American Physicians Capital Unveils Q1 Report

Michigan-based American Physicians Capital Inc. (APCapital) announced net income of $7.3 million or $.82 per diluted common share for the first quarter of 2005. This compares to net income of $5.9 million, or $.69 per diluted common share for the 2004 first quarter.

“We posted strong financial results in the first quarter of 2005,
reflecting a continuation of our positive operating trends that emerged in 2004,” stated President and CEO R. Kevin Clinton. “Our reserves remained stable in the first quarter, and our operating results reflect the improved pricing and stricter underwriting practices of the company.”

Net premiums earned in the first quarter of 2005 were approximately the same as the first quarter of 2004. Direct written premiums were down $3.8 million or 7.2% from the first quarter of 2004 due to the discontinuance of a major alternative risk transfer program and reduced writings in Ohio, Kentucky and Nevada. The insured physician policies-in-force count at March 31, 2005 totaled 9,139, which is down 12.6% from a year ago.

The 2005 first quarter loss ratio was 78.6% with $1.6 million of positive
development from prior accident years. This represents a significant
improvement from the 91.1% loss ratio reported in the first quarter of 2004.

The improved loss ratio is reportedly a direct result of the rate increases taken by the company, as well as the stricter underwriting standards that have been in place since 2002.

The number of claims reported in the first quarter of 2005 was 404, up slightly from the fourth quarter of last year, but down significantly from 525 claims reported in the first quarter of 2004.