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Executives

R. Kevin Clinton - President and Chief Executive Officer

Frank H. Freund - Chief Financial Officer

Ann Storberg - Head of Investor Relations

Analysts

David Lewis - Raymond James

Amit Kumar - Fox-Pitt Kelton

Mark Hughes - SunTrust Robinson Humphrey

Michael Grasher - Piper Jaffray

Michael Nannizzi - Oppenheimer & Co.

American Physicians Capital, Inc. (ACAP) Q4 2008 Earnings Call February 13, 2009 10:00 AM ET

Operator

Good day everyone and welcome to today’s AP Capital, Inc., year-end 2008 earnings release conference call. Today’s call is being recorded. At this time I’d like to turn the conference over to Ms. Ann Storberg.

Ann Storberg

Good morning everyone. Thank you for your interest in American Physicians Capital as we discuss our fourth quarter and year-end 2008 financial results. This call is being webcast live on our corporate website at www.apcapital.com, and you can listen to a webcast replay of this call later today which will also be available on our website. Our fourth quarter earnings release is posted on our website located in the ‘For Investors’ section under ‘Press Releases.’ Also for your convenience a complete transcript of this call will be posted on our website in the ‘For Investors’ section under ‘Webcasts’ as soon as it is made available.

As always, I need to remind our listeners that during today’s discussion management may make certain forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. When we discuss our plans or expectations or use words such as will, should, believe, expect, anticipate, estimates, or similar expressions, we are making forward-looking statements. We do not undertake any obligation to update these statements except as required by law. While we believe any forward-looking statements made today are reasonable, they are subject to risk and uncertainties, which could our actual results to differ materially. For a discussion of these risks and uncertainties, please refer to today’s press release and the company’s latest Securities and Exchange Commission periodic report.

Participating in today’s call is Kevin Clinton, our President and Chief Executive Officer and Frank Freund, our Chief Financial Officer. We are going to begin today’s call with Kevin and Frank’s prepared remarks and then we are going to open up the call for questions. At this time, I am going to turn the call over to Kevin.

R. Kevin Clinton

Welcome everyone. We’re pleased to announce AP Capital’s fourth quarter and year-end 2008 results. The fourth quarter was a very good quarter for AP Capital. Net income was $11.6 million or $1.24 per diluted share. For the year ended December 31, 2008, net income amounted to $45.2 million or $4.60 per diluted share. This represents an annualized return on beginning equity of 17.1%.

There are several highlights I’d like to share with you. First, our balance sheet remains very solid. The highlight of our quarter and the year had to be the asset side of the balance sheet with the performance of our investment portfolio. On an average of approximately $850 million of invested assets, we incurred no sub-prime losses in 2008 and we increased our book value by 10.8% during the year. On the liability side of the side of the balance sheet, our professional liability open claim count decreased 19% for the year from 1741 open claims to 1418 open claims. Despite this decrease, professional liability IBNR reserves increased by $22.5 million during the quarter.

Reported claim counts fell dramatically during the quarter; from 233 claims last quarter to 180 claims reported this quarter. While we are very pleased with the results, we are not anticipating this low level of claims reporting in the future.

We are retaining our insured doctors. Despite strong competition, we retained 87% of our policy holders in 2008 and our insured doctor count is down just 1.6% from year-end 2007. Although our net earned premiums are down, our revenues per diluted share are not. Revenues per diluted share were flat over the year and are actually up 3.2% from 2006. The increase in the revenue per share is a result of our active stock repurchase program. We were very active in our stock repurchases in 2008, particularly in the fourth quarter. Taking advantage of the volatile stock market, we were able to repurchase 788,000 shares of our company stock or approximately 8.2% of the total outstanding shares of the company during the fourth quarter, at an average cost of $37.64 per share.

We are also pleased to announce that the Board of Directors declared a fourth quarter cash dividend of $0.11 per common share payable on March 31, 2009, to shareholders of record on March 13, 2009. The $0.11 dividend is an increase from the $0.10 dividend declared last quarter. I will turn it over to Frank for his comments.

