Service Plan Provides Customized Approach
to Risk Management/Loss Prevention

Realizing that general risk management and loss prevention education may not be an effective way to reduce the number and cost of injuries and lawsuits, Princeton Insurance undertook a major shift in its approach to risk management and loss prevention services in 2001, embracing a goal-oriented structure. Services continue to be provided by a Princeton Insurance Company subsidiary, Princeton Risk Protection, Inc. (PRP). Under the Service Plan concept, hospitals and health care systems receive customized analysis of their operations from a risk reduction perspective. Specific recommendations derived from examination of loss trends at the individual facility help guide PRP consultants' efforts and may ultimately result in improved loss experience. The goal of the Service Plan is to improve loss results in areas where the facility is most vulnerable. Better loss experience can contribute to lower premiums.

TABLE OF CONTENTS

Cover Page

Letter to Policyholders

A Year of Market Turmoil

Princeton's Legacy Continues

2001 Financial Statements

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