<PAGE>

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                          ---------------------------

                                   Form 10-Q

<Table>
<S>          <C>                                                           <C>
[X]
                 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

[ ]
                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF 1934
                     For the transition period from           to
                          Commission File Number: 000-32057
</Table>

                       AMERICAN PHYSICIANS CAPITAL, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   MICHIGAN                                      38-3543910
       (State or other jurisdiction of                         (IRS employer
        incorporation or organization)                     identification number)
</Table>

             1301 NORTH HAGADORN ROAD, EAST LANSING, MICHIGAN 48823
              (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (517) 351-1150

        Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par
                                     value

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                             YES  [X]       NO  [ ]
The number of shares outstanding of the registrant's common stock, no par value
per share, as of November 12, 2001 was 10,934,122.

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<PAGE>

                               TABLE OF CONTENTS

<Table>
<S>                                                             <C>
PART I. FINANCIAL INFORMATION
       Item 1. Financial Statements (Unaudited)
               Condensed Consolidated Balance Sheets........      3
               Condensed Consolidated Statements of
               Income.......................................      4
               Condensed Consolidated Statements of
               Comprehensive Income.........................      5
               Condensed Consolidated Statements of Cash
               Flows........................................      6
               Notes to Condensed Consolidated Financial
               Statements...................................      7
       Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations...................................      8
       Item 3. Quantitative and Qualitative Disclosures
               About Market Risk............................     13
PART II. OTHER INFORMATION
       Item 6. Exhibits and Reports on Form 8-K.............     14
SIGNATURES..................................................     15
</Table>

                                        2
<PAGE>

                         PART I. FINANCIAL INFORMATION
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

ITEM 1. FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                SEPTEMBER 30,   DECEMBER 31,
                                                                    2001            2000
                                                                -------------   ------------
                                                                 (UNAUDITED)
                                                                       (IN THOUSANDS,
                                                                     EXCEPT SHARE DATA)
<S>                                                             <C>             <C>
ASSETS
Investments:
  Fixed maturities
     Available-for-sale, at fair value......................     $  624,382       $464,784
  Equity securities, at fair value..........................            608            730
  Other investments.........................................         39,700         40,631
                                                                 ----------       --------
          Total investments.................................        664,690        506,145
Cash and cash equivalents...................................        107,275        255,878
Premiums receivable.........................................         58,725         51,354
Reinsurance recoverable.....................................         94,617         72,002
Federal income tax recoverable..............................         14,289
Deferred federal income taxes...............................         31,091         32,725
Property and equipment, net of accumulated depreciation.....         14,037         15,949
Goodwill, net of accumulated amortization...................         14,881         16,481
Other assets................................................         39,722         27,442
                                                                 ----------       --------
          TOTAL ASSETS......................................     $1,039,327       $977,976
                                                                 ==========       ========
LIABILITIES
Unpaid losses and loss adjustment expenses..................     $  572,425       $483,273
Unearned premiums...........................................         95,639         88,047
Other liabilities...........................................         29,207         37,231
                                                                 ----------       --------
          Total liabilities.................................        697,271        608,551
                                                                 ----------       --------
SHAREHOLDERS' EQUITY
Common stock, no par value, 50,000,000 shares authorized:
  10,949,522 and 11,625,055 shares outstanding at September
  30, 2001 and December 31, 2000, respectively
Additional paid-in-capital..................................        131,790        144,940
Retained earnings...........................................        199,187        226,454
Unearned stock compensation.................................         (1,169)        (1,450)
Accumulated other comprehensive income:
  Net unrealized appreciation (depreciation) on investments,
     net of deferred federal income taxes...................         12,248           (519)
                                                                 ----------       --------
          Total shareholders' equity........................        342,056        369,425
                                                                 ----------       --------
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........     $1,039,327       $977,976
                                                                 ==========       ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        3
<PAGE>

