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Austin, TX 78734

There are Fruitcakes in the Kitchen Trying to Reason with Hail and Hurricane Season

In a blinding glimpse of the obvious statement, the esteemed CEO of a national InsurTech said, "our biggest issue is hail in Texas". He was explaining the company's 178% Gross Loss Ratio for the 2nd Quarter of 2023, shutting down writing new business, and the company's very big concentration of risks in Texas. It was almost as if it was a surprise that there is bad hail in Texas which oddly was his same excuse in 2022 when the company lost over $200M, and in 2021 when they lost almost $400M.

He followed that, saying "our definition of a place we are comfortable with is one that has significantly reduced volatility subject to weather."

What does this mean for their oversized Texas book of business? I hoped that meant....if the company is going keep writing the cheap home insurance that they advertise, it would be in less severe weather areas.

But NO.....two weeks ago this company made a big announcement about entering the Florida insurance market.

This got me wondering, who gave this fruitcake the keys to the car?

Apparently, that is the same question that many of you are asking about the leaders of several of your previous Go To markets. I know this because I have been talking to a lot of our agents and prospective agents lately. And I am often ask these 2 questions.

Do you write a lot of business in the Dallas Ft Worth area? Answer - No

Do you write a lot of business in and around Harris County? Answer - No

Fortunately, when I'm asked these questions by agents in every other part of the state, the response is the same. It goes something like..."Good! I've seen so many companies get killed in those places, then shut down or raise our rates etc. etc."

We do write a lot of renters business in those areas, but we do not write homeowners, dwellings, mobile homes, or vacant houses in those areas. We don't write in those areas for a very simple reason. Over the long term, it is very hard to charge the premium that we believe that we need to write profitable business in these very hostile weather areas. So, we made the choice many years ago to stay away.

That is one of the big reasons why we haven't had to raise rates in 2 years, have no plans to raise rates now, and our carrier partners are really happy with our results. I don't think that it is a coincidence that Hochheim, Homeowners of America, Hippo, Germania, Kemper, National Summit etc. etc. all have large concentrations of homeowners business in these areas....and are no longer writing new business there....among their other actions.

This was why it was so important for us to partner with a Texas based company and get out of the London Market where they demanded rate increases even where our results were good. The folks at Insurors understand the Texas market very well.

We plan on sticking with our plan and growing and supporting agents in the other parts of the state with all of our products. We must be doing something right as we are seeing more and more agents binding policies with us every week. We love to write older, or smaller homes, in big and small towns, in cities, or rural area. We also write all ages of home, rental dwellings, and mobile homes in both protected and unprotected areas.

So, while our competitors are raising their rates, paying you less, and/or shutting down in all, or parts of the state, we are trying to make it even easier to work with us and save your clients money in these tough times.

If you haven't quoted us in a while, please give us a try. It is quick and easy to quote and bind a policy with us. If you have any questions or need any help, please reach out to us at (512) 494-4164 or through our Contact Page. Thank you for your support!

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