FNHC - Earnings call transcript Q1 2019

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Operator

Good morning and welcome to the FedNat Holding Company's First Quarter 2019 Financial Results Conference Call. My name is Bella, and I will be your operator today. Please note that today's call is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. call not conference forward-looking facts this statements. in that historical are are Statements anticipate, continue, intended potential, budget, expect, such words target believe, Words as other and contemplate, forward-looking forma, seek, intend, similar statements. might, or will pro phrases guidance, may, could, identify plan, probably, possibly, are predict, or project, should, to indicate, estimate, envision, not are risks The matters in being expectations based involving and on that are these discussed on realized. expectations forward-looking this current statements call result uncertainties that may management events, in on materially risks other with time. filings time or due release Actual described not results what from the uncertainties this the by differ SEC made numerous from and but in outcomes may press forward-looking issued and conference limited yesterday is expressed risks our to Company to, and to this and forecasted uncertainties including, made the statements call call,

any date revise of Holding information, Forward-looking Company speak only reflect otherwise. to or statements as future disclaims to this call new events made circumstances and FedNat conference forward-looking statements obligation or today's update during specifically any or

I sir. time, this of Chief Holding the President to go Officer like Mr. Michael at Now Braun, conference over Executive Please Company. FedNat and turn ahead, to would

Michael Braun

profitable to business became our and homeowners our focused Officer. then reduced increased overall leaner transformative growth Thank for performance details. shareholder financial driving with of will as call. our quarter's morning Accounting and off give first is Fernandez, provide significantly entered cost earnings morning Chief Erick a a coming the welcome momentum Ron value. an and core will of much result and Financial our quarter structure business. you. in I our Good With positive scale some to Chief build We our year with our Jordan, and overview earnings me this XXXX Ron Officer; We additional strategy and FedNat

with hail in increased since resulted of agents. late The due disappointing, for recorded serviced But to experienced significantly on has program. weather underlying weeks, the momentum Brevard to quota is were reported gross hail over storm share again pleased Most occurred. and am have that event of I our importantly, from we date, estimate in the is over have large we County our million, South trusted intentionally largest to quarter. our was QX us impacted policyholders we've a away an of in have and state our short an dispatched service reinsurance with and the which that the resources once Florida FedNat's we claims results to share number intensity to severity fifth To loss the estimated $XX.X continued over we in to east an the have appropriate to market $XX.X and of a event provide strong which driven years, the our fundamental quality It Brevard that net quickly business County mission, relative X area coast performance. almost hail unusual Our primary million XXX Florida's claims that XX% diversified ultimate a enjoy. we have at that FedNat, translates Florida. ever in this state county fact unusual worst targeted nature events, of our as has

Ron includes we objectives, particularly the related diversification in for and during are in start strategy, good to announced our of their the then news them itemize year. will acquisition very a release a give keeping high items we geographic need share which non-GAAP we investment in comment Despite I on the provide the in up Maison impacted are I'll measures a that you making the work and that with with our will financial the results, a transparency, great will of progress on our to our the more growth to of community we level mandate weather time for event, quarter. quarter. brief provide review. there overview In live excellent the to detailed off GAAP we enjoy. non-reoccurring introduced further are the our reputation quarter. We the earnings Ron our in hard

drag general from benefit the again in and to our wind which commercial continue were We to business liability, auto quarter. decision a down on lines, noncore the earnings

captured additional net reported premiums per strong was which Brevard compared in million for the XX%. had management, us responsibly. first the due quarter capital our million year's exposure the July, $X.X our million that homeowners driven performance $XXX.X the helped Total Overall, with or to in business more million which $XXX,XXX in from year-over-year, Net earned of $XX.X losses a including quarter, XX.X% share. hailstorm. last core but save unrealized We $XX prudent in of to in $X.X benefit ratio XX.X% earned by all has reinsurance million gains. on also weather-related protected XXX by improved million quarter, risk We savings in increased driven loss We revenue than to originated and part of our a approximately program million manage grew points from net in last from premiums. investment $X.X quarter loss $XX.X coming reinsurance expense of our in the premiums the to by basis $X.XX

