Homeowners Choice Acquires HomeWise Insurance Company Florida Book of Business November 7, 2011
Tampa, Fla. – (Nov. 07, 2011) – Homeowners Choice, Inc. (NASDAQ:HCII), a Florida-based insurance holding company, announced today that its wholly owned insurance subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., has acquired the Florida policies of HomeWise Insurance Company.
The terms of the deal, approved by the Florida insurance regulators, include the transfer to Homeowners Choice of up to 70,000 homeowners’ policies and approximately $53 million of unearned premium. According to Homeowners Choice, exact figures will be unavailable until ongoing policy cancellations and premium refunds are accounted for. The deal remains subject to certain contingencies.
“This acquisition nearly doubles the size of the company without doubling administrative expenses.” said Homeowners Choice Chief Executive Officer Paresh Patel. “We have acquired large numbers of policies before and are confident we can handle this transaction as well with minimal disruption to our operations. Our financial strength enabled us to satisfy the regulators and move quickly to consummate this transaction.”
Homeowners Choice, Inc. is a Florida-based insurance holding company headquartered in Tampa. Through its subsidiary corporations, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance. Founded in 2006, Homeowners Choice prior to the assumption served approximately 59,000 policyholders throughout Florida representing approximately $130 million in annualized premiums. The company's common shares trade on the NASDAQ Global Select Market under the ticker symbol HCII and are included in the Russell Microcap Index. Its warrants trade on the same market under the ticker symbol HCIIW. Its Series A, Cumulative Redeemable Preferred shares trade on the NASDAQ Capital Market under the ticker symbol HCIIP. More information about Homeowners Choice, Inc. is available at www.hcpci.com.
Forward-Looking Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. For example, there can be no assurance the company will handle this acquisition with minimal disruption to operations. Some of these risks and uncertainties are identified in the company’s filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company’s business, financial condition and results of operations. Homeowners Choice, Inc. disclaims all obligations to update any forward-looking statements.
ATTENTION HOMEWISE INSURANCE COMPANY POLICYHOLDERS: September 5, 2011
ATTENTION HOMEWISE INSURANCE COMPANY POLICYHOLDERS:
Demotech has recently withdrawn the Financial Stability Rating® (FSR) of HomeWise Insurance Company. Although this rating will not affect your policy, your mortgage lender or insurance agent may contact you regarding this situation. We are working diligently to restore the Demotech rating as soon as possible.
In the meantime, please click the “Request a Letter” link in the Popular Links section or click here to generate an individualized letter to your lender from HomeWise assuring them your coverage is sound. Your coverage is backed by the company’s surplus and the added stability of our ‘A’ rated reinsurance partners.
If you have any additional questions, please call us at 1-866-496-1782.
STRAIGHT TALK - The Insuring Florida Blog May 31, 2011
Florida property insurance bill explained: reinsurance costs
Gov. Scott signed the property insurance bill (SB 408) last week, and depending on what newspaper you read, the new law is either a “small reform” (according to the Wall Street Journal on May 21) or sweeping legislation (according to the Miami Herald on May 18). That just goes to show you how perspective plays into it – and, perhaps, it also means that we should read multiple newspapers!
One way to characterize the property insurance bill is to think of it as a correction, a fix for past legislative changes that had unintended consequences. The Florida Legislature this year recognized that some of the insurance reforms passed in 2007 were a mistake, and not correcting them would have been another mistake.
A change gaining the most attention is one that also has been incorrectly characterized. This is the measure that allows expedited filing for reinsurance costs. Reinsurance is insurance for insurance companies to share some of the costs of risk. Many news accounts you may have read or seen on TV make it sound like your insurance rates will be going up by 15% a year to cover the cost of reinsurance. This is not the way it will work. In fact, this is a very minor change to the way the law works now. Currently, insurers are allowed to have an expedited rate filing for up to 10% per policy, so the truth is that this change raises the ceiling by five percent. A small reform. And, more important, if reinsurance rates do not rise, then there is no change at all.
You may have also been led to believe that insurers can pass on this cost without the state’s insurance regulator approving it. That is not true. If a company says it needs to raise its rates because reinsurance costs have risen, regulators still have to provide a full review – and approve or disapprove an increase. Expediting rate filing reviews for reinsurance costs was part of a law passed in 2009, and it means that regulators approve or disapprove a rate increase in 45 days, rather than the 90 days they have for a regular rate increase request. This change enables insurers to account for fluctuating reinsurance prices, and there is an upside to consumers: If an insurance company is severely restricted in recouping the costs of doing business, it has to restrict how much business it can take on. In other words, an insurer cannot accept more customers and try to make it up on volume because the very nature of insurance demands that enough money is on hand in advance to pay anticipated claims.
Here’s another clarification about the 15% expedited rate filing for reinsurance: It does not equate to 15% of your entire premium because reinsurance costs are only a portion of your rate. For example, let’s say your insurance company has a rate formula where reinsurance is 30% of your premium. If reinsurance rates rise by 10%, then your rate increase would be three percent. Yes, it’s an increase and you don’t want one at all – but now you know how it works.
Thomas (Tom) A. Lee Named To HomeWise Board of Directors June 8, 2009
HomeWise, the Tampa, Florida-based property insurer, has elected Thomas (Tom) A. Lee to its Board of Directors.
Lee brings more than 25 years of experience in the residental property market, and in public policy and state government, having recently served as President of the Florida Senate from 2004 to 2006.
Says HomeWise President and CEO Dale Hammond, "Tom's relevant background in both home building and public service in Florida makes him a great assist to HomeWise, which specializes in providing residental property insurance to Floridians."
HomeWise Ranks in Top 10 Insurance Companies Statewide in its Premiere Year on the Florida Association of Insurance Agents' (FAIA) 2008 Company Survey July 1, 2008
HomeWise, the homeowners insurance company, has ranked in the top 10 insurance companies operating in Florida, according to The Florida Association of Insurance Agents' (FAIA) 2008 Company Survey. The FAIA reported that 584 member insurance agencies responded to the survey which allows agents to company insurance companies in a number of areas.
The survey asks FAIA members to rank any five of the insurance companies they have a relationship with in nine categories. Included among the categories are: competitiveness, automation, management approach, agent compensation, and underwriting practices. The survey also includes four service categories, one each for personal lines, commercial lines, claims, and accounting and dispute resolution. Each of those nine categories are then broken down further into subcategories that target more specific items such as how a carrier handles quotes, underwrites new business, or services renewal policies.
For more information about the FAIA 2008 Company Survey, click on the following link: www.FloridaUnderwriter.com
