—	net income of $7.5 million, or $0.76 per diluted common share, compared to $9.2 million, or $0.81 per diluted common share, for the second quarter of 2009; and
—	operating earnings(1) of $7.0 million, or $0.71 per diluted common share, compared to $8.2 million, or $0.72 per diluted common share, for the second quarter of 2009.

 

 

—	net income of $14.7 million, or $1.46 per diluted common share, compared to $17.6 million, or $1.53 per diluted common share, for the six months ended June 2009; and
—	operating earnings(1) of $14.0 million, or $1.39 per diluted common share, compared to $16.6 million, or $1.44 per diluted common share, for the six months ended June 2009.

 

(1)

To supplement the consolidated financial information presented herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we report operating earnings and certain other non-GAAP financial measures widely used in the insurance industry to assist in evaluating financial performance over time.  For additional information and reconciliation to GAAP results, see the section entitled “Non-GAAP Financial Measures” found later in this press release.

 

 

 

 

—	Professional liability policyholders, excluding policyholders under alternative risk arrangements, increased 29 percent to 18,111 policyholders as of June 30, 2010, compared to 13,999 policyholders as of June 30, 2009.  This increase in policyholders primarily resulted from the acquisition of Advocate, MD, which closed in November 2009.  Excluding Advocate, MD, professional liability policyholders increased 2 percent.
—	Our national policyholder retention was 96 percent for the six months ended June 30, 2010 compared to 95 percent for the comparable period in 2009.  Excluding Advocate, MD, national policyholder retention was 97 percent.  Our Florida policyholder retention was 97 percent and 96 percent for the six months ended June 30, 2010 and 2009, respectively.
—	Net premiums written increased 20 percent for the three months ended June 30, 2010 primarily due to the acquisition of Advocate, MD.  Excluding Advocate, MD, net premiums written increased 4 percent for the three months ended June 30, 2010 primarily due to an increase in professional liability policyholders.
—	Consolidated revenues were 7 percent higher for the three months ended June 30, 2010, compared to the same period in 2009.  Excluding Advocate, MD, consolidated revenues were 8 percent lower for the three months ended June 30, 2010 primarily due to lower net premiums earned, as well as lower net investment income.
—	Net investment income was 12 percent lower for the three months June 30, 2010, due to lower yields on fixed income securities and cash and cash equivalents.
—	The continuation of favorable overall claim results as compared to previous estimates resulted in the recognition of favorable net loss development related to previously established reserves of $5.0 million for the three months ended June 30, 2010 and 2009.  Our current accident year loss ratio for the three months ended June 30, 2010 was 71.9 percent compared to 71.0 percent for the same period in 2009.
—	Our expense ratio was 29.2 percent for the three months ended June 30, 2010, compared to 26.2 percent for the same period in 2009.  The higher ratio in 2010 is primarily due to lower recoveries on previous insurance guaranty fund assessments, amortization of intangible assets related to the acquisition of Advocate, MD, and the write down of a receivable deemed uncollectible.
—	Book value per common share grew 7 percent to $29.55 as of June 30, 2010 from $27.58 as of December 31, 2009.  As of June 30, 2010, the statutory surplus of our insurance subsidiaries was $261.1 million and the ratio of net premiums written to surplus was 0.6 to 1.
—	On a trade date basis, we repurchased 369,579 shares of our common stock during the three months ended June 30, 2010 at an average price of $27.25 per share and as of June 30, 2010, had remaining authority from our Board of Directors to repurchase 481,762 more shares under our stock repurchase program.  Through July 30, 2010, we have repurchased an additional 119,265 shares of our common stock, on a trade date basis, at an average price of $28.01 per share, and had remaining authority from our Board of Directors to repurchase an additional 362,497 shares as of that date.
—	On June 1, 2010, Fitch Ratings affirmed the A- (Strong) insurer financial strength rating and stable outlook of our insurance subsidiaries.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)	Earnings per common share and weighted-average common shares outstanding for the periods ending June 30, 2009 have been restated to reflect the three-for-two stock split in March 2010.

 

 

 

 

 

 

 

(1)	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 “Reconciliation of Non-GAAP Measures to the Nearest Comparable GAAP Measures” provided later in this release.
(2)	Excludes the impact of an accumulated other comprehensive gain associated with investments of $17.0 million as of June 30, 2010 and $11.2 million as of December 31, 2009.
(3)	Excludes goodwill and intangible assets of $27.7 million and $28.2 million as of June 30, 2010 and December 31, 2009, respectively.
(4)	The number of common shares outstanding as of December 31, 2009 has been restated to reflect a three-for-two stock split in March 2010.

 

 

 

 

 

 

 

(1)	Includes $0.6 million and $1.7 million of premiums associated with alternative risk arrangements for the three months and six months ended June 30, 2010, respectively, compared to $0.5 million and $2.0 million of premiums for the three months and six months ended June 30, 2009, respectively.  Management fees for such arrangements are included in other income.

 

 

 

 

 

 

 

(1)	The claims with indemnity payment (“CWIP”) ratio is defined as the ratio of total professional liability claims with indemnity payment to the sum of total professional liability claims with indemnity payment and total professional liability claims closed without indemnity payment.

 

 

 

 

 

 

 

 

 

 

 

 

(1)	Diluted earnings per common share and diluted weighted-average common shares outstanding for the periods ending June 30, 2009 have been restated to reflect the three-for-two stock split in March 2010.

 

 

 

 

(1)	The number of common shares outstanding as of December 31, 2009 has been restated to reflect a three-for-two stock split in March 2010.

 

 

(1)	The number of common shares outstanding as of December 31, 2009 has been restated to reflect a three-for-two stock split in March 2010.