Definitive Additional Materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(AMENDMENT NO.     )

 

Filed by the Registrant x                            Filed by a Party other than the Registrant ¨

Check the appropriate box:

 

¨ Preliminary Proxy Statement

 

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨ Definitive Proxy Statement

 

x Definitive Additional Materials

 

¨ Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12

 

 

SCPIE HOLDINGS INC.

(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

 

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

 

Payment of Filing Fee (Check the appropriate box):

 

x No fee required.

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1) Title of each class of securities to which transaction applies:

 

 
  (2) Aggregate number of securities to which transaction applies:

 

 
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 
  (4) Proposed maximum aggregate value of transaction:

 

 
  (5) Total fee paid:

 

 

 

¨ Fee paid previously with preliminary materials.

 

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1) Amount Previously Paid:

 

 
  (2) Form, Schedule or Registration Statement No.:

 

 
  (3) Filing Party:

 

 
  (4) Date Filed:

 

 

 

On June 7 and June 8, 2006, SCPIE Holdings Inc. (“SCPIE”) will present a slide show presentation during meetings with various institutional investors and an institutional advisory service. A copy of the presentation is included below.

On May 8, 2006, SCPIE filed a definitive proxy statement with the Securities and Exchange Commission (“SEC”) and mailed it to SCPIE’s stockholders. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT SCPIE HAS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Security holders are able to obtain a free copy of the proxy statement and other related documents filed by SCPIE at the SEC’s website at www.sec.gov. SCPIE’s proxy statement and other related documents may also be obtained from SCPIE free of charge by contacting SCPIE’s Communications Department at (310) 551-5942.

LISTING OF PERSONS WHO MAY BE DEEMED “PARTICIPANTS” IN THE SOLICITATION AND CERTAIN INFORMATION CONCERNING SUCH PERSONS IS SET FORTH IN THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON MAY 8, 2006, WHICH MAY BE OBTAINED THROUGH THE WEB SITE MAINTAINED BY THE SEC AT www.sec.gov. SINCE SUCH DATE, WILLIAM A. RENERT, M.D. SOLD 1,895 SHARES OF SCPIE’S COMMON STOCK ON MAY 12, 2006.

SCPIE Holdings Inc.
Donald J. Zuk
President and Chief Executive Officer
Robert B. Tschudy
Chief Financial Officer
June 2006
(NYSE:SKP)

2
Safe Harbor Statement
In addition to historical information, this presentation 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 its current
insureds
are dependent upon a variety of factors, including future economic,
competitive and market conditions, and future business decisions,
all of which are difficult or impossible to predict accurately and many of which
are beyond the control of the company. 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.

3
Our Business
Leading provider of medical malpractice insurance and
related liability insurance products—primarily in
Southern California—to:
–
Physicians
–
Oral surgeons
–
Healthcare facilities
–
Others engaged in the healthcare industry

4
Company Overview
Founded in 1976
Merged Southern California Physicians Insurance Exchange with
SCPIE Indemnity Company in 1997
IPO on NYSE on January 30, 1997
Today,
third
largest
provider
of
medmal
insurance
in
California,
with
nearly
14%
market
share
–
Well-established core book of business
–
10,285 policies in force at March 31, 2006
–
96% of business is physician and medical group malpractice
Strong presence in Delaware

5
Strong Foundation
Disciplined premium rate structure
Outstanding
12-month
retention
rate
–
95%
Excellent combined loss ratios
Innovative product offerings
Experienced management team

6
Successful Turnaround Strategy
Withdraw from healthcare liability insurance markets outside
of core geographic markets
Exit from assumed reinsurance operations
Successful continuing settlement of liabilities in non-core
businesses

7
Financial Overview

8
Improving  Core Operations
$119.1
$129.9
$123.2
$125.0
$127.6
$116.4
$32.0
$31.9
$31.1
$29.0
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2003
2004
2005
1Q 05
1Q 06
Net Premiums Earned
Loss/Expense
(in millions)

9
Improving  Core Operations
($10.8)
($1.9)
$11.2
$0.1
$2.1
($12)
($9)
($6)
($3)
$0
$3
$6
$9
$12
2003
2004
2005
1Q 05
1Q 06
(in millions)
Underwriting Income (loss)

10
Loss Ratios
88.6%
80.6%
70.9%
76.9%
71.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2003
2004
2005
1Q 05
1Q 06
Core Direct Healthcare Liability Insurance Underwriting Results

11
Combined Ratios
Core Direct Healthcare Liability Insurance Underwriting Results
109.1%
101.5%
91.2%
99.7%
93.2%
80.0%
90.0%
100.0%
110.0%
2003
2004
2005
1Q 05
1Q 06

12
Net Income
($12.8)
($7.9)
$3.5
$1.7
$2.4
($15.0)
($10.0)
($5.0)
$0.0
$5.0
2003
2004
2005
1Q 05
1Q 06
(in millions)

13
Investment Portfolio
ASSET ALLOCATION
Fixed Maturities
Cash
&
Cash
Equivalents
86%
QUALITY
59%
AAA+/AAA
AA
11%
A
28%
BBA/BBB
2%
5.2%
Current Yield:
Tax-Exempt –
0%
4.1 years
Effective Duration:
Taxable –
100%
3.9 years
Weighted Average
Combined Maturity:
Fixed-Income Allocation:
14%

14
Shareholder Value
SKP Stock Chart
(6/1/04 - 6/01/06)
8
10
12
14
16
18
20
22
24
26
28

15
The Road Ahead
Focus on direct healthcare liability insurance in core markets
Improve A.M. Best rating
Continue run-off of non-core healthcare and assumed reinsurance
liabilities
Embrace new technologies to enhance product offerings and
customer service
Target new markets for growth

16
Kaj
Ahlmann
•
Provides independent consulting services to various companies
related to the insurance and reinsurance industries
•
Chairman
and
CEO
of
Inreon,
2001
–
2003
•
Vice Chairman and Executive Officer of E.W. Blanch Holdings, Inc.,
1999 –
2001
•
Chairman, President and CEO of Employers Reinsurance
Corporation, 1993 –
1999
•
Currently serves on the boards of Erie Indemnity Company, Erie
Insurance Group and Cyrus Re

17
Marshall Geller
Has spent more than 40 years in corporate finance and investment
banking, including 21 years as Senior Managing director for Bear,
Stearns and Company
Co-Founder and Senior Managing Director of St. Cloud Capital, a
private investment fund formed in December 2001
Chairman, CEO and founding partner of Geller & Friend Capital
Partners, Inc., a private merchant bank formed in 1995
Currently serves as a Non-Executive Chairman of the Board of
Directors of ShopNBC-Value Vision Media, Inc., as well as on the
boards of several financial institutions

18
Elizabeth Murphy
Executive Vice President, 2002-2006, and Chief Financial Officer,
2002-2005, of Scottish Re Group Limited, an NYSE-traded company
Treasurer, ACE Limited, a property and casualty insurance company,
2001-2002
Chief Financial Officer, ACE Tempest Reinsurance Ltd., 1993-2000
Member of the Institute of Chartered Accountants in England and
Wales

19
Investment Rationale
Three prospective board members
Experienced, knowledgeable management team
Established leader in core markets
Solid momentum in core business
Committed to increasing shareholder value