               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<Table>
<Caption>
                                                   THREE MONTHS ENDED     NINE MONTHS ENDED SEPT
                                                        SEPT 30,                   30,
                                                   ------------------     ----------------------
                                                     2001       2000        2001         2000
                                                     ----       ----        ----         ----
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                <C>         <C>        <C>          <C>
Net premiums written...........................    $ 56,833    $53,405    $149,350     $139,061
Change in unearned premiums....................      (7,868)    (7,318)     (1,793)      (6,483)
                                                   --------    -------    --------     --------
  Net premiums earned..........................      48,965     46,087     147,557      132,578
Investment income..............................      11,619      9,265      36,409       26,419
Net realized (losses) gains....................      (2,358)      (860)     (2,540)       1,004
Other income...................................           4        290         514        2,393
                                                   --------    -------    --------     --------
  Total revenues...............................      58,230     54,782     181,940      162,394
                                                   --------    -------    --------     --------
Losses and loss adjustment expenses............     100,451     39,082     186,598      112,718
Underwriting expenses..........................      11,186     11,384      32,772       31,344
Investment expenses............................         411        592       1,354        2,145
Interest expense...............................          75        212         310          676
Amortization expense...........................         533        582       1,600        1,746
General and administrative expenses............         618        124       1,550          688
Demutualization costs..........................                    139                      413
Restructuring costs............................                     55                      514
                                                   --------    -------    --------     --------
  Total expenses...............................     113,274     52,170     224,184      150,244
                                                   --------    -------    --------     --------
  Income (loss) before income taxes............     (55,044)     5,612     (42,244)      12,150
Federal income tax (benefit) expense...........     (19,216)       277     (14,977)       3,387
                                                   --------    -------    --------     --------
  Net (loss) income............................    $(35,828)   $ 2,335    $(27,267)    $  8,763
                                                   ========    =======    ========     ========
Net loss per common share
  Basic........................................    $  (3.26)              $  (2.42)
  Diluted......................................    $  (3.26)              $  (2.42)
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        4
<PAGE>

               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

     CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

<Table>
<Caption>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                                -------------------
                                                                  2001       2000
                                                                --------    -------
                                                                  (IN THOUSANDS)
<S>                                                             <C>         <C>
Net (loss) income...........................................    $(27,267)   $ 8,763
Other comprehensive income:
  Unrealized gains on investment securities net of deferred
     income taxes of $6,875 in 2001 and $1,372 in 2000......      12,767      2,548
                                                                --------    -------
  Comprehensive (loss) income...............................    $(14,500)   $11,311
                                                                ========    =======
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        5
<PAGE>

               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<Table>
<Caption>
                                                                  NINE MONTHS ENDED
                                                                    SEPTEMBER 30,
                                                                ----------------------
                                                                  2001         2000
                                                                  ----         ----
                                                                    (IN THOUSANDS)
<S>                                                             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net (loss) income.........................................    $ (27,267)   $   8,763
  Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
     Depreciation and amortization..........................        3,666        3,664
     Net realized losses (gains)............................        2,540       (1,004)
     Deferred federal income taxes..........................       (5,436)      (1,402)
     Changes in other assets and liabilities................       32,568       45,424
                                                                ---------    ---------
       NET CASH PROVIDED BY OPERATING ACTIVITIES............        6,071       55,445
                                                                ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases
     Available-for-sale -- fixed maturities.................     (233,517)    (199,499)
     Available-for-sale -- equity securities................                   (39,593)
     Real estate............................................                    (5,352)
     Property and equipment.................................       (1,782)      (1,129)
  Sales and maturities
     Available-for-sale -- fixed maturities.................       92,416      149,048
     Available-for-sale -- equity securities................          180       40,669
     Held-to-maturity.......................................                       980
     Other investments......................................          260        3,584
     Property and equipment.................................        1,919
                                                                ---------    ---------
       NET CASH USED IN INVESTING ACTIVITIES................     (140,524)     (51,292)
                                                                ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Decrease in note payable..................................       (1,000)
  Purchase of treasury stock................................      (13,150)
                                                                ---------
       NET CASH USED IN FINANCING ACTIVITIES................      (14,150)
                                                                ---------
       NET (DECREASE) INCREASE IN CASH......................     (148,603)       4,153
       CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.......      255,878       33,093
                                                                ---------    ---------
       CASH AND CASH EQUIVALENTS, END OF PERIOD.............    $ 107,275    $  37,246
                                                                =========    =========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                        6
<PAGE>

               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements include the
accounts of American Physicians Capital, Inc. ("APCapital") and its wholly owned
subsidiaries, Insurance Corporation of America ("ICA"), APSpecialty Insurance
Corporation, APConsulting LLC, APDirect Sales LLC, Alpha Advisors, Inc.,
APIndemnity (Bermuda), Ltd., APManagement, Ltd. and American Physicians
Assurance Corporation ("APA"), together referred to in this report as the
"Company". All significant intercompany accounts and transactions are eliminated
in consolidation.

