Property insurance capacity in the US appears to be on the rise in several regions, presenting growth possibilities for The Woodlands Financial Group (TWFG), according to Chairman and CEO Gordy Bunch. However, challenges persist in California, Bunch stated during the company’s earnings call.
Bunch noted that California’s property market remains unstable, highlighting the California FAIR Plan as a significant factor contributing to the problem. He compared the state’s residual market to those in Florida and Louisiana during times of extreme stress, arguing that it now shoulders a disproportionate share of risk. Bunch indicated that a rate increase might help stabilize the market.
Developments in California’s property insurance sector are linked to wildfire exposure, the reliability level of new catastrophe models, and ongoing reinsurance support, according to Bunch. He added that the process of filing new programs in the state remains difficult, especially when competing with a state-run plan. Given the market conditions, TWFG may explore a wrap-around product for the FAIR Plan.
To address capacity issues, TWFG has secured access to additional secondary and tertiary property markets, offering its agents more options. In Florida, the company is pursuing expansion after maintaining a limited presence in what Bunch described as a previously volatile market. Following recent legislative reforms, TWFG is now partnering with reciprocal and stock insurers to support take-outs from Citizens Property Insurance Corp. Bunch expressed that TWFG’s participation in the Florida market is more active now than in the past.
TWFG 2024 Results
TWFG, licensed in all 50 states, operates through 520 retail locations and 14 corporate offices nationwide. In 2024, the company saw strong financial performance. Total revenues for the fourth quarter increased by 30.8% to $51.7 million, up from $39.6 million in the same period the previous year. Net income for the quarter rose to $8.2 million, compared to $5.2 million a year earlier. Commission income grew by 20.7%, reaching $43.7 million, while contingent income surged by 371.4% to $5.0 million. Total written premium for the quarter grew by 20.0%, amounting to $361.4 million. The organic revenue growth rate for the quarter was 20.5%, and adjusted EBITDA increased by 91.7% to $13.8 million.
