Software company Porch Group has announced that Homeowners of America Insurance Company (HOA), its wholly owned insurance carrier subsidiary, has been released from the Texas Department of Insurance (TDI) temporary regulatory supervision.
According to the announcement, the TDI “is satisfied with HOA’s capital surplus, financials, and operating plan following Porch Group’s $57 million investment, in exchange for both a $49 million surplus note as well as the acquisition of HOA’s rights to potential claims receivables related to the fraud connected to Vesttoo and others.”
HOA is a property and casualty insurance company that specialises in residential property coverage for homeowners and investors. It was founded in 2006 in Texas, and is a $10 billion homeowners insurance market licensed to operate in 31 states.
The Porch Group announced its plans to purchase the Managing General Agent and insurance carrier hybrid back in January 2021, alongside three other acquisitions.
In April 2021, the Group completed HOA’s acquisition for approximately $100 million, of which approximately $21.7 million is payable in Porch common stock, according to the announcement.
Matt Ehrlichman, Chief Executive Officer, commented: “We appreciate the time and effort of the TDI, who did a thorough review of HOA’s financials and go-forward business plan. Our release from supervision reinforces our belief that our insurance business is well positioned for the future.
“I would like to thank the team for working diligently to resolve this quickly, while continuing to effectively serve our policyholders. We remain focused on managing gross written premium and taking underwriting actions to maximise profitability and increase value for shareholders. We look forward to sharing more at our upcoming Q3 2023 earnings.”
