Bruce Lucas in $100mn fundraise for homeowners insurtech start-up

The former founding CEO of Heritage Insurance Bruce Lucas is in the latter stages of a $100mn capital raise to support the launch of a Florida-based homeowners and commercial residential insurtech called Slide Insurance Holdings, The Insurer can reveal.

Sources said the start-up will primarily focus on the homeowners market and plans to roll out its offering initially in Florida, New York, New Jersey and Rhode Island.

It is expected to broaden that footprint into other states in 2022 and beyond.

Details of the business plan have not been confirmed, but it is not thought that Slide will look to participate in any take-outs from Florida’s state-backed insurer Citizens as part of its initial portfolio build.

Sources said that Lucas has been working with a major tech player and will go down the full-stack risk-bearing carrier model rather than looking to operate as an MGA.

It is thought the start-up will harness AI technology that will help it develop its own reinsurance costing and expected loss ratio data.

Slide is likely to have a hybrid distribution model that will include a direct-to-consumer channel but will primarily focus on selling coverage through agents.

Its user interface is expected to be flexible to allow insureds to select the level of coverage at a time when Florida homeowners rates have been surging as domestic carriers put in multiple filings for increases in an attempt to return to profitability.

The new Tampa Bay-based venture filed a US federal trademark for Slide in late September this year.

The application sought to trademark the name for a range of insurance business uses, including downloadable mobile apps to provide access and information in the field of insurance products and services.

Insurance services included as a carrier, agency and brokerage for personal and business P&C insurance, as well as allowing cover to be bought and managed online.

It also has a listing on Crunchbase that describes Slide as an insurtech that uses AI and data science to help consumers buy and maintain “the right insurance at the right price for their needs and budget”.

The recent success of HCI Group’s TypTap insurtech has proved the potential of a tech-enabled carrier with the right strategy to navigate a Florida market where many traditional carriers have struggled in a challenging operating environment of cat and attritional losses and a highly unfavourable judicial climate.

TypTap has grown faster than expected and is lining up an IPO after a $100mn buy-in by Centerbridge Partners earlier this year valued it at $850mn.

Lucas declined to comment on this article.

Lucas’s homeowners Heritage

As the founder of Heritage in 2012, Lucas already has a track record of rapidly building out a Florida homeowners carrier from scratch.

The insurer – which underwrites through its main operating subsidiary Heritage Property & Casualty Insurance – kick-started its portfolio-build with a 60,000 policy take-out from Citizens in 2013 and has grown rapidly since to become the 19th largest homeowners insurer nationwide.

It had over $1bn in-force premium when Lucas left at the end of 2020.

The Clearwater, Florida-based carrier operates as a personal residential insurer in 15 states and also as a commercial residential writer in Florida, New York and New Jersey.

As well as growing its top line – including through the acquisitions of Hawaiian carrier Zephyr in 2016 and Narragansett Bay in 2018 – the insurer developed distribution and underwriting partnerships with major US carriers including Geico, Safeco and The Hartford under Lucas.

The executive also took Heritage public in an IPO within 20 months of its launch, delivering strong returns to investors in the process.

Although it fell to an underwriting loss in 2020, with a 107.0 percent combined ratio, the carrier delivered sub-100 percent combined ratios in every other year of its operation under Lucas, according to an August 2021 company presentation.

As a super-regional carrier, Heritage also became a major cedant for the reinsurance market.

Lucas announced he was retiring from the carrier in November last year, with COO Ernie Garateix stepping into the role of CEO and co-founding president Richard Widdicombe adding the chairman role.