FNHC - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to FedNat Holding Company's Fourth Quarter and Full Year 2019 Conference Call. My name is Sarah, and I'll be your conference operator this morning. [Operator Instructions] Before we begin today's call, I'd like to remind everyone that this conference call is being recorded as well as broadcast live via the webcast.

Additionally, today's call will be available via webcast replay later this afternoon and accessible by visiting the Investor Relations section of FedNat's website at www.fednat.com.

Now, I'd like to turn the conference over to Bernie Kilkelly for FedNat Investor Relations. Bernie?

Bernie Kilkelly

and XXXX to conference morning, and fourth Good year full call. you. welcome FedNat's again quarter Thank

Our earnings use release more non-GAAP to measures, and greater meaningful, prepared remarks as provide prior operating include efficient adjusted comparison income. year's and We transparency these to measures such non-GAAP a references results. to

in reconciliations release. from and to non-GAAP earnings GAAP measures the our non-GAAP Our the measures are available

continue, are could, conference probably, call should, estimate, possibly, believe, that forward-looking facts statements. are other and this historical anticipate, plan, Words or words in target indicate, Statements budget, pro guidance, or intended not contemplate, envision, expect, might, statements. seek, intend, phrases as such identify are to will similar forma, may, project, predict, potential, forward-looking

are that in this or forward-looking risks to conference not this may limited not and call this differ made company SEC statements expectations statements made based being outcomes from current in on risks other expressed but uncertainties, release discussed uncertainties yesterday realized. what in matters the and forecasted described time and these with on call and involving risks results forward-looking materially may management that result expectations events, are Actual The on the issued uncertainties from filings and our to time. including press call, by numerous to the is due

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

Executive over the Mike turn Chief Braun. call I'll Now Officer, FedNat’s to

Mike Braun

our our with Accounting this XXXX full our to and Officer, are Erick Thank conference Fernandez, and fourth Chief you. welcome Officer; morning, call. morning. Jordan, Ron Financial and year Chief me here quarter Good

items issued we quarter impacted fourth significant that you week As several a press we results. last pre-announced that release know,

dive near-term challenges call, and strategies and more of in in environment Then with going financial and for Ron After discuss into then FedNat's deeper that our markets the review provide our those and for have questions. will those detail. fourth markets. today's items sheet we'll the dealing On time to quarter a balance I'm I'll current some provide results

a Before announcement, we confident question combat market position. additional litigation to near diving Florida and rate increased challenges we're the underwriting There in right as follow to of from frequency stringent the XXXX. in enter our to that provide steps deep take into homeowner's We're higher taking no outlook severity space and is there I high-level practices in term want in week's are last the our but levels costs. Florida

in over continue to will as will available business. in cost Florida XXXX, will $XX further We Ron alleviate add compared to detailed more in are accurately trends. rate reflect increased increases will doing of claims to incremental restrict actions acquisition expected costs new release, until and implemented net which The to – we address the our business XXXX be premium last week's of million rate adverse our impact of help which related are of

build our taking long the XXXX this More but to is XXXX open the continue financial legislator. enacted Florida by introduced be long-term AOB very to and year a are tort believe but beginning. on believe the Florida is and in entering shareholder of come, the we necessary for that that remain performance for efforts in it actions value We our wide we're with supportive Reform reform the improve eyes Legislation homeowners only to term. positive We

have last strategy the over Florida. particular, more into expanding year, implemented markets of outside of In our profitable homeowner we coastal

Mississippi. presence in like Carolina, announced today to expand the Alabama our acquisition Maison entrance Texas, Louisiana, us profitably into our and as Our organic growth as markets we South coastal well positions

that momentum just premiums doubled illustrate that December. our in addition earned gross To how gross is to by in carrying and fourth of and the tripled, the significant into policies non-Florida of strategy compared written quarter XXXX, note XXXX, we our and the Maison are force non-Florida aided

