FNHC - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the FedNat Holding Company's Second Quarter 2020 Conference Call. My name is Dexter and I will be your conference operator this morning. At this time, all participants will be in listen-only mode.

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 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.

to Investor call Relations. like Kilkelly to would FedNat for I turn over the Bernard Now, Bernie?

Bernard Kilkelly

Thank again quarter to operator. FedNat's you, Good second XXXX morning conference and welcome call.

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

SEC including risks the and made not call statements Statements estimate, are statements expect, forward-looking from are on predict, conference phrases similar project in described Our call, and measures matters call in forward-looking is measures our time this result forward-looking risks may GAAP results that conference this issued and numerous facts press this differ other risks these expressed are uncertainties, with identify but materially based may reconciliations intended historical statements. as discussed time. forward-looking to, outcomes and The that non-GAAP uncertainties the realized. are Words what made available due call release in from company the non-GAAP involving and expectations Actual the to to events, to forecasted our on in earnings are on are or or release. and current other not the to that in by words yesterday expectations, such this not management filings uncertainties and from statements. limited being anticipate,

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

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

Michael Braun

call me and questions. provide Ron of and results. give Thank with the Fernandez, more XXXX our on Erick I'm Chief quarter. financial welcome our Officer; the Financial conference Then will going will call. the you. Then on the an quarter Accounting call Chief overview Ron today. are to to we Jordan, our Officer, Good second open details morning to

our ongoing Americans we in experiencing and results, operate. quarter wanted we countless states within that communities acknowledge the the Before are discuss which second to we challenges

our COVID-XX committed recognize everyone since the remotely Our vast hearts plan our affected resilience continue crisis. safety our incredible dedication especially the highest who and we policyholders have while to to back the of out and quality FedNat all of stakeholders, in is go wellbeing to as our to agents employees they by I majority our business agents. and put policyholders pandemic. to want of providing work March. to continue continue The during place to the demonstrate contingency our partner service and staff in staff,

COVID-XX underwriting we such not impact a we the be could FedNat's our results But FedNat. economy, As first May, expect there in to we since impact widespread do on pandemic impacts the results. directly restated, quarter when to released pandemic is having the

any states long-term which may closely to communities to track to adjust our we situation monitor more and operate, continuing effects and the are within specifically We in operations and the that develop.

the the announced net pre-tax results, of country. million $XX.X a weather high catastrophe to losses across now was by quarter early southeast as number our in entire second the region the the previously events quarter in storyline of and July, Florida Turning driven main in severe of

proactively million action the took years, of line Florida reserves accident in pre-tax challenging. We prior this claims to environment the business XXXX accident homeowners that year. our we by within We because also related for to $X.X be property preannounced Florida primarily strengthened continues

remains plaintiff's insurers. diligent litigation in avenues to Florida sharply, continues powerful bar decline While against to the number of finding AOB in lawsuits the bring

implemented. the outpace to result, experience we adverse impact rate our financial plus a results increases continues have As that

our limit new costs. until to business continue premiums within increased accurately appetite we our reflect such, Florida to these more write As

XXXX strong of our $XXX million million us first-event $X.X billion, total of and reinsurance our of providers approximately of at million, and subject million, of of with Florida $X.X coverage $XX approximately coming billion in placed private additional an plus for cover limit months. provides the been has to non-Florida time excess within in cost program a Our aggregate $XXX adjustments points different $XXX states, at successfully in an reinsurance reinsurance for

low also recently detailed second We as our of reinsurance third and events public potential as $XX additional for as lowers retention disclosures. million Florida, in purchased that to inside prior our

in from beyond. reinsurance to our headwinds, turn to capital results the we the XXXX with support strategy our the partners. reinsurance the drive high-quality of half pleased of of our the continue Having strong tower let me operating appreciate improved and and execution and are to addressed primary in second efficiency participants receive We we our

ongoing and restrict to are continuing of improve the Florida raise to rates efforts business. Our new our homeowners by business profitability of book

