SCPIE Holdings Inc. (NYSE:SKP), a major provider of healthcare
liability insurance, reported improved net income for its third
quarter and nine months ended September 30, 2006. For the 2006
third quarter, SCPIE reported net income of $3.3 million, or $0.34
per diluted share, on total revenues of $35.1 million. This
compares to a net loss in the 2005 third quarter of $3.1 million,
or a loss of $0.33 per diluted share, on total revenues of $37.0
million. For the first nine months of this year, SCPIE reported net
income of $8.3 million, or $0.86 per diluted share, on revenues of
$108.3 million. This compares to net income for the prior-year nine
months of $254,000, or $0.03 per diluted share, on revenues of
$111.0 million. Core Operating Review The Company has realized
improvement in its core business throughout the first nine months
of 2006, including the third quarter of 2006. This represents a
continuation of the improvement that began early in 2005. In the
2006 third quarter, SCPIE�s core direct healthcare liability
operations posted an underwriting profit of $2.8 million, compared
to $4.4 million in the same period in 2005. In the 2005 third
quarter, the Company recognized a significant reduction in claims
frequency. The favorable trend in claims frequency has continued in
2006, but at a lower rate. Net earned premium for core direct
healthcare operations totaled $30.5 million for the 2006 third
quarter, compared with $32.0 million for the same period a year
earlier. Net written premium for the 2006 third quarter was $6.7
million, compared with $6.9 million in the same prior-year period.
The combined ratio for SCPIE�s core business in the 2006 third
quarter was 90.9%, with a loss ratio of 71.1%. A year ago, the
company�s combined ratio for the third quarter was 86.1%, including
a loss ratio of 67.0%. The core expense ratio in the 2006 third
quarter increased slightly to 19.8% from 19.1% in 2005. For the
first three quarters of 2006, SCPIE�s core healthcare operations
had an underwriting profit of $7.7 million, a 26.2% increase over
the underwriting profit of $6.1 million in the first nine months of
2005. Net earned premiums for the core business decreased slightly
to $93.1 million from $96.5 million a year earlier. Net written
premiums totaled $98.8 million, compared with $102.3 million in the
first nine months of 2005. The combined ratio for the nine-month
2006 period was 91.7%, including a loss ratio of 71.0%. This is
improved from a combined ratio for the first nine months of 2005 of
93.7%, with a loss ratio of 72.8%. SCPIE�s retention rate for its
core direct healthcare liability business over the past 12 months
totaled 95.5%. �This quarter and the full nine months� results
clearly demonstrate the improved financial condition of our
company,� said Donald J. Zuk, SCPIE President and Chief Executive
Officer. �Our core book has performed very well, and we expect to
build on that in the months ahead.� Non-Core Review SCPIE�s
continuing run-off of its non-core healthcare liability operations
in states other than California and Delaware had minimal impact on
the company�s financial results for the third quarter and first
nine months of 2006. Net outstanding reserves for this segment
declined to $45.3 million from $60.6 million at December 31, 2005.
Open claims dropped to 156 from 229 at year-end 2005. In the
assumed reinsurance area, which is also in run-off, there was an
underwriting loss of $2.6 million for the quarter and $8.5 million
for the first nine months of 2006, compared to losses of $17.3
million and $22.8 million, respectively, for the same periods in
2005. Financial Summary Revenues for the third quarter of 2006
included net investment income of $5.3 million and realized
investment losses of $259,000, compared with net investment income
in the 2005 third quarter of $4.6 million and realized investment
losses of $264,000. For the first nine months of 2006, net
investment income totaled $15.5 million and realized investment
losses of $423,000. A year earlier, SCPIE reported nine-month net
investment income of $13.4 million and realized investment losses
of $258,000. The increase in net investment income in 2006 over
comparable periods in 2005 is attributable to the general rise in
shorter-term interest rates during 2006. At September 30, 2006,
SCPIE�s balance sheet remained debt-free. Book value at the end of
the third quarter was $21.08, compared with $20.05 per share at
December 31, 2005. About SCPIE Holdings SCPIE Holdings Inc. is a
leading provider of healthcare liability insurance for physicians,