More in so including book was profitable fourth of profitable represented this the growth Maison, non-Florida quarter importantly, our growth. all

provide to release, we want detailed the results. more fuel some items I significant the four to In week. on fourth the quarter update last announced impacted press items we that

catastrophe in reinsurance of pre-tax, which line claims roughly First, with net we had our was profit of share, million and expectations. $X.X

million catastrophe and million agreement $X claims as are which impacted profit-sharing other $X from Gross which Olga Florida other general related as were in quarter Texas, states. underwriter. our the fourth to Florida non-Florida, The storms in a XX% PCS tropical were $X catastrophe claims million Nestor subject well including to with and managing and events,

dedicated I'm service again who that and number quality is once our FedNat's in say provide always proud to policyholders our and their trusted which priority. to our staff need, a agents one time

is which runoff. faced The headwinds homeowners that environment our announced items we market week, lines other operating share litigious the in the one Florida both all in we in with are and common in non-core macro theme, our last

CGL, confident we the our claims. from on $X.X auto adjustments we remaining to year. and a in the The inventory including in CGL, some our recorded overall In way lines of but run-off million reserve of our in adverse these million both resulted $X.X and million through claim within in run-off auto, reopens continue position years, auto development in we are claims $X prior lines, tail, non-core and to are and in and strengthening will pre-tax work the remaining reserve

aggressive the claims us, impacting prior frequency but years. line, our of experiencing impact in is CGL In we from policies have which no of litigation environment, for are

the we anticipated our reflect to are environment. reserves made trends in have appropriate adjustments bulk updated to and claims what have the We the seeing

accident the in year accident events recorded to primarily year million the trends development. XXXX, weather due In and than years. these adverse higher including Florida impacts to expected activity, pre-reform from we prior AOB wind was related homeowners $X pre-tax related This business, adverse and primarily of loss hail claims, storm of

the recording additional of we steps XXXX. elevated strengthen and to of took loss the months claims strengthening prior Florida claims of AOB to that expected costs reserves. our enactment related litigation the higher to This homeowners to million reserves for in on business influx $X X, water necessary of was occurred and a related first nine Additionally, than XXXX, July reform

by insurers. As win of I a that the will to the believe be homeowners top reform in the for to lower as premium a we result mentioned at increases legislation continue to for long-term call, policyholders limit cost big AOB helping Florida of

reform. has the dates lawsuits second all XXXX, important effectiveness date the prior of to that of pertain substantially, AOB's the July clarify of While lawsuits half loss it is of of to the continued in volume full of to X, the AOB XXXX,

sharper approximately AOB claim basis. This second dates lawsuits AOB put with going XX go-forward have over XXXX, To This we compares will July X claims to over severity of have in the of it, the point on through when unquestionably AOB week, number even frame. time of reduction on from a suit with XX% we the post-reform AOB overall last only loss. had a an impact half comparable favorable on on claims lawsuits had six of

in insurers. which in become litigation I'm past in view plaintiffs Florida the Since our public continues claims operating more With of in against Florida a The XXXX trend attorney We have powerful are the months. that percentage adjuster avenues it few our muted short-term to has this bar larger we opportunity Florida bring that the an said, sorry XXXX, contractor indicator is homeowner -- doubled. through in or involved market a of the has our or that many either has a feel strong environment.

in we to in will this sponsored policyholders hopeful to the abuses and proactively we we taking short higher our so for the efforts root Florida. anything of are believe steps remaining of As we passed not the issue help are Florida and all right this, prevent that get the supportive term, underwriting. taking in that which vigilant lead tort legislator, in additional we can stated, that mitigate are are rate to But reform rates be being

unfolds. to our will currently to we Florida not though do year result, book, our As reevaluate plan the a continue appetite as grow we

successfully our non-Florida including of of December. expanding markets, has While FedNat beginning the the is strategy at Florida our market acquisition Maison become in profitable of more implementing successful the presence challenging, more

increased Maison the acquisition, of XX% to Following Florida the from percentage XX%. homeowner of policies FedNat outside in-force

expect We and our down increase in to XXXX, take we to Florida profitably as that opportunities to flat non-Florida percentage book markets. slightly of grow in advantage stays

into expanded Additionally, state we to the have Mississippi. pleased of are

in managing underwriting a homeowners' aid third non-Florida valuable that will underwriter a remains party general our -- be business our non-Florida markets. state through which We general partner in

plans growth also and Both non-Florida these of through Maison. are We to in our part MGU to write channels business expand continuing directly markets. are through profitably our

a ratios result Maison's improved and implemented the attritional loss XXXX, of increases, as rate throughout During combined significantly year.