of throughout is] year within [This and the to October. also increases Ron plus I took which calendar rate have add XX%, on premiums touch filed wind all [ph] a approved, share in average since Louisiana, additional recently that and on during along our this business existing are a effect effect filings XXXX. we increases season higher of that averaging gross of states out, filed expect million Florida, throughout aggregate, year. $XX X.X% on if with in past an related rate within costs, have earned to increase in have reinsurance earning book pending force take increase to XX additional for will but will Florida in the and still We statewide to will moment. policies in incremental filed X.X% balance compared XXXX which Monarch specifics, continue for rate increases decline will June across Texas over

indicating the I'm the the We quarter strategy that expectations. $XXX,XXX higher XXXX a in Premiums $XXX,XXX, XXXX. Florida policy. continued trend of second from rate point. to meeting our a strong XXXX in decline shedding policies premiums comparison by end have the XX% at - to per current average less aptly over due of not long-term end in-force that in A the of our are of year in increases, than illustrates in-force Policies are at down Florida sorry, our of is

We increases the in to percentage yet factoring rate increases earn-out. that To X.X continue, filed point impact the years, expect to XX%. grows given put are that trend XX%. over of rate finer reached to past the it, have our compounding, on cumulative cumulative When in the Florida a

reinsurance second - a have the continue focused profitability strategy expanding to terms severe operating approved in remain claims the including rates. more sorry, of long-term of impact to profitably non-Florida quarter. have rates that homeowner's that meet flexibility incur. demonstrated to until discipline our business, We Florida. We Florida environment, of setting line the costs on our book we have These events The in more currently litigation continue attractive clearly are markets the we our higher and of our growth in growth of outside in weather our limit more markets continually excluding in coastal expectations less homeowner more favorable and with

existing But X June quarter reinsurance into effective the operating share an be Re, subsidiary it affect impact expectation wholly mirrors XXXX became premium. our annual XX% and arrangement, XX% continues with essentially as the of XX, to treaty with will entering of on We any combined significantly it efficiency in our the an Arizona to renewal. including SageSure. to components pre-tax SageSure. net will partnership relationship pleased place. quota the not of performance run with a second ratio, continue a earned improved share the Anchor capital new owned reduction share which quota of by through Maison results, the with This domiciled July be and on have SageSure reinsurance of will FedNat's profit We This with with strong in treaty

receive share statutory carrier, We relief expect surplus our that this from insurance quota treaty. FedNat, will

in over are in filed And for take we Texas effect of to if X.X% maintain we FNIC filed for rate Florida, to and to continue Louisiana increase has increase doing to increases Maison strict as XX.X% approved profitability. in non-Florida has November. approved. and take a see discipline if November, in November, effect in great markets our in Louisiana in underwriting and increase Just

well as to unknown performance our the remains declines shareholders after solid returning discuss through the by of prudently in maintenance our in in initiative light back shares detail. losses of months quarter, that first highlighted second equity focusing Ron our share the to the our the quarter solid the to at several was will this challenges The which below strong FedNat's we investment enable markets on periodic was capital in successful of with will our value more balance dividend value, position portfolio early a in commitment of the and Our repurchases. us quarter. maintain as paused base. strong at rebound sheet environment purchasing macroeconomic capital associated book quarter After time, second weather and the and

authorization remaining of of at have our the $XX in balance XXXX. disposal million for We buybacks

to repurchases capital though limited based decisions our the repurchases conditions continue during make will needs season. on of market board Our the on wind and quite typically company, are

optimizing markets achieve adequate to on continuing profitable and move outside strategy our rates in Florida. more with we until ahead, of our book Looking attractive in of forward growth are we Florida focusing homeowners

our allow of meet us our and and staff to agents value dedicated for Our policyholders needs shareholders. partner will generate network of to the continue

the the Now I'll to over detail. to call over financials in turn go Ron more

Ronald Jordan

Thanks, morning, and Mike, good everyone.