oral and maxillofacial surgeons, and other healthcare providers, as
well as medical groups and healthcare facilities. Since the company
was founded in 1976, it has carved out a significant niche in the
insurance industry by providing innovative products and services
specifically for the healthcare community. Investor Conference Call
An investor conference call to discuss SCPIE�s third-quarter 2006
results will be held today, November 3, 2006, at 9 am PST (12 noon
EST). The call will be open to all interested investors through a
live audio web broadcast via the Internet at www.scpie.com and
www.earnings.com. Rebroadcast over the Internet will be available
for one year on both websites. A telephonic playback of the call
will be available approximately 11 am PST, Friday, November 3,
2006, to 5 pm PST, Friday, November 10, 2006. Listeners should call
888/286-8010 (domestic) or 617/801-6888 (international) and use
Reservation Number 55663379. Forward-Looking Statements In addition
to historical information, this news release contains
forward-looking statements that are based upon the company�s
estimates and expectations concerning future events and are subject
to certain risks and uncertainties that could cause actual results
to differ materially from those reflected in the forward-looking
statements. Actuarial estimates of losses and loss expenses and
expectations concerning the company�s ability to retain current
insureds at profitable levels, successful withdrawal from the
assumed reinsurance business, continued solvency of the company�s
reinsurers, obtaining rate change regulatory approvals, expansion
of liability insurance business in its principal market, and
improved performance and profitability are dependent upon a variety
of factors, including future economic, competitive and market
conditions, frequency and severity of catastrophic events, future
legislative and regulatory actions, uncertainties and potential
delays in obtaining rate approvals, the level of ratings from
recognized rating services, the inherent uncertainty of loss and
loss expense estimates in both the core business and discontinued
non-core business and the cyclical nature of the property and
casualty insurance industry, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of the company. The company is also subject to certain
structural risks as an insurance holding company, including
statutory restrictions on dividends and other intercompany
transactions. In light of the significant uncertainties inherent in
the forward-looking information herein, the inclusion of such
information should not be regarded as representation by the company
or any other person that the company�s objectives or plans will be
realized. SCPIE Holdings Inc. and Subsidiaries Consolidated Balance
Sheets (Dollars in Thousands) � September 30, 2006 December 31,
2005 ASSETS Securities available-for-sale: Fixed maturities
investments, at fair value (amortized cost 2006 - $424,653; 2005 -
$469,350) $ 416,517� $ 461,480� Equity investments, at fair value
(cost 2006 - $1,779; 2005 - $1,934) � 2,030� � 2,095� Total
securities available-for-sale 418,547� 463,575� Cash and cash
equivalents � 114,224� � 68,783� Total investments 532,771�
532,358� � Accrued investment income 5,038� 5,874� Premiums
receivable 23,510� 18,731� Assumed Reinsurance Receivables 16,817�
6,960� Reinsurance recoverable 50,807� 55,933� Deferred policy
acquisition costs 8,815� 7,120� Deferred federal income taxes, net
47,874� 51,214� Property and equipment, net 1,913� 2,449� Other
assets � 6,671� � 6,325� Total assets $ 694,216� $ 686,964� �
LIABILITIES Reserves: Loss and loss adjustment expenses $ 422,374�
$ 429,315� Unearned premiums � 47,396� � 41,705� Total reserves
469,770� 471,020� Amounts held for reinsurance 7,005� 4,818� Other
liabilities � 16,350� � 20,333� Total liabilities 493,125� 496,171�
� Commitments and contingencies � STOCKHOLDERS' EQUITY Preferred
stock - par value $1.00, 5,000,000 shares authorized, no shares
issued or outstanding � -� -� Common stock - par value $.0001,
30,000,000 shares authorized, 12,792,091 shares issued, 2006 -
9,541,303 shares outstanding 2005 - 9,456,916 shares outstanding �
� 1� 1� Additional paid-in capital 37,127� 37,127� Retained
earnings 267,942� 259,645� Treasury stock, at cost (2006 -
2,750,788 shares and 2005 - 2,835,175 shares) (95,227) (97,063) �
Subscription notes receivable (2,347) (2,649) Accumulated other
comprehensive income � (6,405) � (6,268) Total stockholders' equity
� 201,091� � 190,793� Total liabilities and stockholders' equity $
694,216� $ 686,964� SCPIE Holdings Inc. and Subsidiaries
