Unique Investment Opportunity in Company Taking over The Florida Insurance Market

The Florida residential homeowners insurance market experienced severe financial stress between 2017 and 2023, largely driven by social inflation, fraud, and liberal underwriting practices; however, we view Florida’s stressed and imbalanced homeowners insurance market as an opportunity. Despite those recent market challenges, there are several market factors that have converged, and the SPIN Insurance Exchange team believes the time is right to deploy risk capital into Florida’s insurance market to take advantage of these positive macroeconomic shifts listed below.

Let’s See the Numbers

Florida insurance market statistics indicate dramatic improvements in financial health:

• Expenditure on legal defense costs, expressed as a percentage of premium, fell from 8.4 percent in 2022 to 3.1 percent in 2023, and greater improvements are being realized in 2024.
• The (direct incurred) loss ratio, a measure of insurance underwriting profitability, was 40 percent in 2023, down from 125 percent in 2022. Currently, loss ratios are trending down to 30% in 2024. 
• The Florida Office of Insurance Regulation reports homeowner insurance lawsuit volumes are trending down. Many insurers report litigation rates have been reduced by 50% or more.
• The number of policies issued by Citizens fell from an all-time high of 1.4 million (Sept. 30, 2023) to 1.036 million (October, 2024). Citizens was created in 2002 to make property insurance available to eligible Florida property owners unable to find insurance coverage in the private market. It was intended to “depopulate”—send policyholders back to private insurers when the market stabilized—because Citizens was supposed to be a stopgap measure. The recent reduction in Citizens’ portfolio shows that depopulation is happening. 

Several new insurers have entered the Florida property insurance market in the past two years. The fact that private investors have been committing risk capital to Florida’s insurance market is a vote of confidence in the changed environment. That being said, there is a real first mover advantage at play, and those new entrants that enter the market in the next 12 months are in the best position to seize on the opportunity. In addition to the macroeconomic opportunities, SPIN plans to deploy several operational efficiencies listed below to improve its value proposition:

Our solution is a fresh new “SPIN” on insurance that offers homeowners insurance coverage through the Florida admitted market. SPIN will deploy innovative product forms and adequate rate structures in a manner that will allow us to price and conservatively underwrite our risk exposures to achieve consistent underwriting profits.

• Using online content with an intentional paced application process, SPIN can educate insureds and their agents as to the limits and coverages they have chosen.
• Stored photos, videos, and inspections in the SPIN core insurance system provide an objective, refreshable view of the true condition of insured building materials.
• At purchase and at renewal, claims scenarios reflecting current policy endorsements will be highlighted.
• SPIN coverage language is always available online to insureds and agents.
• SPIN encourages insured involvement in claims and early reporting to reduce severity of claims and future price increases.

Current Stage: Planned launch Q1 2025.

Offer: 25% of the company in exchange for the $50m in investment.

Capital Raise: $50m+ USD.

Minimum Ticket Size: $10m USD.

Pitch Deck: Available upon request.

To list your project and maximize its visibility in our exclusive investors network, join De Bacci Capital platform on DFX (Free start with code “DBC”):

https://www.dealflowxchange.com/de-bacci-capital-community

Disclaimer: The content of this website is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. Readers should carefully consider whether investing in the given product is appropriate for them based on their financial circumstances, consider the risks, and seek independent consultation.