a results our even which second included severe in weather tornadoes were hail, by mentioned, high the windstorms, impacted quarter and events, of a wildfire. Mike As number

homeowners having of FNIC's year time, year excluding outside year-to-date same losses, challenges with XX.X% the in also Florida. the year long-term we cat opportunities business. ongoing at business, current growth the on accident our our and remain current profitable business, At pleased stepped non-Florida Florida to of including terms reserves, committed accident to strategy We the Florida of focusing our and were of both up profitability for in booked prior

let's Now our deeper dive quarter into results. second

remaining Florida with non-Florida Alabama. of excess were agreement million and under in FNIC's $X treaty; The to pre-tax reinsurance South in pursuant by disclosed million to followed losses all business. our previously the Texas net by storm XX recoveries Cristobal, ago, few PCS catastrophe from cat including X-K gross million were Florida a weeks was were by recoveries, reinsurance. of including losses of pre-tax Aggregate million were reduced Net events losses, and million. Louisiana $XX the our $XX.X and $XXX,XXX treaties; events profit our from losses plus place sources: $XX X As There under Panhandle these reduced $XX.X tropical $XX Carolina million approximately share a in cat $XX.X our million of Florida from quota with million. designated in gross million, related loss quarter, income to $XX.X related $XX.X losses These wildfire. share filed net

of In underwriting benefit commissions $XX result the and terms approximately income profit other writing through of - line in geography, losses expense. with the million through $XX item flowing loss is share statement the LAE million flowing

As eclipsing quarter. XX $X.XX in $XX.X loss approximately Gross by such, later. second these and second per income or $X.X primary per investment income this result million execution storms share. a the share added impacts million $XXX million, compared year's gross first million the on reduced the for income $XX.X year's share gains, of a was and in was mark $XX.X our of points strategy. offset adjustment loss points $XX.X was little pre-tax second direct year's XX% operating last are quarter or per year-over-year $X.X decline per year's quarter of $X.XX ratio which or of written $XXX premiums in premiums the touch to that compared of non-Florida and million or our loss written to net with premiums I'll operating by the income time Florida $X.XX earnings million our or $X.XX XX between in in the to XXX%, with net our approximately adjusted quarter up million The grew X%, net Adjusted million $X.XX quarter, combined per Consequently, in operating share our this in share. quarter adjusted last ratio approximately the to of

underwriting to until book We our restrict in with and are costs. respect to rates higher continuing our are Florida claims stronger reinsurance

into We believe coastal of continue growth. which Florida, profitable attractive for with opportunities we to expansion our outside markets be homeowners provide pleased

increased for gross period percentage XX% to XX% in Our second of premiums non-Florida quarter last written mix compared the year. same the to

of end Our compared policies to increased non-Florida up the the force in in at markets to XXX%. last year, quarter second XXX,XXX XX,XXX

would increases focused additional go pleased into Louisiana in rate we discussed, we While are in And this filed for with as November, growth. growth we policies, if have on and are effect Texas that approved. Mike profitable in

of XXXX, compared fully contributed $XX of to that on to of effect of compared earned a the me on-track over million $XX of are second once to increases impact increases this these catastrophe took expect rate more to give out premium Based comparison, rate to XXXX. let XXXX, particular given over specifics have to are out this July have compared to cash we higher reinsurance point the XXXX we Now critical ceded X $XX you costs XXXX in of This of including $XX year. out, and increases multiple incremental still over increases XXXX. is total that in in premium filed, on the million half we fourth that will on have. And over quarter expected round incremental topic, our as earning second some including the the million million half as as are generate incremental of premium of compared XXXX the

a see, to as months. to you So can we profitability the path next enhanced XX in clear have XX

let's generated part $X.X to primarily of investment from portfolio million of our gains of to investment statutory quarter fixed million our We securities portfolio. in to second Now overall income the $XX.X the approach due managing as and gains de-risking turn realized capital. our

as of the second mark-to-market $X.X first equity also million adjustments declines had rebounded equity the from in gains quarter quarter. unrealized We following in markets

include minus below we XXXX, and of a income of from an portfolio investment-grade not duration As March A, as We single X.X, rating up at XX. down to pleased of to security. XX, overall mitigate risk June continue our with fixed does stands as were Portfolio XX, A carries from look thesis, composite ability to our investment any X.X of our capital preserving March as maintaining scenario. demonstrated across execute and economic liquidity

