•	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

 

 

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.