Physicians Insurance
1-800-962-1399 Create Account


Physicians Insurance's Financial Position at December 31, 2008

By Rod Pierson, Senior Vice President, Chief Financial Officer, and Treasurer
Physicians Insurance A Mutual Company

The company produced excellent financial results in 2008 and ended the year with surplus of $138 million. The net premiums written-to-surplus ratio was a very strong and conservative .52 to 1.00.

Our investment portfolio performed well in a difficult environment in 2008 because we take a fairly conservative approach to our investments and stress high quality. This is in keeping with the company's mission to provide excellent insurance coverage consistent with sound financial and insurance practices.

Our investment portfolio totaled approximately $326 million at December 31, 2008--with 6% invested in equities and 94% in bonds. The equity investments are all in six mutual funds, and the company owns no individual stocks. Nearly 70% of these equity investments are in index funds that track the S&P 500. The remaining 30% are in mid cap, small cap, and international funds. Not surprisingly, the total results of these investments track fairly closely with changes in the overall stock market.

Our well-diversified bond portfolio is composed primarily of three components: tax-exempt municipal bonds (33% of the total), mortgage pass-throughs (30%), and corporate bonds (15%). The remaining 22% is composed primarily of U.S. Treasury bonds, bonds of U.S. government agencies, and commercial mortgage-backed securities. The mortgage pass-throughs are pools of mortgages through Fannie Mae and similar organizations; all are high-quality mortgages and in effect guaranteed by Fannie Mae and Freddie Mac, and none are sub-prime. All of Physicians Insurance's bond holdings are currently rated investment grade by the rating agencies, with the exception of one $2 million municipal bond that was downgraded by one rating agency to below investment grade in 2008 but remains rated investment grade by the other major rating agency. Despite certain problems relating to the county that issued the bond, we anticipate collecting all amounts of this bond because it is backed by specific dedicated resources.

Physicians Insurance did not take any significant losses on bond sales in 2008. At the end of December, the market value of the company's $308 million bond portfolio in total was approximately $2 million higher than amortized cost (carrying value).

< Previous ArticleNext Article >

For all media inquiries, please contact:

David Kinard
Marketing and Communications
206-343-6618 or

(206) 343-7300 | 1-800-962-1399 | Fax: (206) 343-7100 | E-mail Us
Your Account | Contact Us | Privacy & Terms of Use
Stay Current, Stay Connected: WordPress Blog  Facebook  Twitter  LinkedIn