—	operating earnings of $10.2 million, or $1.20 per diluted common share, as compared to $8.3 million, or $0.86 per diluted common share, for third quarter 2007;
—	income from continuing operations of $6.5 million, or $0.76 per diluted common share, as compared to $8.2 million, or $0.86 per diluted common share, for third quarter 2007; and
—	net income of $6.5 million, or $0.76 per diluted common share, as compared to $8.0 million, or $0.84 per diluted common share, for third quarter 2007.

—	operating earnings of $31.4 million, or $3.57 per diluted common share, as compared to $36.1 million, or $3.64 per diluted common share, for the nine months ended September 30, 2007;
—	income from continuing operations of $27.6 million, or $3.14 per diluted common share, as compared to $36.0 million, or $3.63 per diluted common share, for the nine months ended September 30, 2007; and
—	net income of $27.6 million, or $3.14 per diluted common share, as compared to $35.8 million, or $3.61 per diluted common share, for the nine months ended September 30, 2007.

 

 

 

—	Operating earnings increased 23 percent (40 percent on a diluted common share basis).
—	Net premiums written declined 8 percent, primarily as a result of lower premium rates in our Florida market offset by growth in professional liability policyholders.
—	In the third quarter of 2008, we incurred $5.4 million of net realized investment losses, including charges of $4.8 million for investments relating to certain financial service companies that were other-than-temporarily impaired.  As of September 30, 2008, we had a total of $733 million in cash and investments, and our fixed-income investment portfolio had an average Moody’s credit quality rating of Aa2 (High Quality).
—	Consolidated revenues declined 21 percent, primarily as a result of higher net realized investment losses and a 13 percent decline in net premiums earned.
—	The number of professional liability policyholders, excluding policyholders under alternative risk arrangements, increased 1 percent to 13,691 policyholders at September 30, 2008 compared to 13,498 policyholders at September 30, 2007.  The number of professional liability policyholders increased 3 percent over second quarter 2008.
—	National and Florida policyholder retention was 96 percent for 2008 compared to 94 percent national retention and 95 percent Florida retention for 2007.
—	Our current accident year loss ratio was 68.1 percent compared to 69.0 percent.  We recognized $4.0 million of favorable development on prior year reserves during the quarter compared to $5.0 million in third quarter 2007.
—	Our expense ratio was 21.7 percent compared to 29.9 percent.  Excluding the impact of the FIGA assessment and related recoveries discussed above, our expense ratio was 23.9 percent compared to 21.8 percent.
—	Book value per common share was $32.90 as of September 30, 2008 compared to $33.03 as of December 31, 2007.  Book value per common share excluding unrealized investment losses was $34.74 as of September 30, 2008 compared to $33.05 as of December 31, 2007.
—	By virtue of our strong capital position and in furtherance of our capital management initiatives, we received $31.0 million in dividends from our insurance subsidiaries during the first nine months of 2008.  The statutory surplus of our insurance subsidiaries as of September 30, 2008 was $251.9 million compared to $261.6 million as of December 31, 2007.
—	On a trade date basis, we repurchased 194,392 shares of our common stock during the three months ended September 30, 2008 at an average price of $46.35 per share and as of September 30, 2008, had remaining authority from our Board of Directors to repurchase 430,527 more shares under our stock repurchase program.  Through October 24, 2008, we have repurchased an additional 232,802 shares of our common stock, on a trade date basis, at an average price of $46.33 per share and had remaining authority from our Board of Directors to repurchase an additional 197,725 shares as of that date.

 

i)	The effect of negative developments and cyclical changes in the medical professional liability insurance business;
ii)	The effects of competition, including competition for agents to place insurance, of physicians electing to self-insure or to practice without insurance coverage, and of related trends and associated pricing pressures and developments;
iii)	Business risks that result from our size, products, and geographic concentration;
iv)	The risks and uncertainties involved in determining the rates we charge for our products and services, as well as these rates being subject to or mandated by legal requirements and regulatory approval;
v)	The actual amount of our new and renewal business;
vi)	The uncertainties involved in the loss reserving process, including the possible occurrence of insured losses with a frequency or severity exceeding our estimates;
vii)	The unpredictability of court decisions and our exposure to claims for extra contractual damages and losses in excess of policy limits;
viii)	Assessments imposed by state financial guaranty associations or other insurance regulatory bodies;
ix)	Developments in financial and securities markets that could affect our investment portfolio;

 

 

 

 

x)	Legislative, regulatory or consumer initiatives that may adversely affect our business, including initiatives seeking to lower premium rates;
xi)	The passage of additional or repeal of current tort reform measures, and the effect of such measures;
xii)	Developments in reinsurance markets that could affect our reinsurance programs or our ability to collect reinsurance recoverables;
xiii)	The loss of the services of any key members of senior management;
xiv)	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;
xv)	Other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2007, 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 February 27, 2008, and other factors discussed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 filed with the SEC on October 29, 2008.

FPIC Insurance Group, Inc. Investor Relations, Dana Mullins, 904-360-3612 225 Water Street, Suite 1400 Jacksonville, Florida 32202

For all your investor needs, FPIC is on the Internet at www.fpic.com or e-mail us at ir@fpic.com.

 

 

 

 

 

 

 

(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 the “Reconciliation of Non-GAAP Measures to the Nearest Comparable GAAP Measures” provided later in this release.
(2)	Excludes the impact of accumulated other comprehensive loss associated with investments of $15.1 million as of September 30, 2008 and $0.2 million as of December 31, 2007.
(3)	Excludes goodwill of $10.8 million as of September 30, 2008 and December 31, 2007.
(4)	Net cash used in operating activities for the nine months ended September 30, 2007 reflects a payment of $87.7 million as the result of the commutation of reinsurance treaties with PRI effective January 1, 2007.

 

 

 

 

(1)	Includes $0.6 million and $2.3 million of premiums associated with alternative risk arrangements for the three months and nine months ended September 30, 2008, respectively.  Management fees for such arrangements are included in other income.
(2)	During February 2007, our subsidiary, First Professionals, commuted, effective January 1, 2007, all assumed reinsurance treaties with PRI under which First Professionals acted as a reinsurer.  In connection with the commutation, First Professionals recognized an after-tax gain of $9.7 million.  Excluding the impact of the PRI commutation, net premiums written were $147.4 million for the nine months ended September 30, 2007.

 

 

 

(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.