ 171 219 174 189
(3) The 1999 year-to-date information includes activity for Intermed
and Interlex subsequent to the acquisition date only. The
information previously presented in the third quarter 2000 press
release contained all of 1999's year-to-date activity for these
subsidiaries.
Unaudited
---------------------
Twelve Months Ended
Selected equity information 12/31/00 12/31/99
--------------------------- -------- --------
($ in millions, except per-share data)
Total GAAP shareholders' equity $ 172.5 166.4
Consolidated statutory surplus $ 108.5 117.2
Book value per share $ 18.39 17.29
Book value per share, excluding SFAS 115 $ 18.29 18.18
Common shares outstanding, in thousands 9,380 9,621
Selected consolidated cash flow information
-------------------------------------------
($ in millions)
Net cash provided by operating activities $ 14,843 14,343
Net cash used in investing activities (3,150) (46,069)
Net cash provided by financing activities 445 31,493
-------- --------
Net increase in cash and cash equivalents $ 12,138 (233)
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