FPIC Insurance (FPIC) 8-K Reports Fourth Quarter and Year 2004 Results

Exhibit 99

FPIC INSURANCE GROUP, INC.

REPORTS FOURTH QUARTER AND YEAR 2004 RESULTS

JACKSONVILLE, Fla. (Business Wire) - February 23, 2005 - FPIC Insurance Group, Inc. (“FPIC”) (Nasdaq: FPIC) today reported net income of $7.2 million, or $0.68 per diluted share, for the fourth quarter 2004, up from net income of $4.9 million, or $0.49 per diluted share, for the fourth quarter 2003. Operating earnings increased to $6.9 million, or $0.65 per diluted share, for the fourth quarter 2004, up from operating earnings of $4.9 million, or $0.49 per diluted share, for the fourth quarter 2003.

For the year ended December 31, 2004, net income was $28.2 million, or $2.70 per diluted share, up from net income of $16.6 million, or $1.71 per diluted share, for the year ended December 31, 2003. For the year ended December 31, 2004, operating earnings increased to $25.8 million, or $2.48 per diluted share, up from operating earnings of $15.3 million, or $1.58 per diluted share, for the year ended December 31, 2003.

Operating earnings is a non-GAAP measure widely used in the insurance industry to evaluate financial performance over time. Operating earnings is also an often-used tool of investors and analysts in our sector to facilitate understanding of results by excluding the net effects of realized capital gains and losses, which are tied to the financial markets, and the cumulative effects of accounting changes and other infrequent or non-recurring items, which can affect comparability across reporting periods. The table below reconciles net income to operating earnings.

	Three Months Ended				Twelve Months Ended
Reconciliation of Net Income to Operating Earnings (In Thousands)	Dec 31, 2004		Dec 31, 2003		Dec 31, 2004		Dec 31, 2003
Net income	$	7,185		4,933		28,181		16,572
Less: Net realized investment gains, net of income taxes(a)		310		67		2,375		1,260
Operating earnings	$	6,875		4,866		25,806		15,312
(a) All net realized investment gains, net of income taxes, for the periods reported relate to the insurance segment.

“FPIC delivered outstanding results for the fourth quarter and year 2004,” said John R. Byers, President and Chief Executive Officer, “reflecting our ongoing commitment to shareholder value and customer service. We are seeing significant improvement in our insurance operations and are pleased with the continued strong results of our insurance management operations. Our entire organization is focused on performance and our results clearly speak for themselves.”

2004 Financial Highlights:

• Net income and operating earnings up 70% and 69%, respectively;
• Diluted earnings per share increased 58%;
• Twelve consecutive quarters of positive consolidated operating earnings;
• Improved underwriting results, with GAAP combined ratio down 6% to 92% from 98%;
• Claims administration and management fees up 30%;
• Twenty-four consecutive quarters of positive operating earnings from insurance management (also referred to as reciprocal management) operations;
• Increases in assets, reserves, shareholders’ equity and statutory surplus;
• Book value per share increased 13%; tangible book value per share, excluding goodwill and other intangible assets, increased 15%;
• 14% return on average equity.

2004 Operational Highlights:

• Insurance management fees increased 47%, driven by the addition of significant new business in the insurance operations we manage;
• Elimination of future cessions under the net account quota share reinsurance agreement with Hannover Re, effective July 1, 2004, resulted in revenue growth;
• Policyholder retention levels in Florida moderated during the fourth quarter but remain high for the year, at over 90%;
• Overall claims metrics consistent with expectations, with newly reported claims lower than expected;
• Completed year-end reserve study, confirming adequacy of reserves;
• Continued focus on core markets, with a 13% increase in Florida policyholders;
• Continued contribution of capital from internally generated funds in support of the growth of our insurance underwriting operations;
• Overall price adequacy at actuarially sound levels, with Florida rate increases continuing but at a more moderate level.

“This has been an excellent year for our company,” continued Byers. “FPIC is delivering solid returns to its shareholders, and we are committed to the business strategies that are driving our performance. We enter 2005 with strong earnings momentum, a solid balance sheet, growing equity and surplus and a wealth of intellectual capital stemming from our cohesive management team. We look forward to the prospects that 2005 brings.”

Conference Call

FPIC will host a conference call at 11:00 a.m., Eastern Time, Thursday, February 24, 2005, to review fourth quarter and year 2004 results. Mr. Byers and Kim D. Thorpe, Executive Vice President and Chief Financial Officer, will host the call. Messrs. Byers and Thorpe, together with Robert E. White, Jr., business leader of FPIC’s insurance operations, will answer questions from analysts and investors. To access the conference call, please dial (800) 261-3417 (USA) or (617) 614-3673 (International) and use the access code 36183486.

