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Tampa startup Slide buys 91,400 homeowners policies from UPC Insurance

Slide will take on $272 million in annual premiums from St. Petersburg’s United Insurance Holdings Corp.
 
Homes in the Palmetto Palms Mobile Home Park in Fort Myers showed significant damage sustained during Hurricane Ian on Sep 29.
Homes in the Palmetto Palms Mobile Home Park in Fort Myers showed significant damage sustained during Hurricane Ian on Sep 29. [ DOUGLAS R. CLIFFORD | Times ]
Published Feb. 1, 2023|Updated Feb. 2, 2023

A fast-rising Tampa insurance technology startup has acquired more than 91,400 Florida homeowners insurance policies from St. Petersburg’s UPC Insurance, which decided last summer to withdraw from the Florida marketplace.

Slide, founded in 2021 by a former executive of Tampa’s Heritage Insurance, will take on what amounts to $272 million in annual premiums, bringing the value of all its premiums to $560 million.

UPC, which is owned by United Insurance Holdings Corp., said it would be canceling 72,000 homeowners policies on Wednesday, with Slide immediately issuing replacement policies with limited changes. Slide CEO and co-founder Bruce Lucas said the remaining policies are due to end in March and April, and would be up for renewal then.

“It’s essentially an identical policy, is the way we’ve structured this,” Lucas said. “It’s the same premium, it’s the same coverages, it’s the same deductibles. We are using the approved UPC forms until your natural renewal date. And then at renewal, you’ll be getting a renewal offer from Slide using our forms and our rates. For the time being, for the ones we’re taking over today, there’s effectively no change.”

Terms of the deal were not immediately disclosed.

The acquisition is similar to one last year, when Slide acquired $400 million in premiums covering between 120,000 and 150,000 policyholders from Orlando’s St. Johns Insurance Co.

Lucas said changes to the state’s insurance laws, passed by the legislature in December, made company leaders confident it was a safe time to expand their presence in Florida. The changes include a $1 billion fund to assist struggling insurers, and restrictions on policyholders’ ability to sue them.

The UPC deal includes the company’s intellectual property, including risk and underwriting data on more than $1 trillion in insured value and years of claims information. The data is key to Slide’s business model, which uses it to build custom policies.

“It helps us to understand the portfolio on a more granular and accurate level, which helps us to better underwrite the policies and pick policies that are going to have an acceptable profit margin,” Lucas said. “We’ve already incorporated that data, and we’re already using it.”

United has said it plans to withdraw homeowners policies in Florida, Louisiana, Texas and New York after its rating was downgraded from an “A” by financial analysis firm Demotech. Slide’s Demotech rating is currently an “A.” The company attributed some $36.5 million in losses to tropical storms, including Hurricane Ian, during the quarter ending in September, according to U.S. Securities and Exchange Commission filings.

Lucas said Slide “probably posted a break-even, or a small loss, or a small gain,” during the quarter in which Ian hit, given its smaller policy load. And it’s still flush with cash. In late 2021, the company closed a Series A funding round of $105 million, followed by an oversubscribed follow-on round of $30 million.

“We don’t really need to raise any money, not even to support this transaction,” he said. “We are in discussions with several private equity firms about a much larger transaction and partnership. But until something is done, that’s talk.”

Slide now has more than 100 employees, and Lucas said the company may add another 50 or so after this deal, potentially including some from United who may find themselves out of work.

“We are working with UPC to identify dislocated employees so that we can give them a new home at Slide,” he said. “So it’s good for our local economy, for sure.”