Claim Costs Rise

Last year, we saw an increase in professional liability claim activity against insured hospitals. The number of claims with payments in excess of $500,000 was up 61%, and the number of new claims reported for institutional risks increased by more than 200. Up, too, was the total cost of disposing of institutional claims.

For doctors, the total cost to dispose of claims rose for the third year in a row. While reunderwriting helped Princeton Insurance achieve a mix of insured specialties with better claims experience, high costs associated with certain types of claims, especially birth-related injuries, continued to drive costs up.

TABLE OF CONTENTS

Cover Page

Letter to Policyholders

A Year of Market Turmoil

Princeton's Legacy Continues

2001 Financial Statements

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