Tech-savvy TypTap achieved the milestone after just three years in business.
TypTap, a subsidiary of Tampa-based HCI Group (NYSE: HCI) that specializes in flood insurance, has achieved its goal of $50 million in premiums.
It’s an impressive surge for the tech-driven company, with a data-centric business model — made possible by HCI’s software subsidiary, Exzeo USA Inc. — that provides flood insurance quotes in as little as two minutes.
As of August, TypTap had $32 million in premiums on the books. In an interview with the Business Observer earlier this year, TypTap CEO Paresh Patel, who founded the company in 2016, predicted that number would rise to $100 million in 2020.
“Gross written premiums at TypTap have grown more than fourfold since the third quarter of 2018,” Patel states in a press release. “This rapid growth is organic and, most important, profitable. We’re not sacrificing margins for the sake of growth.”
TypTap, headquartered in Ocala, offers flood insurance in Florida, South Carolina, New Jersey, Pennsylvania, Maryland, Texas and California. Patel says the company has never raised its rates nor has it filed for a rate increase in any of the states where it does business.
“The reason we got into this is because we have a technology edge over of everybody else,” Patel tells Coffee Talk. “Our underlying technology lets you figure out if risk is adequately priced. If you get it right, why would you need to change the price?”
TypTap’s flood-focused business model proved so effective that it allowed the company to penetrate the market for homeowners insurance, as well. Today, the firm’s portfolio of premiums is 71% homeowners/29% flood.
“With flood, we ask only two questions and give you a quote,” Patel says. “The regular homeowners policy is a little more complicated. We asked you, like, five questions and give you a quote. We’ve worked very hard to make it simple.”