Consolidated Statements of Operations (Dollars in Thousands, except
per-share data) � Nine Months Ended Three Months Ended September
30, 2006 � September 30, 2005 September 30, 2006 � September 30,
2005 Revenues: Net premiums earned $ 93,245� $ 96,408� $ 30,163� $
31,371� Net investment income 15,476� 13,355� 5,265� 4,556�
Realized investment gains/(losses) (423) (258) (259) (264) Other
revenue � 18� � 1,522� � (41) � 1,348� Total revenues 108,316�
111,027� 35,128� 37,011� Expenses: Losses & loss adjustment
expenses incurred 74,584� 86,016� 23,678� 32,958� Other operating
expenses � 21,071� � 24,501� � 6,334� � 8,782� Total expenses �
95,655� � 110,517� � 30,012� � 41,740� � Income before federal
income taxes 12,661� 510� 5,116� (4,729) Income tax expenses �
4,364� � 256� � 1,833� � (1,607) � Net income $ 8,297� $ 254� $
3,283� $ (3,122) � Basic earnings per share of common stock $ 0.87�
$ 0.03� $ 0.35� $ (0.33) Diluted earnings per share of common stock
$ 0.86� $ 0.03� $ 0.34� $ (0.33) � Average number of shares
outstanding-basic 9,504,992� 9,416,827� 9,506,208� 9,429,052�
Average number of shares outstanding-diluted 9,619,165� 9,593,713�
9,620,381� 9,605,938� SCPIE Holdings Inc. and Subsidiaries
Supplemental Financial Data (Dollars in Thousands) � Nine Months
Ended September 30, 2006 Nine Months Ended September 30, 2005
Direct Healthcare Liability Assumed Direct Healthcare Liability
Assumed Core(2) Non-Core (3)(4) Reinsurance (4)(5) Other(7)
Total(6) Core(2) Non-Core (3)(4) Reinsurance (4)(5) Other Total(6)
� Net written premium(1) $ 98,757� $ -� $ 179� $ 98,936� $ 102,287�
$ 56� $ (1,524) $ 100,819� � � Net earned premium $ 93,066� $ -� $
179� $ 93,245� $ 96,474� $ 73� $ (139) $ 96,408� � Net investment
income $ 15,476� 15,476� $ 13,355� 13,355� Realized investment
losses (423) (423) (258) (258) Other revenue � � � � 18� � 18� � �
� � 1,522� � 1,522� � Total revenue 93,066� -� 179� 15,071�
108,316� 96,474� 73� (139) 14,619� 111,027� � Incurred loss and LAE
66,083� -� 8,501� 74,584� 70,229� (2,612) 18,399� 86,016� Other
expenses � 19,294� � -� � 168� � 1,609� � 21,071� � 20,161� � 50� �
4,290� � -� � 24,501� � Net underwriting income/(loss) $ 7,689� $
-� $ (8,490) (801) $ 6,084� $ 2,635� $ (22,828) (14,109) � Net
investment income, other revenue & expense $ 13,462� � 13,462�
$ 14,619� � 14,619� � Income before federal Income taxes $ 12,661�
$ 510� � Net cash provided/(used) in operating activities $ 2,350�
$ (35,818) � Loss ratio 71.0% 72.8% Expense ratio � 20.7% � 20.9% �
Combined ratio (GAAP) � 91.7% � 93.7% 1) Net written premium is a
non-GAAP financial measure which represents the premiums charged on
policies issued during a fiscal period less any reinsurance. Net
written premium is a statutory measure of production levels. Net
earned premium, a comparable GAAP measure, represents the portion
of premiums written that is recognized as income in the financial
statements for the periods presented and earned on a pro-rata basis
over the term of the policies. A reconciliation of net written
premium to net earned premium is provided herein. � 2) Core Direct
Healthcare Liability Business represents California and Delaware
excluding discontinued dental and hospital programs. � 3) Non-Core
Direct Healthcare Liability Business represents other state
business and dental and hospital programs in California. � 4)
Ratios are not shown for the Non-Core Healthcare Liability and
Assumed Reinsurance columns, because their run-off status produces
ratios which are not meaningful. � 5) The expense component for the
Assumed Reinsurance segment includes the effect of the
retrospective accounting treatment required by Financial Accounting
Standards Board No. 113, more fully described in SCPIE's 2005
Annual Filing in Form 10K, page 41. � 6) Ratios are not shown for
the Total column, because inclusion of the discontinued Non-Core
Healthcare Liability and Assumed Reinsurance results produce ratios
which are no longer meaningful. � 7) Other expenses in column
relate to a proxy challenge instituted in January 2006. SCPIE
Holdings Inc. and Subsidiaries Supplemental Financial Data (Dollars
in Thousands) � Three Months Ended September 30, 2006 Three Months
Ended September 30, 2005 Direct Healthcare Liability Assumed Direct
Healthcare Liability Assumed Core(2) Non-Core (3)(4) Reinsurance
(4)(5) Other(7) Total(6) Core(2) Non-Core (3)(4) Reinsurance (4)(5)
Other Total(6) � Net written premium(1) $ 6,703� $ -� $ (331) $
6,372� $ 6,911� $ (102) $ (675) $ 6,134� � � Net earned premium $
30,494� $ -� $ (331) $ 30,163� $ 32,017� $ (97) $ (549) $ 31,371� �
Net investment income $ 5,265� 5,265� $ 4,556� 4,556� Realized
investment losses (259) (259) (264) (264) Other revenue/(loss) � �
� -� � (41) � (41) � � � � 1,347� � 1,347� � Total revenue 30,494�
-� (331) 4,965� 35,128� 32,017� (97) (549) 5,639� 37,010� �
Incurred loss and LAE 21,679� -� 1,999� 23,678� 21,467� (2,604)
14,095� 32,958� Other expenses � 6,031� � -� � 260� � 43� � 6,334�
� 6,131� � (27) � 2,678� � -� � 8,782� � Net underwriting
income/(loss) $ 2,784� $ -� $ (2,590) 194� $ 4,419� $ 2,534� $
(17,322) (10,369) � Net investment income, other revenue &
expense $ 4,922� � 4,922� $ 5,639� � 5,639� � Income (loss) before
federal Income taxes $ 5,116� $ (4,730) � Net cash provided/(used)
in operating activities $ 3,747� $ (941) � Loss ratio 71.1% 67.0%
Expense ratio � 19.8% � 19.1% � Combined ratio (GAAP) � 90.9% �
86.1% 1) Net written premium is a non-GAAP financial measure which
represents the premiums charged on policies issued during a fiscal
period less any reinsurance. Net written premium is a statutory
measure of production levels. Net earned premium, a comparable GAAP
measure, represents the portion of premiums written that is
recognized as income in the financial statements for the periods
presented and earned on a pro-rata basis over the term of the
policies. A reconciliation of net written premium to net earned
premium is provided herein. � 2) Core Direct Healthcare Liability
Business represents California and Delaware excluding discontinued
dental and hospital programs. � 3) Non-Core Direct Healthcare
Liability Business represents other state business and dental and
hospital programs in California. � 4) Ratios are not shown for the
Non-Core Healthcare Liability and Assumed Reinsurance columns,
because their run-off status produces ratios which are not
meaningful. � 5) The expense component for the Assumed Reinsurance
segment includes the effect of the retrospective accounting
treatment required by Financial Accounting Standards Board No. 113,
more fully described in SCPIE's 2005 Annual Filing in Form 10K,
page 41. � 6) Ratios are not shown for the Total column, because
inclusion of the discontinued Non-Core Healthcare Liability and
Assumed Reinsurance results produce ratios which are not
meaningful. � 7) Other expenses in column relate to a proxy
challenge instituted in January 2006. SCPIE Holdings Inc. and
Subsidiaries Supplemental Financial Data (Dollars in Thousands) �
9/30/2006� Fixed-maturity portfolio � U.S. government &
agencies $ 175,219� 42.1% Mortgage & asset-backed 74,691� 17.9%
Corporate � 166,607� � 40.0% Total $ 416,517� 100.0% � Average
quality AAA� Effective duration 3.0� Yield to maturity 4.5%
Weighted average combined maturity 3.8� Nine Months Ended Three
Months Ended September 30,2006 September 30,2005 September 30,2006
September 30,2005 � Total premiums Net written premium $ 98,936� $
100,819� $ 6,372� $ 6,134� Change in unearned premium (5,691)
(4,411) 23,791� 25,237� � Net earned premium $ 93,245� $ 96,408� $
30,163� $ 31,371� SCPIE Holdings Inc. (NYSE:SKP), a major provider
of healthcare liability insurance, reported improved net income for
its third quarter and nine months ended September 30, 2006. For the
2006 third quarter, SCPIE reported net income of $3.3 million, or
$0.34 per diluted share, on total revenues of $35.1 million. This
compares to a net loss in the 2005 third quarter of $3.1 million,
or a loss of $0.33 per diluted share, on total revenues of $37.0
million. For the first nine months of this year, SCPIE reported net
income of $8.3 million, or $0.86 per diluted share, on revenues of
$108.3 million. This compares to net income for the prior-year nine
months of $254,000, or $0.03 per diluted share, on revenues of
$111.0 million. Core Operating Review The Company has realized
improvement in its core business throughout the first nine months
of 2006, including the third quarter of 2006. This represents a
continuation of the improvement that began early in 2005. In the
2006 third quarter, SCPIE's core direct healthcare liability
operations posted an underwriting profit of $2.8 million, compared
to $4.4 million in the same period in 2005. In the 2005 third
quarter, the Company recognized a significant reduction in claims
frequency. The favorable trend in claims frequency has continued in
2006, but at a lower rate. Net earned premium for core direct
healthcare operations totaled $30.5 million for the 2006 third
quarter, compared with $32.0 million for the same period a year
earlier. Net written premium for the 2006 third quarter was $6.7
million, compared with $6.9 million in the same prior-year period.