approximately X, cost the after value million. in the in we've quarter of outstanding. of in shares shares structure cash losses In subsidiaries HoldCo cat the acquisition million repurchased back an December since X% April. non-regulated the quarter, of June capital during cash by then X,XXX,XXX per Maison XXXX, and XX. remained and quarter per of We as not share quarter. over quarter at approximately XXX,XXX shareholders in with of impacted and of We share. To close was $XX sheet, remain the remain to raise the markets aggregate appropriate. our continuing $XXX the representing homeowners total, $X.XX repurchased committed slowed any and shares attractive in balance million strengthening well our We the on position equivalents Our our solid capital ended to liquidity and Book through rates sequentially as end repurchases growth and $X responsibly non-Florida dividend repurchases declined the stock returning buying we by and Florida. up, restrict focused value reserve profitably more wrap second growing to on our to share We $XX.XX and about and of in

back a cat million largely premium are as impact and compared over the pending moments to offset capital liquidity. And closely that of business potential in conservatively the half that, impact XXXX reinsurance ago, stated investment second managing to And few the turn either of approved pandemic, to of the continue portfolio call XXXX. for already are XXXX and or enhance increases in higher expected As add I'll including monitor we will Mike. filed to $XX with our from costs preservation our incremental rate any to

Michael Braun

questions. Operator, you, that, Thank we some to Great. with like take would Ron.

lines, please. can open you the If up

Operator

from Okay. the of comes Greg First [Operator line Instructions] question Peters.

Gregory Peters

this would going know how a forward, like at when company. marketplace In we to another so accident Florida. that Ron, you're I reserves point other tie are provided reform you're don't legal year, your better Mike XXXX discussion with next get to the maybe for at continue around point this year? on, I back. post-AOB some the this around setting step understanding words, have reserve Let's we're you can comments in facing hit and what this you challenge in, the the challenges

Michael Braun

Okay.

headwind number environment, the years. year. did was a In have AOB last in of And July significant of terms reform clearly AOB a of for Greg, legal we

this that Ron decreased, book a So be that I would date has the we the we're some book on for piece we're is through a the been continuously that of was is not prior say scenarios up go But at. claims But in loss but with challenges years evolved of suits ratio cure. corresponding that the that. still what number we've challenges what picking X puzzle about - raised rates the to our at This that ratio. since continues with reserves, at seen terms work any of then, legal as environment has have that really loss those reserving AOB the to are there ever of detail seen of suits of and from until prior more a that. around ago. some And down for math. the And XX% in year, massively years while total attritional down is trending highest in we've have are relief XX.X% and in business can our seeing environment

slightly different. me Let that say

Our faster have. rate loss ratio our has attritional than increases increased actually

give color I that. can on think Ron more So

Ronald Jordan

of Big-X and rate we actuarial like them doesn't like ago years them miss. they miss, use like X firm don't even stronger guess, to that XX.X% book had the on to relative - Yeah, ratio start, increases all that equivalent I these we a a to is to before increases. the years than loss Board and and that's book X ago, rate our don't these We miss, had is to

also appropriately relative here year-to-date would been confident can I've this recording the been XX.X% case. So CFO, to That's what the can XXXX, in with and certainly best actuarial for ever our you, estimates. in Greg, are prior always say and recorded tell my year years But we current I'm confident that here. I more reserves I tell as in as time you always booked I time or as of my is

look, suits. just And number creative the said, As all attitude the at of their half that is, bar decline far decline a have avenues but Until has and We've not the hatch. suits, of seeing both they as plaintiff's suits, With goes, suits. of in reform they drop not our half craft. been the not half there year for sharp first in our other of counting is our But the XXXX. seen that total good said, With there first show year. as don't know. that's beneficial a total AOB hard prior And position in XXXX trends reserve AOB-related we assuming we lawsuits, We're are any triangles, versus we XXXX, we all up clearly works seen about and in the are actuaries first a in before AOB our and exist. on any and chickens we goodness. feel loss current attitude are

Gregory Peters

that Ron, that, in about first And of follow-up you do a do a how maybe give us loss, litigation? go notice case on go you an establishing setting if you you about potential can there Thanks number answer. - when for a as a Maybe when reserve for is idea how IBNR?

