Florida-based FPIC Insurance Group Inc. has reported that its net income increased to $7.5 million, or $0.72 per diluted share, for the third quarter 2004, up from net income of $5.4 million, or $0.55 per diluted share, for the third quarter 2003. Operating earnings increased to $7.6 million, or $0.72 per diluted share, for the third quarter 2004, up from operating earnings of $4.6 million, or $0.47 per diluted share, for the third quarter 2003.
For the nine months ended Sept. 30, 2004, net income was $21.0 million, or $2.00 per diluted share, up from net income of $11.6 million, or $1.22 per diluted share, for the nine months ended Sept. 30, 2003. For the nine months ended Sept. 30, 2004, operating earnings increased to $18.9 million, or $1.80 per diluted share, up from operating earnings of $10.4 million, or $1.09 per diluted share, for the nine months ended Sept. 30, 2003.
John Byers, president and CEO, stated, “Solid underwriting results from our insurance operations and increased fee income from the addition of significant new business at the New York insurance reciprocal we manage have yielded excellent results for the third quarter and nine months.”
Financial highlights for Q3 and first nine months of 2004
— Net income and operating earnings up 40% and 65%, respectively, quarter over quarter, and up 80% and 81%, respectively, first nine months over first nine months;
— Eleven consecutive quarters of positive consolidated operating earnings;
— GAAP combined ratio down 4% from 98% to 94% quarter over quarter and down 5% from 99% to 94% first nine months over first nine months;
— Claims administration and management fees up 28% quarter over quarter and 35% first nine months over first nine months;
— Twenty-three consecutive quarters of positive operating earnings from insurance management operations;
— Increases in assets, gross reserves, equity and statutory surplus for the first nine months of 2004;
— 13% return on average equity for the trailing 12 months.
Operational highlights for Q3 2004
— Higher insurance management fees driven by the addition of significant new business at the insurance reciprocal we manage;
— Elimination of future cessions under the net account quota share reinsurance agreement with Hannover Re, effective July 1, 2004, which will result in revenue growth;
— Continued high policyholder retention levels in company’s core Florida market;
— Overall claims metrics consistent with expectations, except that the number of newly reported claims are lower than expected;
— Continued focus on core markets, with an 8% increase in Florida policyholders;
— Continued contribution of capital from internally generated funds in support of the growth of our insurance underwriting operations.
Byers concluded, “We remain committed to the tenets of our business strategy, including market focus, disciplined underwriting and pricing, aggressive claims management, conservative reserving, maintaining balance sheet strength and prudent capital management, which empower our performance and drive long-term value to our shareholders.”
FPIC Insurance Group Inc., through its subsidiary companies, is a provider of professional liability insurance for physicians, dentists and other healthcare providers. FPIC also provides insurance management services to Physicians’ Reciprocal Insurers, a New York medical professional liability insurance reciprocal, and third party administration services both within and outside the healthcare industry.
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