1. Joseph L. Petrelli Demotech, Inc. Columbus, Ohio

2. Demotech, Inc. will become the leading provider of innovative solutions to financial analysis issues by focusing our resources on niches presenting opportunity for corporate growth. 2

3. Demotech, Inc. is a financial analysis firm specializing in evaluating the financial stability of regional and specialty insurers. Since 1985, Demotech has served the insurance industry by assigning accurate, reliable and proven Financial Stability Ratings ® (FSRs) for Property & Casualty insurers and Title underwriters. FSRs are a leading indicator of financial stability, providing an objective baseline of the future solvency of an insurer. Demotech's philosophy is to review and evaluate insurers based on their area of focus and execution of their business model rather than solely on financial size. This philosophy was the catalyst for the Demotech Company Classification System to stratify and categorize insurers by broad operational categories. 3

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5.  How interest yield environment  Highly volatile economic conditions – next bubble?  Labor participation rate at or near historic low  Homeownership rate has crept up but tenuous  Global government spending has done little to invigorate economies  Capital on the sidelines is getting antsy  Political unrest 5

6. 6 Company Premium Written 1995 % of TotalPremium Earned 1995 Loss Incurred 1995 DCC Incurred 1995 State Farm Fire and Casualty Co504,823,12730.0%474,813,735264,759,43515,222,703 Allstate Insurance Company279,704,54616.6%279,011,695158,277,1726,152,416 Nationwide Mutual Fire Insurance Co78,843,2864.7%71,932,39856,600,7441,263,833 United Serv Automobile Assn68,428,8734.1%64,296,07174,122,1376,408,625 LM Property and Casualty Ins. Co.35,081,7222.1%34,917,1625,286,7811,643,212 Standard Fire Insurance Co33,479,0982.0%29,227,23114,666,200705,347 Metropolitan Property & Cas Ins Co30,481,8231.8%22,422,42610,005,637230,121 Automobile Ins Co of Hartford CT28,679,0651.7%25,193,06814,613,745477,667 Liberty Mutual Fire Insurance28,241,7811.7%26,064,42313,196,523352,134 Florida Farm Bureau General Ins Co23,155,8631.4%20,599,63915,695,69762,447 Top 10 Total1,110,919,18465.9%1,048,477,848627,224,07132,518,505

7. Company Premium Written 1995 % of TotalPremium Earned 1995Loss Incurred 1995DCC Incurred 1995 Federal Insurance Company22,936,3101.4%21,942,54710,313,733965,904 Auto Owners Ins Co22,742,1361.3%21,442,79613,097,8421,101,356 USAA Casualty Insurance Co22,701,5441.3%20,682,32115,908,821847,372 Travelers Indemnity Company22,321,0601.3%19,210,98710,010,259700,832 Government Employees Insurance Co21,203,9101.3%21,450,59012,710,184810,993 Hartford Insurance Co of The Midwest21,025,1071.2%19,548,12210,912,815439,786 State Farm General Insurance Co18,895,2071.1%18,816,09911,709,71145,782 Florida Farm Bureau Casualty Ins Co18,578,8581.1%16,320,28210,380,361255,991 Firemans Fund Insurance Co17,663,9921.0%15,542,3839,414,109648,828 Phoenix Insurance Company17,477,1171.0%16,812,63310,355,727329,131 11-20 Total205,545,24112.2%191,768,760114,813,5626,145,975 7

8. Company Premium Written 2000 % of TotalPremium Earned 2000 Loss Incurred 2000 DCC Incurred 2000 State Farm Florida Insurance Co583,296,40020.1%556,952,383243,081,64412,540,580 Castle Key Ins Co312,825,27710.8%309,946,07568,452,4803,257,969 Clarendon National Insurance Co158,386,1805.4%160,101,57747,223,9486,628,920 Clarendon Select Insurance Co133,975,2894.6%133,805,35034,145,2374,809,255 United Serv Automobile Assn104,630,4653.6%101,758,64828,304,6291,303,005 Nationwide Insurance Co of Florida74,849,9832.6%19,338,3316,162,260184,418 First Floridian Auto & Home Ins Co71,289,6442.5%67,653,59126,774,5491,228,290 Nationwide Mutual Fire Insurance Co60,424,7572.1%108,096,73436,432,4811,637,400 Federal Insurance Company57,490,3622.0%50,946,30119,784,2631,670,463 Florida Select Insurance Company51,366,6691.8%47,787,11614,798,820-61,220 Top 10 Total1,608,535,02655.3%1,556,386,106525,160,31133,199,080 8

