Startup to take over 72K UPC policies
By policy count, new acquisition will vault Slide into the top 10 Florida insurers
Slide Insurance Co., a startup carrier that didn’t exist prior to 2022, is taking over 72,000 former United Property & Casualty (UPC) policies and might renew more than 21,000 others.
The announcement by Slide comes nearly a year after the company took over 147,000 Florida policies from failing St. Johns Insurance. The new acquisitions would vault Slide into the top 10 of largest Florida insurers by policy count.
Slide’s agreement to take over the UPC policies was authorized in a consent order signed Tuesday by Anoush Brangaccio, general counsel for the Florida Office of Insurance Regulation.
Under terms of the transaction, the company will cancel the 72,000 policies effective Feb. 1 and replace them with newly issued Slide policies that will remain effective under the same terms and pricing until their original expiration dates. UPC will remain responsible for any claims filed prior to Feb. 1.
Transferred policyholders will have 30 days to reject the shortterm coverage from Slide, according to the consent order.
As part of the consent agreement with the Office of Insurance Regulation, Slide confirmed that it would purchase enough reinsurance to meet state requirements during the 2023 and 2024 hurricane seasons.
The Florida Association of Insurance Agents, in a notice to its members, reported that Slide also acquired the renewal rights to more than 21,000 policies scheduled to renew in April or May. The association, which helped to arrange the deal between UPC and Slide, said it would continue working with state regulators and staterun Citizens Property Insurance Corp. to find solutions for policyholders not being assumed under the arrangement.
UPC has about 116,000 policies in Florida and has been under state supervision since December while it undergoes an “orderly run-off ” of its Florida operations. In August, the company announced plans to withdraw from Florida, Texas, Louisiana and New York. The company stopped writing new business in Florida in late 2021.
Headquartered in St. Petersburg, UPC was founded in 1999. State market share reports downloaded from the Office of Insurance Regulation’s website shows that UPC has 197,027 policies statewide in the fourth quarter of 2016. Of those, 45,441 were in Broward, Miami-Dade or Palm Beach counties. Citing a “trade secret” exemption, the company started blocking public release of its county-level market share data in 2017.
Slide, based in Tampa, was founded by Bruce Lucas, former CEO of Heritage Property & Casualty Insurance Corp. That company started in a similar fashion as Slide — in May 2013, it forged a deal to take over 40,000 policies from state-owned Citizens Property Insurance Corp. and received $33 million in premiums dating back to Jan. 1 of that year.
State legislators questioned why the deal was not subjected to Citizens’ usual approval process and asked whether Heritage benefited from political contributions made to Gov. Rick Scott and other state officials.
Last year, top private market insurance officials said they were taken by surprise when Lucas and Slide announced approval by the Office of Insurance Regulation to take over 147,000 policies from St. Johns at the same time that St. Johns was declared insolvent.
As part of that deal, Slide was allotted $90 million in unearned premium from the Florida Insurance Guaranty Corporation, a state-run organization that takes over claims-paying responsibilities from failing insurers.
CEOs of two companies — Locke Burt of Security First Insurance and Bob Ritchie of American Integrity — were quoted in the Insurance Journal questioning why other carriers didn’t get an opportunity to bid on the St. Johns policies.
On Wednesday, insurance insiders said the latest deal was different. First, Slide didn’t get $90 million from FIGA. Second, UPC’s book of business was unprofitable. The company lost about $100 million last year. Third, many private-market insurers are worried about their ability to purchase enough reinsurance before the June 1 start of hurricane season, and taking on additional risk could endanger those prospects.
In addition, even as it’s in an “orderly runoff,” UPC hasn’t been taken over by the state. Its leaders have every right to strike a deal with Slide.
Finally, the company’s financial troubles have been well known for weeks, unlike St. Johns, whose insolvency was made public at the same time as the Slide acquisition.
“This was very transparent in the sense that any company could look at the UPC data and make whatever decision they wanted to,” Burt said by email Wednesday. “We looked at the data and decided not to pursue a renewal rights transaction.”
Stacey Giulianti, chief legal officer at Florida Peninsula, praised Lucas as “a very smart insurance entrepreneur” and said “he’s within his rights to make deals with other carriers to assist their customers in finding new policies.”
He added, “When one company can offer a “soft landing” to another carrier’s customers in need of coverage, the marketplace has done its job.”
According to its news release, Slide’s future is bright. In just over a year, the company raised $105 million in its initial round of venture capital funding. It recruited over 100 employees and took in more than $600 million in revenue.
As an “insurtech” company, “Slide’s cutting edge technology leverages artificial intelligence and big data to hyper-personalize, optimize and streamline every part of the insurance process,” the release states.
The release also said that Slide is the “first Florida insurer to open for new business in 2023.” Beginning Wednesday afternoon, Florida homeowners could begin the process of getting a quote by going to the company’s website, slidein surance.com, and entering information about their home.