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Federated National Holding Company Message Board

  • mutinycapital mutinycapital Jun 3, 2011 5:59 PM Flag

    Where's the 8-K?

    The old reinsurance policy expired on May 31. They should have already signed the new one. It's been three days. Where's the 8-K? Braun virtually promised a sub-$40MM annual reinsurance expense for the next 12 months on the last conference call.

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    • Estimated 39.3 million. Dear Lord.... did something good finally just happen?

      • 1 Reply to jkoons.rm
      • Not quite. It looks like the annual savings are about $3.5MM. I would have hoped for a larger savings. They are paying more for the private insurance with less coverage.

        Let's look at the last four quarters EBT adjusted by removing the realized investment gains and losses:

        2Q10 (4,985)
        3Q10 (3,655)
        4Q10 (6,399)
        1Q11 (3,070)

        Total Loss: (18,109)

        $3.5MM won't even come close to putting the company back in the black. In fact, I don't see how they are ever going to be profitable in FY11. In the past, they were helped by investment gains from the investment portfolio. Management probably won't have that help this year. It's time to liquidate.

    • Ok, I take it back. I went back through the 8-K's. It looks like they did the new deal with FL back in early March. Not sure why it was done so early since the previous deal ended at the end of May. We'll see what happens with the third party reinsurance in July.


      United Property & Casualty Insurance Company (UPC), a wholly-owned subsidiary of United Insurance Holdings Corp. (the Company), has entered into a reimbursement contract for the 2011-2012 hurricane season, effective as of June 1, 2011, with the State Board of Administration of Florida, which administers the Florida Hurricane Catastrophe Fund (FHCF). The FHCF contract will reimburse UPC for covered property losses under its homeowners' insurance policies resulting from hurricanes that cause damage in the state of Florida through May 31, 2012.

      Under this contract, the FHCF will provide $335.3 million of aggregate coverage for covered losses in excess of $117.5 million subject to 10% participation by UPC. For the first event, UPC retains the first $10 million of loss and an affiliated reinsurer retains then next $5 million of loss. UPC also participates in the $10 million Limited Apportionment Company protection provided by the FHCF. The premium for the FHCF contract will be approximately $30.2 million, payable in three installments in August, October and December 2011. The final attachment point, total coverage and cost will not be finalized until December 2011.

      UPC purchases excess of loss type coverage from private reinsurers to cover its 10% participation requirement under the FHCF contract and to recoup losses incurred up to the FHCF attachment point. UPC bound such excess of loss coverage with private reinsurers effective June 1, 2011. As is typical in the industry, many of the material terms of the contract including total coverage and payment terms are not finalized until after the coverage is bound.

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