9. Company Premium Written 2000 % of Total Premium Earned 2000 Loss Incurred 2000 DCC Incurred 2000 USAA Casualty Insurance Co47,457,8061.6%44,679,71610,307,426305,708 Liberty Mutual Fire Insurance47,210,2211.6%46,391,34617,822,455417,053 Tower Hill Preferred Ins Co40,508,7061.4%38,990,2058,181,954359,340 Hartford Insurance Co of The Midwest40,180,6061.4%39,315,96911,914,716479,763 Harbor Specialty Insurance Company37,914,8741.3%37,485,4319,590,473593,285 LM Property and Casualty Ins. Co.34,094,0661.2%35,259,81511,360,405219,014 American Superior Ins Co33,911,1751.2%32,480,4939,881,5061,428,880 Southern Family Insurance Company32,975,8311.1%34,397,90311,465,152-47,603 Qualsure Ins Corp32,749,2481.1%11,716,2642,390,11835,246 Omega Insurance Company32,637,7081.1%31,760,5868,972,5371,212,257 11-20 Total379,640,24113.1%352,477,728101,886,7425,002,943 9

10. Company Premium Written 2005 % of Total Premium Earned 2005 Loss Incurred 2005 DCC Incurred 2005 State Farm Florida Insurance Co1,175,848,93919.3%1,097,835,3721,274,636,06217,177,314 Citizens Prop Ins Corp511,493,0218.4%515,156,045620,972,05922,383,248 Castle Key Ins Co375,827,1096.2%370,083,519416,521,583-3,341,000 Nationwide Insurance Co of Florida269,152,6154.4%248,030,218334,928,0589,008,375 Atlantic Preferred Insurance Co197,126,5193.2%168,833,022629,445,421808,332 Florida Preferred Prop Ins Co173,427,6462.8%140,002,056421,768,345425,944 United Serv Automobile Assn157,367,1042.6%151,156,840249,340,935951,847 Liberty Mutual Fire Insurance138,817,3602.3%123,634,303114,668,5842,289,825 First Floridian Auto & Home Ins Co120,498,3022.0%105,032,065106,752,6534,783,932 Geovera Specialty Ins Co111,695,2871.8%88,455,468126,369,84117,851,033 Top 10 Total3,231,253,90252.9%3,008,218,9084,295,403,54172,338,850 10

11. Company Premium Written 2005 % of Total Premium Earned 2005 Loss Incurred 2005 DCC Incurred 2005 Federal Insurance Company110,634,1801.8%101,749,51435,361,4421,209,338 United Prop & Cas Ins Co104,978,2151.7%82,416,156220,994,5581,891,269 Castle Key Ind Co99,239,9391.6%99,972,2464,195,9571,566,237 USAA Casualty Insurance Co96,577,2521.6%91,172,848127,892,595939,464 Tower Hill Preferred Ins Co96,293,7901.6%84,830,989173,283,8591,889,115 Clarendon Select Insurance Co94,207,3881.5%111,729,976355,631,346-3,455,095 Gulfstream Prop & Cas Ins Co93,418,7691.5%31,969,242116,485,028488,702 American Strategic Insurance Co85,747,5471.4%87,791,51547,538,0231,640,063 Tower Hill Prime Insurance Company83,639,9191.4%61,726,60777,743,153842,160 Universal Ins Co of NA81,510,1111.3%43,798,17371,190,689662,906 11-20 Total946,247,11015.5%797,157,2661,230,316,6507,674,159 11