Frank H. Freund

Good morning everyone. As Kevin highlighted, AP Capital completed a successful 2008 year by generating net income of $11.6 million or $1.24 per diluted share in the fourth quarter. For the year, AP Capital generated income of $45.2 million or $4.60 per diluted share. This represents return on beginning equity of 17.1%. We also increased our book value per share to $28.83, up 10.8% from the end of 2007.

We incurred no investment losses or impairments in the fourth quarter. In fact, our available for sale portfolio unrealized gain position increased by $7.5 million or 3.2% before tax effect in the quarter and is up $3.8 million for the year in 2008. And while it does not flow through our financial statements, unrecognized gains on our held to maturity investments were up $11.8 million or 2.5% in the fourth quarter pre-tax, and are up $6.6 million for the year.

In 2008, our direct written premiums were down $10.4 million or 7.7%. This decline was caused primarily by rate reductions taken in recent years. However, the rate of premium decline has slowed and premiums were actually up quarter over quarter in the fourth quarter of 2008. Our book of business has stayed relatively stable with our insured position count down only 1.6% in 2008. We retained 87% of our policies and wrote $10.7 million of new business in 2008. We remain focused on our four key states and 98% of our policies have limits of a million dollars or less.

Investment income was down $6.6 million or 15.3% this year and our overall book return was 4.38%. We allocated $118 million more of our portfolio to tax exempt securities this year, which reduced our gross yield. In addition, our short-term investments averaged only 2.31% in 2008 as compared to over 5% in 2007 with the decline in short-term rates in the market.

As noted earlier, we incurred no losses in the fourth quarter of 2008 and our only loss in 2008 was our pre-emptive sale of CIT bonds at a value of $84.67 in April, which resulted in a $558,000 after-tax loss in the first quarter.

Loss and loss adjustment expenses were good again in 2008. The accident year loss ratio was 78.5%. This is up from the 74.6% reported in 2007, but still at historically good levels. The increase in 2008 reflects the rate decreases we have taken recently.

The development of reserves established for prior-year claims was positive again in 2008. We continue to experience decline in claim frequency. We had 908 new claims reported in 2008, down 4.6% from 2007, which already was a very low-frequency year and addition claim severity has remained flat. We believe the decline in claim frequency is attributable to our quality book business and our aggressive but intelligent claim management, which we believe has significantly reduced non-meritorious claims action against our insurance.

As a result of the declining claims frequency and flat severity, reserving assumptions made on past accident years have proven to be very conservative. Accordingly, as actual development emerges, we have had to adjust our original reserve estimates downward. During 2008, we reduced prior-year reserve estimates by $32.2 million or 5.8% of beginning year and year net reserves.

Favorable development emerged in all of our professional liability markets; however, we did increase our runoff workers’ compensation reserves by $1.9 million during the year. Despite these reserve takedowns in 2008, our overall reserve position is still very strong. Our open claim count at December 31, 2008, stands at 1418, down 18.6% from a year ago. Our average case reserves continue to increase and is currently $166,500 per claim compared to $144,800 at the end of 2007. Our independent actuary again has our recorded reserves above the best estimate.

Underwriting expenses were down $2.7 million in 2008, but the underwriting expense ratio was up in the fourth quarter and finished 2008 at 22.1%. The decline in premium is part of the ratio increase as only 9.5% of our expenses vary with premium volume. As I noted last quarter, we anticipate higher expense ratio in the future as our new information system is now operational, and as a result, we are no longer capitalizing internal development salaries and have begun to amortize previously capitalized cost.

Other expenses were down in 2008 primarily due to the lower interest cost on our trust preferred debt which is what is caused by a combination of lower interest rates and our $5 million debt retirement in August of last year. We have reduced our effective tax rate from 32.5% in 2007 to 29.4% in 2008 due to our greater allocation of tax exempt securities.

