Porch Group files application to form a reciprocal insurance exchange
March 20 2023 - 9:00AM
Porch Group, Inc. (“Porch” or “the Company”) (NASDAQ: PRCH), a
leading vertical software company reinventing the home services and
insurance industries, today announced that its insurance business,
Homeowners of America (“HOA”), has filed an application to form and
license a Texas reciprocal insurance exchange (a “Reciprocal”) with
the Texas Department of Insurance (“TDI”). If approved and fully
implemented by Porch, its insurance underwriting business would be
conducted exclusively through the Reciprocal.
The formation of the Reciprocal is an initial step in Porch’s
long-term strategy to reduce its exposure to earnings volatility
from its Insurance segment by mitigating direct exposure to
insurance claims and weather events. The Reciprocal may also help
to reduce the impact of a challenging reinsurance market that has
both less capacity and higher prices.
Homeowners that purchase policies in the Reciprocal could
receive benefits and value-added services unique to what Porch and
its various companies offer. Similarly, Porch would be able to
continue to pursue its growth strategy by reaching homebuyers early
and throughout the homebuying journey, and leveraging access to
homebuyer information and property data.
A reciprocal insurer is an insurance association owned by its
policyholder-members who spread risk by pooling their risks
together. This reciprocal exchange structure has been utilized by
other homeowner insurance businesses such as Farmers Insurance. The
day-to-day operations of the Reciprocal would be managed by a
subsidiary of Porch, which would receive ongoing fees for
originating, underwriting and processing claims on behalf of the
Reciprocal.
The launch of the Reciprocal remains subject to review and
approval by the TDI, which is not expected before Q3 2023.
Formation of the reciprocal is subject to ongoing Porch and
regulatory review in context of broader capital and operating
environment and the decision to proceed remains within the
Company’s discretion.
About Porch Group
Seattle-based Porch Group, Inc., the vertical software platform
for the home, provides software and services to approximately
30,900 home services companies such as home inspectors, mortgage
companies and loan officers, title companies, moving companies,
real estate agencies, utility companies, and warranty companies.
Through these relationships and its multiple brands, Porch Group
provides a moving concierge service to homebuyers, helping them
save time and make better decisions on critical services, including
insurance, warranty, moving, security, TV/internet, home repair and
improvement, and more. To learn more about Porch Group, visit
porchgroup.com or porch.com.
Forward-Looking Statements
Certain statements in this press release may be considered
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
relate to future events or future financial or operating
performance of Porch Group, Inc. (“Porch”). For example, statements
herein that describe the potential formation of a new reciprocal
exchange, including its capital, financial and operational impact,
and other statements of management's related beliefs, intentions or
goals also are forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as “may,”
“should,” “expect,” “intend,” “will,” “estimate,” “anticipate,”
“believe,” “predict,” “potential,” “target,” or “continue,” or the
negatives of these terms or variations of them or similar
terminology. Such forward-looking statements are subject to risks,
uncertainties, and other factors which could cause actual results
to differ materially from those expressed or implied by such
forward-looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Porch and its
management at the time they are made, are inherently uncertain.
Factors that may cause actual results to differ materially from
current expectations include, but are not limited to: (i) the
ability of Porch and its affiliates to consummate the proposed
formation of the reciprocal exchange and the satisfaction of the
conditions precedent to consummation of the proposed formation of
such exchange, including the ability to secure regulatory approvals
(on a state by state basis and initially in Texas) on the terms
expected, at all or in a timely manner; (ii) the ability of Porch
to successfully operate its businesses alongside a reciprocal
exchange; (iii) the ability of Porch to implement its plans,
forecasts and other expectations with respect to the reciprocal
exchange business after the completion of the formation and to
realize expected synergies and/or convert policyholders from its
existing insurance carrier business into policyholders of the
reciprocal exchange; and (iv) potential business disruption
following the formation, as well as other risks and important
factors detailed in our public filings with the Securities and
Exchange Commission (the “SEC”), including Porch’s most recent
Annual Report on Form 10-K for the year ended December 31, 2022,
and subsequent reports on Form 8-K, all of which are available on
the SEC’s website at www.sec.gov. Porch does not undertake any duty
to update these forward-looking statements, whether as a result of
changed circumstances, new information, future events or otherwise,
except as may be required by law.
Investor Relations Contact: Lois
PerkinsPorch GroupIR@porch.com
Porch Group Press Contact: Anna
Rutter Gateway Group, Inc. (949)
574-3860 PRCH@gatewayir.com
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