American Physicians Capital (ACAP) 8-K American Physicians Capital, Inc. Reports Fourth Quarter and Year End 2003 Results

For Immediate Release	Contact: Ann Storberg, Investor Relations
	(517) 324-6629

AMERICAN PHYSICIANS CAPITAL, INC. REPORTS
FOURTH QUARTER AND YEAR END 2003 RESULTS

Significant Fourth Quarter 2003 Events

• Net income of $102,000, or $.01 per share

• Operating income of $533,000, or $.06 per share

• Pre-tax income of $6.1 million in medical professional liability

• A significant reduction in the number of reported medical professional liability claims

• No adverse reserve development

• Began process of exiting workers’ compensation and health insurance

• Successful completion of the SCW Agency contract (February 2004)

• A.M. Best assigns a B+ rating to American Physicians Assurance Corp. and APSpecialty (January 2004)

East Lansing,Mich. (February 12, 2004) — American Physicians Capital, Inc. (APCapital) (NASDAQ:ACAP) today announced net income of $102,000, or $.01 per share for the fourth quarter of 2003. For the year ended December 31, 2003, the Company reported a net loss of ($76.8) million or ($9.02) per share. This compares to a net loss of ($1.2) million, or ($.14) per share for the 2002 fourth quarter, and a net loss of ($18.5) million or ($1.98) per share for the year ended December 31, 2002.

“Our professional liability financial results improved significantly in the fourth quarter,” stated President and CEO R. Kevin Clinton. “Our reserves remained stable and we are beginning to see the results of our underwriting efforts and rate increases.”

“Our positive medical professional liability results were masked by our exit from workers’ compensation, severance costs and deferred tax accounting. However, we are greatly encouraged by improved results in our remaining core business, which we believe demonstrates that our strategic business plan is starting to turn around APCapital’s results.”

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MEDICAL PROFESSIONAL LIABILITY RESULTS

			THREE MONTHS ENDED						YEAR ENDED
			DECEMBER 31,						DECEMBER 31,
			2003			2002			2003			2002
Direct Premiums Written			$	45,049		$	38,540		$	195,742		$	177,253
Net Premiums Written			$	35,762		$	34,171		$	164,157		$	154,583
Net Premiums Earned			$	39,874		$	40,582		$	158,777		$	148,646
Incurred Loss and Loss Adjustment Expenses:
	Current Accident Year			34,938			35,299			153,180			157,750
	Prior Year			—			500			44,250			4,500
		Total		34,938			35,799			197,430			162,250
Underwriting Expense				8,653			6,686			31,315			27,157
Underwriting Loss				(3,717	)		(1,903	)		(69,968	)		(40,761	)
Net Investment Income				9,595			10,493			36,052			35,762
Other Revenue (Expense)				234			(515	)		95			(220	)
Pre-tax Income (Loss)			$	6,112		$	8,075		$	(33,821	)	$	(5,219	)
Loss Ratio:														��
	Current Accident Year			87.6	%		87.0	%		96.5	%		106.1	%
	Prior Year Development			—			1.2	%		27.8	%		3.1	%
	Calendar Year			87.6	%		88.2	%		124.3	%		109.2	%
Underwriting Ratio				21.7	%		16.5	%		19.7	%		18.3	%
Combined Ratio				109.3	%		104.7	%		144.0	%		127.5	%

Net premiums earned were down $708,000 in the fourth quarter of 2003, or 1.7% compared to the fourth quarter of 2002. For 2003, net premiums earned were up $10.1 million, or 6.8% from 2002. The decrease in fourth quarter premiums was caused by our exit from the Florida market. The premium increase for the full year is the result of the Company’s rate increases in late 2002 and throughout 2003. The insured physician count at December 31, 2003 has decreased 11.9% from December 31, 2002. The decrease in physician count is due to the Company’s exit from the Florida market, the discontinuance of Ohio and Kentucky occurrence-based policies, and elimination of poor risks in other markets.

The 2003 fourth quarter loss ratio was 87.6% with no adverse development from prior accident years. For all of 2003, the reported loss ratio was 124.3%, consisting of 96.5% on the current accident year and 27.8% of prior year development. These ratios compare to 106.1% from the 2002 accident year and 3.1% of prior year development for a total loss ratio of 109.2% reported in 2002. The Company reported $44.3 million of adverse prior year development in 2003, including $43.0 million, ($28.0 million, net of tax) in the third quarter. The $44.3 million prior year development related specifically to the 1999-2002 accident years. The states primarily affected were Ohio ($16.4 million), Florida ($16.0 million), and Kentucky ($15.0 million), which were partially offset by positive development in Michigan.

