➤ Insurtech Slide Insurance Co. was founded in 2021 by Bruce Lucas, founder and former CEO of Heritage Insurance Holdings Inc.

➤ Slide quickly built a portfolio by absorbing an estimated 150,000 policies from the now-defunct St. Johns Insurance Co. Inc. and by purchasing exclusive renewal rights for 91,400 homeowners policies from UPC Insurance.

➤ Lucas said his confidence in the Florida market has been boosted by regulatory reforms recently passed by the state Legislature.

No stranger to the Florida insurance market, Bruce Lucas has taken Slide from a startup to an insurer with a total in-force premium value of $560 million in less than two years. The Tampa-based carrier took in over $400 million in premiums from St. Johns after it went into receivership, while its transaction with UPC represented $272 million in premiums. Lucas cited recent legislative reforms, including the elimination of one-way attorney fees and the ending of assignment of benefits, as a source of confidence for its deal with UPC.

S&P Global Market Intelligence spoke with Lucas about Slide's strategy, the state of the Florida P&C market and how the company is trying to set itself apart from other insurtechs. The following conversation has been edited for length and clarity.

S&P Global Market Intelligence: Is it possible to overstate how important the reforms passed by the legislature were to Slide taking on the UPC policies?

Bruce Lucas: I have been incredibly pessimistic about the legislative reforms to address this crisis over the years. My position steadfastly has been to get rid of one-way attorney fees, shorten the statute of limitations and get rid of assignment of benefits. They did all of those things this year, as well as enacting tort reform and reform of the state's insurer of last resort, Citizens Property Insurance. There is now a one-year statute of limitations on lawsuits and policyholders can only allege bad faith after a trial verdict indicates that an insurer breached its contract. They were 100% ground-changing, earth-shattering reforms. Without them I never would have done the UPC deal.

Given that you have been in this market for only a short time, how would you gauge Slide's overall position?

We are in a completely different financial position from everyone else. We're solvent. We're profitable. We will have $100 million in holding company capital within the next couple of weeks. Nobody else has that flexibility, and we have the largest percentage of our book on the new statute versus any Florida carrier. So we're about a year ahead of the market there. That makes us a far superior underwriting risk for reinsurers.

A number of insurtechs across the country have had profitability issues of late. What do you think sets you apart from those companies?

The problem for a fair number of them is the lack of insurance knowledge at inception. You see companies that are designing technology with no real understanding of how the underlying business truly works. The result is those models expect the insurance part of the equation to conform to whatever they have developed on the technology side. That is not viable. Our focus is creating new technology that enhances the underwriting process. We were able to take the insurance model and make it more efficient and more profitable over time by having a better understanding of risk selection and underwriting. Everything is focused on underwriting technology, not just user experience, which is what other insurtechs had been fixated on.

Is the property insurance market in Florida on the road to recovery?

I am incredibly bullish on the Florida homeowners market going forward. That being said, the truth of the matter is that the legacy Florida homeowners carriers are going to struggle for the next three to five years because they have such a large number of open lawsuits and open claims from prior periods that they have not addressed yet. Those are not going to age well at all. So while I am calling a bottom to the Florida market, I'm not calling a bottom to Florida insolvencies.

You are not "calling a bottom" on insolvencies. Do you see more trouble on the horizon for others in the market?

There is some real systemic risk here. You could see a mass extinction event this year. It's not guaranteed, but it's not impossible. If you look at what a lot of companies have been doing over the last four or five years, they have been cashflow underwriting to stay afloat, so they have to write more and more business today to pay the claims of yesterday. The problem is that as the Florida market has started to aggressively raise rates, it hurts insurers' ability to sell new business compared to Citizens. That business is now going to Citizens on the front end and cashflow underwriting ceases to exist as an effective tool for survival.