in continuing to states. market and and competitive and taking diversifying we home book neighboring by while are be disciplined We profile a execute our to Florida, continuing are and coastal remains more fragmented approach In market risk prudent. overall in our of the Florida well growing quickly

last our XX%, take the to compared premiums earned non-Florida quarter. share $X the while of the year's and in million We written were in Texas, business. state diligently tripled continue opportunity large advantage to largest second to over U.S., over by grow premiums doubling up which Gross premiums $XX to million led gross

benefits. the have weeks plus ago, Tier Two to X We assignment Tier thank the Florida's especially and X around received market to area. the state. and all unscrupulous line system by Florida attorneys eliminate the passage policyholders We Florida the their issue to the reinsurers. years. vendors of very with to restore to the Chief It reform homeowners in welcome abuse own gamed insurance and David the diligent and of handling news like of Altmaier for to continue rational a target and and very expense Houston pockets subset legislation AOB, the last legislators counties, of to help Commissioner catastrophe will for the State Officer it Jimmy This for the insurers the is AOB in on Insurance the and win will an among big that market would cost across claims. will at The support lead of carriers, pricing for Patronis homeowners reform ultimately few long increased competition work overdue and lower lower Financial of and state coastal premiums

look homeowners I claims all date, get increase effect have big market seen say, in I are new sentiment we've on management, the the XXXX. our the see will benefits. results we plaintiff's be for effort our it's picture, to legal shareholders, in to in To will in market, should contain or For a watershed improved and that continue peers we an one July we moment claims disruption been and we the everyone think, we share through better AOB Florida caution as excited of the Florida be X, moving been have soften under plaintiff's since to face AOB I major to our believe when I the But forward. of rate a until underwriting expenses impact see able I as finally the to we and under and the increases. to into financial rules AOB assignment wire. improved activity able before education financial pay has that that go

rate went for Outside XXth a Louisiana effect with better combined environment, in in strides performance and second into quarter. in well diversification Carolina, on a positive and impact more Florida, New of The bode Texas, to of the rates, strategy the continue financial X.X% great future FedNat. will of starting have on we our rational our executing make Alabama. South increase April

these gross last year's from penetrate which continued opportunity these share for growth. in offer great or states, neighboring quarter. premiums and markets earned Non-Florida increased to XX% continue million We grow first by strong a coastal $X.X over

to close Ron the now markets The last almost company again hailstorm are market and to provide I that forward the on and close great performance. for closer as staff continuing a Maison's anticipated and XX% eager be It's we we our regulatory of call financial will ever a is XXth, and Following year's XX% look bolton deal latest to expected share help from Maison continued more of review. look to ratio, overall obviously June addition to our acquisition the outside quarter, manage be Brevard and Louisiana a though over before earnings, is become we use net both, know is and the acquisition, of excluding FedNat should the in approximately the from part of drive additional Maison to In for necessary operating and Texas, operating we'll turn homeowners quarter. It's of fit as lowered finally, results. to Florida. to growth. invest perspective. and strong more reduction in scale as the And an scheduled book efficiently size well our approximately to of our XXX% impact financial subject will moving facilitate increases our are to both financial will we continue cost XX-point XX% plan. immediately combined in accretive our at the that Ron? productive, technology first The

Ron Jordan

Mike earnings welcome to everyone call. and you, again our QX Thank

strong was in looking in single included of quarter, last quarter light also performance. we core As underlying otherwise on This the established momentum In Mike unusual QX, first several impacted we this a we're build strong good year. believe the items. non-recurring continued what mentioned, first beyond performance, hailstorm to other homeowners position a

introducing we this the to of measures operating quarter result, results. XX. Page results non-GAAP facilitate a found can measures fundamentals and our the discussion one on or being more As manner. a Page We and step in the non-GAAP of to measure measures of these be of greater The be Definitions efficient included on a took related income. GAAP two meaningful found non-GAAP transparency non-GAAP X our measures to the reconciliations year's operating provide a from titled underlying prior can the adjusted release to primary comparison more in

ahead in more their will even the our utility. we the believe the increase to look of measures we quarter, acquisition closing Maison second during on As non-GAAP