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During 2003, increases in prior year reserves were determined to be necessary based on actuarial projections. In the third quarter of 2003, the Company experienced a significant increase in average paid and reported loss severity. These higher losses indicated a trend representing a major increase in the average paid severity on the 1999 — 2002 accident years. As a result, the actuarially estimated severity of future claim settlements was increased significantly.

The increase in severity is a result of the overall market conditions for medical professional liability and specific issues associated with the Company’s book of business. In Ohio, the Company experienced an increase in the overall severity and frequency of large losses in the Northeast portion of the state. In response, the Company reduced policy limits, discontinued writing occurrence-based policies, and significantly restricted business writing in this area. In Kentucky, the frequency and severity of large losses has also increased. The Company has reduced limits, discontinued occurrence-based policies and reduced the insured physician count in this state.

The Company began to exit the Florida market in December 2002 due to the large settlements and high loss adjustment fees experienced by the industry in this market. The Company has experienced an increase in settlement costs and the frequency of claims filed since the announcement of our exit. As a result of these increasing severity and payment trends, the Company increased reserves on the run-off of this book by $16.0 million in the third quarter of 2003.

In the fourth quarter of 2003, internal and external actuaries again analyzed the Company’s professional liability reserves in all markets and determined that there was no indication of further adverse development from the reserves recorded at the end of the third quarter of 2003.

Underwriting expenses were $8.7 million, or 21.7% of net premiums earned in the fourth quarter of 2003 and 19.7% for the year. Underwriting expenses for the fourth quarter of 2002 were $6.7 million, or 16.5% of net premiums earned resulting in an underwriting ratio of 18.3% for all of 2002. The increases in underwriting expenses were directly attributable to an increase in commissions and premium taxes associated with the higher direct written premium volume. In addition, a greater allocation of corporate expenses was made to the professional liability line due to the larger proportion of the Company’s total premiums represented by professional liability.

“We were required to adjust our reserves on prior accident years in 2003 as losses in certain markets developed much worse than anticipated,” said Clinton. “However, over the last two years, we have changed our book of business dramatically and we are beginning to see positive results from these efforts. One indicator that I look at to determine if we are moving in the right direction is the number of claims reported. I am pleased to report that the number of claims reported has decreased to 531 in the fourth quarter of 2003, down 239 or 31% from 770 claims reported in the same period in 2002.”

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WORKERS’ COMPENSATION RESULTS

			THREE MONTHS ENDED						YEAR ENDED
			DECEMBER 31,						DECEMBER 31,
			2003			2002			2003			2002
Direct Premiums Written			$	4,743		$	9,488		$	37,337		$	64,194
Net Premiums Written			$	4,733		$	8,805		$	38,521		$	60,446
Net Premiums Earned			$	10,246		$	16,881		$	43,844		$	63,517
Incurred Loss and Loss Adjustment Expenses:
	Current Accident Year			10,138			17,574			37,032			55,157
	Prior Year			—			2,000			(1,400	)		—
		Total		10,138			19,574			35,632			55,157
Underwriting Expense				4,829			4,944			15,698			16,222
Underwriting Loss				(4,721	)		(7,637	)		(7,486	)		(7,862	)
Net Investment Income				1,382			371			5,553			5,438
Other Revenue (Expense)				(736	)		(205	)		(747	)		(96	)
Pre-tax Income (Loss)			$	(4,075	)	$	(7,471	)	$	(2,680	)	$	(2,520	)
Loss Ratio:
	Current Accident Year			98.9	%		104.1	%		84.5	%		86.8	%
	Prior Year Development			—			11.9	%		-3.2	%		—
	Calendar Year			98.9	%		116.0	%		81.3	%		86.8	%
Underwriting Ratio				47.1	%		29.3	%		35.8	%		25.5	%
Combined Ratio				146.0	%		145.3	%		117.1	%		112.3	%

Net premiums earned were down $6.6 million in the fourth quarter of 2003, or 39.3% from the fourth quarter of 2002. For 2003, net premiums earned were down $19.7 million, or 31.0% from 2002. The decrease was the result of our restructuring of this line during 2003 and the start of our exit from workers’ compensation in the fourth quarter. Most states require a period of notice, after which all policies can be formally non-renewed. We have notified all applicable state insurance departments of our intention to non-renew all policies. Prior to the expiration of this notice period, our policy renewals have been very limited as most insureds are seeking coverage elsewhere. In January 2004 our direct premiums written were $619,000 as compared to $3.8 million in January 2003.

