Porch Group is set to receive commissions and fees for operational and other services provided to PIRE. Credit: MacroEcon/Shutterstock.

Porch Group has concluded the creation of Porch Insurance Reciprocal Exchange (PIRE) and the sale of Homeowners of America Insurance Company (HOA) to PIRE. 

The group secured approval from the Texas Department of Insurance in October 2024 to set up PIRE. 

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Porch sold HOA to PIRE for a price based on HOA’s expected surplus of around $105m as of 31 December 2024.  

However, this amount was reduced by a $49m surplus note from 2023 and $9m in outstanding interest that is expected to be paid in 2025.  

As a result, Porch now holds a total of around $106m in surplus notes. 

PIRE will now take ownership of all insurance policies, premiums, claims, and the assets and liabilities previously held by HOA.  

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Porch Group is set to receive commissions and fees for operational and other services provided to PIRE, which is set to yield more stable and higher-margin financial outcomes for its shareholders. 

It is part of Porch’s strategy to boost profitability and stabilise earnings within its insurance division by reducing direct claims exposure and mitigating weather-related risks. 

This move is a key step in Porch’s ambition to establish a substantial and profitable homeowners insurance enterprise.  

With PIRE operational, Porch is looking to expand its insurance written premiums.  

The expected surplus of $105m was based on the company’s best estimates. 

Porch acquired HOA in 2021 for nearly $100m. 

Porch CEO Matt Ehrlichman said: “We are thrilled to announce the formation of the Porch Insurance Reciprocal Exchange, a transformative step in our journey to redefine the homeowner experience while enhancing profitability for Porch shareholders. This is just the beginning of an exciting new chapter. We look forward to delivering exceptional value to our stakeholders and continuing to innovate in the homeowner’s insurance industry.”