CURE assumes Americas book and secures $200mn XoL cat tower

Cajun Underwriters Reciprocal Exchange (CURE) successfully placed more than $200mn in cat reinsurance limit through its broker Acrisure Re at the recent mid-year renewal, as the start-up assumed a $55mn book of homeowners and dwelling fire business from failed carrier Americas, The Insurer can reveal.


As previously reported, Louisiana-based CURE is a joint venture between SafePoint and ClinchPoint Holdings, with Acrisure Re also understood to be strategically aligned with the start-up.

ClinchPoint Holdings is affiliated with Accident Insurance Company, a New Mexico carrier led by Bill and Bob Arowood, who also run Appalachian Underwriters, the MGA platform recently bought by Acrisure.

Tim Chesson of Appalachian Underwriters is also understood to be involved as part of the attorney-in-fact (AIF) for CURE through ClinchPoint Holdings.

The SafePoint leadership team led by founding CEO Dave Flitman, CFO Steve Hoffman and chief reinsurance officer Glenn Jackson manage the day-to-day entity that is acting as the AIF with ClinchPoint Holdings for CURE.

Homeowners specialist SafePoint has been highly active in assuming policies in Louisiana, which has seen a string of carrier failures as a result of the series of hurricanes that hit in 2020 and then Ida last year.

As previously reported, Ida losses went through the top of reinsurance protections for a number of Louisiana-focused homeowners carriers.

SafePoint earlier this year agreed to assume around 55,000 policies from three companies the Louisiana Department of Insurance had put into receivership: Access Home, State National Fire and Americas Insurance Company.

And the portfolio for Americas – formerly led by Ray Pate – was subsequently transferred from SafePoint to CURE, effective 15 June 2022.

The start-up received its certificate of authority from Louisiana regulators in mid-June and was affirmed by Demotech with an A rating in mid-July, with policyholders’ surplus of $15mn.

The policies assumed are thought to represent around $55mn in premium, a total that is expected to rise based on the rate increases being put through on the book of business in Louisiana.

The newly launched reciprocal exchange will begin renewing assumed policies effective 1 October 2022.

The Americas portfolio is understood to represent around $6.6bn in total insured values.

With the North Atlantic hurricane season entering its most historically active phase, CURE is not currently writing new business, although sources suggested the start-up could look at opportunities to do take-outs from Louisiana Citizens later this year or in 2023 and continues to look at opportunistic book roles in this dislocated marketplace.

The state-backed residual insurer has dramatically increased in size as it has assumed policies shed in Louisiana by the private market. The backstop market of last resort is reportedly tripling in size due to the various failures of companies and MGUs supporting the Louisiana marketplace.

The emergence of CURE is the latest example of new reciprocal exchanges entering the market, especially for cat-exposed coastal business.

As previously reported, Tower Hill launched its own reciprocal exchange last year with backing from Gallatin Point Capital along with Bermudians Vantage and RenaissanceRe. The vehicle has since assumed an estimated $600mn book of Florida homeowners business from other Tower Hill entities.

Coastal MGA SageSure also launched SureChoice Underwriters Reciprocal Exchange last year, while high net worth specialist PURE added another of the vehicles this year in the form of Pure Specialty Exchange.

In 2020 coastal MGA Orchid partnered with Homesite to launch Trusted Resource Underwriters Exchange in Florida, while insurtechs Kin and Branch have both used the structure to provide access to their own paper.

Reciprocal exchanges are policyholder-owned and managed by a so-called AIF for a fee. Sponsors typically provide start-up surplus which is then built up over time by policy premiums.

The Insurer comment

The emergence of CURE and its appetite to assume the Americas book is the latest example of innovative approaches to bring new structures and capital into markets where there is plentiful opportunity to assume business from retrenching traditional carriers.

The reciprocal exchange model has been growing in popularity in recent years and as a policyholder-owned structure may be seen to have some advantages by providing alignment of interest between insured and insurer in a Southeast coastal market where that relationship has been heavily strained.

The joint venture provides SafePoint with access to additional capital and paper to take advantage of growth opportunities, while the strategic alignment with Acrisure Re provides extra incentive for the broker to be laser focused as it navigates challenging reinsurance market conditions to secure the best capacity for the vehicle.

In a segment where the trend has been for insurance capital to retrench, those that can find the right entry point, structure and access to capital in a hardening homeowners market could reap the benefits.