The fourth quarter 2003 reported loss ratio was 98.9% with no prior year development, compared to 116.1% in the fourth quarter of 2002. For the full year, the reported loss ratio for 2003 was 81.3% compared to 86.8% for 2002. The lower loss ratios in 2003 were the result of our effort to exit higher risk accounts.

Underwriting expenses were $4.8 million, or 47.1% of net premiums earned in the fourth quarter of 2003 compared to $4.9 million, or 29.3% in the fourth quarter of 2002. Underwriting expenses for 2003 were $15.7 million, or 35.8% of net premiums earned as compared to $16.2 million or 25.5% of net premiums earned for 2002. The increases in the underwriting expense ratio were attributable to our exit process from this line, as premiums declined more quickly than related underwriting expenses.

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Also, the Company remains in discussions with interested parties on a loss portfolio transfer for its existing workers’ compensation loss reserves and premium earned in 2004. As of December 31, 2003, workers’ compensation reserves totaled $62.3 million, $60.6 million net of reinsurance.

Health and Other Operating Activities

Net premiums earned for the health program were $5.0 million in the fourth quarter of 2003, a 28.9% decrease over the fourth quarter of 2002. For the full year, net premiums earned were $22.2 million in 2003, a decrease of 6.8% from 2002. The health premiums relate to a single preferred provider program sponsored by one of the Company’s major Michigan professional liability insured groups. The decrease in fourth quarter and full year premiums is the result of our decreasing exposures in this line, partially offset by increasing rates. The number of covered lives in the program has decreased 49.2% since December 31, 2002.

The Company has formally notified the related professional liability insured group of its intention to exit the health insurance program effective December 31, 2003. Pursuant to the terms of the operating contract, the Company will begin non-renewing all accounts 180 days from the effective date.

The health line generated a reported loss ratio of 76.8% in the fourth quarter of 2003 as compared to 107.1% in the 2002 fourth quarter. For 2003, the reported loss ratio was 83.8% as compared to 97.6% for 2002. The decrease in the 2003 fourth quarter and year-to-date loss ratios was the direct result of re-underwriting efforts and rate increases.

Loss reserve development and reinsurance treaty adjustments related to the run-off of the personal and commercial lines resulted in a loss before taxes of ($135,000) in the fourth quarter of 2003 and ($1.5) million year-to-date. This compares to a loss before taxes of ($965,000) in the fourth quarter of 2002 and ($2.6) million for 2002. This adverse development is associated with a small number of primarily personal injury claims that remain from this book of business. Management is aggressively working to resolve all outstanding claims, which now number less than 25.

Investment Income

Investment income was $12.9 million in the fourth quarter of 2003, an increase of $1.4 million as compared to $11.4 million for the same period in 2002. For 2003, investment income was $45.1 million, a slight decrease from $45.5 million in 2002. The fourth quarter increase in investment income was the result of a smaller cash allocation in our portfolio.

The average yield on investments was 6.52% for the fourth quarter and 5.78% for 2003, as compared to 6.10% for the fourth quarter and full year in 2002.

Balance Sheet and Equity Information

APCapital’s total assets were $1.063 billion at December 31, 2003, up $4.1 million from December 31, 2002. Net unrealized gains on the Company’s investments increased $7.6

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million, $5.0 million net of tax, during 2003. At December 31, 2003, the Company’s total shareholders’ equity was $201.8 million, down from $280.3 million at December 31, 2002. The decrease in equity was the result of losses incurred in 2003 and the establishment of a deferred tax asset valuation allowance.

APCapital’s book value per common share was $23.87 at December 31, 2003, based on 8,452,778 common shares outstanding, compared to $32.24 at December 31, 2002. Tangible book value per common share was $23.69 at December 31, 2003, compared to $32.24 at December 31, 2002.

Stock Repurchase Program

The Company repurchased 21,500 shares of its common stock during the first three days of October 2003 at a cost of $608,000 or $28.26 per share bringing the total shares repurchased in 2003 to 272,800. Under the September 11, 2003 authorization, the Company has approximately 418,500 shares available for repurchase. At this time the Company does not anticipate repurchasing any of its shares in the near future.

