I just initiated a small position in FPIC, a provider of medical professional liability insurance primarily (catering primarily to Florida). This might be just a trade for me, but I feel FPIC has the potential to be a rewarding long-term investment.
Here are some things that I like about FPIC:
- P/B ratio is 0.89
- Insiders own 3.65% of outstanding shares
- Book value per share has grown at a rate of 7.6% over the past 11 years
- Combined ratio (underwriting profitability) has remained under 100% since 2001 and has declined since then to 80% — a really good thing!
- Big repurchaser of their own shares — shares outstanding have decreased from 10.43 million in ’06 to 7.66 million today
- Medical professionals will always need insurance!
I will be doing some more research into the history of FPIC. Right now the only thing I don’t like too much about FPIC is the fact that they are heavily reliant on Florida, but this could be a good thing as this is a niche for them and therefore it might be extremely hard for other insurers to steal their market share in Florida. Also, FPIC’s dominance in Florida means they can only expand outward into other states in the South.
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