As Kevin highlighted the balance sheet of AP Capital remains in very good condition. Our investment portfolio came through 2008 very well and remains in good position for 2009. Our cash and investment portfolio has a carrying value of $830.6 million at December 31, 2008. We have approximately 26% of our portfolio in government-sponsored agency debt and mortgage-backed securities. These were all purchased in early 2005 or prior. Recently, we’ve been adding to our tax exempt portfolio which now represents 46.3% allocation. Our focus here is on essential purpose bonds which have a “stable” tax base; however, we continue to monitor these bonds very closely.

We also have 12.6% of our portfolio in corporate bonds, we currently do not own any banks or brokers; we own four domestic insurance company bonds, John Hancock, Berkshire Hathaway, State Auto and the Money Group. All are trading at approximately par value at 12/31/08. Our investments are managed externally by our experienced staff at Alpha Advisors. We are finalizing our year-end investment disclosures. Our detailed investment portfolio on 2008 activity will be available on our website when we file our statutory statements in a couple of weeks.

Effective December 31, 2008, we commuted our 2005 reinsurance treaty. This treaty had been swing rated whereby we paid in a provisional premium, but could potentially pay more up to a maximum premium based upon last experience. The commutation resulted in approximately $16 million of previously seated reserves including $10 million of IBNR returning to AP Capital as a liability. We had approximately $8.6 million of seated premiums we previously paid to reinsurance returned to us and we eliminated an $8.1-million seated premium payable which had represented our maximum exposure on the swing feature of this treaty. We recognized a gain of $633,000 on the transaction which represented the commutation bonus per the terms of the agreement. As a result, our reinsurance recoverable and seated premium payable balances are down on this year-end balance sheet.

From a capital perspective, AP Capital remains in very good condition and capital management remains as one of our top priorities. Our GAAP equity was $254 million or $28.83 per share outstanding. In 2008, we repurchased 1,333,970 shares or 13.2% of the January 1, 2008, shares outstanding, and as Kevin highlighted, in the fourth quarter, we repurchased 788,370 shares at an average cost of $37.64 per share. Our insurance company’s statutory surplus stands at $205 million and we are currently riding at a net written premium surplus ratio of 0.59:1. We have $39.3 million of cash at our holding company to fund further capital initiatives. In 2009, we will maintain our flexible capital strategy whereby we will continue our shareholder dividends and continually evaluate share repurchases, debt retirement, reinsurance arrangements, and M&A opportunities. That concludes my comments on the fourth quarter and year-end results.

Question-and-Answer Session

Operator

(Operator instructions). We will go first today to David Lewis with Raymond James.

David Lewis - Raymond James

Kevin, can you talk a little bit about any changes you see in the pricing trends as we go into 2009? Clearly, pricing has been down given the improved client frequency trend. So, do you see any changes there in any particular markets; that would be helpful. And Frank, could you just walk me through the line item impact from the commutation?

R. Kevin Clinton

I think the price increases, if you look at our book of business; we took on an average about an 8.2% decrease in 2008. I don’t see that level of decrease for our company in 2009. I would get maybe a small decrease, 2% or 3%, but it is not going to be an 8% decrease, and as I see the rest of the industry, I see the industry going there as well. I think a lot of capital has been depleted from the market. In certain areas, you have seen increases in frequency and increases in severity. So, I just would anticipate that the market is going to firm up a little bit. I don’t think it is going to be a hard market by any means.

Frank H. Freund

On the commutation, firstly everything pulled through the loss item and we kind of highlighted it in the detail to the press release when we showed payments and things like that, that we have shown those net of the commutations, but basically on the balance sheet, we got about $8.6 million of cash sent to us which was a representative return of premium. We eliminated $8.1 million of seated premium payable on the liability side, and then we basically reduced the seated losses which increased the losses on the balance sheet, and again, almost everything followed through the loss line on the income statement.

David Lewis - Raymond James

Kevin, given the capital reduction for the industry, do you see any changes in the M&A activity upcoming?