SCW Agency

“I am pleased to announce that a new agreement has been executed between the Company and SCW Agency,” said Clinton. “I believe this agreement is mutually beneficial to both parties. One important aspect of this agreement is that SCW has agreed to only represent the Company in Michigan. SCW is our largest and most profitable agent in Michigan. They produced $46.7 million in professional liability direct premiums in Michigan in 2003, which is 24% of our total professional liability premiums written during the year.”

SCW Agency also writes medical professional liability for the Company in Illinois, and Kentucky. SCW Agency is 91.1% owned by William B. Cheeseman, a current director of APCapital and its former president and chief executive officer.

A.M. Best Rating

In January 2004, A.M. Best downgraded the financial strength rating for APCapital’s largest subsidiary, American Physicians Assurance Corporation (American Physicians), to B+ from B++. Both ratings are considered “Very Good” and fall within the A.M. Best “Secure” range. According to A.M. Best, the rating for American Physicians remains under review with negative implications pending, among other things, the assessment of the company’s finalized year-end 2003 capital adequacy, operating structure and holding company financial leverage. APCapital downstreamed $25 million from the holding company to American Physicians in January 2004 to increase the subsidiary’s surplus. At APCapital’s request, the group of companies is no longer group rated, and A.M. Best now views American Physicians, APSpecialty and ICA on a stand-alone basis.

Outlook

“This was a difficult year for APCapital and its shareholders,” said Clinton. “However, we believe we have taken the steps needed to improve our Company, including exiting non-core

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business lines and markets, and refocusing our Company on professional liability within our core states. I believe we have improved the position of our Company and we are starting to see the benefits of our strategic plan.”

Conference Call

APCapital’s Web site, www.apcapital.com, will host a live Webcast of its conference call in a listen-only format to discuss 2003 fourth quarter and year end results on February 13, 2004 at 10:00 a.m. Eastern time. An archived edition of the Webcast will be available for two weeks following the event. For individuals unable to access the Webcast, a telephone replay will be available by dialing 1-800-642-1687 or (706) 645-9291 and entering the conference ID code: 5307301. The replay will be available through 11:59 p.m. Eastern time on February 27, 2004.

Corporate Description

American Physicians Capital, Inc. is a regional provider of medical professional liability insurance focused primarily in the Midwest markets through American Physicians Assurance Corporation and its other subsidiaries. Further information about the companies is available on the Internet at www.apcapital.com.

Forward-Looking Statement

Certain statements made by American Physicians Capital, Inc. in this release may constitute forward-looking statements within the meaning of the federal securities laws. When we use words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions, we are making forward-looking statements. While we believe any forward-looking statements we have made are reasonable, they are subject to risks and uncertainties, and actual results could differ materially. These risks and uncertainties include, but are not limited to, the following: the potential inadequacy of our loss and loss adjustment expense reserves, a deterioration in the current accident year experience could result in a portion or all of our deferred policy acquisition costs not being recoverable, which would result in a charge to income, the continued adverse development related to the run-off of our personal and commercial business could result in additional unanticipated losses, we may be unable to collect the full amount of reinsurance recoverable from Gerling Global, a significant reinsurer, if their cash flow or surplus levels are inadequate to make claim payments, which could result in a future charge to income, we may experience unforeseen costs associated with our exit from the health insurance line of business and possible run-off of workers’ compensation claims, which could result in future charges to income, liabilities imposed that exceed our policy limits and reserves, increased pressures on premium rates and our potential inability to obtain rate increases, adverse changes in the health care industry, our potential inability to obtain adequate and affordable reinsurance coverage from creditworthy reinsurers, adverse regulatory changes in certain states of operation, our potential inability to execute our business strategy, the loss of our relationships with medical associations, an unanticipated increase in claims or other unforeseen costs due to our exit from markets and lines of business, an interruption or change in our principal third-party distribution relationship, a reduction in our A.M. Best Company rating, negative changes in financial market conditions, a downturn in general economic conditions, and any other factors listed or discussed in the reports filed by APCapital with the Securities and Exchange Commission, under the Securities Exchange Act of 1934. APCapital does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

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Definition of Non-GAAP Financial Measures

The Company uses operating income (loss), a non-GAAP financial measure, to evaluate APCapital’s underwriting performance. Operating income (loss) differs from net income (loss) by excluding the after-tax effect of realized capital gains and (losses) and the after-tax effect of changes in accounting principles.

