Stephen Weinstein, a Harvard-trained lawyer, has spent more than two decades with Renaissance Re as chief legal officer and executive vice president. He is now turning that experience to Mangrove Property Insurance, a startup insurer based in Florida.
The Demotech financial rating firm last week granted Mangrove a financial stability rating of “A Exceptional.” Florida regulators granted the insurer a certificate of authority, and approved a major takeout offer for Citizens Property Insurance Corp. policies.
Insurance Journal recently spoke with Weinstein about the plans for Mangrove to become what he calls “a big player” in the Florida property insurance market. Here are some highlights:
IJ: Can you say what brought Mangrove about, and why now?
Weinstein: I’ve personally been in and around the Florida market since shortly after Hurricane Andrew. In my opinion, Florida is simultaneously the most challenging and the most exciting market in the world for insurance. We’ve had the opportunity in my past to help oversee and launch some of the companies that were most successful, and to see what are some of the things that are going well and what can we do better.
Florida has had two challenges: The internal challenge of managing hurricane risk on a peninsula at sea level. Florida’s other long-term challenge has been a legal and insurance loss structure that has permitted an unusual amount of abuses and expensive practices.
What has given me the conviction to risk a substantial amount of my own capital, my time and my brand, is the market opportunity that the culmination of smart, effective legislative and regulatory reforms have done to stabilize the market, making it possible to bring a new balance sheet, and a world-class team to Florida.
Without the reforms, despite the attractions of Florida, the time would not be right. Taken together with where the market sits, the continuing growth of Florida’s economy, and these reforms, the time is right now for a new entry like Mangrove.
At least 10 new insurance companies have entered the Florida market in the last two years. Is that too much of a good thing?
No, the market will be made more healthy by new entrants that bring an underwriting culture, giving consumers and agents a choice. Florida grows rapidly with new homeowners and construction every day. Mangrove will be a significant market share participant in the space but there’s room for a large number of competitors and we think that’s healthy for the market, for agents and homeowners.
Mangrove appears to be one of the few new carriers not affiliated with an existing insurance company. A number of those new insurers are reciprocal exchanges. But Mangrove will not be a reciprocal, right?
No. Some smart people, out of respect, have launched their managing reciprocals but we’ve chosen a path and a structure where we feel very comfortable. It’s important for Mangrove that we want to be aligned with our capital providers, our reinsurers, who are in many respects the most important capital providers for Florida insurance companies. Everything at Mangrove is under one roof. We want to be good stewards of our carrier and we are very comfortable with our structure, which we’ve helped manage and run for 30 years. Everything has its pros and cons but the one we’ve chosen has a long history in Florida, and one with which we are very comfortable.
You’ll have a managing general agency?
Our Florida’s homeowners model, which is really a unique model for HO, is the right way to manage peak risk. Our structure includes our carrier, our MGA, and other affiliates which support the management, all under one roof. It is really important to me that the agency operations are run very effectively and we partner with independent agents and third-party claims professionals and oversee them well. Also, we have to be stewards of the carrier and overseers of the policyholder promises we make. Those are under one roof with a holding company with our sister affiliates.
In recent years, with the legal costs and heavy loss adjustment expenses in Florida, there have been several innovations from some carriers, including arbitration of claims disputes and roof-age endorsements. Will Mangrove have roof-age or other types of endorsements?
We’re going to provide robust coverage exclusively in the admitted market. We want to lean into solutions. Policyholders will be able to find out shortly about our voluntary channel policy options by contacting us through their agents.
Can you say where Mangrove’s capital is coming from?
We’re very comfortable with our capital base, which we raised at a private offering. We got the capital we need to execute this plan and that is aligned with my vision of trying to set a new standard of protection in Florida.
I do come from a reinsurance background. We are reaching out now to our global partners in the reinsurance and risk-transfer space to structure a portfolio protection that will be second to none. It is dependent on sharing risk globally and being a great option for global reinsurers so that the portfolio is efficient, well structured, and liquid when it pays out. That’s one of the ways Mangrove will differentiate itself.
Will Mangrove offer condominium insurance in what has become a tough market in Florida?
We have an HO-6 license and will be in that market as well. We’ll try to not bite off more than we can chew but we also want to grow. Our goal is to be a big player in Florida, a permanent franchise. If we tackle the main needs, we’ll add on to our capabilities over time.
Some Florida insurers have focused on different segments of the market, including high-end properties.
Good question. Our focus is not there. There are plenty of companies in the high-end market. I think there’s the reality of the market that Citizens was designed to serve. The mid-market is where there’s the most need for our capacity and solutions.
Do you have a target for the number of policies in force by the end of this year?
I would say we are honored to be given the order from OIR to assume up to 81,000 policies from Citizens. So that’s a comfortable number. That can grow. We are more focused on quality underwriting rather than policy count. If it’s lower, we won’t alter our underwriting standards. We may consider raising more capital to meet a bigger opportunity.
Citizens and other carriers in Florida have been criticized for not paying enough claims – criticized unfairly, many in the industry have said. Is there a secret sauce to explaining that situation to potential policyholders?
The Mangrove ethos is to pay claims quickly. Also, it will be our goal to carefully review claims that may have issues and may not be valid claims. When you pay claims that are not valid, you’re robbing Peter to pay Paul. If you look back, I think the market can be proud of its track record, as a generalization. There’s always an outlier. But the challenge was dealing with the litigation and fraud crisis. Only 7 cents on the claim actually got to the policyholder. Public adjusters and trial lawyers took 73% of dollars. The industry struggled with a table that was set askew. That was balanced with the legislative reforms.
On takeouts from Citizens: The OIR numbers show that only about 10% of all takeout offers were accepted in 2024. If that ratio holds true going forward, that would leave you with maybe 8,000 policies accepted.
We’ve seen acceptance numbers into the high 60s percentage for some companies. It’s a function also of companies doing takeout bidding on the same properties. Every takeout cycle is different. Our goal is to only provide policies in the 20% band (with offered premiums within 20% of Citizens’ price). There will be no theatrical gestures from Mangrove.
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