Howard working on Florida homeowners carrier with SiriusPoint and Bolttech

Former Lighthouse, Edison and AmRisc executive David Howard is working with (re)insurer SiriusPoint and insurtech exchange Bolttech on a tech-enabled Florida homeowners carrier called Vyrd, The Insurer can reveal.

Details of the start-up are not known, but it is understood that SiriusPoint and Bolttech are both backing its launch as investors. 

Sources suggested the size of the combined investment from the two companies is likely to be in the $40mn-$60mn range and that the start-up is expected to apply for a take-out of policies from Citizens.

It is understood that Vyrd will have a strong emphasis on the innovative use of technology, including to mitigate risk. It is thought to be in the final stages of the approval process with Florida insurance regulators.

Sources added that in a situation where a (re)insurer sponsors the creation of a Florida homeowners carrier it would typically secure the right of first refusal on its reinsurance placement.

SiriusPoint has also been building a portfolio of insurtech investments over the last couple of years.

Bolttech has a connection with Florida and Citizens as its digital platform sits behind the state-backed insurer’s so-called Clearinghouse.

The Clearinghouse is a multi-carrier interface that aims to identify comparable coverage from participating private market carriers before placing business with Citizens. The contract was renewed for five years in 2017.

According to Howard’s LinkedIn profile, the St Petersburg, Florida-based executive is currently engaged in “company formation and development”.

He was most recently president at coastal homeowners specialist Lighthouse Property Insurance Corporation, which is authorised to write in Florida, Louisiana, the Carolinas and Texas.

He is also the former founding CEO of Florida carrier Edison Insurance Company, and has held executive positions at cat-focused MGA giant AmRisc, now part of Truist Insurance Holdings.

Sources said the new venture is likely to have a heavy emphasis on being tech-enabled and could be in the running to apply for a Citizens take-out in the round slated for February 2022.

From repop to depop?

A new round of significant depopulation from Citizens is now anticipated. After the success of several years of meaningful take-outs in the early part of the last decade that slashed its exposure, Citizens has again seen its policy count jump from 420,000 to more than 700,000 over the last two years.

The surge in policies moving back into Citizens has come as the state’s domestic homeowners carriers have shed business from their portfolios in a bid to address underwriting losses and pull back probable maximum losses to lower reinsurance costs.

The current forecast is that Citizens could reach 760,000 policies by the end of 2021 and reach between 1.1 million and 1.3 million of policies by the end of 2022.

Incumbent Florida homeowners carriers have restricted new business and shed policies in areas including the so-called SOLO counties and tri-county area.

They have also been filing for meaningful rate increases, with some carriers taking up to four increases a year, with cumulative rate increases in some cases well in excess of 20 percent.

That has led to an expectation that there will be a number of new players looking to enter the market, or ramp up in the state, to take advantage of higher rates and the potential for margins to begin improving in what has been a loss-making market for several years.

The deadline for submitting a request to assume personal residential policies for the planned Citizens take-out on 22 February 2022 passed last Friday (29 October), with a 29 December deadline for the 19 April 2022 assumption.

Further 2022 take-outs from Citizens are slated for 21 June, 23 August, 18 October and 20 December.

Howard could not immediately be reached for comment, SiriusPoint and Bolttech declined to comment on this article.