     The Company is principally engaged in the business of providing medical
professional liability and workers' compensation insurance throughout the United
States with a concentration of writings in the Midwest.

     The accompanying unaudited condensed consolidated financial statements of
the Company have been prepared in conformity with accounting principles
generally accepted in the United States ("GAAP") and with the instructions for
Form 10-Q and Rule 10-01 of Regulation S-X as they apply to interim financial
information. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements.

     In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. The operating results for the nine-month period ended September 30,
2001 are not necessarily indicative of the results to be expected for the year
ending December 31, 2001. The accompanying condensed consolidated financial
statements should be read with the annual consolidated financial statements and
notes contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.

     In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the dates of the balance sheets and revenues and expenses for
the periods then ended. Actual results may differ from those estimates.

     The most significant estimates that are susceptible to significant change
in the near term relate to the determination of the losses and loss adjustment
expense reserves. Although considerable variability is inherent in these
estimates, management believes that the reserves are adequate. The estimates are
reviewed regularly and adjusted as necessary. Such adjustments are reflected in
current operations.

2.  STOCKHOLDERS' EQUITY AND NET INCOME PER SHARE

     In March 2001, the Company's Board of Directors authorized the purchase of
up to 5% of its then outstanding common stock, representing approximately
581,000 shares. The Company's purchase of any of its shares is subject to
limitations that may be imposed by applicable securities laws and regulations
and the rules of the Nasdaq Stock Market. The timing of the purchases and the
number of shares to be bought at any one time depend on market conditions and
the Company's capital requirements. During the quarter, the Company completed
its purchases pursuant to this authorization. During this period, an additional
166,000 shares were purchased at a cost of $3,480,000, bringing the total cost
to $11,386,000.

     In July 2001, the Company's Board of Directors authorized the repurchase of
up to an additional 5% of the then outstanding shares of its common stock, or
approximately 560,000 shares. As of September 30, 2001, the Company has
purchased 91,000 shares at a cost of $1,764,000 pursuant to this authorization.
In November 2001, the Company's Board of Directors authorized the repurchase of
an additional 540,000 shares.

     Net income per share is computed by dividing net income by the weighted
average number of shares of common stock and common stock equivalents (stock
options and stock awards) calculated on a daily basis. The weighted average
common shares used for determining basic income per common share were 11,274,980
for the nine months ended September 30, 2001. The weighted average common shares
used for determining basic income per common share were 11,002,095 for the three
months ended September 30, 2001.
                                        7
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

3.  SEGMENT INFORMATION

     The Company is organized and operates principally in the property and
casualty insurance industry and has five reportable segments -- medical
professional liability, workers' compensation, personal and commercial lines,
other, and corporate and investments. The accounting policies of the segments
are the same as those described in the basis of presentation. Expense
allocations are based primarily on loss and loss adjustment expenses by line of
business and certain other estimates for underwriting expenses. Reported segment
results would change if different methods were applied. The Company does not
allocate assets, investment income and income taxes to operating segments.
Segment information, for which results are regularly reviewed by management in
making decisions about resources to be allocated to the segments and assess
their performance, is summarized as follows:

<Table>
<Caption>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                                --------------------
                                                                  2001        2000
                                                                  ----        ----
<S>                                                             <C>         <C>
Revenues:
  Professional liability....................................    $ 88,418    $ 81,517
  Workers' compensation.....................................      39,765      34,112
  Personal and commercial...................................       5,566       9,391
  Other.....................................................      13,808       7,558
  Corporate and investments.................................      34,383      29,816
                                                                --------    --------
     Total revenue..........................................    $181,940    $162,394
                                                                ========    ========
Income (loss) before income taxes:
  Professional liability....................................    $(52,618)   $ (4,192)
  Workers' compensation.....................................     (12,655)     (3,266)
  Personal and commercial...................................      (3,460)     (1,778)
  Other.....................................................      (3,080)     (2,249)
  Corporate and investments.................................      29,569      23,635
                                                                --------    --------
     Total income loss before income taxes..................    $(42,244)   $ 12,150
                                                                ========    ========
</Table>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the condensed consolidated financial statements and the notes thereto included
elsewhere in this report and the Company's Annual Report on Form 10-K for the
year ended December 31, 2000. The following discussion of our financial
condition and results of operations contains certain forward-looking statements
relating to our anticipated future financial condition and operating results and
our current business plans. These forward-looking statements represent our
outlook only as of the date of this report. While we believe any forward-looking
statements we have made are reasonable, actual results could differ materially
since the statements are based on our current expectations and are subject to
risks and uncertainties. These risks and uncertainties are detailed from time to
time in reports filed by the Company with the Securities and Exchange
Commission. See, for example, the disclosures in "Item
1 -- Business -- Uncertainties Relating to Forward-Looking Statements" of the
Company's Annual Report on Form 10-K and in other reports filed by the Company
with the Securities and Exchange Commission. Other factors not currently
anticipated by management may also materially and adversely affect the Company's
results of operations. The Company does not undertake, and expressly disclaims
any obligation, to update or alter its forward-looking statements whether as a
result of new information, future events or otherwise, except as required by
applicable law.