of the we to which share December, Maison our profits ownership a in non-Florida made expect contribution and As to positive was to earnings the period XXXX. per result, Maison our accretive continue basically month during to be a of

those we been of from course and in-sourcing XX of this operating service staff. to in the closing integration by months since underwriting Over harvest process operations the customer The have next transaction. expect functions has million ongoing so, synergies, Maison and or by FedNat the our smooth handled $X largely

through XXXX program that in with continues attract our continues legacy reputation we partner XXXX-XXXX with agents savings combined network. benefit our Together to market June. in of end in the broader $X from million through which insurance is business, effect enter from strong the book also FedNat to of an the excellent reinsurance

are including reinsurance level. to re-insurers current number We their program that participating XXXX-XXXX increase and looking are who working are pleased our large program, our we in are currently with on participation the those of

in signs on reinsurance is In needs. upcoming on the see It be our to to last and are addition, confident the too comment that that we are detailed we pricing markets we to for later, press rate combined program, targets ratio additional our approved early the release that aiming what we the alternative expect options in we still week, reinsurance us will encouraging our increases planned for. Ron which enable will discuss maintain but afford

the over call I'll to numbers over Now, in to more detail. quarter Ron go fourth turn

Ron Jordan

and good Mike Thanks morning everyone.

recently in As Florida Maison are by the encouraged growth the facing Mike we acquired generating non-Florida business. given market performance book we're the the in claims profitable but strong and we're including environment mentioned, challenges our current

On reported $X.X a XXXX. $X.XX compared the million loss fourth in income loss $X.XX $X.X by of of compared $X.XX Michael. was a million per quarter generated to share or per loss last XQ Hurricane as $X.XX a basis, which loss or impacted year's of operating a fourth XXXX per share of in we to adjusted quarter, XQ an share In diluted

core our and these as from lines. items to the catastrophe delineated, these results of Mike lines offer I'll development each included speak losses non-core well of I As our business. as as events comments impact of in several on weather of adverse severe

in loss Our homeowners' business fourth million compared an operating adjusted accounted $X million operating an of for year's in quarter to prior the fourth loss the adjusted of quarter. $X.X

costs Quarter-over-quarter $X reinsurance more X on favorability related from than offset reserve year that XXXX both this by prior higher losses nine took totaling by the of strengthening effect catastrophe months years to the million. was lower first and and accident July

It experienced our quarter that is development for for business, business zero book adverse homeowners, fourth in year we within of quarter pointing the pertain or and of full to all book experience loss year. the our loss now the Florida full adverse non-Florida worth of

we one just more have reviewing expansion is underscores stable That that element placed non-Florida importance markets. on and for of in our point profitable the strategy data

expectations. weather generally the is which impact homeowners' our strengthening, in quarter line in loss and gross approximately was Excluding with of the near-term underlying our XX.X%, reserve ratio

grew in to in line written our XX.X% $XXX the quarter. premiums Gross fourth homeowners' million

basically the premiums without Our XX%. non-Florida Florida Maison essentially continued contribution Maison, premiums of premiums doubled our one were while flat with XX%. underwriting month our from prudence, which included gross our written growth reflecting of non-Florida by grew Even

Louisiana, at We Alabama by write least Texas on to led with XXX%. are in by each growing business to which XX% grew capitalize Texas, profitable and continuing Carolina, by opportunities South these markets

non-Florida SageSure and $XX XXXX in our to million written Note XXXX somewhere meaningfully in over again that expect premium. of the of terms vicinity grow book we gross in above

release be press in on of reinsurance are renewal business increase new of in March week, taking was Florida proactively the rate Continuing rate homeowners' will market as we and for approved expedited our X.X% our topic premiums, XX. effective beginning we announced the homeowners' last

for in approval. taken increase effective increases we've we to Additionally, in book. anticipate June business beginning X.X% rate in annual Florida with a XX non-Florida our our In with subject renewals also taking to homeowners parallel rate be Florida, regulatory

rate X% process went the the to in rate Texas a the earning August Maison go are XX% of or into of benefit increase increase we and operations. Texas, legacy Texas April into in our a out In anticipate of in effect already in effect book XXXX that

other incremental annual quarter already million estimated of premium rate generate Ultimately, premium the that third fully Mike when in $XX of mentioned increases that million these will as XXXX, in XXXX. over these XXXX. and incremental will is contribute to earned of it increases over compared $XX out

