One of Florida’s major medical malpractice insurers is seeking state approval to be sold to an out-of-state insurance group with the initial price tag expected to total $365 million. The Florida Office of Insurance Regulation has scheduled a public hearing on the deal later this week.
FPIC Insurance Group, one of Florida’s largest providers of physicians and surgeons medical professional liability groups in Florida has announced it will be selling to the California based-The Doctors Co. for $42.000 per share, representing an aggregate price of some $362 million. The $42 figure includes a premium of roughly 11 percent over the $31.10 per share price based on May 23, the last trading day before the deal was announced.
The FPIC Group is the largest medical malpractice insurer in Florida with 18,000 policies. Additionally, it is the fourth largest insurer in Texas and is among the top five in Georgia and Arkansas. In all, FPCI writes medical malpractice cover in 14 states and is licensed to write in an additional 14 percent.
In its first quarter reports to its shareholders, FPIC said its retention rate for the first three months of this year was 96 percent, virtually unchanged from the prior two quarters of 2010. Net written premiums declined by five percent, based on premiums returned to policyholders under retrospective rating plans. However, the company’s net investment income did decline by 14 percent for the first quarter this year, primarily to lower investment rates. The company also acknowledged that its operating expense was 30.5 percent as compared to 28 percent increase last year. Company officials said the 2011 higher values reflected lower net premiums and higher commissions and acquisition costs.
The Doctors Co. was founded by doctors in 1976 and is the nation’s largest insurer of physician and surgeon medical professional liability with nearly 55,000 member physicians, $4 billion assets, and “A” rating by Fitch Ratings and an A- rating by A.M. Best.