Fitch Assigns ‘A-‘ IFS Rating to The Doctors Co. Group’s Subs

Fitch Ratings has assigned an ‘A-‘ insurer financial strength (IFS) rating to The Doctor’s Company an Intercompany Insurance Exchange (Doctors) and its wholly owned insurance subsidiaries (see list below), collectively referred to as The Doctors Company Group (TDC): The Doctors’ Company an Intercompany Insurance Exchange;
Professional Underwriters Liability Insurance Company (PULIC);
Underwriter for the Professions Insurance Company (UPIC);
Northwest Physicians Insurance Company (NPIC).

Doctors is a California domiciled reciprocal insurer with operating subsidiaries engaged in medical malpractice insurance. The company ranks among the top five U.S. writers of medical malpractice insurance.

TDC’s ratings are based on above-average underwriting performance and profitability relative to medical malpractice insurer peers, adequate loss reserve levels, improving statutory capital position, and a highly experienced management team that employs a conservative operating strategy that is focused on long-term underwriting profitability. TDC has an established reputation for being a leader in legislative and judicial reform in the medical malpractice market. TDC is licensed as an admitted carrier in 48 states, the District of Columbia, and the Territory of Guam.

The rating also considers that TDC is essentially a mono-line insurer operating in one of the more volatile segments of the property/casualty insurance industry. Although market conditions have improved recently due to the impact of legislative reforms, sharp rate increases, and market exits from underperforming competitors, medical malpractice was one of the worst-performing market segments for the last several years.

TDC’s recent improvement in operating performance is a function of rate increases, the exit from unprofitable business lines, in particular, hospital and assumed reinsurance, and a refocus on TDC’s core competencies. As of Sept. 30, 2005, TDC has experienced an 84% combined ratio compared to 98.9% for full-year 2004. Fitch currently views TDC’s loss reserve position as adequate. Material adverse reserve development would cause Fitch to reconsider the current rating.

Founded in 1976, the California-based TDC insures more than 26,000 physicians. As of Sept. 30, 2005, TDC reported net premiums written of $368 million and shareholders equity of $518 million.