                                        8
<PAGE>

               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS -- 2001 QUARTER AND YEAR-TO-DATE RESULTS COMPARED TO 2000

     We operate primarily in three insurance product segments: Medical
Professional Liability, Workers' Compensation and Personal and Commercial Lines.
See Note 3 to Notes to Condensed Consolidated Financial Statements for further
information regarding the operating results of our business segments.

     MEDICAL PROFESSIONAL LIABILITY INSURANCE OPERATIONS SEGMENT

     Medical professional liability net premiums earned were $88.4 million for
the nine months ended September 30, 2001, an increase of $6.9 million, or 8.5%,
compared to the nine months ended September 30, 2000. For the three months ended
September 30, 2001, medical professional liability net earned premiums were
$29.3 million, an increase of $857,000, or 3.0%, compared to the three months
ended September 30, 2000. The increases in medical professional liability net
premiums earned were mainly due to price increases and reduced discounts
instituted by the Company in all states. Also, the Company experienced greater
penetration of the Florida and Illinois markets. However, this was offset by
insured physician reduction in Ohio and Kentucky due to re-underwriting efforts.
The Company is seeking regulatory approval of significant additional rate
increases.

     Medical professional liability incurred loss and loss adjustment expenses
totaled $123.2 million for the nine months ended September 30, 2001, an increase
of $52.4 million, or 74.0%, compared to the nine months ended September 30,
2000. For the three months ended September 30, 2001, loss and loss adjustment
expenses were $72.8 million, an increase of $49.4 million or 111.1%, compared to
the three months ended September 30, 2000. The medical professional liability
incurred loss and loss adjustment expense ratio increased to 139.4% for the nine
months ended September 30, 2001 from 86.9% for the same period of 2000. For the
three-month period ended September 30, 2001 and 2000, the loss ratios were
248.9% and 82.4%, respectively. The increasing loss ratios were due primarily to
reserve adjustments taken in the third quarter, which related to prior accident
years and revisions made to current year expected losses. Due to the unexpected
significant increase in reported losses and claim severity in the third quarter
of 2001, including an unusually high frequency of large claims, the Company
undertook and completed a comprehensive internal actuarial study. As a result of
this study, the Company determined to revise the actuarial assumptions upon
which its loss reserves are based and adjusted its loss reserves accordingly.

     On a direct basis, the Company's paid medical professional liability losses
were $80.4 million for the nine months ended September 30, 2001, compared to
$64.4 million for the comparable period in 2000, an increase of $16.0 million or
24.8% for the three months ended September 30, 2001, direct paid medical
professional liability losses were $28.3 million compared to $24.9 million for
the third quarter of 2000.

     The reserve adjustments included a total of approximately $20.0 million
increase on prior accident years, primarily the medical professional liability
1999 and 2000 years. In addition, the current accident year loss estimates were
increased approximately $24 million to reflect the Company's revised assumptions
regarding loss development patterns. The adjustments were made primarily as a
result of a loss in the Company's Ohio, Florida and Kentucky medical
professional liability markets. Ohio and Florida are relatively new markets for
the Company and tend to have higher policy limits. Thus, actual loss development
can be volatile and difficult to predict. With these revised loss assumptions,
the 2001 accident year net loss and loss adjustment expense ratio is 116.8% for
medical professional liability.