$X.X million items the include So prepayment the costs, the that the including all non-operating write-off debt, fees $XXX,XXX a of investment Maison income. in basis. adjusted on of related old to plus to quarter acquisition, our the the the result non-recurring million issuance I'm GAAP pre-tax expenses unrealized of following; debt on repayment $X.X of in old primarily loss income net $X.X coming approximately side of favorable gains. After the portfolio in tax, on our referring these to items million and operating

As County quarter's Brevard the weather-related bottom $XX results of of from impact including Mike million include per mentioned, losses, million share. storm or line hailstorm. was the $X.XX $XX The this $XX.X million

a $X.XX per adjusted an the $X.XX. loss with of loss a operating As reported share of result, quarter we in diluted

of Adjusted annualized Excluding ROE $XX.X is million exclude revenues as was million quarter, $X.XX per income portfolio, in up investment approximately been in revenue, X.X% the of total operating to $XX.X the adjusted million XX% 'XX our non-GAAP XX%. in our versus adjusted an growth which would share, storm, homeowners unrealized or over the our the over with other measure XQ line from business. of figure defined have represents operating gains $X.X that Brevard and

in quarter XX% net loss year's preceding in XX% and last quarter the in first was quarter. the ratio Our XX% compared with

XX% loss two feel As lower I which and is at in points came we This the very mentioned, during Hurricane would points, flat good ratio clean loss 'XX, a a ratio loss Michael. XX the added XQ have than storm XX%, with otherwise, number the Brevard about impact no of quarter weather. backing where in net with out storm net ex-Brevard come the ratio XQ severe was

us experience. recall, of typically quarter terms As for you lower a may XQ loss is seasonally in

claims XQXX So of than toward applied in to the fourth of we the ex-storm an current have than first say is ratio rather eye have the stronger of loss to versus usual our a the let initial of 'XX, more of reasonable not the within accident quarter hasten pick losses past. with the loss 'XX we ratio ratio me applied that full-year indicative loss expectation in flat worse range quarter experience quarter in

bear as an for the thereof. one point this evaluates the quality in earnings to is think quarter results important I our mind and

with net XX%. 'XX of review I'll from at expense quarter of over of year's first-quarter last Our which ratio were both lines our XX.X%, down XXXX's start with the ratio was business. first-quarter of brief business my core flat significantly fourth homeowners, expense

roughly book, earned combined over our cat of and and We earned the operating for storm The approximately in the Gross ex-Brevard, written were X% for reflecting rate XX% increases. continue premiums quarter, and approximately as overall increase premiums reflecting essentially were CGL impact, million in at of the development strategy reinsurance precise were X loss line have for to favorable X, loss disciplined homeowners ratio, net we approximately and up Gross declined in to and non-Florida in and 'XX XX% general liability representing business. premiums down. of recorded were our be as were $XX.X million. and auto was the Net quarter. Auto of $X wind XX% homeowners lower spend business. $X,XXX the $X.X homeowners adjusted compared premiums net diversification premiums million same planned. Brevard an million earned GAAP homeowners year to As $X.X Florida both first-quarter in down written excluding would made lines written X% in prior essentially commercial

out unearned of during will third significantly to CGL has the resolve open auto, last reserves which of left, In quarter. earn reduced $XXX,XXX continue approximately the claims and we claims have We inventory. premium

year line, development. driven in of bottom the prior which reserve resulted by auto $XXX,XXX, On a loss of was $XXX,XXX adverse

from the from million fixed value a interest our rose the further Maison bit plus process. Book per on despite to share in first million share related unrealized Interest at XQXX income business the average position roughly line and of The December XQ representing That the other the on $XXX,XXX acquisition general such per the commercial our the pending which quarter Brevard repositioning, million favorable auto contribution in million an at line. quarter, in $X.X in up the development of impact $X.X in the by million $XX.XX the offset which an business. is our Net $XXX,XXX first prepayment increased borrowing basis adjusted little what year approximately development roughly interest to $XX issuance debt operating of cost the had our $X.X we our $X.XX long-term loss driven $X.X year driven of of bottom and capital already prior homeowners, $XX.X briefly expense line approximately Via place non-GAAP that investment essentially secured balance gains, refinancing, quarter. of the to of sheet. portfolio, measures coupon an debt to transaction, in prior development of Long-term by the detailed. X% of of the In per expenses fell the XQ rising by versus March, stands storm share over 'XX amortization. I'll and driven basis. now on cost rates Go strong due and in end to that equity we exclude per financing the debt market turn income put XX were lowered pretax the to quarter. we quarter. forward new million represents by earnings for XXX includes points. almost in interest to will as gains be portfolio performance expense due annualized declining of now were rates our Investment to

