FedNat
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This would become an event of default under the company's outstanding $100mn senior unsecured notes due 2029 and $21mn convertible notes due 2026 if not discharged within 60 days. -
Loss creep from Hurricane Ida has led to the loss and an increase in loss reserves.
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Demotech earlier warned that more than 15 possible carrier downgrades could come in July.
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Board member David Patterson took on the role on an interim basis, while Monarch has recruited a new CFO who previously served at Security First.
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Group chief accounting officer Erick Fernandez will step in as an interim.
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The company previously had its Demotech rating downgraded from 'A' to 'S'.
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The company cited its continued Q1 2022 underwriting losses and recent rating downgrade.
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The Floridian carrier must improve its financial strength rating ahead of its 1 July reinsurance renewal.
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The downgrade was attributed to weather claims from Louisiana and Texas following the company’s expansion into those markets.
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Net income was impacted by $4.4mn of reserve strengthening, net of reinsurance recoveries.
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The Floridian carrier recorded $8.1mn cat losses net of reinsurance compared with $27.9mn a year earlier.
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Just under half of the $8mn cat losses stem from insurance books FedNat is running off, with reserve strengthening impacted by 2020 reinsurance gaps.
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