Northern Capital Group scored phenomenal growth in 2008, securing the top spot as the country's fastest-growing private company on Inc. Magazine's 500 list.

Considering that Northern Capital's main business is selling homeowners insurance in Florida, doubling its revenue again this year isn't likely. But that's OK with the company.

Future growth -- albeit slower than 2008's torrid pace -- will come from insurance-related businesses, not just policy premiums. In the past two years, Northern Capital has started a home inspection company, a claims adjusting firm, an insurance agency and a company developing agency management software.

``We want to increase revenues that aren't prone to hurricane risk,'' says Alexander Anthony, Northern Capital's chairman and chief executive.

Northern Capital's 2008 consolidated revenue -- including policy premiums for the two insurers and investment income -- jumped to $95 million from $42.3 million.

``Northern Capital understands the concept of `spreading the risk,' '' says Lisa Miller, former deputy insurance commissioner and consultant to several Florida-based insurers. ``It has done that successfully by insuring homes across Florida as well as spreading its business risk by creating insurance-service companies to deal with the ups and downs of the insurance market.''

Contributing to revenue growth in 2009 will be rate increases for its two insurance companies. Northern Capital Insurance and Northern Capital Select have asked Florida regulators to approve an average 10-percent rate increase statewide.

The higher rate will primarily recoup higher cost for backup insurance this year. Northern Capital bought more private reinsurance than coverage from the Florida Hurricane Catastrophe Fund, which would have been cheaper for the company, because it was unsure the state fund would have enough funds to pay losses.

In 2006, Northern Capital Insurance booked just $300,000 in revenue. That was the company's first year of operation.

Northern Capital Insurance, which writes only homeowners coverage, started selling its own policies in 2007. The following year, it began taking policies out of Citizens Property Insurance, the state-run insurer of last resort. About one-third of the nearly 58,000 policies on its books have come from Citizens.

NO MORE TAKE OUTS

Anthony says the 750 Citizens policies that Northern Capital took out in March are the last to come from the state-run insurer. Going forward, the insurer will focus on selling its own policies, especially outside of South Florida, to lower its coastal risk.

Northern Capital Select was launched in 2007 to write homeowners insurance. But it has expanded to write commercial auto, nonstandard auto -- drivers with spotty records or luxury cars such as Bentleys and Maseratis -- and inland truck freight coverage.

The funds to start Northern Capital came from a group of security services companies owned by Anthony and Albert Fernandez, Northern Capital's vice chairman.

As a small insurer, Northern Capital operates a bit different.

Wayne Fletcher, president and chief executive of the two insurance companies, says the insurers minimize risk by carefully choosing which types of homes to cover.

Homes built after 2002, while desirable to most insurers because they're built with the latest mitigation requirements such as storm shutters, require Northern Capital to give them the largest mitigation credit on the windstorm premium. That's a substantial 68 percent discount on the wind portion of a home policy.

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