involving a short approximately Our We of Brevard repurchase quarter period both $XX first active and to with a and duration results. investment on the the million. of portfolio which X.X with Maison a remain of the million quite highly We quarter acquisition. first with value plan damper stock million, total closing In to of carrying on the S&P term rated of were liquidity composite leading are ended activities company $XXX interim with $XXX hand quarter a in minus Maison. up conclusion, our in due A put cash non-insurance the of not storm the our elevated

quarter. improve our fundamentals underlying the believe great healthy the we a profitability business in However, core continued We in in are to XXXX. in to deliver position

that of XXth Our increases kicked X.X% in on average go-forward the state wide results April rate will increase top benefit rate prior from years. from on Florida

We half book challenged several have also past the AOB that the of Florida XXXX in anticipate years. relief our headwinds from for the second

better states and through The our from to synergies business and coastal earnings and growth will operations the starting technology continued we strong benefit CGL diminish third And year. to finally, XXXX scale, the in non-Florida auto to accretion structured continues Our we reductions drag leverage both from to continue progress the productivity. of as drive and to are show due investment Maison will in staffing quarter.

So Mike. with turn I back over will that, to call the

Michael Braun

All right. questions. for Thank we're you, ready Ron. Operator,

If line? you the up can open

Operator

the first Our of Ruth instructions] question [Operator line from Doug from comes Lenox.

is line Your open.

Doug Ruth

Mike, think little with you're you might the appreciate and you the reduction and what about Ron, expense happen I that? Could seeing appreciate in with talk the what a reinsurance bit -- ratio.

Michael Braun

reinsurance hot obviously Yes. Good topic. Doug. Yes, morning, is a

had partners of are company Our over our in a last have and the $X cat part billion big losses that. three years in reinsurance

and lot pain in the experienced pain. parts So They've in they the country, wildfires of the felt so California that other a of also on.

capital. their documented It's believe to they I cost on for an So they're going reinsurance that are well that firm want holding of pressure and there's clearly the pricing. increase

under that a three, movement it that next will weeks, way here the two, four is expect I our under and have we increase. we'll lot anticipate of but reinsurance do pricing in pressure with we're So, conversations.

Doug Ruth

there for any And any is do this need Okay. going? or And tangible then are hurdles? Do we something you since there you overcome that you what need or happen it is to need updated the to that Florida things Maison is -- us? us is know -- feel there can OIR the to acquisition do last you we from that give

Michael Braun

Yes.

paperwork have we in business resides Louisiana, of licensed Florida states. regulators, currently We in own our are with everything in both the the those all and and completed and obviously both

states, does Their and second It's that thorough be the XX% to well middle We're in continue So and shortly review under among conducting I those hopeful thorough be I XX% our formality the and about think concerned. to have for no just staff. or of make have quarter. close either do able a should that a it's process management the plans the a concerned premium thereafter. review facilitate this of to the that, We a premium. is They to and team of to reason talk on integration. be very in no state and reason analysis is way. we whether But our of our of staff I have about June

of Louisiana states We integration this once we're the we're that dealing two is we're think occur. it business that two regulators again, that and states, are Their Texas already I And primarily, in how in. these again with the will interested with. very comfortable that are once --

done, So we of where work we're small feel business. process. new same at lot be a a of acquisition. it's good but in states, relatively the lines to There's It's no

Doug Ruth

how feel related about, between on combined do two you a feel save you of how companies? matter, once do the And completed, reinsurance acquisition the then is about the also sort

