Porch Group, Inc. (“Porch”, “Porch Group” or “the Company”)
(NASDAQ: PRCH), a leading vertical software company reinventing the
home services and insurance industries, today announced its wholly
owned insurance carrier subsidiary, Homeowners of America Insurance
Company (“HOA”), is released from temporary regulatory supervision.
The Texas Department of Insurance (“TDI”) is
satisfied with HOA’s capital surplus, financials, and operating
plan following Porch Group’s $57 million investment, in exchange
for both a $49 million surplus note as well as the acquisition of
HOA’s rights to potential claims receivables related to the fraud
connected to Vesttoo and others.
“We appreciate the time and effort of the TDI,
who did a thorough review of HOA’s financials and go-forward
business plan. Our release from supervision reinforces our belief
that our insurance business is well positioned for the future. I
would like to thank the team for working diligently to resolve this
quickly, while continuing to effectively serve our policyholders.
We remain focused on managing gross written premium and taking
underwriting actions to maximize profitability and increase value
for shareholders. We look forward to sharing more at our upcoming
Q3 2023 earnings.” Matt Ehrlichman, Chief Executive Officer.
About Porch Group
Seattle-based Porch Group, Inc., the vertical
software and insurance platform for the home, provides software and
services to approximately 30,700 home services companies such as
home inspectors, mortgage companies and loan officers, title
companies, moving companies, real estate agencies, utility
companies, and warranty companies. Through these relationships and
its multiple brands, Porch Group provides a moving concierge
service to homebuyers, helping them save time and make better
decisions on critical services, including insurance, warranty,
moving, security, TV/internet, home repair and improvement, and
more. To learn more about Porch Group, visit porchgroup.com or
porch.com.
Forward-Looking Statements
Certain statements in this release may be
considered “forward-looking statements” within the meaning of the
“safe harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Although the Company believes that
its plans, intentions, and expectations reflected in or suggested
by these forward-looking statements are reasonable, the Company
cannot assure you that it will achieve or realize these plans,
intentions, or expectations. Forward-looking statements are
inherently subject to risks, uncertainties, assumptions, and other
factors which could cause actual results to differ materially from
those expressed or implied by such forward-looking statements.
Generally, statements that are not historical facts, including
statements concerning the Company’s possible or assumed future
actions, business strategies, events, or results of operations, are
forward-looking statements. These statements may be preceded by,
followed by, or include the words “believes,” “estimates,”
“expects,” “projects,” “forecasts,” “may,” “will,” “should,”
“seeks,” “plans,” “scheduled,” “anticipates,” “intends,” or similar
expressions.
These forward-looking statements are based upon
estimates and assumptions that, while considered reasonable by the
Company and its management at the time they are made, are
inherently uncertain. Factors that may cause actual results to
differ materially from current expectations include, but are not
limited to: (1) expansion plans and opportunities, and managing
growth, to build a consumer brand; (2) the incidence, frequency,
and severity of weather events, extensive wildfires, and other
catastrophes; (3) economic conditions, especially those affecting
the housing, insurance, and financial markets; (4) expectations
regarding revenue, cost of revenue, operating expenses, and the
ability to achieve and maintain future profitability; (5) existing
and developing federal and state laws and regulations, including
with respect to insurance, warranty, privacy, information security,
data protection, and taxation, and management’s interpretation of
and compliance with such laws and regulations; (6) the Company’s
reinsurance program, which includes the use of a captive reinsurer,
the success of which is dependent on a number of factors outside
management’s control, along with reliance on reinsurance to protect
against loss; (7) the uncertainty and significance of the known and
unknown effects on HOA and the Company due to the termination of
the reinsurance contract with Aon White Rock following the
allegations of fraud against Vesttoo, including, but not limited
to, the implications from Demotech, Inc.’s withdrawal of HOA’s
financial stability rating and the length of time before the rating
is restored; the outcome of Vesttoo's Chapter 11 bankruptcy
proceedings; the Company's ability to successfully pursue claims
arising out of the alleged fraud, the costs associated with
pursuing the claims, and the timeframe associated with any
recoveries; HOA's ability to obtain and maintain adequate
reinsurance coverage against excess losses; HOA’s ability to stay
out of regulatory supervision; and HOA's ability to maintain a
healthy surplus; (8) uncertainties related to regulatory approval
of insurance rates, policy forms, insurance products, license
applications, acquisitions of businesses, or strategic initiatives,
including the reciprocal restructuring, and other matters within
the purview of insurance regulators; (9) reliance on strategic,
proprietary relationships to provide the Company with access to
personal data and product information, and the ability to use such
data and information to increase transaction volume and attract and
retain customers; (10) the ability to develop new, or enhance
existing, products, services, and features and bring them to market
in a timely manner; (11) changes in capital requirements, and the
ability to access capital when needed to provide statutory surplus;
(12) the increased costs and initiatives required to address new
legal and regulatory requirements arising from developments related
to cybersecurity, privacy, and data governance and the increased
costs and initiatives to protect against data breaches,
cyber-attacks, virus or malware attacks, or other infiltrations or
incidents affecting system integrity, availability, and
performance; (13) retaining and attracting skilled and experienced
employees; (14) costs related to being a public company; and (15)
other risks and uncertainties discussed in Part I, Item 1A, “Risk
Factors,” in the Company’s Annual Report on Form 10-K (“Annual
Report”) for the year ended December 31, 2022, and in Part II, Item
1A, “Risk Factors,” in our Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2023 and June 30, 2023, as well as those
discussed in subsequent reports filed with the Securities and
Exchange Commission (“SEC”), all of which are available on the
SEC’s website at www.sec.gov.
Nothing in this release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date of this release. Unless
specifically indicated otherwise, the forward-looking statements in
this release do not reflect the potential impact of any
divestitures, mergers, acquisitions, or other business combinations
that have not been completed as of the date of this release. Porch
does not undertake any duty to update these forward-looking
statements, whether as a result of changed circumstances, new
information, future events or otherwise, except as may be required
by law.
Investor Relations Contact:
Lois Perkins, Head of Investor Relations
Porch Group, Inc.
Loisperkins@porch.com
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