Porch Insurance Reciprocal Exchange and Porch Group enter a definitive agreement to acquire the insurance carrier, managing general agency and captive reinsurance entity of Allied Trust. The reciprocal takes the carrier and Porch Group takes the agency and the captive reinsurer. Allied Trust is a regional carrier writing in Louisiana, Texas, South Carolina and North Carolina. Louisiana accounted for almost half of its 2025 premiums and is a new state for the reciprocal. The reciprocal acquires the carrier for an initial base price of US$55 million in cash, subject to adjustment for the statutory surplus and indebtedness of the carrier at closing, plus US$50 million of deferred consideration payable over the 12 months following completion. The deferred element may be settled in cash or in Porch Group shares already held by the reciprocal, which Porch Group describes as largely non-admitted. The transaction is expected to be approximately statutory surplus neutral for the reciprocal. Porch Group acquires the managing general agency and the captive reinsurance entity together for an aggregate base purchase price of US$95 million, comprising US$75 million in cash and an expected US$20 million in shares. No price is given for the captive reinsurer separately. Porch Group puts the acquisition multiple at less than four times, measured against the expected contribution of Allied Trust to adjusted earnings before interest, tax, depreciation and amortisation excluding the reciprocal, in the first full year after completion. The company describes that figure as a non-GAAP measure and states that it is not providing a reconciliation to the comparable measure under generally accepted accounting principles. The acquisition is expected to add approximately US$200 million of reciprocal written premium and approximately US$25 million of that adjusted earnings measure in the first full year following completion, figures that Porch Group says reflect planned portfolio optimisation. Allied Trust is expected to operate under the same structure as the existing Porch Group insurance business after completion. The reciprocal owns the carrier, collects premiums and pays claims, commissions, reinsurance costs and fees to Porch Group for operating services, while Porch Group earns commissions and fees based primarily on premium and policy volume. Matt Ehrlichman, chief executive officer of Porch Group, says: "Allied Trust is a strong strategic fit for Porch and the Reciprocal, and we are excited about the opportunity to add a high-quality insurance business." Ehrlichman says: "This transaction is expected to expand the insurance products we manage, add a meaningful presence in Louisiana, and bring a strong team, a healthy company, and over a decade of claims data that we believe can become even more valuable when combined with Porch’s proprietary data and insurance operating capabilities." Assuming completion on 1 January 2027, Porch Group targets more than US$900 million of reciprocal written premium, more than 360,000 reciprocal policies written and more than US$180 million of the adjusted earnings measure for 2027. Formal guidance is to follow in the first quarter of 2027, after regulatory approval and completion. The transaction is subject to regulatory approvals and customary closing conditions and is expected to complete in the first quarter of 2027. Porch Group identifies the approval of the Texas Department of Insurance among the conditions on which completion depends. Porch Group separately expects to file for an at-the-market equity offering programme that would allow it or the reciprocal to sell shares from time to time. For the reciprocal, Porch Group says the programme would provide flexibility to sell portions of its existing holding over a long period in order to add growth capital to statutory surplus.