R. Kevin Clinton

We are anxiously waiting to see what happens in the fourth quarter results with other companies, particularly some of the neutrals that will come out, we will get those results in March. I think a lot of companies had money in the stock markets and I think some of them got hit and we are kind of waiting back because we are pretty well capitalized to take advantage of that.

Operator

We will take our next question from Amit Kumar with Fox-Pitt Kelton.

Amit Kumar - Fox-Pitt Kelton

Congrats on the quarter. Just quickly, I guess following up on that discussion in terms of your states; are you looking at any other states, any new states at this point, or are you sort of satisfied with I guess the top four states in your book of business?

Frank H. Freund

Not knowing what the fourth quarter results are going to bring for other companies, assuming that the status quo is what we see now, we are not planning on going into another state right now. They are all pretty competitive. We are planning on growing though. Our plan is to grow on our current marketplace.

Amit Kumar - Fox-Pitt Kelton

In that sense, going back to the M&A question; some of your peers have branched out into similar lines, professional liability kind of lines. I know you have previously talked about perhaps personal lines of space. Has that thought process changed or just looking at the level of buybacks, is the thought process that first and foremost I would keep on buying my stock at attractive levels and then the second choice would be looking at any candidates down the road as the market changes.

Frank H. Freund

I think, in terms of the buybacks, we saw some weakness in our stock in 2007. We bought back a whole bunch of shares and we did the same thing last year in the fourth quarter. The market was volatile, stocks were going down to what we believe was a much lower value that the worth of our company and we were active in buying it. If the same thing happens again next year, I cannot promise you it just depends on how we are going to allocate capital, but I would be inclined to look at buying back our stock as well. You also asked would we look at expanding our product line, maybe, into another line like some other companies are doing. I guess, maybe, that depends on the opportunity. I would not say that we are actively out there seeking those types of M&A opportunities in lines that we are not familiar with, but I would not say that if the opportunity came to us, that we would certainly look at it and if it looks like a good opportunity, we would possibly invest in it. I guess it would depend on the opportunity. We do not have the people here to run it. So it would have to come with a solid management team that knew what they were doing for that opportunity to exist for us.

Amit Kumar - Fox-Pitt Kelton

I guess my final question would be in terms of the current recession or the economic cycle; what sort of correlation do you anticipate when you are setting your loss picks in terms of the economic cycle and the claims count going forward?

Frank H. Freund

I have been in the business since basically 1984 and I have not seen a correlation between the economy and claims reported. I realize that probably people will look toward any source of money they can, but the gatekeepers on these are the attorneys and the attorneys do not want to spin their wheels on nuisance lawsuits and they do not want spend their money on nuisance lawsuits by going out and having to hire expert witnesses and depose our expert witnesses. If we are getting a whole bunch of more nuisance lawsuits, I think the plaintiff bar will weed those out because they are just going to lose money on them. So, I just do not think there is a correlation because I do not think there is more malpractice going on and hopefully those attorneys are going to read our those claims.

Amit Kumar - Fox-Pitt Kelton

I guess the followup would be that with the recent change, I think, what you have said is a modest uptick would be expected, but really there is nothing on the horizon which would seem bothersome. Is that fair?

Frank H. Freund

You mean in reporting the claims?

Amit Kumar - Fox-Pitt Kelton

No, I am talking about the Obama administration and the view that with the Democrats at the helm, typically the trial lobby is a bit emboldened and hence you would see some of that impact maybe flow into the challenges to the Tort Reform and things of that nature.

Frank H. Freund

I think you might. Some of the states went more liberal. I think, as we’ve said before, we anticipate that the Illinois Tort Reform will probably be overturned. We are running our business assuming it will be overturned. You may have some pressures in other states to do that. I think it is too early to tell right now though.

Operator

We will take our next question from Mark Hughes with Suntrust Robinson Humphrey.

Mark Hughes - Suntrust Robinson Humphrey

You did, obviously, quite well picking up the new business in the quarter. What accounts were they? Was it new initiatives on your part, some disruption among competitors? What is your thought on that?

