Florida Approves 19% Homeowners Rate Increase for Federated National

Florida premium rates are soon on their way up for Federated National Insurance Co.'s homeowners plans. The company announced it received approval from the state to increase its rates an average of 19% for customers across the state.

The wholly owned subsidiary of 21st Century Holding Co. will boost the rates on policies starting or being renewed effective Nov. 1 or Dec. 1. The higher rates, approved by the Florida Office of Insurance Regulation, will vary based on location.

Florida Insurance Commissioner Kevin McCarty recently said that 102 of 210 insurers in the residential market reported underwriting losses in their second-quarter financial filings (BestWire, Sept. 28, 2009).

The approval for an increase in rates "will allow us to compete over a broader geographic range within the state of Florida," Michael H. Braun, president of Federated National and chief executive officer and president of 21st Century (NASDAQ: TCHC), said in a statement. Also, he said, it will help the company "offset increased reinsurance costs and reduce the effects of state-imposed wind mitigation credits." Attempts to reach 21st Century for comment were not immediately successful.

According to an AMB Credit Report, the Florida-licensed company reported writing $30.3 million in net premiums in 2008.

The top five writers of homeowners multiperil in Florida based on direct premiums written for 2008, according to A.M. Best state/line data, were: State Farm Group, with a 17.7% market share; Citizens Property Insurance Corp., 16.2%; Universal P&C Insurance Co., 7.2%; USAA Group, 5.1%; and Tower Hill Group, 4.5%.