Under the terms of the agreement, Aon and Aon Re will extend various services to Porch Group entities, resulting in an upfront payment of approximately $25 million to Porch, with an additional estimated $5 million anticipated over the subsequent four years.
Aon and Porch Group will collaborate closely to secure reinsurance coverage for 2024 during the impending renewal cycle set for April 1, 2024. As part of this partnership, both parties have mutually agreed to a release of claims stemming from the Vesttoo fraud. Notably, Porch has asserted its intention to vigorously pursue recovery while refraining from releasing any claims against non-Aon entities involved in the matter.
Porch Group disclosed in its second-quarter 2023 earnings report that Homeowners of America (HOA) had a reinsurance agreement with White Rock Insurance, an Aon subsidiary facilitated by Vesttoo’s capital arrangement. Consequently, the company recorded a charge of $48.2 million in provision for doubtful accounts to mitigate the net recorded balance receivable from the associated reinsurance contract. HOA remains committed to seeking recovery for all incurred losses and damages.
Matt Ehrlichman, CEO, Porch Group, said: “We think Aon is the right partner for us. They are a well-known name in the insurance industry who can provide a variety of important services to help across our business. Porch and our insurance carrier have worked with Aon for many years and we are excited to expand this relationship with Aon as our sole partner for certain services through 2028.”