Michael Braun

we. exposure of do and Florida, they in meaning overlap have There that terms is clearly our some Texas in as Louisiana, exposure,

there are believe there. process the on we're so So than again, synergies exposed speak, that to the we pricing, there in that that reinsurance we lot there's as there we on moving on of through, is non-Florida, through as we're we Florida that programs. is believe the the more speak. value reinsurance But once working past, And pressure stated but a going pieces we've so as business Doug

Doug Ruth

for you Okay. the the further answering ratio improvement my and throughout a And we're you XXXX. looking for I questions. Well, appreciate thank in expense reduction

Operator

the next Marcos from Your line comes with James. Raymond of question Holanda

Marcos Holanda

some reinsurance you, ask underlying X the was close some color ratio, the me more there's points of we're I improvement on if with competitors, there, think that of was off in from And X I'm saves. of understand from deteriorating cost give most Let and doing, points But addition a your can what the expense ratio, just them the the and you to assuming start because question reported results. seeing combined Mike us improvement.

there would any be Mike. So, great, color

Michael Braun

Yes, our business mean, we're continue, I so reinsurance on. driver and of cat we where the in is terms obviously costs, at, the in costs

everyone's the over have entering that, or and the been favorable last the So we're phase. last to new and memory at three attritional refresh few have we've costs the that a same years, now really attacked on losses But pressure. time, four for years, cat our been significant under

yet the the over XX,XXX of Florida our and Florida. three we've only dropped $XX in in last excess well $XX policies exposure, about dropped of premiums So State dropped million. We've in years, billion of

So just say write me attritional as And much impacted in been has our attritional and we been our impacted and Florida, have appetite that business a driven business as and to that haven't losses writing in of non-renewed. AOB losses well our policies cat. savings as that lot therefore, in let new it savings our and desire absolutely

reliance with is on be AOB which the to of recent I Now the Florida. yet our that reform, passage think signed changes Governor, by

from but that it's Barry plays right that with on rates out. in business. worked what and this all state. entity, is seeing numbers. the AOB doesn't XX% reform. to to out. direction. have everything, think the he step his average across are And cure but increase the we're to We're encouraged XX%, dropping write These their to on a It fix people, But we sees their a XX% Gilway, anywhere it's this extremely has runs big see lot to appetite indicated There's Citizens, I who going which Florida state be how

increase that attritional appetite, up, pressure think a to that our clearly -- attritional that. will a be the on taking to which our once again, And in on AOB our going costs, can honestly this we of help with you're the and that -- going improve some will believe side, basis, have losses side. monitor off reinsurance support more quite see will rates we our go-forward reinsurance and taking be there's I So lot work to reform responsibility Clearly which be be our shoulder rates. will we'll that done going regard

Ron Jordan

guess, reductions. ratio the staffing mentioned, well. Mike Maison run lot combined transaction, I loss pull I meaningful third to Yeah, a would year I tend last almost a about overall $X our core that's XX% of as more mix the rate in just that toward we with of $X of shift be add as think will year to on. in a staffing, item terms We non-Florida million, talked the terms our as down million business just ratio, in beginning about reductions our the in those Also a blended the and non-Florida, up quarter will like

Marcos Holanda

reinsurance it. Got just Should for quarter quarter this to savings, looking the million right? the flow through more we be $X.X one second at quarter, for then for in that. we still the have Thanks this million $X.X on year? of And

Michael Braun

Yes.

reinsurance $XX so, that would would million, over reinsurance you, to you four $XXX lot that's to to going that allocated spend yes I savings July, bring this to our of tell a Marcos, our spend dropped down, in million XXX, was it year. XXX $XXX quarters. So last be million, a a world, flat from the back so

since last year Our down XX%. Florida is another exposure probably

once million perhaps world, would So I million flat again, down, $XX be that would million, $XX by -- going with say, in $XXX additional. a

to clarify. pieces Now, There's that. two me let

Our non-Florida is growing. book

points, So There's going it's at give that our the market up X.X XX approximately to examples. up again don't reinsurance going will it a market three If six premium is go, -- some X.X once is points. cost, that's reinsurance goes is if points, percentage we points, the pricing talk of is let's know XX%, X%, XX it but where that, impact XX%. as points points and just you is up. But goes

this the pressure point I are once a my believe on we manageable and and I believe So situated reinsurance and and experience we a We've with partnership but well got is, to and renewal, is with partners. that them. to to robust we we're respect going have be our we a reinsurers, again and on long need there XX-plus have trading -- that their capital return relationship folks pricing panel these

think in we're we So our for good renewal. shape

Marcos Holanda

Mike, And quarter. then what just here finally, far seen could comment in so second you've the you on if

quarters, is non-cat this so losses one think quarter? into big I of the loss second how is the here shaping going up far