Ronald Jordan

careful analysis all past jump trends starts, of Greg, But and triangles. Yeah. a and And supplement. with our Mike loss our historical it I'm in past sure will

severity of average the that process At $X,XXX. in, cause FNOL the adjusters average a loss, second point, that getting severity adjusting that severity, say, $X,XXX, of and is average begins, claims out our historical put let's comes up given claims for So if we that including inspecting. then

time quick the could it on fairly adjusted obviously, of would frame a there, different historical be to expectation of review $X,XXX that within so, the case. From an the adjusters actual FNOL, there's based And go. paths

as claim outcome for strong is to run because and and objective policyholder there and that if themselves add. get best may policyholder you the up to the involved, for long be that going And, third-parties worst Our for and when as delays, quickly both a to Mike, end fairly in are well the us. have I When for know settle pay experience us. anything don't being the that's can that's

Michael Braun

increase. set XX%, adjusts for in And But amount said our the continuously it. reserves, excess business and XX,XXX Simultaneous have policyholders reserves those Yes, I terms monitored. bulk believe which absolutely, It's life. of throughout in in small are loss we've Florida. based we of again, to at a and shareholders, of appropriate compounded truly at the for it, book time bite file to that on, seen painful XX% reform. for It's Florida from it's even initial case XX% you loss in reserves are XX%. our mean, remarkable again going simultaneous, is that time once the attritional FNOL. ratio taken when felt works to X Ron XX,XXX to the is the as we the that more The AOB of interesting continuously is a triangles And what rate an adjustor look massive years' us, that, has been Greg. restricted once a we of I we've with in policies. taken which apple claim

work more companies out limit And accurately why well. until there reflect of experience seeing growth. entity is enact and insurance needed. bit state a there's you're of documentation lot quite other it's And our citizens more the reform, going that's think to us a rates these the until the as more appetite And of legislators trends. I

Gregory Peters

can XX% this a and at number and down? back you Is there a the rate you're governor need saying why to loss attritional that more on now you approaching get we at assumption, point more at that your not even ratio get that's how this OIR much and juncture So are Florida rate?

Ronald Jordan

going continuously. we're Greg, back Yeah,

of now we've did year, we in rate filed should beginning of also I'm already the additional had our another that right another in it effective became I we - take X.X% X%. filed took homeowners. have we filing approved go. be about in day going And And we next an in current I of the another Florida then, we the the reinsurance, terms not and filing, approximately to filing And we ready announced immediately, stands, rate, And speaking So January in And rate X.X%. June. X.X% the only then, rate days. believe FNIC XX filing that anticipate as rate within

me clarify. let So

can rate only additional the the have indication time we're at business. one would need And line we're what why in may is on filing You a that become increases? taking based available. be, rate And doing well, question of you as these numbers

that back as we year, reflecting And policies soon and that's those that in immediately So our known seeing and and to rate the going contracts, as premiums. prior were reinsurance and the ensure year cost bound, additional now us for department asking current reinsurance development to filed. we're we're to went was the that in

Gregory Peters

the Got Thank you detail. for it.

The other with the I SageSure. would question around relationship have be

You, et that outside in which that, some catastrophe there's program, share, the the going means reinsurance - are in losses. to losses, well, now business the there cetera, that to those of new they - a reinsurance in when quota related share is

year? be there in a Do facing to SageSure, be So claims? us have your these position outside collection to markets the pay the that they to written we're talk can have business minute on behalf? they the and hurricane we going going next Is reinsurance have to at issue the point some for in season of capital capital they've an spend if you about of where active a - if Florida

Michael Braun

us. never they those share, for businesses we've does been XX/XX well-run, share more than a we've variety been a been partner There's company, a a decade that ours to into $XXX has for profit the profit them. SageSure impact that them, of book transitioned of financials share a long-term business. are support statement. which in and quota with not It's from business of capital really $XXX well-managed recently a involved They produce profit simplistic have a the And We've million, issues. share, Greg, million with always had plus a operations.

it statutory provides carrier, statutory a on benefit a capital perspective, which the for obviously. from However, relief creates base

It's We and So continue appreciate been maintain we're they've their believe position. to had. to the the with that got with we're comfortable operations and going partnership. We capital that. the capital they've always successful

Gregory Peters

Got for answers. it. Thanks the

Michael Braun

Greg. you, a good Thank Have day.