The combined ratio for SCPIE's core business in the 2006 third
quarter was 90.9%, with a loss ratio of 71.1%. A year ago, the
company's combined ratio for the third quarter was 86.1%, including
a loss ratio of 67.0%. The core expense ratio in the 2006 third
quarter increased slightly to 19.8% from 19.1% in 2005. For the
first three quarters of 2006, SCPIE's core healthcare operations
had an underwriting profit of $7.7 million, a 26.2% increase over
the underwriting profit of $6.1 million in the first nine months of
2005. Net earned premiums for the core business decreased slightly
to $93.1 million from $96.5 million a year earlier. Net written
premiums totaled $98.8 million, compared with $102.3 million in the
first nine months of 2005. The combined ratio for the nine-month
2006 period was 91.7%, including a loss ratio of 71.0%. This is
improved from a combined ratio for the first nine months of 2005 of
93.7%, with a loss ratio of 72.8%. SCPIE's retention rate for its
core direct healthcare liability business over the past 12 months
totaled 95.5%. "This quarter and the full nine months' results
clearly demonstrate the improved financial condition of our
company," said Donald J. Zuk, SCPIE President and Chief Executive
Officer. "Our core book has performed very well, and we expect to
build on that in the months ahead." Non-Core Review SCPIE's
continuing run-off of its non-core healthcare liability operations
in states other than California and Delaware had minimal impact on
the company's financial results for the third quarter and first
nine months of 2006. Net outstanding reserves for this segment
declined to $45.3 million from $60.6 million at December 31, 2005.
Open claims dropped to 156 from 229 at year-end 2005. In the
assumed reinsurance area, which is also in run-off, there was an
underwriting loss of $2.6 million for the quarter and $8.5 million
for the first nine months of 2006, compared to losses of $17.3
million and $22.8 million, respectively, for the same periods in
2005. Financial Summary Revenues for the third quarter of 2006
included net investment income of $5.3 million and realized
investment losses of $259,000, compared with net investment income
in the 2005 third quarter of $4.6 million and realized investment
losses of $264,000. For the first nine months of 2006, net
investment income totaled $15.5 million and realized investment
losses of $423,000. A year earlier, SCPIE reported nine-month net
investment income of $13.4 million and realized investment losses
of $258,000. The increase in net investment income in 2006 over
comparable periods in 2005 is attributable to the general rise in
shorter-term interest rates during 2006. At September 30, 2006,
SCPIE's balance sheet remained debt-free. Book value at the end of
the third quarter was $21.08, compared with $20.05 per share at
December 31, 2005. About SCPIE Holdings SCPIE Holdings Inc. is a
leading provider of healthcare liability insurance for physicians,
oral and maxillofacial surgeons, and other healthcare providers, as
well as medical groups and healthcare facilities. Since the company
was founded in 1976, it has carved out a significant niche in the
insurance industry by providing innovative products and services
specifically for the healthcare community. Investor Conference Call
An investor conference call to discuss SCPIE's third-quarter 2006
results will be held today, November 3, 2006, at 9 am PST (12 noon
EST). The call will be open to all interested investors through a
live audio web broadcast via the Internet at www.scpie.com and
www.earnings.com. Rebroadcast over the Internet will be available
for one year on both websites. A telephonic playback of the call
will be available approximately 11 am PST, Friday, November 3,
2006, to 5 pm PST, Friday, November 10, 2006. Listeners should call
888/286-8010 (domestic) or 617/801-6888 (international) and use
Reservation Number 55663379. Forward-Looking Statements In addition
to historical information, this news release contains
forward-looking statements that are based upon the company's
estimates and expectations concerning future events and are subject
to certain risks and uncertainties that could cause actual results
to differ materially from those reflected in the forward-looking
statements. Actuarial estimates of losses and loss expenses and
expectations concerning the company's ability to retain current
insureds at profitable levels, successful withdrawal from the
assumed reinsurance business, continued solvency of the company's