Although the investment of premiums to generate investment income and capital gains or (losses) is an integral part of an insurance company’s operations, the determination to realize capital gains or (losses) is independent of the insurance underwriting process. In addition, under applicable GAAP accounting requirements, losses can be created as the result of other than temporary declines in the value of investment securities, without actual realization. APCapital believes that the level of realized gains and (losses) for any particular period is not indicative of the performance of our ongoing underlying insurance operations in a particular period. Changes in accounting principles, likewise, are not indicative of the current or future performance of our insurance operations, and have therefore also been excluded in the calculation of operating income (loss). As a result, the Company believes that providing operating income (loss) information makes it easier for users of APCapital’s financial information to evaluate the success of the Company’s underlying insurance operations, and may, in APCapital’s opinion, lead to incorrect or misleading assumptions and conclusions regarding the Company’s ongoing financial performance.

In addition to the Company’s reported loss ratios, management uses accident year loss ratios, a non-GAAP financial measure, to evaluate the Company’s current underwriting performance. The accident year loss ratio excludes the effect of prior years’ loss reserve development. APCapital believes that this ratio is useful to investors as it focuses on the relationships between current premiums earned and losses incurred related to the current year. Although considerable variability is inherent in the estimates of losses incurred related to the current year, the Company believes that the current estimates are reasonable.

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Summary Financial Information
APCapital, Inc.

Balance Sheet Data				December 31,		December 31,
				2003		2002
				(In thousands, except per share data)
Assets:
		Cash and investments		$	834,005	$	801,556
		Premiums receivable			65,362		62,531
		Reinsurance recoverable			103,652		98,128
		Deferred federal income taxes			—		42,542
		Federal income taxes recoverable			973		1,100
		Intangible assets			1,539		—
		Other assets			57,515		53,061
			Total assets	$	1,063,046	$	1,058,918
Liabilities and Shareholders’ Equity:
	Unpaid losses and loss adjustment expenses			$	673,605	$	637,494
	Unearned premiums				103,806		103,420
	Long-term debt				30,928		—
	Other liabilities				50,698		37,715
			Total liabilities		859,037		778,629
	Minority interest in consolidated subsidiary				2,201		—
	Shareholders’ equity				201,808		280,289
			Total liabilities and shareholders’ equity	$	1,063,046	$	1,058,918
Book value per share:
		Total		$	23.87	$	32.24
		Tangible		$	23.69	$	32.24
Shares outstanding					8,453		8,695

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Summary Financial Information
APCapital, Inc.

Income Statement

					Three Months Ended								Year Ended
					December 31,								December 31,
					2003			2002					2003				2002
					(In thousands, except per share data)
Net premiums earned					$	55,070		$	64,581				$	224,590			$	235,551
Investment income						12,860			11,417					45,069				45,525
Net realized (gains) losses						(663	)		(235	)				628				(913	)
Other income (expense)						586			(96	)				1,104				376
		Total revenues				67,853			75,667					271,391				280,539
Losses and loss adjustment expenses						49,009			63,568					252,742				242,028
Underwriting expenses						14,276			13,229					51,104				48,593
Restructuring expenses						808			—					808				—
Other expenses						2,397			1,192					7,620				4,859
		Total expenses				66,490			77,989					312,274				295,480
		Income (loss) before income taxes, minority interest and cumulative effect of a change in accounting principle				1,363			(2,322	)				(40,883	)			(14,941	)
Federal income tax expense (benefit)						1,609			(1,106	)				36,296				(5,529	)
		Loss before minority interest and cumulative effect of a change in accounting principle				(246	)		(1,216	)				(77,179	)			(9,412	)
Minority interest in net loss of consolidated subsidiary						348			—					348				—
		Income (loss) before cumulative effect of a change in accounting principle				102			(1,216	)				(76,831	)			(9,412	)
Cumulative effect of a change in accounting principle (1)						—			—					—				(9,079	)
		Net income (loss)			$	102		$	(1,216	)			$	(76,831	)		$	(18,491	)
												��
Adjustments to reconcile net income (loss) to operating income (loss)					$	102		$	(1,216	)			$	(76,831	)		$	(18,491	)
Net income (loss)
			Add back:
				Realized losses (gains), net of tax		431			153					(408	)			593
				Cumulative effect of a change in accounting principle (1)		—			—					—				9,079
Operating income (loss)					$	533		$	(1,063	)			$	(77,239	)		$	(8,819	)
Earnings per share data:
Net income (loss) before cumulative effect of a change in accounting principle
				Basic	$	0.01		$	(0.14	)			$	(9.02	)		$	(1.01	)
				Diluted	$	0.01		$	(0.14	)			$	(9.02	)		$	(1.01	)
Cumulative effect of a change in accounting principle (1)
				Basic	$	—		$	—				$	—			$	(0.97	)
				Diluted	$	—		$	—				$	—			$	(0.97	)
Net income (loss)
				Basic	$	0.01		$	(0.14	)			$	(9.02	)		$	(1.98	)
				Diluted	$	0.01		$	(0.14	)			$	(9.02	)		$	(1.98	)
Operating income (loss)
	Basic				$	0.06		$	(0.12	)			$	(9.07	)		$	(0.94	)
	Diluted				$	0.06		$	(0.12	)			$	(9.07	)		$	(0.94	)
Basic weighted average shares outstanding						8,356			8,575					8,520				9,340
Diluted weighted average shares outstanding						8,533			8,575		(2)			8,520		(2)		9,340	(2)
Loss ratio						89.0	%		98.4	%				112.5	%			102.7	%
Underwriting ratio						25.9	%		20.5	%				22.8	%			20.6	%
Combined ratio						114.9	%		118.9	%				135.2	%			123.3	%

