John Martin

Saint Petersburg, FL (USA)
Role(s):
Founder/Owner/Principal

People Choice Insurance

Find More Startups Startup
Location: Saint Petersburg
Industry: Insurance
Year Founded: 2005
Number Employees: 10-50 people
Description: Choice Financial Holdings Corporation Citizens Choice Insurance Company Executive Summary John F. Martin CEO/ President 6534 Central Avenue St. Petersburg, FL 33707 [<a href="(URL removed)">send me a message</a>] Fax [<a href="(URL removed)">send me a message</a>] (URL removed) Company Citizens Choice (proposed) is a newly formed property insurer concentrated to property and liability risk mitigation in the state of Florida. The decision to form the company, and its parent holding company, for the purposes of offering property owners in the state of Florida an alternate choice to the state operated agency Citizens Property Insurance Corporation. The state agency is currently an “over populated insurer” that has developed a program to reduce its risk through a depopulation program know as “take-outs”. As many of you know, there has been an insurance crisis in the state of Florida since Hurricane Andrew made landfall in Homestead, Florida during the 1992 hurricane season. Since then, many of the major national in-state insurers have retreated from offering standard risk and left the public with one major choice for property insurance, Citizens Property Insurance Company. Due to the demise of most of the state insurers, State Farm, Allstate, Nationwide, Met Life P&C, the state has created on incentive to newly formed insurance companies to participate and share in the business and risk. Our mission at Citizens Choice is to participate in the state programs to provide competitively priced homeowners, condominium, renters, and commercial property insurance in years 1-3 capturing 120,000 premium paying clients. In future years the company intends on extending ancillary financial products, auto insurance, and life products to the captive client audience. Capitalization Florida State has reduced capital requirements for new insurers to only Ten Million Dollars on the day of approval by the Office of Insurance Regulation (OIR). Once approval is granted by the OIR and other qualifying agencies within the state, the company is able to participate in the Citizens Property depopulation program. Marketing The depopulation program provides for an immediate client base of up to 40,000.00 policy owners that have been underwritten and currently paying premiums. Following the establishment and approval for the company participation in the scheduled take-out dates, the depopulation program will provide an immediate cash flow anticipated to range from $1100.00 to $3500.00 per assumed or transferred policy. An average premium of $1700.00 per policy, premium revenues will range upwards of $68,000,000.00 during the first twelve months of operation. In addition, the company will have direct association with over 1,000 agents in the state to offer and underwrite new policies based on the internal rates and underwriting guidelines of the company. An immediate distribution channel that currently has limited choices of programs to offer current and future clients. All agencies are awaiting additional insurers to offer to their clients at competitive pricing. Competition Currently there are approximately nine insurers in the state participating in the Citizens take-out program. There are approximately 1.3 million insured’s in the take-out pool to tag for immediate transfer to the company. The limitations of 40,000 policies per company should take several years to reduce the take-out pool. All take out insurers operate on a “virtual” basis. Virtual operations are set up for the company to include web-based management, customer service, policy issuance, policy maintenance, and claims. Business Operations The company anticipates an official launch date of March 31, 2009 in order to participate in the April, 2009 take-out. Offices will be located in St. Petersburg / Tampa with future expansion into the Boca Raton area in 2010. Initially, there will be a minimum staff to