Press Release
April 19, 2004
For Immediate Release
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For Information Contact:
Eric R. Anderson, Vice President, Investor Relations - 202.969.1866
NCRIC GROUP, INC. ANNOUNCES AFFIRMATION OF A-, EXCELLENT, RATING BY A.M. BEST
COMPANY
WASHINGTON, D.C. -- NCRIC Group, Inc. (NCRIC) (Nasdaq National Market: NCRI), a
leading provider of medical professional liability insurance and physician
practice management services in the Mid-Atlantic region, today reported that
A.M. Best Company has affirmed its rating of A- (Excellent) with a stable
outlook. The rating applies to NCRIC's insurance subsidiary, NCRIC, Inc.
"We are very pleased with A.M. Best's decisions to affirm our A- rating and to
issue a stable outlook for our rating," stated R. Ray Pate, Jr., President and
Chief Executive Officer, NCRIC Group, Inc. "Financial strength is one of our
primary objectives and A.M. Best's evaluation is a leading measure of financial
stability in the medical professional liability insurance industry."
According to A.M. Best, the rating reflects NCRIC, Inc.'s excellent
risk-adjusted capitalization, historically favorable operating profitability and
leadership position in providing medical professional liability insurance to
individual and groups of physicians throughout the Mid-Atlantic region. The
rating acknowledges NCRIC's reaction to marketplace changes by reorganizing to
be able to better address the changing needs of physicians and to address
hardening market conditions. The rating notes that the completion by NCRIC of
its second-step conversion to a fully public corporation from a mutual holding
company structure and the investment of 75 percent of the net proceeds into the
insurance company has provided NCRIC, Inc. with additional capital to support
growth initiatives, to allow increased risk retention levels and to enhance the
ability to sustain adverse loss reserve development.
The positive rating factors are offset by the rise in claims severity, the
increase in the costs of defending claims and substantial growth in exposures as
well as recent adverse loss reserve development and the resulting decline in
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operating profitability. However, A.M. Best's rating rationale comments
favorably on management's response to adverse loss cost trends through continued
re-underwriting initiatives, including the implementation of compounded rate
increases and reduced scheduled credits, and aggressively managing claims while
de-emphasizing coverage in unprofitable jurisdictions.
A.M. Best also commented that given NCRIC, Inc.'s evolving underwriting actions
to restore operating profitability, the financial flexibility of its
publicly-traded parent company which maintains favorable financial leverage and
coverage ratios, and the expectation that NCRIC, Inc. will achieve its near-term
financial projections, the rating outlook is stable. Additional details
regarding NCRIC, Inc.'s rating are available at the A.M. Best Web site,
http://www.AMBest.com, via the U.S. mail by writing to A.M. Best Company, Ambest
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Road, Oldwick, New Jersey 08858, or by calling (908) 439-2200.
Safe Harbor Information
Certain statements contained herein are not based on historical facts and are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements may be identified by reference to a future period or
periods, or by the use of forward-looking terminology, such as "may," "will,"
"believe," "expect," "estimate," "anticipate," "continue," or similar terms or
variations on those terms, or the negative of those terms. These forward-looking
statements include: statements of our goals, intentions and expectations;
statements regarding our business plans, prospects, growth and operating
strategies; and estimates of our risks and future costs and benefits. These
forward-looking statements are subject to significant risks, assumptions and
uncertainties, including, among other things, the following important factors
that could affect the actual outcome of future events:
o general economic conditions, either nationally or in our market area,
that are worse than expected;
o price competition;
o inflation and changes in the interest rate environment and performance
of financial markets;
o adverse changes in the securities markets;
o changes in laws or government regulations affecting medical
professional liability insurance and practice management and financial
services;
o NCRIC, Inc.'s concentration in a single line of business;
o our ability to successfully integrate acquired entities;
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o changes to our ratings assigned by A.M. Best;
o impact of managed healthcare;
o uncertainties inherent in the estimate of loss and loss adjustment
expense reserves and reinsurance;
o the cost and availability of reinsurance;
o changes in accounting policies and practices, as may be adopted by our
regulatory agencies and the Financial Accounting Standards Board; and
o changes in our organization, compensation and benefit plans.
We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and wish to
advise readers that the factors listed above could affect our financial
performance and could cause actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
periods in any current statements. We do not undertake and specifically decline
any obligation to publicly release the result of any revisions that may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
About NCRIC Group, Inc.
NCRIC Group, Inc. (NCRIC) is a healthcare financial services organization that
assists individual physicians and groups of physicians in managing their
practices by providing medical professional liability insurance, practice
management and financial services, and employee benefits plan design and pension
administration. In addition to its headquarters in Washington, D.C., NCRIC has
offices in Richmond and Lynchburg, Virginia as well as Greensboro, North
Carolina and provides services to more than 5,000 physician clients.
For further information, contact Eric R. Anderson, Vice President, Investor
Relations; 1115 30th Street, NW, Washington, D.C. 20007; 202.969.1866, ext.
3102; anderson@ncric.com; or consult NCRIC's website, www.ncric.com.
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April 19, 2004