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HCI-owned InsurTech TypTap files for NYSE listing under ticker ‘TYTP’

Tampa Florida Skyline

HCI’s InsurTech subsidiary TypTap Insurance has moved ahead with its plan for a public listing, filing a S-1 with the Securities and Exchange Commission (SEC) on Monday.

The filing provided financial details for investors ahead of the company’s public markets entry.

According to figures disclosed on Monday, the company had $78.8mn of gross premiums earned in 2020, and $119.4mn for the nine months ended 30 September 2021.

The average premium at TypTap was over $2,800 in 2020, and the policyholder retention rate was 87%. The company said its in-force premiums exceeded $100mn at the end of 2020, climbing to $214mn by September 2021.

Monday’s disclosure also showed that TypTap incurred net losses of $12.4mn and $6.9mn in 2020 and 2019, respectively, and a net loss of $14.7mn for the nine months ended 30 September 2021.

TypTap called the $100bn U.S homeowner insurance market a "large market with attractive industry dynamics and a strong growth outlook".

“We believe that it is also a good candidate for technology-driven innovation,” the disclosure stated. “For decades, the insurance industry has underinvested in technology and is thus dependent on inefficient legacy systems.”

The statement went on to say that inefficient systems have led to mispriced risk and high loss ratios, low policyholder satisfaction scores and a frustrating agent experience.

TypTap predates the current InsurTech boom; the business was spun out of a HCI technology initiative called Exzeo, which started in 2012. TypTap began writing business in 2016.

It has been working to expand nationally in the past year, and had been approved in 12 states outside of Florida as of April.

“We chose to develop and test our underwriting technology in Florida, a complex yet attractive homeowners insurance market with a total addressable homeowners insurance market of $11 billion,” Monday’s disclosure stated.

“Since then, we have continued to refine our technology and improve our underwriting platform. After developing a market leading underwriting track record in Florida, we have begun to execute on a national growth strategy and are writing policies in seven states as of October 2021,” the statement continued.

The news of the InsurTech’s entry into public markets was first reported by this publication in August.

The picture for publicly traded InsurTech businesses is mixed. Lemonade was by some measures the best performing IPO of 2020, finishing last year at $113 per share, almost quadruple its $29 per share offering price. Yet, Lemonade’s shares closed at $70.50 per share on Monday, down about 60% from its high in January.

Root, which went public a year ago, was down to $5.08 a share on Monday, 81% below its $27 listing price. Fellow auto InsurTech Metromile trades at $3.16, off by 68.4% from $10 a share where it listed. Similarly, homeowners’ MGA Hippo is down 58%.

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