Porch Group, Inc., a leading vertical software company reinventing the home services industry, successfully completed its previously announced acquisition of Homeowners of America (HOA), making Porch one of the largest Insurance Technology (InsurTech) companies.
HOA is a Managing General Agent and insurance carrier hybrid with high margins and a capital-efficient reinsurance strategy that limits retained risk. HOA, on the whole, operates in six states, including Texas, Arizona, North Carolina, South Carolina, Virginia, and Georgia. The organization was founded in 2006 in Texas, a $10 billion homeowners insurance market, and became the 12th biggest home insurer in Texas in 2019. HOA is certified to function in 31 states, positioning it for nationwide enlargement as a part of Porch.
Porch obtained HOA for approximately a hundred million dollars, concern to normal buy rate adjustments, of which approximately $21.7 million is payable in Porch common stock.
“With HOA’s experienced management team and scale of
effective insurance operations, combined with Porch’s homebuyer access and
unique property data, we are positioned to scale into our InsurTech ambitions,”
said Matt Ehrlichman, Porch founder, chairman and CEO. “We are looking to
immediately provide value to current HOA agents and customers through our
technology platform and expanded offerings to be more than just an insurance
carrier, but the partner for the home. We expect HOA’s fit within our unique
vertical software platform will provide rapid, scalable, and profitable growth.
The InsurTech space is nascent, and this acquisition demonstrates our
commitment to industry leadership.”
With the acquisition, Porch seeks to create efficient growth with decreased customer acquisition cost through the homebuyers accessed via its vertical software program platform, proprietary property data collection and HOA’s current licensure in 31 states. Porch plans to increase HOA’s Insurtech footprint nationwide through its own insurance offering and HOA’s existing independent agent distribution channels.
Combining Porch’s vast access to homebuyers and unique property data with HOA’s strong pricing and claims experience, Porch believes it can become one of the largest InsurTech companies with significant advantages to driving rapid, long-term growth. For the full year 2021, the Company expects over $270 million of pro forma gross written premium between HOA and Porch’s existing insurance agency. Agents and customers currently using HOA services should expect enhanced product offering and expanded opportunities through the Porch vertical technology systems and data.