Michael Braun

no this have point, at information We adverse. that's

and bad very for you are. -- get the have good. had been quarter, statement So again, limitations book can would We've real Brevard always we I the from you I that statement. a once This in event. of the second been I of that things big We like QX think a Once how say understand Brevard. your feel years. exclude great was many because been limitations pretty strong it not for and Brevard,

have wire. XX% that a that out and to believe and Brevard to be do facilitated about it has of have I people really the are that These AOB is in attorney pressure getting going put on vendors, went We market contractors, because under going these the that is and encouraging and X. to identified work they're resolve the online to of there the it very system that last that and state, remedy great the until AOB he's minute, trying CFO the video of before everyone and July incorporate the new game out up

success basis. a So on set up it's, go-forward again, once we're think for I

very performing, is in our non-Florida business homeowners of were Florida and book core Our in with homeowners pleased it.

Operator

KBW. the from comes question line next of Campbell with Your Christopher

Christopher Campbell

starting what I losses for Irma and creep are latest on just off Michael I the guys? you guess, gross loss guess,

Michael Braun

Yes. big Those events. are

a tell with number will that you million at a looking AOB. is of So I direct gross, correlation and Irma, big we're $XXX

result, out still So some of We're per massive, big losses day, and to that's, Michael first most, on the direct knocking these were have is out getting we it. force, let part $XXX impacted there, are experienced million getting there new, new up It's loss. about of on call, and that's XX AOB state me clarify. are week. what Irma XX opinion, of a my up in notice vendors FNOL, this AOB. to plus development XX doors, is every in a continuing months again, of the county Once those vendors in it. wind

and those losses. two really those big AOB were So storms has amplified

Christopher Campbell

comes if reinsurance far are like I terms reinsurers like, the Got discussions reform? could of of in, how it. renewals? with going your And are reinsurer, as then AOB in how reform kind guess, you impact that AOB just how upcoming And the so

Michael Braun

put legislators, right we the was our Insurance really in the to reform proud I to the I the what effort has tell it State CFO throughout. and you, the inform State Commissioner, reform, the prior as the they've to reinsurers, to for expectations. When they impressed my as did of say, visited well exceeded of I'm policyholders with will Florida of I get I'm the AOB was think situation, and the the leadership personally,

the trip. marketing with were that, to reinsurers conversations prior our So underwriting our formal

the let you industry us, events, only on you public companies and different the we has Irma really are taking could, on remind materially However, Florida illustrate are in some not sense is business have thrived moved Michael document, where But always massively the Citizens. everybody, the we Florida in entire not an these in call industry at on other five but companies. your we for unusual, what is moved unusual, look from Citizens events, policies depop the has Panhandle. it, me of not it's of Irma.

we side. I But minimal reinsurers also impacted the And cat and recognize that. no that losses. also side, going us and AOB understand AOB has on them side the on understand So these is Panhandle think had exposure folks how in but cat the the our the exposure to storm us reinsurers the impact attritional or on

is So on that reinsurance. think part it's all pressure nonetheless, the equation. I pricing, But of on there Chris,

Christopher Campbell

to that through -- I reinsurance went want think digging And Got of from some given million, you pricing $XXX bit pressure, is kind little that year your you to had out it. I then million like think correct? into last is just and said, spend numbers, $XXX think that of I a these,

Michael Braun

Correct. and of Excessive up underwriting how policies. we and because million approximately to million the book Correct. down shrunk $XXX tightened loss $XXX non-renewed