reinsurers, obtaining rate change regulatory approvals, expansion
of liability insurance business in its principal market, and
improved performance and profitability are dependent upon a variety
of factors, including future economic, competitive and market
conditions, frequency and severity of catastrophic events, future
legislative and regulatory actions, uncertainties and potential
delays in obtaining rate approvals, the level of ratings from
recognized rating services, the inherent uncertainty of loss and
loss expense estimates in both the core business and discontinued
non-core business and the cyclical nature of the property and
casualty insurance industry, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of the company. The company is also subject to certain
structural risks as an insurance holding company, including
statutory restrictions on dividends and other intercompany
transactions. In light of the significant uncertainties inherent in
the forward-looking information herein, the inclusion of such
information should not be regarded as representation by the company
or any other person that the company's objectives or plans will be
realized. -0- *T SCPIE Holdings Inc. and Subsidiaries Consolidated
Balance Sheets (Dollars in Thousands) September 30, 2006 December
31, 2005 ------------------ ----------------- ASSETS Securities
available-for-sale: Fixed maturities investments, at fair value
(amortized cost 2006 - $424,653; 2005 - $469,350) $ 416,517 $
461,480 Equity investments, at fair value (cost 2006 - $1,779; 2005
- $1,934) 2,030 2,095 ------------------ ----------------- Total
securities available- for-sale 418,547 463,575 Cash and cash
equivalents 114,224 68,783 ------------------ -----------------
Total investments 532,771 532,358 Accrued investment income 5,038
5,874 Premiums receivable 23,510 18,731 Assumed Reinsurance
Receivables 16,817 6,960 Reinsurance recoverable 50,807 55,933
Deferred policy acquisition costs 8,815 7,120 Deferred federal
income taxes, net 47,874 51,214 Property and equipment, net 1,913
2,449 Other assets 6,671 6,325 ------------------ -----------------
Total assets $ 694,216 $ 686,964 ==================
================= LIABILITIES Reserves: Loss and loss adjustment
expenses $ 422,374 $ 429,315 Unearned premiums 47,396 41,705
------------------ ----------------- Total reserves 469,770 471,020
Amounts held for reinsurance 7,005 4,818 Other liabilities 16,350
20,333 ------------------ ----------------- Total liabilities
493,125 496,171 Commitments and contingencies STOCKHOLDERS' EQUITY
Preferred stock - par value $1.00, 5,000,000 shares authorized, no
shares issued or outstanding - - Common stock - par value $.0001,
30,000,000 shares authorized, 12,792,091 shares issued, 2006 -
9,541,303 shares outstanding 2005 - 9,456,916 shares outstanding 1
1 Additional paid-in capital 37,127 37,127 Retained earnings
267,942 259,645 Treasury stock, at cost (2006 - (95,227) (97,063)
2,750,788 shares and 2005 - 2,835,175 shares) Subscription notes
receivable (2,347) (2,649) Accumulated other comprehensive income
(6,405) (6,268) ------------------ ----------------- Total
stockholders' equity 201,091 190,793 ------------------
----------------- Total liabilities and stockholders' equity $
694,216 $ 686,964 ================== ================= *T -0- *T
SCPIE Holdings Inc. and Subsidiaries Consolidated Statements of
Operations (Dollars in Thousands, except per-share data) Nine
Months Ended Three Months Ended -----------------------
----------------------- September September September September 30,
2006 30, 2005 30, 2006 30, 2005 -----------------------
----------------------- Revenues: Net premiums earned $ 93,245 $
96,408 $ 30,163 $ 31,371 Net investment income 15,476 13,355 5,265
4,556 Realized investment gains/(losses) (423) (258) (259) (264)
Other revenue 18 1,522 (41) 1,348 ----------- -----------
----------- ----------- Total revenues 108,316 111,027 35,128
37,011 Expenses: Losses & loss adjustment expenses incurred
74,584 86,016 23,678 32,958 Other operating expenses 21,071 24,501
6,334 8,782 ----------- ----------- ----------- ----------- Total
expenses 95,655 110,517 30,012 41,740 ----------- -----------
----------- ----------- Income before federal income taxes 12,661
510 5,116 (4,729) Income tax expenses 4,364 256 1,833 (1,607)
----------- ----------- ----------- ----------- Net income $ 8,297
$ 254 $ 3,283 $ (3,122) =========== =========== ===========
