On Feb. 16, FPIC Insurance Group (NASDAQ:FPIC) released fourth-quarter earnings for the period ended Dec. 31, 2006.

The quarter's expense ratio increased because of a levy of $4.7 million by the Florida Insurance Guaranty Association related to the bankruptcy of Poe Financial Group. This can later be recouped by FPIC.

  • Although net income was flat, operating earnings (excluding realized gains and discontinued operations items) were up 25%.
  • For the year, policy retention rates were strong at 94% in Florida and 92% nationwide.
  • Favorable loss reserve development shaved 9.2% off the quarter's combined ratio, versus favorable development of 0.4% last year.
  • FPIC has a four-star rating in Motley Fool CAPS. Tell us what you think about this company.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

% Change

Premiums Earned

$54,871

$63,984

(14.2%)

Investment Income

$8,848

$6,863

28.9%

Net Income

$9,431

$9,306

1.3%

EPS

$0.92

$0.90

2.2%



Get back to basics with a look at an insurer's income statement.

Ratio Checkup

Q4 2006

Q4 2005

Change

Loss Ratio

56.6%

70.5%

(13.90%)

Expense Ratio

29.0%

16.8%

12.20%

Combined Ratio

85.6%

87.3%

(1.70%)

*Expressed in percentage points.

What do these ratios mean?

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

% Change

Investments

$865,997

$764,079

13.3%

Total Assets

$1,219,059

$1,308,541

(6.8%)



Liabilities

Gross Loss Expense Reserve

$642,955

$663,466

(3.1%)

Reserve, Net of Reinsurance

$484,087

$359,619

34.6%

Long Term Debt

$46,083

$46,083

0.0%



Learn your way around an insurer's balance sheet.

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  • St. Paul Travelers (NYSE:STA)

Related Foolishness:

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Fool contributor Emil Lee is an analyst and a disciple of value investing. Emil doesn't own shares in any of the companies mentioned above and appreciates hearing your comments, concerns, and complaints. The Motley Fool has a disclosure policy.