     Medical professional liability underwriting expenses were $17.8 million for
the nine months ended September 30, 2001, an increase of $2.9 million, or 19.5%,
compared to the same period of 2000. The underwriting expense ratio was 20.1%
for the nine months ended September 30, 2001, compared to 18.3% for the same
period of 2000. Underwriting expenses were $6.3 million for the quarter ended
September 30, 2001, an increase of $700,000, or 12.5% from the same three months
in 2000. The underwriting ratio increased to 21.5% for the third quarter of 2001
from 19.8% for the same period in 2000. These increases were due primarily to
the growth of premiums in states where the Company pays higher commissions and
higher license and other fees. In addition, the Company recorded the maximum
ceded premium on all effected swing-rated
                                        9
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

reinsurance treaties due to the higher loss assumptions. This approximately $3
million increase in ceded premiums contributed to the higher underwriting
expense ratio.

     WORKERS' COMPENSATION INSURANCE OPERATIONS SEGMENT

     Workers' compensation net premiums earned were $39.8 million for the nine
months ended September 30, 2001, an increase of $5.6 million, or 16.4%, compared
to the nine months ended September 30, 2000. For the three months ended
September 30, 2001, workers' compensation net earned premiums were $13.5
million, an increase of $2.0 million, or 17.4%, compared to the three months
ended September 30, 2000. The increases in net premiums earned were due
primarily to premium rate increases and reduced credits, as well as policy
growth in the states of Minnesota, Illinois and Indiana. The Company is seeking
regulatory approval of significant additional rate increases.

     Workers' compensation incurred loss and loss adjustment expenses totaled
$41.7 million for the nine months ended September 30, 2001, an increase of $14.5
million, or 53.3%, compared to the same period of 2000. For the three months
ended September 30, 2001, loss and loss adjustment expenses were $19.4 million,
an increase of $7.9 million, or 68.7%, compared to the three months ended
September 30, 2000. The workers' compensation incurred loss and loss adjustment
expense ratio increased to 104.9% for the nine months ended September 30, 2001
from 79.8% for the same period of 2000. For the three-month period ended
September 30, 2001 and 2000, the loss ratios were 143.6% and 83.6%,
respectively. The increasing loss ratios were due to an overall pattern of
increasing losses in workers' compensation, especially in the Company's newer
states, Illinois, Iowa and Kentucky. As a result of these high loss patterns,
the Company increased its prior year reserves in almost all markets by a total
of $5 million. The current accident year loss estimates were increased $6
million, primarily in the markets noted above. After these adjustments, the 2001
accident year net loss and loss adjustment expense ratio is 90.9% for workers'
compensation.

     Workers' compensation underwriting expenses were $10.7 million for the nine
months ended September 30, 2001, an increase of $500,000, or 4.9%, compared to
the same period of 2000. The underwriting expense ratio decreased to 26.9% for
the nine months ended September 30, 2001, from 29.8% for the same period of
2000. Underwriting expenses were $3.6 million for the quarter ended September
30, 2001, an increase of $100,000, or 2.9% from the same three months in 2000.
The underwriting ratio decreased to 26.8% for the third quarter of 2001 from
30.4% for the same period in 2000. These decreases resulted primarily from the
Company's expense reduction initiatives and lower assessments and fees.

     PERSONAL AND COMMERCIAL LINES INSURANCE OPERATIONS SEGMENT

     Personal and commercial net premiums earned were $5.6 million for the nine
months ended September 30, 2001, a decrease of $3.8 million, or 40.4%, compared
to the nine months ended September 30, 2000. For the three months ended
September 30, 2001, personal and commercial net earned premiums were $1.0
million, a decrease of $2.4 million, or 70.6%, compared to the three months
ended September 30, 2000. These decreases were due to the Company's decision to
exit this line of business.

     Personal and commercial incurred loss and loss adjustment expenses totaled
$7.9 million for the nine months ended September 30, 2001, an increase of
$200,000 or 2.6%, compared to the nine months ended September 30, 2000. For the
three months ended September 30, 2001, loss and loss adjustment expenses were
$1.6 million, a decrease of $1.7 million, or 51.5%, compared to the three months
ended September 30, 2000. The personal and commercial insurance incurred loss
and loss adjustment expense ratio increased to 141.5% for the nine months ended
September 30, 2001, from 82.5% for the same period of 2000. For the three-month
periods ended September 30, 2001 and 2000, the loss ratios were 167.9% and
97.5%, respectively. The increasing loss ratios were due primarily to a higher
amount of winter storm-related losses in 2001 and the Company's decision to exit
this line of business.