Frank H. Freund

I think we got a couple of new larger accounts this quarter. One came from offshore. It was an offshore account that came back onshore and it was in our home state. The other one was just brought by one of our agents. It was just an opportunity. It was an anesthesiology group, but we are going to have, on big accounts, you are going to get the big accounts, you are going to show an increase, you are going to lose the big accounts you are going to show a decrease in one quarter. So, we are pleased to go. It was nice. The one thing that I am looking at, particularly in the state of Illinois and possibly Kentucky and Ohio, we took some rate decreases and those rate decreases needed to flow through the system because we write 12-month policies, and I’ll give you, for instance, in Illinois, we took a rate decrease on 3/1/07. Well, those affected the first two months of ’08; it was a 14% decrease, and then we took an 11% decrease on March 1, 2008, and that affected March through December 2008. It is going to affect it for a couple of months in 2009 because they are annual policies, but effective 3/1/09, we took a 1.5% decrease, so we should see the less premium decrease than we saw in 2009 than we saw in 2008, but it does take a while to get through the system there. So, we are hopeful that topline firms up, but as I said earlier, if you look at our revenue per share and with our buybacks, our revenue per share has remained steady and in some instances depending where you compare it have gone up, and that is despite our investment income coming down about 15 points and that investment incomes come down because we are investing in immunities and because the short-term rates are a lot lower. If those short-term rates go up, we could see a real positive impact on revenues per share.

Mark Hughes - Suntrust Robinson Humphrey

Right. Likewise, the 4Q claims, new claims reports, are quite low; was that just a random variation or do you feel like some new initiatives had contributed to that?

Frank H. Freund

We have shown a steady decrease in the past four years. I did not anticipate anything this low though, and I don’t think that is going to last. I would love it if it did, but we are not anticipating; that is not built into our rates to have it that low, not built into reserving assumptions. That was just a real nice quarter.

Operator

We will take our next question from Michael Grasher with Piper Jaffray.

Michael Grasher - Piper Jaffray

Congratulations on a great year. Just a couple of questions left here; I guess for Frank. New money, where are you putting your new cash flows in terms of investments? Are you still going into immunities?

Frank H. Freund

We haven’t been recently, we watched that because we look primarily to, when the spreads there are advantageous and again when there is good quality bonds to buy, we have tried to look more where there are some good, stable corporations out there because some of them when they do go out to market now or having to pay a pretty high coupon and so if we can find somebody we like in a good stable industry, we will buy something there.

Michael Grasher - Piper Jaffray

Okay, and then a couple of followups to that. First of all, do you see the investment yield sort of being flat in ’09 relative to ’08 or can it climb back to what we were in ’07?

Frank H. Freund

Probably not climbing, I think the driver is going to be whatever happens to short-term rates because we keep a fair amount of cash for our other capital initiatives and we purposely tend to be a bit short in this environment; so if short-term rates stay where there are, then I certainly do not see it going up.

Michael Grasher - Piper Jaffray

Okay, and then your investments within the tax-free, is that fully reflected within the current tax rate? Is that a fair run rate going forward?

Frank H. Freund

Yes, I mean it is pretty close. The last big allocation was probably like a March-

April timeframe; so you didn’t have a full-year effect of tax exempt interest, but you are getting pretty close.

Michael Grasher - Piper Jaffray

Okay, and then a final numbers question, I guess, interest expense in the quarter?

Frank H. Freund

Yes, I guess we do kind of put that all together. It was $444,000.

Operator

We will go next to Michael Nannizzi with Oppenheimer & Co.

Michael Nannizzi - Oppenheimer & Co.

Just a couple of numbers questions; what was that holding company cash number?

Frank H. Freund

$39.3 million.

Michael Nannizzi - Oppenheimer & Co.

$39.3 million. Okay, and the dividend available from the sub at the end of ’08; this is going to be the stat net income number I guess.

Frank H. Freund

Yes, that will be the stat net income number and Kevin has got that.

R. Kevin Clinton

It’ll be approximately close to $48 million.

