Recent news of insurance companies announcing they will no longer write new homeowners policies in the Florida market has reverberated across the industry. The dominant narrative suggests a worrying trend for Florida’s top insurance agents. However, not all carriers should be bundled into the conversation. For TypTap, the decision to pause new Homeowners (HO-3) business in Florida was a strategic move we have applied since 2018 to sustain our capital efficiency at the benefit of existing policyholders and allows us to be a stable market in the future. In fact, we proactively announced it to our agents as a commitment to quality service and transparent communication.
Insurance remains a capital-intensive industry, requiring significant reinsurance for carriers to protect the balance sheet and reduce earnings volatility. While reinsurance allows carriers to grow their operations, inflation and uncertainty of market conditions can drive policyholders to feel insecure. For TypTap, the decision to pause new Homeowners (HO-3) business in Florida was made as a strategic decision to maintain capital efficiency to benefit existing policyholders.
Those key principles, along with unprecedented growth in 2021, brought us to the decision to pause new business in Florida to maintain adequate rates, coverage levels, and long-term sustainability. Agents were provided 28-day notice to ensure all impacted had adequate time to secure coverage for their clients if needed. TypTap held more than $90 million in surplus as we prepared to pause.
That steady, conservative approach allows us to realize our objective of leveraging technological innovation to drive quality coverage and agent satisfaction with our long-term goal of profitable nationwide expansion. We have yielded strong growth patterns in only a few short years with a national expansion and a loss ratio track record of more than 25 percentage points better than the industry average of 75 percent from 2018-to 2020. Today, we operate across 12 states with security, stability, and a readiness to effectively restore order for the policyholder in the event of a claim. As we progress through 2022, we’re on pace to reach our stated objectives.
Evaluation, adjustment, and reconfiguration is the TypTap way. We will resume writing policies in Florida upon establishing reinsurance prices and a clearer understanding of the upcoming hurricane season, keeping our commitment to provide quality service and simplified insurance.