12. Company Premium Written 2010 % of Total Premium Earned 2010 Loss Incurred 2010DCC Incurred 2010 Citizens Prop Ins Corp1,156,647,31515.3%965,072,025436,092,44428,888,968 State Farm Florida Insurance Co980,590,40413.0%994,185,248398,327,27651,390,548 Universal Property & Casualty Ins603,334,9068.0%557,600,093159,003,19814,302,318 St Johns Ins Co Inc248,124,8703.3%259,300,27071,657,0926,145,175 United Serv Automobile Assn221,075,1632.9%218,358,77758,759,7621,591,624 Florida Peninsula Ins Co179,228,0092.4%180,108,91958,874,9767,761,861 Royal Palm Ins Co147,859,2442.0%149,290,46174,974,4415,614,930 Federal Insurance Company138,344,7591.8%139,172,21331,680,608749,432 American Home Assurance Company137,667,1541.8%141,528,30624,722,0401,185,570 Castle Key Ins Co135,302,9131.8%135,703,63039,043,7792,387,945 Top 10 Total3,948,174,73752.2%3,740,319,9421,353,135,616120,018,371 12

13. Company Premium Written 2010 % of Total Premium Earned 2010 Loss Incurred 2010DCC Incurred 2010 United Prop & Cas Ins Co135,192,1521.8%134,463,24146,259,3376,461,956 Homewise Ins Co128,332,1641.7%90,074,37123,415,054138,102 USAA Casualty Insurance Co127,838,1481.7%127,895,23927,750,0321,719,382 Security First Ins Co127,204,1251.7%112,681,81434,011,9143,040,452 Liberty Mutual Fire Insurance123,102,1961.6%131,772,177117,776,0096,824,017 Tower Hill Prime Insurance Company119,008,9761.6%103,263,95234,211,3943,140,489 Homeowners Choice Prop & Cas Ins Co116,063,1211.5%106,084,54428,458,5042,736,765 Tower Hill Preferred Ins Co111,877,6101.5%103,373,46246,498,3653,858,459 Universal Ins Co of NA104,973,0101.4%110,553,93657,284,0845,755,389 Castle Key Ind Co96,271,7181.3%64,979,80515,262,1671,557,612 11-20 Total1,189,863,22015.7%1,085,142,541430,926,86035,232,623 13

14. CompanyPremium Written 2013% of Total Premium Earned 2013 Loss Incurred 2013 DCC Incurred 2013 Citizens Property Ins Corp.1,272,335,75914.5%1,445,423,995388,109,714116,650,999 Universal P&C Insurance Co.684,379,1717.8%695,475,896141,630,30915,518,512 State Farm Florida Ins Co.646,850,7237.4%696,037,459136,310,93616,653,060 Homeowners Choice P&C Ins Co.311,550,2983.6%271,635,44745,609,6342,605,103 Florida Peninsula Insurance Co310,352,5243.5%281,285,30060,317,3479,694,585 United Services Automobile277,431,5453.2%264,931,48257,644,4261,923,173 United P&C Insurance Co.263,178,0223.0%237,133,88164,272,6902,618,554 St. Johns Insurance Co.255,851,8812.9%255,366,41961,309,9825,368,990 Federated National Ins Co.220,639,6532.5%153,291,68740,820,9077,078,663 People's Trust Insurance Co.203,009,8022.3%118,908,47530,468,2754,434,572 Top 10 Total4,445,579,37850.7%4,419,490,0411,026,494,220182,546,211 14

