A Message from Our President and CEO

                                                                                                                                               MATT LUPINO FOR EDITING

To Our Agents and Customers:

A.M. Best has changed its Financial Strength Rating (FSR) for FHM Insurance Company. Previously our rating was B++ with a negative outlook. Effective 6/28/19 our current rating is B+ with a stable outlook. The stable outlook is a reflection of Best’s confidence in our level of capitalization relative to our premium writings.

In light of this change, I wanted to send you some important information that underscores the continued financial strength and in particular the balance sheet strength of FHM Insurance Company. One of the key indicators of an insurance company’s financial strength is A.M. Best’s BCAR (Best’s Capital Adequacy Ratio) score. This score is a key ratio calculated by A.M. Best and they describe it as “the quantitative relationship between a rating unit’s (company’s) balance sheet strength and key financial risks that could impact such strength. As the foundation of financial security, balance sheet strength is critical to the determination of a rating unit’s ability to meet its current and ongoing obligations”. This comment comes directly from A.M. Best’s publication entitled Understanding BCAR for US Property/Casualty Insurers dated May 9, 2019 which I have referenced for your review.

Currently FHM Insurance Company’s BCAR score is 52.5 indicating that Best’s current assessment as to the adequacy of our capital position scores in their “Strongest” category. I have pulled a chart from the attached document which shows Best’s assessment categories for a company’s BCAR score. You will note that a score greater than 25 generates the “Strongest” assessment. The first attachment to this email shows our current BCAR score as well as our estimated BCAR score under two “stress” scenarios. Even under the unlikely stress scenarios depicted, FHM’s BCAR score and thus balance sheet strength, would remain in the “Strongest” category. Simply put, FHM Insurance Company is in an excellent position to meet its financial obligations. 

Source: http://www3.ambest.com/ambv/ratingmethodology/OpenPDF.aspx?rc=197686

The second attachment I have provided is a graphic illustration of our current reinsurance program. You will note that our program attaches at a $500,000 loss level and includes $40 million in limits with A rated reinsurers. Our largest provider of reinsurance support is Safety
National who is A+ rated and has policyholder surplus of $2.4 billion. Safety National is a leader in the workers compensation reinsurance market. Along with our reinsurance broker Aon-Benfield, FHM Insurance monitors all of its reinsurance partners on a quarterly basis to ensure continued financial security. This reinsurance program provides ongoing protection to maintain the strength of our balance sheet.

In summary, we continue to value your ongoing support and belief in FHM. I wanted to personally reach out to you to make sure you had this important information so that you can remain confident in your choice of FHM to serve your clients. Please share this with your staff as you see fit.

I commit to you that we will continue to work very hard to provide the high level of service that you have come to expect from FHM. It is after all “Our Policy To Do More”.

If you have any questions regarding any of this material, please feel free to contact me.

With sincere appreciation,

Matthew J. Lupino, CPCU
President and Chief Executive Officer

Jacksonville 904-854-2777
Orlando 407-373-6247
Mobile 904-463-3234

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