Operator

next Your Financial of comes Lenox from Doug from Instructions] line the Ruth question Services. [Operator

Your line is open.

Douglas Ruth

Hi, good morning, gentlemen.

Michael Braun

Good morning, Doug.

Douglas Ruth

a I read include XXXX that Florida $XXX issues had way carriers? million and million. underwriting also - the the bigger these the in lot a issues. insurance they are of are anybody other industry think to industry people's When some I industry a had but loss net you - and then and This see And $XXX Can loss attention. standing that? FedNat helping you of about up get talk do has Florida FedNat,

Michael Braun

Doug. Good question, Yeah.

of to contain Regulation, need the Absent inform and So the the and for we headwinds Commissioner exclusive the we commissioner, the has us educate been business. of Florida that book it's in best substantial we will to honestly, not he Omari, Office FedNat, these costs. there's I to has And to not at market people have been not that, vocal and Insurance property action very it's the grow specifically think Florida not yet all. Florida as only the the whole But OIR, seen property legislators market. can. tried see And

We will, truly therefore, years. take much it's to taken last amazing additional that X rate. And over the how rate X we've

X going rate reflective And costs the the go of biggest we've attritional challenge XX%. seen in losses appetite. over As can these to up excess to really we have filings That's adapting. our we're see in more Orlando, got unfortunate is the fair last policyholders. got the the X we've for is. in. unfortunate, change where more be State think The costs, filings is We've rate I And may of in environment. more really moved rate pending. related materially. primarily rates And these It contained it's I increase Florida materially once a that with we our But better just stated, because of years,

was the a reinsurance it's increased to related this it costs lesser to is as of in well reinsurance losses. the costs events. year. To a lot attritional And our as So related extent, up And went weather it X have industry by come the driven Irma. in out. reinsurers the losses that And years Florida, continued within to risk claims have nearly weather the of particular, for the of reevaluated noted Irma's

So rate but anything more make contain hopeful legislative is fair see don't the environment needed. I'm to Doug. near on I costs, a it to horizon for action that, for

Douglas Ruth

thing and is lot seems the crisis reading Well, expand that, I'm policies a Yeah. Florida now going X,XXX the like It now is week, again. book of other were it's way. going They which rapidly I that Citizens other - success in a growing. mean, had to it's shows is their the shrinking adding

Michael Braun

Yeah.

So think Gilway reform. does does it, grow. runs an he not He's really job, it. very and I the running the He being in and been for but transparency successful advocate only want great not shrinking to - Barry a Citizens

grow do with to that. I back to see So Citizens continuing we what can do

The no the rate within problems would can have to that challenge growing they Florida, have much but business how take. Citizens' so. that no only We occur do count desire could be

of a at collar XX%. capped they're So

ago, the And will and it's of that will well continues So business. rates to decade policies. double-digit at X.X becomes risk entire large. Citizens much they Citizens does Florida move and become too even when attract had that Citizens A the industry the if not, much competitive documented to more State million more

of amount scenario the state significant. the in by that is Now risk retained

more we're until accurately restrict to reform. once these reflect Until hope rates continue increased to our going So see then, again, costs. business to

Douglas Ruth

Okay.

a about of amount would large law read work companies, think there's that Florida maybe out. would number minute? I good. also to X about Supreme powered X of indicate word that's large off companies. the the that of really approach some public Could an together companies that hope all a a by in ripping litigation get news maybe seem the in Florida the could to litigation, involved talk Court. for had one being the We That firms these was you and organized insurance that talk I maybe And to

Michael Braun

Yeah.

very of they're do. terms what In well in organized the they're they bar, and plaintiff's effective

carriers the But and reluctant job. in. the are You're different of correct. always probably do think carriers variety better could are a that do reasons. The organizations work with industry a insurance There for to participate that I

provided Barry very as are will to to great I well. that down. information of he's then, I Florida I done great hopefully, state and hopefully only education. past think a commissioner meaningful rate to response job legislators increases done a rates commissioner Citizens, that felt think Gilway the not job that with And reform are that that running until the as education that a has think going So in all And And it, hold is for these effective. the stimulate has the by climb. then continue a to policyholders by these rates carriers, I the think the across But receptive are

Douglas Ruth

the available Okay. and answering shareholders. being to Well, the for thanks questions

Michael Braun

good Thank Have Doug. a you, day.

