Profile: Federated National Holding Co (FNHC.OQ)
31 Oct 2014
Federated National Holding Company (FNHC), incorporated on March 7, 1991, is an insurance holding company that controls substantially all steps in the insurance underwriting, distribution and claims processes through its subsidiaries and its contractual relationships with its independent agents and general agents. The Company is authorized to underwrite homeowners’ multi-peril (homeowners), federal flood, commercial general liability, personal auto and various other lines of insurance in Florida and various other states. Its insurance subsidiary is Federated National Insurance Company (FNIC).
FNHC markets and distributes its own and third-party insurers’ products and its other services through a network of independent agents. It sells through contractual relationships with a network of approximately 3,600 independent agents, of which approximately 1,800 actively sell and service its products, and a selected number of general agents. It is authorized to underwrite homeowners’, commercial general liability, fire, allied lines and personal and commercial automobile insurance in Florida. It is licensed as an admitted carrier in Alabama, Louisiana, Georgia and Texas and underwrites commercial general liability insurance in those states, homeowners’ insurance in Louisiana and personal automobile insurance in Georgia and Texas.
FNIC is licensed as a non-admitted carrier in Arkansas, Kentucky, Missouri, Nevada, Oklahoma, South Carolina and Tennessee and can underwrite commercial general liability insurance in all of these states. During December 31, 2013, 89.6%, 4.3%, 2.6% and 3.5% of the premiums the Company underwrote were for homeowners’, commercial general liability, federal flood, and personal automobile insurance, respectively. It also offers premium financing to its own and third-party insureds.
Homeowners’ Property and Casualty Insurance
FNIC underwrites homeowners’ insurance in Florida and Louisiana. Homeowners’ insurance generally protects an owner of real and personal property against covered causes of loss to that property. The number of Louisiana homeowner policies in-force totaled approximately 400 at December 31, 2013. Its homeowner insurance products provide maximum dwelling coverage in the amount of approximately $3 million, with the aggregate maximum policy limit being approximately $5 million.
Commercial General Liability
It underwrites commercial general liability insurance for approximately 380 classes of artisan (excluding home-builders and developers) and mercantile trades (such as owners, landlords and tenants). The limits of liability range from $100,000 per occurrence with a $200,000 policy aggregate to $1 million per occurrence with a $2 million policy aggregate. The Company markets the commercial general liability insurance products through independent agents and a limited number of general agencies unaffiliated with the Company.
Personal automobile insurance markets can be divided into two categories, standard automobile and nonstandard automobile. Standard personal automobile insurance is principally provided to insureds who present an average risk profile in terms of driving record, vehicle type and other factors. Nonstandard personal automobile insurance is principally provided to insureds that are unable to obtain standard insurance coverage because of their driving record, age, vehicle type or other factors, including market conditions. The average nonstandard personal automobile insurance policy, as of 31, December 2013, in-force is approximately $987 for a twelve month policy in Florida and approximately $158 for a three month policy in Texas.
FNIC writes flood insurance through the National Flood Insurance Program (NFIP) on a direct and ceded basis. It writes the policy for the NFIP, which assumes 100% of the flood risk while it retains a commission for its service. The average flood policy premium is approximately $504 with limits up to $250,000. Commissions in connection with this program totaled $0.4 million, as of December 31, 2013.
Managing General Agent Services
FNU, a wholly owned subsidiary of the Company, acts as FNIC’s exclusive managing general agent in Florida and is also licensed as a managing general agent in the States of Alabama, Georgia, Louisiana, Mississippi, Missouri, North Carolina, Nevada, South Carolina, Texas and Virginia. FNU has contracted with several unaffiliated insurance companies to sell commercial general liability, workers compensation, personal umbrella, inland marine and other various lines of insurance through FNU’s existing network of agents.
The Company competes with Citizens, Universal Property and Casualty Insurance Company and St. Johns Insurance Company.
Federated National Holding Co
SUITE 180, 14050 NW 14 STREET
SUNRISE FL 33323