(1) Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standard No. 142 (“SFAS No. 142”), “Goodwill and Other Intangible Assets,” which resulted in the write-off of goodwill totaling $9,079,000, net of tax. In accordance with the transitional guidance given in SFAS No. 142, the goodwill impairment charge that was determined in the fourth quarter of 2002, was recorded in the first quarter of 2002 as a cumulative effect of a change in accounting principle.

(2) Incremental shares for the conversion of options are not included in the calculation as they would be anti-dilutive.

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Summary Financial Information
APCapital, Inc.

Line of Business Results
(Dollars in thousands)			Three Months Ended							Year Ended
			December 31,							December 31,
			2003				2002			2003			2002
Direct Premiums Written:
	Medical professional liability		$	45,049			$	38,540		$	195,742		$	177,253
	Workers’ compensation			4,743				9,488			37,337			64,194
	Health			5,061				7,315			23,156			24,433
	Personal and commercial			—				—			—			380
		Total	$	54,853			$	55,343		$	256,235		$	266,260
Net Premiums Written:
	Medical professional liability		$	35,762			$	34,171		$	164,157		$	154,583
	Workers’ compensation			4,733				8,805			38,521			60,446
	Health			4,950				6,960			22,208			23,820
	Personal and commercial			—				158			(239	)		(432	)
		Total	$	45,445			$	50,094		$	224,647		$	238,417
Net Premiums Earned:
	Medical professional liability		$	39,874			$	40,582		$	158,777		$	148,646
	Workers’ compensation			10,246				16,881			43,844			63,517
	Health			4,950				6,960			22,208			23,820
	Personal and commercial			—				158			(239	)		(432	)
		Total	$	55,070			$	64,581		$	224,590		$	235,551
Loss Ratio (1):
	Medical professional liability			87.6	%			88.2	%		124.3	%		109.2	%
	Workers’ compensation			98.9	%			116.0	%		81.3	%		86.8	%
	Health			76.8	%			107.1	%		83.8	%		97.6	%
	Personal and commercial			—		(4)		466.5	%		-443.9	%		-316.4	%
		Total		89.0	%			98.4	%		112.5	%		102.7	%
Underwriting Ratio (2):
	Medical professional liability			21.7	%			16.5	%		19.7	%		18.3	%
	Workers’ compensation			47.1	%			29.3	%		35.8	%		25.5	%
	Health			16.1	%			18.6	%		17.4	%		20.4	%
	Personal and commercial			—		(4)		231.0	%		-90.4	%		-84.5	%
		Total		25.9	%			20.5	%		22.8	%		20.6	%
Combined Ratio (3):
	Medical professional liability			109.3	%			104.7	%		144.0	%		127.5	%
	Workers’ compensation			146.0	%			145.3	%		117.1	%		112.3	%
	Health			92.9	%			125.7	%		101.2	%		118.0	%
	Personal and commercial			—		(4)		697.5	%		-534.3	%		-400.9	%
		Total		114.9	%			118.9	%		135.3	%		123.3	%

(1) The loss ratio is calculated by dividing incurred loss and loss adjustment expenses by net premiums earned.

(2) The underwriting ratio is calculated by dividing underwriting expenses by net premiums earned.

(3) The combined ratio is the sum of the loss and underwriting ratios.

(4) There were no net premiums earned during the three months ended December 31, 2003, therefore no ratios for these periods was calculated.

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