A Message from Our President and CEO
To Our Agents and Customers;
Each year I look forward to the opportunity to share with you some thoughts about FHM Insurance, our accomplishments during the past year and our goals and challenges for the future. Let me first share that in April of 2016, A.M. Best affirmed our B++ rating. This is considered a secure rating by A.M. Best. This rating is based, in the words of our analyst, on our “continued solid risk-adjusted capitalization” and “the substantive re-underwriting and other operational initiatives to improve operating performance and established presence within its market segment.” All of the team here at FHM has worked diligently over the past twenty-four months to make the operational adjustments necessary to change the trajectory of our financial results. I am also pleased to report to you that through the first half of 2016, we are slightly ahead of our projections for 2016. These 2016 results highlight and reinforce the excellent work done by our team members to not only produce improved accident year results, but to also minimize the impact of our legacy book of claims. We are confident that we now have a core book of business that will serve as a solid foundation for growth and that will consistently yield the desired underwriting results going forward. With respect to our efforts to grow, through the first six months of 2016, we have seen an increase of 28% in our new business writings, and we have also seen an increase in our hit ratio on what we are quoting of 12%. We expect the remainder of 2016 to continue to be a challenging environment to continue to achieve overall net premium growth due to increased competition in all of the markets we serve as well as approved 2016 rate decreases North Carolina. In an effort to bolster sales, we have made significant improvements in our online rating platform and will continue to make select new agency appointments with independent agents that value our relationship based, high-touch service proposition.
In keeping with the nautical theme of this report, I would be remiss as “Captain” of FHM if I were not alert to the approaching clouds and changing winds of the workers’ compensation market. There are many evolving issues in today’s workers’ compensation environment. In the coming months, we will need to face the impending storms created by adverse Florida Supreme Court rulings and the legislative efforts to create alternative options to allow employers to “opt out” of the existing workers’ compensation system.
In summary, 2015 was a very solid year for FHM. Our leverage/surplus ratios continue to reflect our very strong capitalization, and we improved our hit ratios and overall new business sales efforts. 2016 is off to a strong start and will lead to what we believe will be an even stronger year for FHM.
I offer a heartfelt thank you to those who have supported FHM for many years. We owe you much. To those of you who have partnered with us in more recent years, we look forward to showing you the long-term value that is embedded in our “Policy To Do More”.
Matthew J. Lupino, CPCU
President and Chief Executive Officer