New risks test startups that bet big on Florida’s insurance market (Courtesy of the Jacksonville Business Journal) — The era of easy growth is over for property insurance startups that made a big splash in Florida over the last two years.
Dozens of newcomers rapidly scaled their business by taking large batches of policies from Florida’s state-backed insurer as the market has recovered from a historic crisis. Citizens Insurance, the state’s “insurer of last resort,” has 336,000 policies in force after ballooning to more than 1.4 million at the height of the crisis.
Startups, as well as legacy carriers, jumped at the opportunity to gobble up hundreds of thousands of policies as regulators pushed an aggressive depopulation campaign to shift risk back to the private market. Approximately 545,000 policies were transferred last year alone, leaving Citizens with the smallest number of policies in more than five years.
The opportunity to take policies from Citizens will continue to dry up this year, said Bruce Lucas, the CEO of Slide Insurance, the fastest-growing of new carriers to launch in Florida over the last handful of years. The shifting market will test the longevity of smaller, less-capitalized carriers in Florida, he said.
The deluge of new players in the market is driving down rates for consumers while raising the costs of what it takes to add new policies and still turn a profit. Smaller startups are limited in how much they can cut rates to gain a competitive advantage with customers, and they can no longer rely on Citizens’ policy transfers as a source of low-cost growth.
“They came in thinking they’d get this great opportunity from Citizens that isn’t there anymore for them in the scale that they were planning,” Lucas said during an earnings call last month. “They could always reduce rates a little bit to try to get an underwriting advantage; that would be extremely detrimental to their bottom-line results and balance sheet.”
Slide launched in 2022 but has quickly become a market giant. Last year, the company expanded its policies in force across multiple states by 44% to more than 493,500, including around 152,000 policies taken from Citizens.
Lucas, who said Slide’s earnings and balance sheet growth have substantially outpaced prior estimates, has forecasted gross written premiums to reach as high as $1.95 billion and net income of between $455 million and $470 million this year.
Startups also thrived last year as profits surged industrywide. Patriot Select Property and Casualty Insurance Co., a carrier that launched in St. Petersburg last June, reported a $2 million profit for its first six months in business. Patriot assumed around 26,000 Citizens policies to launch in Florida and added an additional 1,600 policies organically through the early part of this year.
While profits surged in 2025, HCI Group CEO Paresh Patel warned that last year could be the peak.
“Everybody had a very good 2025. … The question is: Is 2025 repeatable for the next five years, or is it a peak earnings year?” Patel said.