=========== Basic earnings per share of common stock $ 0.87 $ 0.03
$ 0.35 $ (0.33) =========== =========== =========== ===========
Diluted earnings per share of common stock $ 0.86 $ 0.03 $ 0.34 $
(0.33) =========== =========== =========== =========== Average
number of shares outstanding- basic 9,504,992 9,416,827 9,506,208
9,429,052 Average number of shares outstanding- diluted 9,619,165
9,593,713 9,620,381 9,605,938 *T -0- *T SCPIE Holdings Inc. and
Subsidiaries Supplemental Financial Data (Dollars in Thousands)
Nine Months Ended September 30, 2006
--------------------------------------------------- Direct
Healthcare Liability Assumed ------------------ Non-Core
Reinsurance Core(2) (3)(4) (4)(5) Other(7) Total(6) --------
--------- ------------ --------- --------- Net written premium(1)
$98,757 $ - $ 179 $ 98,936 Net earned premium $93,066 $ - $ 179 $
93,245 Net investment income $ 15,476 15,476 Realized investment
losses (423) (423) Other revenue 18 18 -------- ---------
------------ --------- --------- Total revenue 93,066 - 179 15,071
108,316 Incurred loss and LAE 66,083 - 8,501 74,584 Other expenses
19,294 - 168 1,609 21,071 -------- --------- ------------ ---------
--------- Net underwriting income/(loss) $ 7,689 $ - $ (8,490)
(801) ======== ========= ============ Net investment income, other
revenue & expense $ 13,462 13,462 ========= --------- Income
before federal Income taxes $ 12,661 ========= Net cash
provided/(used) in operating activities $ 2,350 ========= Loss
ratio 71.0% Expense ratio 20.7% -------- Combined ratio (GAAP)
91.7% ======== Nine Months Ended September 30, 2005
---------------------------------------------------- Direct
Healthcare Liability Assumed -------------------- Non-Core
Reinsurance Core(2) (3)(4) (4)(5) Other Total(6) ---------
---------- ------------ -------- --------- Net written premium(1)
$102,287 $ 56 $ (1,524) $100,819 Net earned premium $ 96,474 $ 73 $
(139) $ 96,408 Net investment income $13,355 13,355 Realized
investment losses (258) (258) Other revenue 1,522 1,522 ---------
---------- ------------ -------- --------- Total revenue 96,474 73
(139) 14,619 111,027 Incurred loss and LAE 70,229 (2,612) 18,399
86,016 Other expenses 20,161 50 4,290 - 24,501 --------- ----------
------------ -------- --------- Net underwriting income/(loss) $
6,084 $ 2,635 $ (22,828) (14,109) ========= ========== ============
Net investment income, other revenue & expense $14,619 14,619
======== --------- Income before federal Income taxes $ 510
========= Net cash provided/(used) in operating activities
$(35,818) ========= Loss ratio 72.8% Expense ratio 20.9% ---------
Combined ratio (GAAP) 93.7% ========= *T -0- *T 1) Net written
premium is a non-GAAP financial measure which represents the
premiums charged on policies issued during a fiscal period less any
reinsurance. Net written premium is a statutory measure of
production levels. Net earned premium, a comparable GAAP measure,
represents the portion of premiums written that is recognized as
income in the financial statements for the periods presented and
earned on a pro-rata basis over the term of the policies. A
reconciliation of net written premium to net earned premium is
provided herein. 2) Core Direct Healthcare Liability Business
represents California and Delaware excluding discontinued dental
and hospital programs. 3) Non-Core Direct Healthcare Liability
Business represents other state business and dental and hospital
programs in California. 4) Ratios are not shown for the Non-Core
Healthcare Liability and Assumed Reinsurance columns, because their
run-off status produces ratios which are not meaningful. 5) The
expense component for the Assumed Reinsurance segment includes the
effect of the retrospective accounting treatment required by
Financial Accounting Standards Board No. 113, more fully described
in SCPIE's 2005 Annual Filing in Form 10K, page 41. 6) Ratios are
not shown for the Total column, because inclusion of the
discontinued Non-Core Healthcare Liability and Assumed Reinsurance
results produce ratios which are no longer meaningful. 7) Other
expenses in column relate to a proxy challenge instituted in
January 2006. *T -0- *T SCPIE Holdings Inc. and Subsidiaries
Supplemental Financial Data (Dollars in Thousands) Three Months
Ended September 30, 2006
---------------------------------------------------- Direct
Healthcare Liability Assumed ------------------- Non-Core
Reinsurance Core(2) (3)(4) (4)(5) Other(7) Total(6) ---------
