After 'unprecedented' catastrophes, FedNat exiting non-Florida markets

FedNat Holding Co. is refocusing its operations on the Florida homeowners market and pulling out of all non-Florida markets.

As a result, the company will start a runoff of Maison Insurance Co.'s insurance operations. The subsidiary will file withdrawal-related documentation with regulators in Louisiana, Florida and Texas, and start nonrenewing policies in those states in 2022.

SageSure, the managing general underwriter that writes FedNat Insurance Co.'s non-Florida book, will start giving FedNat Insurance policyholders a chance to renew most of their policies onto alternative insurance carrier partners in Texas and Louisiana. FedNat Insurance will continue to renew policies in South Carolina, Alabama and Mississippi that were written through SageSure until the managing general underwriter's carrier partners secure the needed licensing in those states.

FedNat Holding's geographic expansion strategy was "well-intended," but Maison's acquisition and the non-Florida book's expansion presented significant challenges due to the "unprecedented number" of catastrophes in Texas and Louisiana, FedNat Holding CEO Michael Braun said. The hardening reinsurance market also affected the businesses, the chief executive added.

FedNat Holding logged a third-quarter net loss attributable to common shareholders of $24.8 million, or a loss of $1.42 per share, compared with a loss of $20.7 million, or a loss of $1.51 per share, in the prior-year period.

The company's adjusted operating loss for the period was $26.0 million, or $1.49 per share, compared with $21.5 million, or $1.57 per share, in the year-ago quarter.

Braun said third-quarter results were affected by catastrophe weather events that primarily impacted Louisiana and Texas.