Christopher Campbell

all right. And then it. Got --

said else been increases. you equal, all million down then have there $XX weren't and rate if So would like,

XX. So that it about down takes to

so that have and there is up absolute reinsurance implying, And more And going going thinking if you're to then to because I just rate bump sounds increases, one, just right? be you're premiums. to to like it like ceded I'm pay right,

does right? about increase, So that about sound that rate XX% gets me to

Michael Braun

that want that Well, multiple I And is, I mean what don't say it there's Chris. pieces. way, by to moving

non-Florida -- that's coming Our more increase. piece. Florida book there's our that complicated, gets have understand Maison, reinsurance, reinsurance again on yet Florida in grow. with two, and I'm Therefore, increase is it's Number we Florida it and to demand needs our there it so increasing. on acquisition in has three is has shrunk, not going one book but last , life, What much to -- is have confident continues exposure trying non-Florida. very certainties a pricing in no everyone how is the shrunk. this where is to pending is pricing And is, Number

prefer So roughly Chris, our of cat the reinsurance. what to way is what which XOL, it -- I premium -- goes say to I would would XX% is you, our

increase, If as the math be then a could translate you X%, subscribe well. XX.X% if and could from can extrapolate to a a a to XX%, XX% there you it you subscribe that to

Christopher Campbell

Okay. just reinsurers perspective. just how a -- are market prior I -- that's it I right reinsurance versus big said from I'm talking guess, reinsurance that market seeing guess, Irma year, know Florida pause taking last customer you how is prominent these right Got and are the just, like like and shaping kind impression just back you of renewals the guys years? their the it. in which up terms of was Just you now. in his I like CEO were -- guess then, then is event a thinking, that was now? as And then general, about

Michael Braun

Yeah.

the delay renewal. So where going a gamesmanship did unusual one on. of in it's is lot worst a XXXX an and lot there's of And through I'll say an when program. ever that real this reinsurance unusual mean, clear. By be I was pricing far, we there's market went let's

on Chris. looking -- that the the terms of but massive know some market. lot number, yet until decade some lot we last once pricing, in there's the a subscribe We there's way it at a partners been to to that dynamics Florida that. on. is, know looking increases, reinsurance others we I on, understand increases going the people some very recognize the reinsurers money. of the enter again to want based don't they're soft make of the grow are traditional We need believe number some and that. over We and want dynamics So There's book has want others the And going our pricing that and/or their

pricing. no robust also or We panel. is out weight our one disproportionate very robust to say dominate very panel, proud We've that of have that, renewal a can reinsurer got a

reinsurers What think one the with so is once again, we situated. But seeing our and that industry, well no from on So Irma I think situated. not hear we're development. from I they're the loss we're Michael, inconsistent and with likes what us well

Christopher Campbell

That's all in all then it. Best I second for answers. have. And Okay. the Got luck the just, of quarter. Thanks

Operator

from follow-up We question have Holanda with James. a Raymond Marcos

Marcos Holanda

Hi guys.

quick final Just a one.

could is, I what year, the Maison authorization the me remind Just on, at if stock closes, And then if are just deal was especially some trading the remarks just now the repurchasing I we with repurchasing you great. you got that'll your half book? back see wondering the be understand below guys could if I share. of from now

Michael Braun

you is and our Yes. it in have acquisition Board, that stock that where includes been stock. the Marcos, because not we using a it's market, have unfortunate cannot we the but pending I the much consistent my to Board. be active believe utilize in opinion is on personal and buyback, hand with the our more I we can need be capital that to to that that, our for is speak tell I

entertain at decision However, that we time. the appropriate will

over market So really been since and we've with pending We've there time. deal, at for of been do period folks Maison of unfortunately, a summer. we last good an out extended the talking have the

for been of time. long market the a we've out So

very the I Last it capital. a make utilize everything I'm of the capital a on, $XX on. possible there's to anxious. we're as great to we happen. buyback. our do specifically not appropriate to terms times a lot that. a think I'm And very for make do Board that what happen. that anxious There's of, have anxious authorize market to do do and Unfortunately, want in we capital, decide opportunity does committee have to million meet did can, we we to to the so up now. I'm soon us We to right December, at deploy in as that going