The conference call will also be broadcast live over the Internet in a listen-only format via FPIC’s corporate website athttp://www.fpic.com. To access the call from FPIC’s home page, click on “Investor Relations” and a conference call link will be provided to connect listeners to the broadcast.

Questions can be submitted in advance of the call until 10:00 a.m., Eastern Time, Thursday, February 24, 2005 via e-mail atir@fpic.com or through FPIC’s corporate website athttp://www.fpic.com, where a link on the “Investor Relations” page has been provided.

For individuals unable to participate in the conference call, a telephone replay will be available beginning at 1:00 p.m., Eastern Time, Thursday, February 24, 2005 and ending at 11:59 p.m., Eastern Time, Saturday, February 26, 2005. To access the telephone replay, dial (888) 286-8010 (USA) or (617) 801-6888 (International) and use the access code 31372179. A replay of the conference call webcast will also be available beginning at 1:00 p.m., Eastern Time, Thursday, February 24, 2005 on FPIC’s website.

Corporate Profile

FPIC Insurance Group, Inc., through its subsidiary companies, is a leading provider of professional liability insurance, for physicians, dentists and other healthcare providers, and a provider of insurance management services to other insurance carriers. FPIC also offers third party administration services both within and outside the healthcare industry.

Safe Harbor Disclosure

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Any written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. All forward-looking statements included in this document are based on information available to us on the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements can be identified by such words as, but are not limited to, “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “plan,” “foresee,” “hope,” “should,” “will,” “will likely result” or “will continue” and other similar expressions. These forward-looking statements are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from such statements. These risks, uncertainties and other factors that could adversely affect our operations or cause actual results to differ materially from anticipated results include, but are not limited to, the following:

i)   Risks factors, including the effect on reserves and underwriting results, associated with changing market conditions that result from fluctuating cyclical patterns of the property and casualty insurance business;

ii)   The uncertainties of the loss reserving process;

iii)   The occurrence of insured or reinsured events with a frequency or severity exceeding our estimates;

iv)   The impact of surplus constraints on growth;

v)   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;

vi)   The actual amount of new and renewal business;

vii)   Business risks that result from our size and geographic concentration;

viii)   Developments in reinsurance markets that could affect our reinsurance programs;

ix)   The ability to collect reinsurance recoverables;

x)   The dependence of our insurance management segment upon a major customer, Physicians’ Reciprocal Insurers (“PRI”), for revenue, and consequently, the effects of premium rate adequacy, claims experience, policyholder retention, and overall financial position on PRI’s ability to maintain or grow its premium base;

xi)   Developments in global financial markets that could affect our investment portfolio and financing plans;

xii)   Risk factors associated with the impact of rising interest rates on the market value of our investments;

xiii)   Risk factors associated with the impact of rising interest rates on our interest costs associated with our long term debt;

xiv)   Adverse changes in securities markets;

xv)   Rates, including rates on excess policies, being subject to or mandated by legal requirements and regulatory approval, which could affect our business or reinsurance arrangements;

xvi)   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);

xvii)   Legal developments, including claims for extra-contractual obligations or in excess of policy limits in connection with the administration of insurance claims;

xviii)   Business and financial risks associated with the unpredictability of court decisions;

xix)   The loss of the services of any of our executive officers;

xx)   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;

xxi)   General economic conditions, either nationally or in our market areas, that are worse than expected;

xxii)   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; and

other risk factors discussed elsewhere in FPIC’s Form 10-Q for the quarter ended March 31, 2004, June 30, 2004, and September 30, 2004, filed with the Securities and Exchange Commission (“SEC”) on May 10, 2004, August 6, 2004, and November 8, 2004, respectively; and FPIC’s Form 10-K for the year ended December 31, 2003, filed with the SEC on March 15, 2004.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