--------- ------------ --------- --------- Net written premium(1) $
6,703 $ - $ (331) $ 6,372 Net earned premium $ 30,494 $ - $ (331) $
30,163 Net investment income $ 5,265 5,265 Realized investment
losses (259) (259) Other revenue/(loss) - (41) (41) ---------
--------- ------------ --------- --------- Total revenue 30,494 -
(331) 4,965 35,128 Incurred loss and LAE 21,679 - 1,999 23,678
Other expenses 6,031 - 260 43 6,334 --------- ---------
------------ --------- --------- Net underwriting income/(loss) $
2,784 $ - $ (2,590) 194 ========= ========= ============ Net
investment income, other revenue & expense $ 4,922 4,922
========= --------- Income (loss) before federal Income taxes $
5,116 ========= Net cash provided/(used) in operating activities $
3,747 ========= Loss ratio 71.1% Expense ratio 19.8% ---------
Combined ratio (GAAP) 90.9% ========= Three Months Ended September
30, 2005 ----------------------------------------------------
Direct Healthcare Liability Assumed --------------------- Non-Core
Reinsurance Core(2) (3)(4) (4)(5) Other Total(6) ---------
----------- ------------ ------- --------- Net written premium(1) $
6,911 $ (102) $ (675) $ 6,134 Net earned premium $ 32,017 $ (97) $
(549) $ 31,371 Net investment income $4,556 4,556 Realized
investment losses (264) (264) Other revenue/(loss) 1,347 1,347
--------- ----------- ------------ ------- --------- Total revenue
32,017 (97) (549) 5,639 37,010 Incurred loss and LAE 21,467 (2,604)
14,095 32,958 Other expenses 6,131 (27) 2,678 - 8,782 ---------
----------- ------------ ------- --------- Net underwriting
income/(loss) $ 4,419 $ 2,534 $ (17,322) (10,369) =========
=========== ============ Net investment income, other revenue &
expense $5,639 5,639 ======= --------- Income (loss) before federal
Income taxes $ (4,730) ========= Net cash provided/(used) in
operating activities $ (941) ========= Loss ratio 67.0% Expense
ratio 19.1% --------- Combined ratio (GAAP) 86.1% ========= *T -0-
*T 1) Net written premium is a non-GAAP financial measure which
represents the premiums charged on policies issued during a fiscal
period less any reinsurance. Net written premium is a statutory
measure of production levels. Net earned premium, a comparable GAAP
measure, represents the portion of premiums written that is
recognized as income in the financial statements for the periods
presented and earned on a pro-rata basis over the term of the
policies. A reconciliation of net written premium to net earned
premium is provided herein. 2) Core Direct Healthcare Liability
Business represents California and Delaware excluding discontinued
dental and hospital programs. 3) Non-Core Direct Healthcare
Liability Business represents other state business and dental and
hospital programs in California. 4) Ratios are not shown for the
Non-Core Healthcare Liability and Assumed Reinsurance columns,
because their run-off status produces ratios which are not
meaningful. 5) The expense component for the Assumed Reinsurance
segment includes the effect of the retrospective accounting
treatment required by Financial Accounting Standards Board No. 113,
more fully described in SCPIE's 2005 Annual Filing in Form 10K,
page 41. 6) Ratios are not shown for the Total column, because
inclusion of the discontinued Non-Core Healthcare Liability and
Assumed Reinsurance results produce ratios which are not
meaningful. 7) Other expenses in column relate to a proxy challenge
instituted in January 2006. *T -0- *T SCPIE Holdings Inc. and
Subsidiaries Supplemental Financial Data (Dollars in Thousands)
9/30/2006 ------------------------------- Fixed-maturity portfolio
-------------------------------------- U.S. government &
agencies $ 175,219 42.1% Mortgage & asset-backed 74,691 17.9%
Corporate 166,607 40.0% ------------------------------- Total $
416,517 100.0% Average quality AAA Effective duration 3.0 Yield to
maturity 4.5% Weighted average combined maturity 3.8 *T -0- *T Nine
Months Ended Three Months Ended ---------------------------
--------------------------- September 30, September 30, September
30, September 30, 2006 2005 2006 2005 ------------- -------------
------------- ------------- Total premiums -------------- Net
written premium $98,936 $100,819 $6,372 $6,134 Change in unearned
premium (5,691) (4,411) 23,791 25,237 ------------- -------------
------------- ------------- Net earned premium $93,245 $96,408
$30,163 $31,371 ============= ============= =============
============= *T
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