Michael Nannizzi - Oppenheimer & Co.

Did you guys purchase any more American Physician Services stock; I do not know if you have published your 13F yet.

Frank H. Freund

We bought about 40,000 shares.

Michael Nannizzi - Oppenheimer & Co.

Okay. On the IT system that you were talking about; Frank, what sort of run rate for expanses, now that that is no longer being capitalized, can we expect to see going forward, and related to that question, when should we start to see the lines cross on gained efficiencies from the new system, and more basically, what is system enhancement intended to do?

Frank H. Freund

The easiest way would be to approach that in reverse order. What the new system is allowing us to do is that it basically replaced a more than 30-year-old legacy system. It was old, it kind of grew up with the company. It was an AS400. It was not Windows based. It was very very cumbersome. What we found too was that it made it very difficult to make enhancements to the products and it made it difficult to, as we have grown into new states, the IS department could tell you four stories of when we merged in New Mexico years and years ago, how challenging that was. So the new platform is state of the art, Windows based, it is much easier to use, and it is much more adaptive. So, the benefit is really, going forward, it is going to allow the company to be a lot more flexible and have better access to data and more quickly respond. So that being said, and again, we always ran, I thought, a pretty lean IS shop. So, in the fourth quarter our underwriting ratio was 24.3%. One of the big tickers in all this is just where the premium volume is, makes it a bit challenging. So, most of this software you amortize over three years and what you are going to see, I think is, ’09 and ’10 specially are probably going to be run harder, and I do not know if it will be exactly like the fourth quarter, but certainly that will be higher than that historical 22.1% where we ended up in 2007.

Michael Nannizzi - Oppenheimer & Co.

When do you think those efficiencies will run through?

Frank H. Freund

I think ’09 and ’10 will be the hardest because of the high amortization and it is just going to take a while for it to gain all these efficiencies. I see the first year too being bit of a peak and then moving down from there, but again the amortization tends to run three years to five years anyway, but the next couple of years would be higher.

Operator

We have a followup question from David Lewis of Raymond James.

David Lewis - Raymond James

Frank, just to make sure I am clear on the amortization going forward, the $113,000 you had in the fourth quarter, is that a flat run rate here over the next several quarters, or does it move up a little bit higher?

Frank H. Freund

It will move because the claims unit basically went wide in the fourth quarter and then the policy unit early in January, so that was just an initial amortization of part of it, so it is going to go up from there. I could not tell you the exact numbers as we hammer out the final details here, but the $113,000 was just claims for the fourth quarter.

David Lewis - Raymond James

Okay, just one question on the outlook for any changes in Tort Reform; Illinois I guess may be moving a little quicker than some of the other states based on my understanding? Do you know where that process is and when it gets to the state Supreme Court?

Frank H. Freund

It’s already there, it has been heard, and they are just waiting to decide.

David Lewis - Raymond James

Any guess on what that timeframe typically is? Are we talking about next couple of months or six to twelve months or…

Frank H. Freund

Probably, we are guessing about six months, but we just do not know. Sometimes you can go quickly and sometimes it will sit there forever.

David Lewis - Raymond James

Are there any other states, Ohio, Kentucky, or any others that are moving along fairly quickly and reviewing the Tort Reform issues?

Frank H. Freund

Right now they are looking at New Mexico. One of the things they are talking about doing is raising the cap in New Mexico. I understand that they are going to propose a bill, I have not seen it. If it is raising the cap, it does not affect us because that goes to the state fund. We only write $200,000 limits and raising the cap from its current $600,000 for whatever only affects the state fund and it does not affect us.

Operator

We have no further questions at this time. I will turn the call back over to our speakers for any additional or closing remarks.

R. Kevin Clinton

I just want to thank every body for participating today and we will talk to you next quarter.

Operator

Thank you, and that does conclude today’s conference call. We would like to thank every body for your participation. You may disconnect at this time.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: American Physicians Capital, Inc. Q4 2008 (Qtr End 12/31/2008) Earnings Call Transcript
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