By Chris Munro

April 29 - (The Insurer) - Rebooted Florida homeowners carrier Patriot Select Property & Casualty Insurance Company will “jump start” its business by assuming around 25,000 policies from an initial Citizens depopulation before shifting its focus to the voluntary market, CEO John Rollins has told The Insurer.

This publication earlier in April reported that Patriot Select had secured regulatory approval from the Florida Office of Insurance Regulation (FLOIR) to write admitted homeowners business in the Sunshine State.

The St Petersburg, Florida based company is the rebooted Anchor Property & Casualty Insurance Company which launched in 2014, but entered regulatory supervision in 2020.

In 2020, Anchor sold its insurance policies to Homeowners Choice, while Weston Insurance acquired affiliated Texas-based carrier Anchor Specialty Insurance and an associated MGA.

Rollins joined Anchor as CEO in late 2023, and the executive has since worked to get Patriot Select in a state to begin taking on live business once again.

Talking to The Insurer, Rollins explained that when he joined the company then called Anchor, the business was just a shell with a certificate of authority and its five-digit NAIC number.

As such, Rollins described Patriot Select as “a completely new company that's just building on a little bit of existing scaffold”.

“It's a partially new board that hired a completely new team and raised new capital from different people, and then implemented a completely new business plan.”

RIGHT ENVIRONMENT

The executive said three things had come together to make the environment right for Patriot Select to launch.

Firstly, the far-reaching litigation reforms passed by Florida’s legislature in 2022 and 2023 made the environment far more attractive for insurers.

Secondly, Rollins cited the stability that has returned to the reinsurance market.

And thirdly, the executive noted the bloated state of Citizens, with the need for the residual insurer to shed some of the huge number of policies that were on its book.

Patriot Select has to date raised $30 million of capital to support its launch, and Rollins said it wants to secure another $5 million before June 1.

Rollins said the carrier’s investor base to date comprises four groups: operations and services companies that have experience in the property insurance sector; “entrepreneurial” reinsurance brokers; existing Florida carriers where Patriot Select’s book may provide some diversification; and “friends and family”, a cohort that includes the carrier’s management.

CITIZENS TAKEOUTS ‘A JUMP START’

Supported by its capital base, Patriot Select is in the process of taking on business, with the company having been approved to take out around 40,000 policies from Citizens, of which it expects to assume approximately 24,000.

While Patriot Select is looking to assume those 24,000 or-so policies, Rollins said the carrier is not purely focused on takeouts from Florida’s insurer of last resort.

“We see takeouts as a jump start to a good business plan, but we don't see them as the major element of a sustainable business plan in Florida,” he said.

As he explained, Citizens is a market of last resort, and therefore “by definition, there aren't a lot of policies that a profitable private company would want”.

“So our growth plan really rests on our voluntary policy product, which is approved already, and we will begin writing that product at the same time we take out policies from Citizens,” Rollins said.

“It takes time to build up that book, because you're really just writing one policy at a time,” he said.

“By the end of 2026 we would expect the bulk of our premium volume and policy count, and eventually profits, to come from the voluntary market.”

RENEWAL RIGHTS AND BOOK ROLLS

In the near term, mergers and acquisitions are not in Patriot Select’s plan to grow the business, although Rollins said the company could be open to renewal rights or book roll deals.

Patriot Select has no plans to advertise directly to consumers, with the carrier committed to working with independent agents.

“Thirty years of actuarial experience has taught me that there are certain customer personas out there, and the sorts of folks that tend to be better insurance risks are also the sorts of folks that tend to have people like independent agents that they trust,” he said.

“I've spent my whole career trying to figure out how to avoid adverse selection, and we are not terribly confident that people that buy with one click are the type of folks that help you avoid adverse selection.”

PROPERTY FOCUS

Patriot Select’s initial focus is on writing standard HO-3 homeowners business. Rollins does not forecast the company evolving into an all-lines writer, but he said there is scope for it to branch out into other property sectors, and even other residential lines, for example dwelling fire, condominium unit owner protection, and lender placed insurance.

And, at least for the time being, Patriot Select will be solely focused on writing business in Florida, with the carrier willing to assume risks throughout the Sunshine State bar Monroe County.

“We think we're going to be a broad-spectrum homeowners’ insurer for some time. As to other states, I would point out that there have been some Florida-based companies that have expanded into other states, and not always to their benefit.”

One of the next major steps in Patriot Select’s development is securing its June 1 incepting reinsurance program, with the company having recently begun discussions on getting its coverage placed.

“We are actively seeking our reinsurance,” he said.

“We'll be marketing, doing a lot of handshaking and some overseas trips to make sure we have a solid program,” he said.

Patriot Select’s definition of a “solid” program is one that will cover at least a 150-year storm in a first event scenario, and will also cover “well beyond” a 50-year storm for a second event the same year.

“We’re also either going to buy a third reinstatement or an actual third event cover,” Rollins noted, with the company also in the market for quota share coverage “with solid partners that feel like we do about the attritional loss ratio in Florida”.

“There really should be some room to make a profit if you take a proportional share of what we have,” Rollins said.

Patriot Select is the 13th P&C insurer approved by FLOIR to begin writing business in Florida since wide-ranging legislative reforms were passed in 2022 and 2023.

Those reforms were introduced to help combat abusive litigation practices by plaintiffs’ attorneys that had caused claims costs to soar, and made the operating environment for insurers operating in the state challenging.

Among the other 12 carriers to have launched in Florida are Apex Star Reciprocal Exchange and Mangrove Property Insurance Company.

Other new Florida insurers approved since the 2022/2023 reforms are ASI Select Insurance, Trident Reciprocal Exchange, Ovation Home Insurance Exchange, Manatee Insurance Exchange, Condo Owners Reciprocal Exchange, Orange Insurance Exchange, Orion180 Select Insurance Company, Orion180 Insurance Company, Mainsail Insurance Company and Tailrow Insurance Exchange.