And on pricing upcoming reinsurance of will additional ourselves note the if renewal catastrophe changes, of to rate our Florida avail we process that quickly as appropriate. Fast-track program request

are of reserve XXXX. generated year's the into operating compared this and XQ in lines bulk quarter. XQ $X variance This good million compared $X.X shape business of to adjusted both We reserves to by strengthened business during largely of XXXX of in as lines in development quarter $X last these quarter losses in non-core million as heading million driven fourth XXXX. was adverse Our $X.X million in roughly

Before want structure, I position, on and you conclude, our update I financial portfolio. to capital investment

Our position balance sheet and strong and remains flexibility. ample capital with capital

Book basis of half had or will program. dividend XXX $XXX the We and enable hand returning from of total, of million commitment was our our of continue share points $XX at cash which roughly XXXX, us XXXX. subsidiaries end liquidity million shareholders non-regulated to and through our the value $XX.XX an HoldCo and over at repurchase to to the the on the had in of share value at quarter end increase per fourth of end $XX.XX

we share of million. shares closing of the a Regarding month In following the resumed buybacks the December, at cost we Maison of repurchased repurchases, immediately XXXXXX transaction. total $X.X

to continued have We be in active XXXX.

we have cost company authorization an shares this the Through roughly repurchase available million the approximately on million $X December. million at repurchased a XXX,XXX by Tuesday back week $X additional announced of in $XX leaving of

shares continue based below view repurchases as price to an to decisions book of value market of capital. on at make Board Our conditions. our But repurchases our will continue we on overall, use attractive a

to the credit Since manage Turning portfolio September further to continue our investments, quality. reduced our we and we conservatively. our duration increased XX,

S&P a Our have composite just value a high an X.X, quality fixed average rating of and over with million. A carrying under investments of income total of $XXX duration just minus,

and capital, the each finished and in Our it all with carriers. liquidity in respect is re-insurance ratings subsidiaries our RBC Demotech year the December to to of good shape reaffirmed ratios A assigned

navigate present To in both close, company and terms go challenges claims continued we the will challenges the Florida right we while strategy XXXX, position homeowners believe in reserves of rate a the but market forward future for have these in filings. place stronger the putting to in

managing increasing of conservatively our depth focused Florida book. in non-Florida presence remaining are on and We breadth and our the

financial we great As confidence position such the Year we entered with actions, to have the for in have ourselves improved New taken performance.

Mike. And over with to call turn that, back I'll the

Mike Braun

Ron. that you, the Thank open ahead With go call. up we'll and

from great. queue take you the could ahead that'd So the calls and if operator, go be

Operator

Instructions]. [Operator you Thank

Services. Our from line the with Ruth Financial Lenox of comes first Doug question

now open. Your line is

Doug Ruth

some that morning hiring you are is be suing good that Should everybody. be worth these that of Hi, would to pursuing? a lawyers you defending you strategy be

Mike Braun

challenge. make good in living to the Well, they defense attorneys Doug. side The is and morning, real a the court difficult is that good reality a on legal go because very actually it's the such side environment plaintiff's many

XX and a last use so in years, real that resources, we've from litigious it Florida team legal comfortable so years, challenge the our three in-house strategy operating at last that we lawsuits with over went the we're company. own to environment in Over and is. people we're with implemented outside the how legal legal it's XX three approximately our the it's our zero it But really both dealing with resources we're in-house the

is a speak. point of and AOB reform it's the we Tallahassee, challenge but capital. but good information lose to the have continued it as think in first which and in is to about are don't items the policyholders lots unfortunately some challenges implemented, was there Doug, this step, those – It'd I needed. fee lose We around steps and see just a being session of be more ideas great multipliers I passed going out There be policyholders is great at there see some

cannot business rates competitive we but amount so we write the have that reality our to would the until and premiums with write unfortunate catch We our costs of really like that's the up situation. it's of