15. Company Premium Written 2013 % of Total Premium Earned 2013 Loss Incurred 2013 DCC Incurred 2013 Security First Insurance Co.184,487,8972.1%187,343,09839,968,04610,791,776 Tower Hill Prime Insurance Co.179,732,9312.1%171,250,25452,238,3084,032,669 Federal Insurance Co.162,155,6671.8%155,495,79237,098,3781,051,901 USAA Casualty Insurance Co.147,191,6481.7%143,249,63730,450,826967,332 Amer Integrity Ins Co. of FL141,915,9231.6%120,613,75724,523,9512,627,889 Castle Key Insurance Co.134,209,6911.5%134,392,27132,680,2962,686,548 Tower Hill Preferred Ins Co.132,209,4091.5%130,084,83334,895,3302,955,385 Tower Hill Select Insurance Co121,368,0001.4%107,518,08932,892,4213,360,517 AIG Property Casualty Co.121,279,0211.4%116,121,96031,847,9271,797,177 Heritage P&C Insurance Co.120,622,9041.4%47,243,38212,339,0861,663,929 11-20 Total1,445,173,09116.5%1,313,313,073328,934,56931,935,123 15

16. 19952000200520102013 Top 1065.9%55.3%52.9%52.2%50.7% 11-2012.2%13.1%15.5%15.7%16.5% All other total21.9%31.6% 32.1%32.8% Total100.0% 16

17.  The structure of Citizens Property Insurance Company makes it a fierce competitor for businesses despite the clearinghouse effort.  2014 estimated direct premium written of $2.42 billion  Assessable Private sector must compete with a huge competitor that is not bound by the terms, conditions and realities that the private sector must address. The competitor has the ability to assess to resolve under-funding and also purchases less reinsurance than a comparable private sector carrier. 17

18.  Prior legislation mandated that any major structure for which a permit is applied on or after July 1, 2014, for new construction or substantial improvement, is not eligible for coverage by the corporation if the structure is seaward of the coastal construction control line or is within the Coastal Barrier Resources System.  House Bill 1089 changed the effective date for permits from July 1, 2014 to July 1, 2015. 18

19.  Senate Bill 708 states the following:  For residential property insurance, if a policy or contract has been in effect for more than 90 days, a claim filed by the insured cannot be denied based on credit information available in public records.  After a policy or contract has been in effect for more than 90 days, the insurer may not cancel or terminate the policy or contract based on credit information available in public records. 19

20.  Senate Bill 1672 provides that a mitigation form provided to the Corporation is not subject to independent verification or reinspection, absent material changes to the structure, if the form was signed by an authorized mitigation inspector and reviewed by and verified by a quality assurance program approved by the Corporation.  Citizens’ current practices will be updated to reflect any impact from this provision. 20

21.  House Bill 1089 mandates that commercial residential condominiums shall be deemed ineligible for coverage if 50 percent or more of the units are rented more than eight times in a calendar year for a rental agreement period of less than 30 days.  This legislation requires changes to Commercial Residential Wind Only eligibility from the current transient standard of more than three (3) rentals per year for periods less than thirty (30) days, or held out to the public as a place regularly rented out to guests for periods of less than thirty (30) days, to the new standard described above. The legislation applies only to commercial residential condominiums. 21

22.  Senate Bill 1672 requires changes to Citizens coastal account eligibility to state that the corporation shall cease offering new commercial residential policies providing multi-peril coverage for risks located in the wind-only eligible area and shall instead continue to offer commercial residential wind-only policies. This change applies only to new business and specifically states that the corporation may continue to renew existing policies in force as of July 1, 2014.  This change does not affect current eligibility for ex-wind policies written in the commercial lines account. 22

23. Rick Scott Florida Governor, 2011-present 23 Charlie Crist Florida Governor, 2007-2011

24.  The Florida Homeowners insurance marketplace has been a laboratory for experimentation. The focus on Citizens and the Cat Fund as insurers sponsored by government has prevented some from viewing the finely toned tools that Florida focused carriers have developed: ◦ Home Hardening ◦ Wind Mitigation ◦ Enhanced catastrophe modeling ◦ Sophisticated underwriting ◦ Arcane pricing models at the catastrophe level ◦ Holistic business models such as People’s Trust Insurance Company ◦ Catastrophe response protocols ◦ Alternatives to reinsurance ◦ Emergence of Demotech as a viable rating alternative (FSU Study and 25 year track record) 24

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