     Personal and commercial underwriting expenses were $1.2 million for the
nine months ended September 30, 2001, a decrease of $2.2 million, or 64.7%,
compared to the same period of 2000. The underwriting
                                        10
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

expense ratio decreased to 20.7% for the nine months ended September 30, 2001
from 36.5% for the same period of 2000. Underwriting expenses were $200,000 for
the quarter ended September 30, 2001, a decrease of $1.1 million, or 84.6%, from
the same three months in 2000. The underwriting ratio decreased to 19.9% for the
third quarter of 2001 from 37.4% for the same period in 2000. These reductions
of expenses were directly related to the Company's decision to close this line
of business, which began in the fourth quarter of 2000.

     CORPORATE, INVESTMENTS AND OTHER

     Net investment income, excluding realized investment gains, was $36.4
million for the nine months ended September 30, 2001, an increase of $10.0
million, or 37.9%, compared to the nine months ended September 30, 2000. For the
quarter ended September 30, 2001, net investment income was $11.6 million, an
increase of $2.3 million, or 24.7% compared to the same period for 2000.
Approximately $6.3 million of the annual increase is attributable to investment
of the proceeds of the Company's initial public offering received in December
2000. In addition, in 2000, the Company liquidated approximately $35.0 million
in equity securities, investing the proceeds in interest income producing
government and corporate bonds and shifting some of the Company's portfolio from
tax-exempt securities to higher yielding taxable corporate securities. Net
realized gains and losses were ($2.5 million) and $1.0 million during the
nine-month periods ended September 30, 2001 and 2000, respectively. Net realized
losses were $2.4 million in the third quarter of 2001 compared to $860,000 in
the third quarter of 2000. Approximately $1.8 million of the 2001 loss was
attributable to a security whose decline in market value was considered other
than temporary by the Company. The Company maintains a portfolio of cash and
short-term investments to meet operating cash needs, fund the share repurchase
programs, and for potential acquisitions. Recent reductions in the short-term
Federal interest rate has reduced the yields generated by this portfolio.

     The Company's general and administrative expenses increased $862,000 to
$1.55 million during the nine months ended September 30, 2001 compared to the
prior year. The increase was due to new costs incurred by the holding company
associated with the Company becoming publicly traded in December 2000. These
costs include stock market listing fees, investor relations fees, shareholder
meeting costs and securities reporting expenses. Management expects the general
and administrative expenses from 2001 to be more representative of continuing
operations.

     The third quarter of 2000 and the nine-month period ended September 30,
2000 also included unique items, which were not incurred in the respective
periods of 2001. These included demutualization costs associated with the
initial public offering process and restructuring charges.

     The Company recorded $15.0 million in federal income tax benefit for the
nine months ended September 30, 2001, compared to a $3.4 million expense during
the same period in 2000, due to the loss for the current quarter. The effective
tax rate was 35.5% for the nine months ended September 30, 2001, compared to
27.9% for the nine months ended September 30, 2000.

     Net loss for the nine months ended September 30, 2001 was $27.3 million on
revenues of $181.9 million compared to net income of $8.8 million on revenues of
$162.4 million for the nine months ended September 30, 2000. Net loss for the
third quarter of 2001 was $35.8 million on revenues of $58.2 million, compared
to net income of $2.3 million on revenues of $54.8 million for the third quarter
of 2000. The decrease in net income was due primarily to increased incurred
losses and the increase in reserves due to adverse development, which were
partially offset by increased investment income and reductions in the Company's
expense ratio.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

     The primary sources of our liquidity, on both a short- and long-term basis,
are funds provided by insurance premiums collected, net investment income,
recoveries from reinsurance and proceeds from the maturity or sale of invested
assets. The primary uses of cash, on both a short- and long-term basis, are
losses, loss adjustment expenses, operating expenses, reinsurance premiums and
taxes. In addition, the Company is
                                        11
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               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

indebted to a related party in the amount of $9.0 million in connection with the
purchase of Stratton-Cheeseman Management Company. The indebtedness is due in
annual installments, without interest, over the next seven years. At September
30, 2001, the Company had no material commitments for capital expenditures, with
the exception of the proposed acquisition of RTW.

     The Company's net cash flow generated by operations was approximately $6.1
million for the nine months ended September 30, 2001, compared to $55.4 million
generated from operations for the nine months ended September 30, 2000. The nine
months ended September 30, 2000 included the receipt of $41.2 million related to
the settlement with the Internal Revenue Service.