FPIC Insurance Group, Inc.
Unaudited Selected Financial Data
(In Thousands, Except per Share Data)
	Three Months Ended						Twelve Months Ended
Consolidated Statements of Income	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Revenues
Net premiums earned	$	44,123			29,992			149,676			131,665
Claims administration and management fees		14,647			12,372			53,246			40,895
Net investment income		5,535			4,512			20,759			18,414
Commission income		1,543			1,093			8,425			7,658
Net realized investment gains		505			109			3,867			2,052
Finance charges and other income		171			283			834			1,040
Total revenues		66,524			48,361			236,807			201,724
Expenses
Net losses and loss adjustment expenses ("LAE")		35,738			25,689			125,172			118,974
Other underwriting expenses		5,633			2,769			12,527			9,443
Claims administration and management expenses		10,762			9,459			43,529			35,780
Interest expense on debt		713			1,379			2,564			5,886
Other expenses		1,971			1,537			7,645			5,658
Total expenses		54,817			40,833			191,437			175,741
Income from operations before income taxes and minority interest		11,707			7,528			45,370			25,983
Less: Income tax expense		4,577			2,584			16,941			9,317
Income from operations before minority interest		7,130			4,944			28,429			16,666
Less: Minority interest		(55	)		11			248			94
Net income	$	7,185			4,933			28,181			16,572
Basic earnings per common share	$	0.72			0.51			2.83			1.75
Diluted earnings per common share	$	0.68			0.49			2.70			1.71
Basic weighted average common shares outstanding		10,033			9,601			9,973			9,483
Diluted weighted average common shares outstanding		10,544			10,003			10,420			9,665
								As of
Selected Consolidated Statements of Financial Position Information								Dec 31, 2004			Dec 31, 2003
Total cash and investments							$	683,968			622,701
Total assets							$	1,271,306			1,182,756
Liability for losses and LAE							$	635,118			574,529
Liability for losses and LAE, net of reinsurance							$	301,699			298,763
Long term debt							$	46,083			46,083
Total shareholders' equity							$	217,120			186,657
Book value per common share							$	21.56			19.10
Tangible book value per common share*							$	19.63			17.09
Common shares outstanding								10,070			9,771
Statutory surplus of insurance subsidiaries							$	160,242			133,882
* Excludes goodwill of $18,870 and $18,870 and intangible assets of $561 and $782 as of
12/31/04 and 12/31/03, respectively. Tangible book value is a non-GAAP measure used by analysts
and investors to gauge book values excluding the effects of goodwill and other intangible assets.
		Three Months Ended						Twelve Months Ended
Selected Consolidated Cash Flow Information		Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Net cash provided by operating activities	$	30,815			40,640			64,916			89,930
Net cash used in investing activities	$	(6,032	)		(58,404	)		(24,947	)		(91,126	)
Net cash provided by (used in) financing activities	$	629			(1,767	)		3,217			(329	)

FPIC Insurance Group, Inc.
Unaudited Selected Financial Data
(Dollars in Thousands)
	Three Months Ended						Twelve Months Ended
	Dec 31, 2004			Dec 31, 2003			Dec 31, 2004			Dec 31, 2003
Total Revenues by Segment
Insurance	$	50,324			34,904			175,093			153,231
Insurance management		12,420			10,145			48,530			36,604
Third party administration		4,053			4,165			16,384			16,514
Intersegment eliminations		(273	)		(853	)		(3,200	)		(4,625	)
Total revenues	$	66,524			48,361			236,807			201,724
Net Income by Segment
Insurance	$	4,075			2,256			16,272			6,803
Insurance management		2,737			2,535			10,870			8,839
Third party administration		373			142			1,039			930
Net income	$	7,185			4,933			28,181			16,572
Selected Insurance Segment Information
GAAP combined ratio:
Loss ratio		81.0	%		85.7	%		83.6	%		90.3	%
Underwriting expense ratio		12.8	%		9.2	%		8.4	%		7.2	%
Combined ratio		93.8	%		94.9	%		92.0	%		97.5	%
Direct and assumed premiums written	$	59,843			64,003			312,728			340,741
Net premiums written	$	50,483			21,643			192,532			143,134
Net paid losses and LAE on professional liability claims	$	30,579			34,917	(b)		119,305			112,443	(b)
Average net paid loss per professional liability claim with indemnity payment	$	190			235	(b)		194			213	(b)
Total professional liability claims and incidents reported during the period		486			657			2,189			3,063
Total professional liability claims with indemnity payment		99			88			350			283
Total professional liability claims and incidents closed without indemnity payment		637			697			2,162			1,965
							As of
								Dec 31, 2004			Dec 31, 2003
Total professional liability claims and incidents that remained open								5,145			5,507
Professional liability policyholders (excludes fronting arrangements)								14,047			13,919
Professional liability policyholders under fronting arrangements								111			2,136

Selected Insurance Management Segment Information	Three Months Ended			Twelve Months Ended
		Dec 31, 2004	Dec 31,2003		Dec 31, 2004	Dec 31, 2003
Reciprocal premiums written under management	$	49,281	46,915		297,836	205,557
					As of
					Dec 31, 2004	Dec 31, 2003
Reciprocal statutory assets under management				$	1,025,092	860,463
Professional liability policyholders under management					12,006	11,149

Selected Third Party Administration Segment Information
Covered lives under employee benefit programs	58,701	106,927
Covered lives under workers' compensation programs	25,075	38,400

^{(b) For the purpose of period over period comparison, net paid losses do not take into account $23,226 received in connection with the Gerling commutation during fourth quarter 2003, which would be a reduction to reported net paid losses.}

Contact

FPIC Insurance Group, Inc.

Jacksonville, Florida

Roberta Goes Cown, Senior Vice President and Corporate Counsel

904-354-2482, Extension 3287

For all your investor needs, FPIC is on the Internet at

http://www.fpic.com

Got a Tough Question? E-mail us atir@fpic.com

FPIC: Providing Answers in a Changing Market