By David Bull

July 2 - (The Insurer) - The Homeowners Reciprocal Exchange (Thore) has received its certificate of authority from the Texas Department of Insurance after successfully placing its reinsurance program through broker Acrisure Re and is now preparing to underwrite its first policies in the state.

The new carrier’s attorney-in-fact Thore Underwriters is led by former American Risk Insurance Company $(ARI)$ executive vice president Johnathan Yazdani.

The reciprocal exchange is expected to secure a Demotech A rating and will look to grow organically by initially offering a standard homeowners product, before diversifying into ancillary areas including renters insurance and high-value homeowners.

According to the startup’s website, it aims to provide a “new approach” to the Texas homeowners market, with “stable, consistent capacity” and a “tech-enabled underwriting, claims and customer experience”.

Speaking to The Insurer ahead of the launch, Yazdani noted that reciprocal exchanges have become a preferred vehicle for startups raising capital in the homeowners insurance space, especially in Florida, where several have targeted takeout opportunities from Citizens.

But he said that Thore’s focus on the Texas homeowners market and its emphasis on delivering a technology-enabled platform to drive its "customer experience", underwriting and distribution is a differentiator.

“It’s a unique opportunity in the market because we’re right now at this intersection of these reciprocal exchanges becoming popular vehicles, but also technology helping that customer experience.

“We’re trying not to be an exchange that’s really just a carrier by another name or another capital raising vehicle,” Yazdani said.

INSTITUTIONAL INSURANCE AND TECH KNOWLEDGE

As well as Yazdani’s decade at Texas homeowners insurer ARI, Thore co-founder Celestine Vettical brings entrepreneurship and enterprise software experience from previous successful startups and corporate roles at Microsoft and SAP.

“So we have insurance institutional knowledge, and we have tech institutional knowledge. I think it’s really important to have both of those.

“Because we’ve had that experience of doing things in an analog fashion, we have the incredible opportunity where we think technology can plug in and make the product better, the underwriting better, the claims management better, the claims experience better, the customer interaction better,” he continued.

Vettical added: “At Thore, we're harnessing AI not just to automate support tasks, but to intelligently streamlin(e) underwriting, accelerate claims workflows and elevate the digital experience for both customers and agents.

“And our deep expertise in edge computing is well-positioning us to leverage emerging smart home technologies to proactively manage risks. This positions us to capture growing market demand for intelligent risk mitigation, creating differentiated value for all stakeholders.”

Yazdani said Thore will take a “very conservative” approach during its first year of operation but is built for scale and will be able to “really impact the Texas market positively”.

He added that the startup has had an “incredible receptive” response from distribution partners and has close to 1,000 agents on board.

The startup is self-funded but is expected to look for external funding with a capital raise at the end of the year ahead of bringing more meaningful capacity to the Texas homeowners market next year.

It worked with broker Acrisure Re to place its reinsurance program to support the launch, with a broad panel of traditional reinsurers across the domestic, Bermuda and London markets.

Yazdani said Thore’s focus is on building long-term trading relationships with its reinsurers.

Reciprocal exchanges are owned by policyholders – or members – with premiums contributing to build up surplus in the vehicle. This can lead to better pricing for those members.