Orchid and Homesite Partnered to Launch TRUE Reciprocal

Orchid Underwriters (“Orchid”) & Homesite Insurance (“Homesite”) launched TRUE property insurance

• TRUE is a reciprocal exchange catering to unmet market needs for coastal property owners and agents
• TRUE underwrites admitted personal and small commercial P&C insurance products
• At the time of the transaction, TRUE planned to initially be focused on Florida with plans to diversify

TRUE was initially capitalized with surplus note commitments from the two sponsors

• Proceeds were used to capitalize TRUE’s balance sheet and support TRUE’s growth prospects
• TRUE obtained a financial strength rating of “A-” (Excellent) from A.M. Best

TRUE entered into an attorney-in-fact agreement with Trusted Resource Underwriters, LLC (“TRU”)

• TRU will provide all operational functions including pricing, U/W, claims, distribution and marketing

TRU’s management team has a proven track record of building and operating insurance companies

• Led by CEO Michael Lorion who was most recently CFO and SVP of Homesite Insurance

Orchid is a leading specialty residential and commercial property MGU founded in 1998

• Orchid manages over $300mm of premium and $60bn in capacity with over 31 carrier partners(a)

Homesite is a subsidiary of American Family Insurance and the 12th largest U.S. homeowners insurer(a)

• Homesite writes over $2bn of annual premium including HO, condo, renters, flood and small commercial

TCMA acted as exclusive Transaction Advisor and Placement Agent for Orchid

• TCMA introduced the reciprocal concept to Orchid
• Provided objective advice and acted as a confidant to Orchid and TRUE throughout the process
• Placement Agent in connection with TRUE surplus note security issuance
• Key roles and responsibilities included:
  • Assistance in preparing TRUE business plan and financial projections
  • Assistance in preparing A.M. Best materials to achieve desired “A-” (Excellent) financial strength rating
  • Assistance in CAT modeling and designing reinsurance program for TRUE

This transaction further solidifies TCMA as the market leader in reciprocal exchange formations

• Including the formation of the Vault Exchange in 2017, and the Noblr and Kin Exchanges in 2019

(a) As of the time of the transaction.