Doug Ruth

doing you industry that better is is you I participants understand. look other at as than think are claims. you handling anybody far When the these as there

Mike Braun

resources. unfortunately there you utilize short not shortage Billboard, competitors all Well, different that others as homeowners Florida it's and is in market the better Doug challenged the at we're the challenge the being unique our a entire entire and from scenarios Florida a really spots, I people the vendors have the the It's in I a learning vendors to is of the ongoing handling so both at TV this – times and next as have term if do certain is frequency market building it's no from as both you're folks appropriately. of from legal do other FedNat things, perspective, both is appropriate and homeowners the marketplace can you – market about it's challenge, getting we believe well see and severity we we it well situation look Florida our ongoing the the believe resources appropriate it. and but we're inside and at look it time to as

costs. those costs our to more have we up premiums and for these our we increase appetite as write business to will to pricing inflated adjust catch So our

Doug Ruth

you what's about SageSure very with could and seem optimistic XXXX there? things about we us tell happening could with the two relationship you talk Maybe Okay. positive

Mike Braun

write and is as they continued with South job partner have XXXX Florida expectations successful of with very they company job. an Alabama, well significantly organization Texas that and and fantastic Mississippi, Insurance growing –I'm quite that sorry really Carolina great for excited Company, what doing that a are for growth. more partnership do They writing appreciate business with a beyond, in we're and partner importantly is they're SageSure as a our we insurance fantastic have so and very encouraged that that we we our non-Florida and our they're growth FedNat Louisiana there partner. But Well, now profitable

Doug Ruth

Okay the by you your expansion synergies them of have -- agent final going some Maison is that talked products and – how had the one that are is far. have we seen my these question was of about so

Mike Braun

So at Maison it's XX well. about it's have folks we're with of really staff we pleased small the that a folks group integrated

of over of renewal terms takes period be system that an switching extended In computer the our to and operations, time. they'll gradually upon

the two agents, of at terms different ways In there's look to it.

distribution. the we're excited anticipate We're litigious Maison's we state cautious Florida because product that, Within of for about our the exact same environment. about through that putting reason the but of

-- we're with job of we're doing Florida. think that. two pleased I which a the states, are slow and Florida Outside They're good it's Doug So to Louisiana folks big Maison. within very his team their and and Texas primarily remain is focused there with a approach on go continuing

Doug Ruth

Okay.

you for can answering for thank you I'm circumstances I best what think you're doing do that folks my for trying questions. under shareholders to and so the grateful are you the the

Mike Braun

good day. Have Doug. a you, Thank

Operator

you. Thank

the of James. next Our comes with line Peters Greg from question Raymond

Your now open. line is

Greg Peters

about your inventory. listening claim to comments was Good morning. I

looks relatively of like claim think any wondering has the has you reform an at a and activity is still at all to been like might how legal compare has of idea AOB you today. seems I that year. to give guess, macro implemented with us there number on considering been just pipeline the it basis high? claim of XXXX last the and doubled representation this said where claims if involvement or at continues point robust be inventory Can you're your with it's from it so was the this that what still if with I point attorney improvement

Mike Braun

term These the claims has will those those last and insurance very of our us the and to approximately claimants. few so lottery Yeah, on folks lottery, doubled benefiting elsewhere payout are Greg that XX% question, X% call call basically years the the nearly run and say a would television, I is company. they represented from XX% inferring lawsuit firms tout endlessly but commercials radio substantial and in the claims Florida good representing before disproportionately there lawsuit a is in the really called you are the

So to in unfortunate fair. our we've always them. intentions claimants ads resolving working were these with industry and getting working always trying that naming think -- situation their their We've the and no was where We've and a are staggering, commercials they claim, firm before of them them We've one communicated claim football The back with situation the always when the is with always numbers on likes unusual and their was treated these had money of them but the rights happens. to done absolutely billboards a colleges spending these there stadiums. staggering. two get that to

