Letter to Policyholders

Dear Policyholder,

2009 marked yet another year of profitability and financial stability for FHM. For the year ended December 31, 2009, FHM recognized $4.3 million in Net Income for the year, which increased our surplus to a 56-year record level of $58.3 million.

We have continued our efforts to expand into other states as a way to provide more comprehensive service to our policyholders who do business throughout the southeast. In 2009, FHM wrote business in 5 southeastern states – Florida, Georgia, Alabama, North Carolina and South Carolina. During the first quarter of 2010, FHM was approved to operate in Kentucky and Virginia.

The role of technology in FHM’s operations continues to grow as we work with policyholders and agents to find ways to streamline operations and enhance their ability to interact with our staff and manage their workers’ compensation programs more efficiently. In addition to continuously updating our web site with new information and providing easier access to frequently used forms, we began work on a pilot program in late 2009 to allow policyholders to enroll in electronic premium payment processing.

During 2009, we continued to emphasize the importance of our Strategic Law Partners program to ensure the Company will have expert representation as part of its efforts to successfully litigate workers’ compensation cases. Our Strategic Law Partners “law firms in each area of Florida who work on retainer to defend all the Company’s workers’ compensation claims in their respective area of the state “increased their interaction with our staff, becoming an integral part of the claims handling team to help us continue our commitment to FHM policyholders to have cost-effective, expert legal counsel available to them when needed. We anticipate expanding the Strategic Law Partners program into the other southeastern states in which we do business as the volume increases.

As we turned the page on 2009 and looked forward to 2010, we were reminded once again of the importance of the relationship we have with you“ our policyholders and agents. Your continued willingness to work with us to create and maintain safe workplaces, and provide quality care for injured workers, as well as your encouragement and support of our exploration of new markets and new ways of doing business are our most valuable assets.

We want you to know we place a high value on the trust and confidence you place in us, and we stand firm in our commitment that “A Policy To Do More” is more than just a slogan. It’s the way we do business.

Sincerely,

Bill Bond, Jr.
President

Jack B. Healan, Jr.
Chairman

Jack Lemine
Chief Operating Officer

Board of Directors:
Walter L. Banks, William Bond, Jr., Ruel L. Bradley, Jr., George D. Gabel, Jr., Jack B. Healan, Jr., Mary Ann Richardson, Joseph G. Seay

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