     At September 30, 2001, the Company had $107.3 million of cash available and
an investment portfolio of $664.7 million. The portfolio includes $8.6 million
of bonds maturing in the next year to meet short-term cash flow needs. On a
long-term basis, fixed income securities are purchased on a basis intended to
provide adequate cash flows from future maturities. As of September 30, 2001,
$259.7 million of bonds mature in the next one to five years and $306.8 million
mature in the next five to ten years.

     Total assets increased $61 million to $1.04 billion at September 30, 2001,
compared to $978 million at December 31, 2000. The increase was due primarily to
increases in reinsurance recoverables, federal income tax recoverable and
accrued investment income.

     Loss and loss adjustment expense reserves increased $89.1 million to $572.4
million at September 30, 2001, from $483.3 million at December 31, 2000. This
increase was due to increased writings in both the workers' compensation and
medical professional liability lines and the reserve enhancement previously
described above.

     The unearned premium reserve increased $7.6 million, or 8.6% to $95.6
million at September 30, 2001, from $88.0 million at December 31, 2000. The
increase was due primarily to the higher seasonal writing in medical
professional liability in the third quarter of 2001.

     In March 2001, the Company's Board of Directors authorized the purchase of
up to 5% of its then outstanding common stock, representing approximately
581,000 shares. The Company's purchase of any of its shares is subject to
limitations that may be imposed by applicable securities laws and regulations
and the rules of the Nasdaq Stock Market. The timing of the purchases and the
number of shares to be bought at any one time depend on market conditions and
the Company's capital requirements. During the quarter, the Company completed
its purchases under this authorization. During this period, an additional
166,000 shares were purchased at a cost of $3,480,000, bringing the total cost
to $11,386,000.

     In July 2001, the Company's Board of Directors authorized the repurchase of
an additional 560,000 shares. As of September 30, 2001, the Company has
purchased 91,000 of these shares at a cost of $1,764,000. In November 2001, the
Company's Board of Directors authorized the repurchase of an additional 540,000
shares. The Company intends to continue repurchasing its shares, in the market
and otherwise, when appropriate using available cash resources.

     In November 2001, the Company entered into a letter of intent to acquire
RTW, Inc., a Minnesota-based insurance company. In the transaction, the Company
would acquire all of the 10.3 million outstanding shares of RTW stock for cash
in the range of $3.10 per share. The transaction, which is expected to close in
early 2002, is subject to various conditions, such as the completion of due
diligence, the negotiation and execution of a definitive merger agreement,
regulatory approvals and approval of RTW's shareholders. The Company expects to
fund the purchase price for the transaction from available cash resources.

     Based on historical trends, market conditions and our business plans, we
believe that our existing resources and sources of funds will be sufficient to
meet our short- and long-term liquidity needs over the next year and beyond.
Because economic, market and regulatory conditions may change, there can be no
assurance that our funds will be sufficient to meet these liquidity needs.

                                        12
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for fiscal quarters of
all fiscal years beginning after June 15, 2000 (as amended by SFAS Nos. 137 and
138). SFAS No. 133 requires that all derivative instruments be recorded on the
balance sheet at fair value. Changes in the fair value of derivatives are
recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction,
and if it is, the type of hedge transaction. Because we currently do not use
derivative instruments, the adoption of SFAS No. 133 did not affect our results
of operations or financial position.

     In July 2001, the FASB issued SFAS No. 141 "Business Combinations" and SFAS
No. 142 "Goodwill and Intangible Assets." These standards provide guidance on
how the Company would account for acquired businesses and related disclosure
issues. In addition, these standards eliminate the "pooling of interest" method
for transactions initiated after June 30, 2001, and effective January 1, 2002,
eliminate the amortization of goodwill and certain intangible assets. The
standards require annual impairment testing and potential loss recognition for
goodwill and non-intangible assets. The change regarding the elimination of
goodwill and other intangible amortization will be made prospectively with the
adoption of the new standard as of January 1, 2002. Prior period financial
results will be not be restated. However, we will also disclose, for comparison
purposes, earnings information for prior periods exclusive of comparable
amortization expense. The majority of goodwill was the result of the purchase of
Stratton Cheeseman Management Company. The Company believes this goodwill has
not been impaired and, as a result, will not be amortized against net income for
periods beginning after January 1, 2002. Management will continue to review this
transaction for impairment.