Florida policyholders have Greg, unfortunate first-party it's once have reform has that again, of it To and of all we're not it our have so our the our rate we rate, costs trends taking increased, our when within costs it's State pay and of are up as the changing have we the are reflects ticked the appetite however, reduced environment AOB will increase third-party Florida. and because suits clarify, suits; unfortunate to improving we The policyholders anticipated. of paying

really you and the it's amount be Until don't then, Florida see what of non-Florida and four the Florida. more in in we've We ramped by appropriate. policies as we're grown States non-Florida that same over we've in situation and our rapidly see years. in headwinds responding challenges with the We've even we sad non-Florida write actually these up business to so the XX,XXX nearly shut see acquisition prudent last we'll we

Greg Peters

and there's year of to and ratio that cat looked and development to some business number us take So that loss because underlying out sort ex-prior the for at prior development if what obviously look number I ratio the like ex-cats out looks get give Can reserve you what cetera. the try for the is deteriorate? business is year and Can losses expectation in going loss on XXXX take like. aside homeowners homeowners of give moving that that and a you I is your number to an it parts, deal development us again what lot then XXXX from or et improve your perspective

Mike Braun

Sure, Greg.

using was actions I head quarter reasonable Just expectation rate a increase degree. least as into around obviously fourth of that a at and that our is help some that about as right XXXX. the we've basis to think from lower talked to underlying all perspective XX.X forward the talk from that that we should hopeful We're

that in non-Florida trends so in loss tick has blend time higher With keeping with overall XX.X we'll in are opposed is and XXXX Florida one more that escalator of Maison Florida have non-Florida. a just loss rate down trends continuing course of about of recently the to been we're AOB in coming mentioned non-Florida. will XXXX. XXXX this Also opposed round -- shift to our and course and that towards done recent reform of it's course, experience of as we it's our that's over down increases kind that Maison that's have we between pace -- lower terms been in lowering though ratios of that in month XX loss I rate we're months as emerging have see increases Of with so homeowners on so to are hopeful

Greg Peters

like and you Okay, comments perspective terms is the rhetoric that if that and reinsurance But that some might from to that's I be there suggest early marketplace a margins comment. environment in of going just could headwinds said, and very question. and on the was too so last from pricing know in and feels there my head I comment observer casual to about you costs on wondering is reinsurance it's robust said the it you reinsurance

Mike Braun

substantial they and reinsurers up us primarily Yeah, do really these got Michael with Greg. paid have lot I a The Irma in increase losses. stepped they the and storms of a in us spend, increase believe and for pricing million quarter from both from reinsurance reinsurance so others our I working an believe in in through the market more per reasonable to We're XXXX. space. $X currently rate be

I for we've But reinsurance the the going with think last understand rhetoric. comments pricing go. I pricing majority environment yeah know where pricing, taken I the don't approximately I was where of that regardless well the the we're the to renewal -- and think is it understand but already is I in pain XX%. equipped up

Greg Peters

Thanks great. Okay, for answers. your

Mike Braun

Greg. Thanks

Operator

you. Thank the [Operator of next Instructions] Our question JMP. Matt with line Carletti comes from

now Your is open. line

Matt Carletti

All right, thanks. Good morning.

Mike Braun

Good morning Matt.

Matt Carletti

to quick Michael First any one QX Irma was a gross -- is in there one, change your just or loss estimates?

Mike Braun

Michael to now for for million, Yeah, so million, million $XX $XXX MNIC to Irma, at then up FNIC $XX.X we went up $XXX and moved it it's million.

Matt Carletti

things QX, care takes lines. question the been we've deeper I'd of maybe of couple you to then have had just took could that issue I the And past other you that at period gave well as say runoff for the a things little you pretty it at development. years in over that, of hopeful dive the the some guys but great. relates hoping Okay, big color, in swings I Florida prior -- swing know was some here just I other both homeowners a had as very

I know swing if Can that's can bigger helpful? was give can was or a help confidence conservative, what give give you some would don't think Thank case versus you on IBNR investing discuss anything more or more on was this perspective this where the you that -- you can be are but public versus perspective actuarial maybe to your range, that I you. you external what