include 4 regional marketing/sales managers, one compliance manager (a former OIR filing manager), the executive staff, and a minimum of 7 Directors that will include John F. Martin, Joseph J. Martin, CLU, Patrick K. Ambrose, CPA, Anthony Spadorcia, An Attorney (TBD), and upon approval by the current board, the addition of the majority shareholders. Quoting and policy management will be handled by Tiva-systems, an industry leader in providing back-bone rating, quoting, binding, and policy issuance services. Customer Services will be handled by CCS systems, and Claims by Katmandu Adjusters. Once application is made to the state, these systems and vendors will be set up on a concurrent basis to assure full operations by the launch date. It is anticipated that the start-up cost will bear an approximate $650,000 securing all contracts and that the immediate cash flow from the take-out program will lighten the initial burden on investors. Product development division will be initiated by year end 2009 to include liability programs and auto insurance. Appendix “A” is a first year scenario of anticipated expenses, start up cost, and anticipated profitability. Keep in mind, Ninety Percent (90%) of all claims are reinsured by the state catastrophic funds and an additional Ten Percent (10%) reinsurance program will be in place by mid-year or earlier to secure the storm season. It is truly an exciting time to be in the Financial Services and Insurance Industry with all the challenges we face with the economy, banking, finance, and possible recession. The insurance industry is a proven industry that has survived, with profit, through all economic downturns and certainly accelerated in profits and growth in all spikes in the economy. This is a rare opportunity. It’s a recognized opportunity that only those that are acutely aware, by being privy to the information, would recognize. It is anticipated that all initial investors will have a return of investment principal and a yield of 8.75 - 9.55%, a secured interest in the company through the expression of warrants and options. Thank you for your consideration of participating in our venture together and we look forward to meeting with you in the very near future. We have attached a letter of commitment for your review and submission, the deadline in January 31, 2009. Respectfully, John F. Martin, Founder President / CEO 6534 Central Avenue St. Petersburg, Florida 33707 Highlights ? Minimum investment $250,000 ? Yield 8.75 – 9.55 % (Senior Convertible Debenture Notes) ? Immediate Client Base (up to 40,000 clients per year) ? Immediate cash flow ? Virtual Operations ? Immediate Distribution Channels (over 1,000) ? Risk Re-insured by the State up to 90% ? Unlimited Growth Potential ? Ancillary Product Growth (Financial Services) ? Principal Investments 2 – 5years ? Minimum Risk ? Warrants and Stock Options ? Recession Proof Industry APPENDIX “A” Revenues Policies Avg Premium TOTAL REV./SEC Citizens Takeout 40000 1700 $ 68,000,000.00 Investment Income 5% Monthly Rate 0.004166667 Average Mo/Premium $ 5,666,666.67 Average Mo/Int. Inc $ 23,611.11 Annual Average Int Inc $ 283,333.33 Newly Issued Policies 1,000.00 1200 1,200,000.00 Anticipated 1st year Revenues $ 69,483,333.33 EXPENSES Agent Commissions Service Agreements (CIT T/O) 9.00% $ 6,120,000.00 New Issues 10% 1700000 $ 170,000.00 TIVA SYSTEM $ 300,000.00 LEGAL EXPENSE $ 500,000.00 Auto Travel Exp Allowance 6500 $ 78,000.00 Florida UCT 0.025 $ 8,437.50 Workmans Comp 0.0025 $ 5,625.00 WAGES 45 50000 $ 2,250,000.00 REINSURANCE EXP $ 200,000,000.00 50,000 $ 8,685,416.67 PAYROLL TAXES $ 360,000.00 INTEREST EXPENSE $ 15,000,000.00 9.25% $ 1,387,500.00 LOSS RESERVES % PREM 35% $ 23,800,000.00 BENEFITS 1125 P/EMP /MO45 $ 607,500.00 PROFIT SHARING 4% MATCH 401K $ 90,000.00 CUSTOMER SERVICE O/S 100/PER CLIENT/YR $ 4,000,000.00 POSTAGE/DELIVERY 41000 / 5.00 $ 205,000.00 ADVERTISING 15% $ 10,422,500.00 COMMUNICATIONS 6000/MO $ 72,000.00 ACCOUTING / AUDITS 3% $ 2,040,000.00 UTILITIES 1200/MO $ 14,400.00 OFFICE SPACE 4500/MO $ 54,000.00 TOTAL EXPENSES $ 61,170,379.17 ANTICIPATED EARNINGS $ 8,312,954.17