The MIIX Group of Lawrenceville NJ announced a net operating loss for the fourth quarter of 2001 of $162.8 million compared to net operating income in 2000 of $4.2 million for the same period.
The group, which specializes in medical professional liability coverage, had been scheduled to announce it’s results last week (See IJ Website Feb.21), but delayed reporting them until it had completed an analysis of the losses. For the full year MIIX reported a net operating loss of $149,567 million, nearly four times the $32,553 loss it reported for 2000.
The company’s announcement indicated that the loss resulted “primarily from strengthening the Company’s loss and loss adjustment expense reserves and from recording a valuation allowance against the Company’s net deferred tax asset.” It increased loss reserves by $64.5 million in December, “to reflect a trend of unprecedented loss severity that emerged in the last half of the year.”
MIIX has been particularly hard hit in Pennsylvania mostly in its institutions book, and is involved in the State’s current medical malpractice reform controversy. It also noted adverse developments “associated primarily with physician business in certain other states, most notably Pennsylvania, Texas and Ohio.”
Recently installed President and CEO, Patricia Costante took steps to reassure shareholders and investors. “The Company is working very aggressively to develop a new operating plan that builds on the business plan implemented by the new management team at the end of 1999,” Costante stated.
” The new operating plan will further focus Company operations on New Jersey and the Mid-Atlantic region where there is a history of profitability and a strong core insured physician base. In addition, the Company plans to exit institutional business to focus solely on physician insureds. Initial actions necessary to accomplish these objectives, including the closure of our regional offices, have already occurred.”
MIIX also plans to further reduce costs and to shed non-core assets in an effort to stem the losses. ” We have met with the two state insurance departments in which our active insurance subsidiaries are domiciled and we are working with them, and regulators in other states, to assure that the issues are resolved in the best possible manner,” Costante stated
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