A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of ?a-? of FPIC Insurance Group (FPIC) and its members. A.M. Best also has affirmed the ICR of ?bbb-? of FPIC Insurance Group, Inc. (Jacksonville, FL) [NASDAQ: FPIC]. Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of ?a-? of FPIC Insurance Group, Inc.'s separately rated subsidiary, Advocate, MD Insurance of the Southwest, Inc. (Advocate, MD) (Austin, TX). The outlook for all ratings is stable. (See below for a detailed listing of the companies.)

The ratings of FPIC reflect its excellent risk-adjusted capitalization, strong operating performance and high policyholder retention levels. These strengths are derived from management's long-standing localized market knowledge and extensive understanding of the Florida regulatory and judicial environment. The ratings also recognize the financial flexibility that exists at FPIC Insurance Group, Inc., which continues to maintain a modest financial leverage of 13.8% (total debt/total capital as of September 30, 2010) and strong interest coverage.

The positive rating factors are partially offset by the inherent challenges associated with FPIC's status as a monoline insurer in the highly cyclical medical professional liability (MPL) line of insurance. As such, the outlook is contingent upon FPIC's cycle management capabilities and its pricing discipline.

The ratings of Advocate, MD reflect its strong risk-adjusted capital position, favorable operating performance since its formation in 2004 and high policyholder retention levels. The ratings also consider the advantages that Advocate, MD derives from being a member of a strong, publicly traded organization. FPIC's management has demonstrated its ongoing support of Advocate, MD since its acquisition in late 2009, most notably through the execution of a significant quota share reinsurance agreement with a FPIC subsidiary, First Professionals Insurance Company.

The FSR of A- (Excellent) and ICRs of ?a-? have been affirmed for FPIC Insurance Group and its following members:

  • Anesthesiologists Professional Assurance Company
  • First Professionals Insurance Company
  • Intermed Insurance Company

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: ?Risk Management and the Rating Process for Insurance Companies?; ?Understanding BCAR for Property/Casualty Insurers?; ?A.M. Best Ratings & the Treatment of Debt?, and ?Rating Members of Insurance Groups.? Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2010 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Co.
Greg Williams, 908-439-2200, ext. 5815
Senior Financial Analyst
greg.williams@ambest.com
or
Henry Witmer, 908-439-2200, ext. 5097
Assistant Vice President
henry.witmer@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com