Mike Braun

we unique Matt. taken anything unfortunately a as well. asked about question Irma the have multiple and on just numbers great you those that's Yeah, the has I on That's taken to Michael and don't development and think development FedNat industry and and times whole

business. so So separate that up, lines is three there of break let me

pre of that's -- on and The claims, and what doing they coming way the me the what and are homeowners, the occurring. way first reform the being let pre-AOB the with they're those we're with tenacious they're Florida clarify and homeowners activity is litigation folks in representative seeing

I range. Therefore, challenge. we and range, Post-AOB reform, to in very suits contracts but a plus in suits down XX% AOB it part. reform we on been that's pre-AOB successful absolutely reform go about, had plus as instances. to be that what reserves has are up first -- XX% that believe ahead XX% those AOB in down party spoke massively, AOB remains the

reserves as trends make and reform, business claim from keeping post-AOB for hoping you also is get on instances a for those agnostic bulk a our we're our not on same a we increasing you item that back you impacts further well, and high seeing the corresponding expectations to in business, of ratios the that pre-AOB our perspective, so have our some were multiple and we're or I last these but anticipation, only policy CGL -- you are ratio years the are attritional these goodness, to when go line the from ahead some then case auto. pursuing say reform So of pressure where and so some loss diminishing should are we attorneys

development, on to of took again had know clarify are a you end a as we're a right there. it's three we're big Auto, appropriate, and position. the summary CGL, we tail some increase tail it's we've at on fairly of at that our product, so bulk really years we three short think we short with tail statistically comfortable Auto reserves, all we're is once in those

taking post-AOB once well, big, increase those as as it well. we've we pre-AOB, in there we're good a So reserves, feel and that taken reform on again big AOB

So have, with areas unfortunately the we business. QX, reserves with we appropriate, appetite to why, best in that's write decreasing we monitor information, continue comfortable feel and that we're to And multiple it it's all available therefore, new our trends.

question So hopefully I'm answering your there.

Matt Carletti

I book, -- kind tail the generally have business, homeowners' implementation a July need go as out -- that's view of Yeah. and an helpful. age the you pre-reform sorts of that, just forth. of what's so how before from No, to very of what and we follow-up or attorney kind there one what Florida time in do your What specific see ask the way to claims. kind And how perspective to another much of you to back involvement that really book

Mike Braun

be let's tends to years. tail it so like call is auto, The three the challenge Yeah. approximately homeowners' short

asked again it and Michael once have about three you Irma within FNOL, Irma. You've years. to report

to So XX we're continue to years that. of per we week. at get approximately Yeah, loss first on XX notices X.X

was appropriate. the So a reserves short did I terms in And increase on pre-AOB, think products. I those we are think what sizable of tail took Matt, we

Matt Carletti

color, Okay. forward. best the you. of Thank for luck going you Thank and

Mike Braun

you. Thank

Operator

Thank you.

Bill next comes Broomall the from Our of question Dowling with line and Partners.

now Your line is open.

Bill Broomall

Great, thank you.

Mike Braun

morning. Good Bill, you are there?

Bill Broomall

Yeah. me? here. am hear I Can Hey. you

Mike Braun

Yeah. can you. hear We

Bill Broomall

on used to not be on so was calls, I I’m Sorry. mute.

per Just to about XX up the XX last following on FNOLs week. statement your

Irma. date where of As Irma for claims we have head into this what up that for you kind do event, kind X-year year anniversary the will -- that anniversary do expectations of of be you to leading

Mike Braun

a anticipate I Bill. spike. Yeah,

marketing five-year XX Going back so a the days we and back saw are in that can that there ongoing. vendors, They you and see to the I was efforts spike, last a We out then. Wilma from and tell the statute XXXX, on.

statute see the So coming marketing think anticipate if people on as three-year efforts not their horizon. maintain that to increase. I I

Bill Broomall

there another perspective, talked bill is from there on Perfect. bill. your that current are multiplier think on about? whether have bills then Thank I faith you. about is couple some bill, There that up fee the fix, costs that a I of comments is bad control know you've out a a bigger contingency versus And bill, all a Brandes. your impact From it's there, helping the following Omnibus one legislative Senator might

