Florida-based 21st Century Holding Co. has reported losses for Hurricane Charley.
Edward (Ted) Lawson, president & chairman of the Board, commented about Federated National Insurance Company, a subsidiary of 21st Century, noting, “First and foremost we would like to assure all of our policyholders that were effected by Hurricane Charley that our adjusters are in the stricken area and working hard to help take care of them. Our claim lines are open 24 hours a day, 7 days a week. Our offices are staffed and we are responding to our policyholders’ needs. The company’s total exposure is now estimated to be between 1,000 and 1,500 claims, which will result in a $5 to $6 million charge to Federated National’s surplus. To help mitigate our loss, we will be filing for rate relief to recover our loss and pay for the increased reinsurance costs that will result from this storm.
“The company has in place approximately $200 million of additional catastrophic coverage. Our amount of insurance coverage was determined by subjecting our homeowner and mobile homeowner exposures to statistical forecasting models that are designed to quantify a catastrophic event in terms of the frequency of a storm occurring in a worst case scenario of once in every one hundred years. In a catastrophic event, Federated National would retain the first $10 million of damage; the next $195 million of damage is paid by the reinsurers. Second event coverage is automatic and included in the treaty.”
Lawson added, “Because of Hurricane Charley, we will be taking a one-time charge to our earnings in the 3rd quarter of approximately $1.25 per share. Our earnings guidance for 2004 will now be $2.50 per share including the one-time charge for this storm.
“Hurricane Charley is going down as one of the most costly natural disasters of all time. There has not been a storm of this magnitude to hit the west coast of Florida in over 70 years. Only Hurricane Andrew, which hit the east coast, caused as much destruction of property and hardship as Hurricane Charley has.”
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