Operator

follow-up Lenox We have another Financial. question Doug from of Ruth

Doug Ruth

the there once have you would signs opportunity issue be could an policy the a that that it? Mike, to cannot AOB attached Governor legislation

Michael Braun

the and to with, what a reform. Yes, industry, these been, protection Doug, led lot have There's inflated reform they're obviously question. it's no what through. coming to Number a consumers of consumer, that's that is will a no small great one, claims, lot help whole is, matter a by of now there's the the the paying advantage of folks, unscrupulous situation pieces company they taken absolutely have and us AOB matter and subset been that of

not lot let the it. the So sophisticated But most a there's lot me stress, for of consumer, of there's again, once pieces individual. protections always who to is

will side, So that company expenses. the there legal to now back insurance is something contain the

we out very into So, could whatever amount. pulled contested pay later, and cases, in the situation $XX,XXX, claim, litigation get when then it maybe, very be could could we'll be fair be a many $XXX,XXX, and small a

the fees can of owe where and there's on, of thousands tens as and so documented dollars and $X. a situations small a thousands literally, that have many of legal So attorneys be of hundreds And then to hundreds you fees. we

very So, the litigation that and that pressured industry have claims table been unfair been has to knowing the is remedy we claims this and pay expensive.

playing So or help. the level is July able that this if will field perhaps to absolutely the Governor would that initiate X sooner, effective

to but we're of to will piece is is looking it, the to correct, exclude Doug it's second And what well, take The is, some to time. add that do more policy as our assignment. language going

So our unhappy will consumer, and the can and situation, if -- with be allow policyholder they litigation protected by occur. they contract this the to are the

for and that so of right. lack they vendor is we're a that that However, assigning to on, cannot and the to assign discount going a this give policyholder

be ability. where suddenly, without have and $X,XXX and may an a may they up now a policy numbers, I'm could assign $X,XXX you So renewal have it making the a -- consumer opportunity have

a to lot there there there's information of for These EUOs, to have out is on So sit it. to vendors of AOB. lot pieces a are the going

the very what think good and I matter it's the think of positive to in state Florida, I going with. citizens it's company help they're no

Doug Ruth

more in you think Florida? of -- would opportunity, could writing where an this also the consider And perhaps do State this policies be you

Michael Braun

yes, Absolutely, very appetite it's for think a absolutely, I and believe us, it's it us grow. to Absolutely. create will great that -- -- I more I opportunities from think there's

good three legislators rate of a of analyst and go approach combat increases As escalator on as would book remedy appetite this last have a these because and component the need years is well. over the to you we which AOB to appetite this and we shrunk have increases AOB know, significantly rate of great it's abuse, and of which news, the our AOB taken portion others to

the So Florida my the renews growing July more don't yes, it once interest I -- book. anymore clarity us shrinking on from after I absolutely that, to kind anticipate lens, we and Florida my book this see of X get

Doug Ruth

questions. thank you very and you Well, answering thank much, Okay. for Mike,

Operator

I the would questions time. Braun. I'm Michael like at turn this conference further to showing back Mr. to now no

Michael Braun

your you everyone. Thank FedNat thank and interest Yes. the for in call. on appreciate We you being

strategies. the legislation to recent local work Once to make in increases enacted, be market implemented. continue While new from we is more Florida on favorable good benefit a our have AOB with do, in we we have the we growth environment, further rate operating much still our headway will

believe have already and we know Our in of presence coastal and Carolina continues horizon, continue to and we heavy with us in our and along a throughout close year. quarter. track business. late lifting and as we in build growth, improvement South to the well. sets up presence multiple book are The that Alabama, we as states positive scheduled performance the greater Texas, near-term to is the as market This have are for integration the impressive planned are on profile we a second on growth Louisiana, a improve profitability of sustained the show add progress to Maison well and progressing we There share developments done profitable

Thank So and I want to thank have you. day. everyone great today a

Operator

this a today's conference. you have day. for and Ladies gentlemen, and wonderful participation Thank your concludes

disconnect. all may You

FedNat Holding (FNHCQ) 11 May 192019 Q1 Earnings call transcript