Flood insurer Wright Flood, a subsidiary of Brown & Brown, said it will acquire the assets of Poulton Associates, one of the largest national catastrophe managing general agents. Closing is scheduled for November.
The acquiring entity is Wright National Flood Insurance Services, an affiliate of Wright National Flood Insurance Co. and part of Arrowhead Programs.
Poulton runs CATcoverage.com, an online marketplace offering catastrophe coverage including the National Flood Insurance Program. It claims to operate the largest private flood insurance facility in the U.S.
The company has positioned its National Catastrophe Insurance Program as a cheaper, broader alternative to NFIP – about 20% less expensive three-quarters of the time, with limits that can stretch to $5 mn for buildings and $500,000 for contents.
The timing of this deal matters. The federal government shutdown, the second-longest in U.S. history, froze NFIP renewals and new policies for nearly a month.
That freeze choked real estate transactions dependent on flood policies required by mortgage lenders.
According to the National Association of Realtors, delayed closings and canceled contracts have piled up. “These setbacks are destabilizing the market,” the trade group said.
Private carriers jumped in. According to AM Best senior analyst Christopher Graham, some homeowners who switched during the shutdown may stick around, either because the coverage feels easier or simply because they won’t bother changing back.
Neptune Insurance Holdings, another flood-focused MGA, saw its shares trade at $20 on Oct. 1, the first day of the shutdown.
Wright Flood has built its business on one product – flood. CEO and Chief Program Advocate Patty Templeton-Jones said joining forces with Poulton would “deliver greater value to our customers” while lifting the overall number of insured properties. Brown & Brown originally bought Wright Insurance Group back in 2014.
The combination of our teams will enable us to deliver greater value to our customers, while also increasing the number of properties covered by flood insurance
Patty Templeton-Jones, Wright Flood CEO
The broader flood market remains messy. Supply gaps, regulatory hiccups, and pricing uncertainty collide with growing demand in flood-prone zones.
This acquisition looks like a straight bet on customers wanting choice beyond NFIP, and maybe, a reminder that the market doesn’t wait for Washington to untangle itself.