     In October 2001, the FASB issued SFAS No. 144 "Accounting for Impairment or
Disposal of Long-lived Assets." This Standard will generally be effective for
the Company on a prospective basis, beginning January 1, 2002. SFAS No. 144
clarifies and revises existing guidance on accounting for impairment of plant,
property, and equipment, amortized intangibles, and other long-lived assets not
specifically addressed in other accounting literature. Significant changes
include (1) establishing criteria beyond those previously specified in existing
literature for determining when a long-lived asset is held for sale, and (2)
requiring that the depreciable life of a long-lived asset to be abandoned is
revised. These provisions could be expected to have the general effect of
reducing or delaying recognition of future impairment losses on assets to be
disposed, offset by higher depreciation during the remaining holding period.
However, management does not expect the adoption of this Standard to have a
significant impact on the Company's 2002 financial results. SFAS No. 144 also
broadens the presentation of discontinued operations to include a component of
an entity (rather than only a segment of a business).

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

GENERAL

     Market risk is the risk of loss due to adverse changes in market rates and
prices. We invest primarily in fixed maturity securities, which are
interest-sensitive assets. Accordingly, our primary market risk is exposure to
changes in interest rates.

     As of September 30, 2001, the majority of our investment portfolio was
invested in fixed maturity securities and short-term investments. The fixed
maturity securities primarily consisted of U.S. government and agency bonds,
high-quality corporate bonds, mortgage-backed securities and tax-exempt U.S.
municipal bonds.

                                        13
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

QUALITATIVE INFORMATION ABOUT MARKET RISK

     Investments in our portfolio have varying degrees of risk. The primary
market risk exposure to the fixed maturity portfolio is interest rate risk,
which is limited somewhat by our management of duration. The distribution of
maturities and sector concentrations are monitored on a regular basis.

     We regularly examine the quality distribution of our investment portfolio
for evidence of impairment. When a security in our investment portfolio has a
decline in market value, which is other than temporary, we are required by GAAP
to reduce the carrying value of such security to its net realizable value. All
declines in market values of our investment securities at September 30, 2001
were deemed to be temporary, with the exception of one security noted earlier
for which the Company recognized a loss in the third quarter of 2001. See
"Subsequent Event," below.

QUANTITATIVE INFORMATION ABOUT MARKET RISK

     Our fixed income security portfolio was valued at $624.4 million at
September 30, 2001 and had an average modified duration of 3.62 years. The
following table shows the effects of a change in interest rates on the fair
value and duration of our portfolio. We have assumed an immediate increase or
decrease of 1% or 2% in interest rate for illustrative purposes. You should not
consider this assumption or the values shown in the table to be a prediction of
actual future results.

<Table>
<Caption>
                                                               PORTFOLIO     CHANGE     MODIFIED
                     CHANGES IN RATES                            VALUE      IN VALUE    DURATION
                     ----------------                          ---------    --------    --------
                                                                    (DOLLARS IN THOUSANDS)
<S>                                                            <C>          <C>         <C>
+2%........................................................    $578,580     $(45,802)     3.55
+1%........................................................     601,405      (22,976)     3.53
0..........................................................     624,381           --      3.62
-1%........................................................     648,913       24,532      3.84
-2%........................................................     674,340       49,959      3.95
</Table>

SUBSEQUENT EVENT

     The Company incurred a $1.8 million realized loss during the quarter which
was attributed to a write-down of a security whose decline in market value was
considered other than temporary impaired by the Company. Subsequent to September
30, 2001, the Company suffered an additional $3.7 million decrease in the market
value of this security, which will be recognized in the fourth quarter if the
security does not recover. The security has a par value of $6.5 million and has
a current market value of $1.1 million.

                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

     None Filed.

     (b) Reports on Form 8-K.

     No reports were filed during the three months ended September 30, 2001.

                                        14
<PAGE>
               AMERICAN PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: November 13, 2001

                                          AMERICAN PHYSICIANS CAPITAL, INC.

                                          By:  /s/ WILLIAM B. CHEESEMAN
                                          --------------------------------------
                                                   William B. Cheeseman
                                            Its: President and Chief Executive
                                                         Officer

                                          By:     /s/ FRANK H. FREUND
                                          --------------------------------------
                                                     Frank H. Freund
                                             Its: Vice President, Treasurer,
                                                 Chief Financial Officer
                                             and principal accounting officer

                                        15