Operator

[Operator Instructions] question & Dowling We Partners. have a from Bill Broomall from

open. is line Your

Bill Broomall

just a I Great. the on Thank moment Mike, you. quick a had question, your about ago rate comment increases.

FNIC. And I could have at approval is The down think if and then a a all? X.X% over up, to January, on the which and for those they're slow might requiring for in wondering slow before I Because might cumulatively if this I would limitation And of a you a the public you just that go process it much period public XX% all there that all another there's as rate I question to roadblocks like file the hearing. rate the that - rate that's process. for think X.X% reinsurance, or was any - mentioned of seems year over all after I'm if later can XX-month down planned. - how then be any add anything have had X% hearing you before you'll like

Michael Braun

Yeah.

has statutorily would a filings, more, If the hearing. that XX%, And have of needs to rate the ability, less wave they can can certain or XX% rate correct, you're believe, it's there be if like, if rate department circumstances. In the under hearing. than a terms off they it's department I

So it really and becomes mandatory XX% above. once you're at

that - so need much with say when rate time these - rate I rate. more I when rate filings. rate, statement my regards than and the And element time to So especially so X% significant so you X%, or these in filings, is much call it's much

quick a as and rate filings So try as apple. to can as bite these as keep of we We the get that do through smaller clean they so possible take possible.

that delayed possible believe being and is it these is could So is possible. not these possible appropriate it that which of a we indications, we will in what It rate as be strategy, is part hearing. taking take our have to is afraid as increases quick

And ratios. we're on additional answer this is, once these taking to is the loss be pressure driving what's this So that going approved? rate one

So act we're to that. on quick

and continuing are that information passing ratio the loss pressure through. attritional you that, have filings as new Unfortunately, on ahead to expense. But with that telling challenge go-forward the income as and remediate put allows you these We the you in as that state to hurts basis. an you have is recognize we're it a it statement to that, we go the feel

is time important. - that's So

Bill Broomall

it. Got

Okay.

combined the summarize, want OIR as you the it's filings to really whether fair? they'd ask really So up additional That's they at look filing just - to X a it's to questions. rate and whether

Michael Braun

- a hearing. - This no is hearing. to we have simple. we rate these correct. we issue could could You're and the quick filings our with have rate preferences rate again, Once keep And

the movement actually the that rate really will to indication that additional quick once no few And we're seeing such in may a hearing. is of our occurred. rate so are we - rate However, them, create X But them. our believe, few - for experience. our and others away it for think our from are large a fear I take when of public is inclination And can benefit. of we week again, in There transparency scheduled I not as as there's a next hearings or have shy competitors

Bill Broomall

it. Got

just renewed, anything for That quota was any switching sub-limits Okay. that was of cat And sense. to share - structure? in - makes you seeding thinking the then changes commissions major share? or that the your I'm or And quota to changes gears any there

Ronald Jordan

yeah. no substantial changes, No,

Bill Broomall

Great. had. I That's you. Thank all

Michael Braun

day. a Have good Bill. you, Thank

Operator

I conference questions back time. no at this Mike further to Okay. There Braun. are would the now like to turn

Michael Braun

Thank on call. for participating Thank today's all you. you

we policyholders. recognize Before want once again including to FedNat agents partner staff, our community, our close, I and

unprecedented enable along balance with to the These FedNat in With our and returning team Our great underwriting. efforts, the commitment stringent continued and build capital participation. excellent a maintaining occasion service these day, times, to to and to sheet value. shareholders long-term strength of for continues rise thank your financial have will our position, continue and you that, everyone

Operator

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

now may You disconnect.

FedNat Holding (FNHCQ) 9 Aug 202020 Q2 Earnings call transcript