TypTap, a five-year old Florida-based author of personal market homeowners and flood insurance, has attracted $100 million in financing from investment firm Centerbridge Partners.
The corporate plans to make use of the cash to expand nationally.
TypTap said it has obtained regulatory approval to do business within the states of Recent Mexico, Utah, Nevada, South Carolina, Mississippi, Indiana, West Virginia, Michigan, Montana and South Dakota. It also has approvals pending in nine other states including Georgia, Massachusetts, Iowa and Illinois.
The corporate said it expects to rent between 50 and 100 people by the top of 2021.
“We’ll immediately begin preparing TypTap for future growth,” Paresh Patel, CEO of HCI and TypTap, said in prepared remarks.
TypTap was launched in 2016 as a Florida private flood insurance provider with backing from HCI Group. By the third quarter of 2020, TypTap reported $15 million in flood insurance premiums in Florida and has been profitable despite multiple hurricanes within the state.
In 2018, TypTap expanded into homeowners insurance in Florida, generating a complete of $15 million in premiums. That number reached $60 million in 2019, and last yr the corporate reported $100 million mark in homeowners premiums.
The corporate uses a web-based platform to quickly quote and bind policies. Algorithms and artificial intelligence drive the platform, which the corporate said helps discover policies that deliver profitable results while mitigating risk.
TypTap’s homeowners offering can be much like what is on the market in Florida, but there can be nuances based on each individual state’s needs and legal requirements, Patel told Insurance Journal in October in discussing plans to expand. The corporate will regularly launch in its chosen states because it receives regulatory approval and appoints agents.
Despite TypTap falling under the insurtech umbrella, Patel said the corporate is “very agent friendly.” Currently, 90% of TypTap’s business comes from agents.
Centerbridge’s investment reflects about 11.75 percent of TypTap, based on post-money valuation for the corporate of about $850 million.
The arrangement gives Centerbridge preferred shares with liquidation, dividend, redemption and other rights, together with a four-year warrant to buy 750,000 HCI common shares at $54.40 per share. In response to TypTap, the popular shares routinely convert to common shares once an initial public offering meeting certain goal posts is accomplished.
Centerbridge also gets to appoint one director to each the HCI and TypTap boards of directors.