Insurtech Porch Group has invested US$57 million into its insurance carrier, Homeowners of America Insurance (HOA).
As part of the mandate, Porch will gain acquisition rights of HOA’s rights to potential Vesttoo claims. It also exchanged a US$49 million surplus note from HOA.
In addition, the group was appointed to the statutory committee of unsecured creditors in the Chapter 11 bankruptcy of Vesttoo and intends to pursue recovery of funds.
HOA is under supervision by the Texas Department of Insurance (TDI) following the release of HOA’s statutory accounts for the quarter ending 30 June this year.
Subsequently, rating agency Demotech withdrew its financial stability rating. Porch is working with the TDI to restore the company’s surplus to an appropriate level.
HOA will continue to use Porch’s captive reinsurer to further support financial strength.
Commenting on the mandate, Matt Ehrlichman, CEO of Porch, says: “This transaction is a credit to the team who worked with TDI and others to find a structure which supports HOA and is a good outcome for Porch and our stakeholders.”