Mike Braun

is and to multiple the and Obviously, contingency multiplier Bill. reward it big pieces plaintiff's the leverage marketplace. massive that gives that in behavior massive can is distort There to the side

a that proposed. But to is lot And -- Bill goes there premise. business hope that is So can good of that we things And under back position. not that we're are to capital I trends. going new prudent, we're we But some see our honestly, operating of a be see being so the there implemented.

in his are said our buy Ron to continuing comments, stock. As opening we here back

of we within want buyback, We we're a proceeds easy shareholder what Florida, so the go us have inability to depressed, do. of unfortunate analysis to intent it's for and continue appropriate that's going for doing shares book, but to but below company are think It's to capital our use don't us an that's at for most that of kind for doing.

So we to there's terms the going have. is with operate market facts in but just that multiple there of these are the statements could something do in that until occur passed in Tallahassee we bills,

Bill Broomall

in where about, recent of And for increase, also companies we've comments Perfect, peers, on degree a maybe your policies access thank you're rate, statewide books. cutting in rate, the that X.X% way, filings, for talk they're about them as other Florida, out some non-renewing but agencies, in their certain or kind of you seen performing rate under about answer. non-renewing then,

about, can about I policies rate, other forward, culling whether rate beyond know you also policies. again further cut-out, when you take or some that that but ago minutes going commented but XX,XXX think you you a agencies few actions that's

about, that out just specifically, some how book take you your cleanup talk you Can it or see playing action? for

Mike Braun

Yeah. There a of things there. couple are

XX, So, And that. public a is XX of we're you're indications of XX, a rate And for, XX, Florida. asking filing there our good lot carriers indication. there's of is portion with points. there for dialled Bill, And carriers information, into

manageable we or So, our XXX% indication. XX XX% And ask did a for than number much of is XX%. more

most it's which water-related where, highest of claims the are expensive -- water it's frequency. we're those claims. And challenges, In the seeing terms is

X-X And as geographic, Florida around you that the can. And best appropriate within as well change many how last for aware everyone's challenge So try occurring And best South last in years of a been in material in seen terms the decades. claims Orlando. -- the we've few years, you that unfortunately as you underwrite rate can. in to a charge are has

-- of on cases, increase in trends, we of those XX%, by Orlando. those And pricing those needs some upwards in to based see prices

pull you back. So just

if what doing. costs. we're that's can't you And get your the for rate pull You back,

rate. taking we're So,

until are We costs better reflected restricting new our appropriate business. the We're better are -- in non-renewing policies, are premiums. as

Bill Broomall

last for that, kind Perfect. of passed We Thank saw is, early of you're me now And that the outside you one a in from Southeast. Florida. January a through a did see little, -- growing we storm that.

related to you've those And me. early if from I Thank wondering was it That's any you. January, seen events. in pickup claims,

Mike Braun

some this consider would Bill, expectations. cetera. claims, at Yeah. definitely January, we we in And in have Louisiana, I point. it's would Texas, nothing say what outside those normal states, et of up along modest

Bill Broomall

you. thank Great,

Mike Braun

Thanks, Bill.

Operator

call session. turn Braun back closing like Mike Thank now I would question-and-answer remarks. to, concludes to you. This for the today's

Mike Braun

a and Thank all committed interest for strong through management, your our are includes and improved reach cash position. share to our which program, building through balance a We financial And you, value both supported in capital purchase remain which FedNat. healthy dividend performance. to shareholders, by our sheet

Florida challenging. the remains market homeowners While

with new rate until our has We are been and approved Florida. economics prudent business our And additional underwriting. improves limiting therefore within

non-Florida remain also existing which to our the business, profitable acquisition homeowners helping of homeowners with our partnership of our committed accelerate profitable pleased SageSure recent both We outside Florida. growth. Maison, long-term our of in more I'm to markets, and expanding is with performance And

questions interest. all. Ron, comments have investors to out We or again additional And Thank day. to reach me thank any either with a you or great your you all once And for encourage

Operator

call. for today's Ladies conference you and this Thank concludes gentlemen, participating.

You disconnect. may now

FedNat Holding (FNHCQ) 28 Feb 202019 Q4 Earnings call transcript