Navigating Challenges in the Home Insurance Market: Insights from Matic’s CEO, Ben Madick
Reading time • 5 mins
By Matic
Navigating the home insurance market can be challenging, especially in states like California where regulations and severe weather add extra complications. Ben Madick, CEO of Matic, knows this firsthand, having dealt with multiple non-renewals and significant premium increases.
With a strong background in the mortgage industry, Ben founded Matic to streamline the insurance process and reduce stress for homeowners. In a recent interview, he shared his insights on the current market, the issues he aims to address, and why mortgage entities should care about insurance. See what he had to say in the Q&A below.
It seems like California is one of the hardest-hit states when it comes to insurance. What insurance problems have you dealt with personally as a California resident?
A: I bought my house in 2019 and initially secured an insurance policy through Matic. Since then, I’ve experienced a rollercoaster with my policy. In the last four years, I’ve been non-renewed three times by carriers. Interestingly, two of those carriers are also investors in Matic. The issue isn’t with me or my house, but rather with the carriers’ participation in the state and regulatory struggles. My original policy cost $1,100, but now, due to non-renewals, I had to go into the excess and surplus market with a product that offers less coverage and costs me $8,000.
What led you to create Matic?
A: Matic was actually founded several years before I faced these personal challenges. The motivation came from my background in the mortgage industry. Prior to Matic, I co-founded MQMR, which provides compliance, risk management, and audit services for lenders and banks. I saw firsthand how insurance issues caused loan closing delays, pipeline losses, and poor customer experiences. Customers often struggled to get insurance in place at the time of closing, which was a significant pain point for lenders.
What issues did you aim to solve when you founded Matic?
A: The primary issues were ensuring customers had the right insurance policy at closing and helping lenders avoid delays caused by insurance procurement. Additionally, some customers couldn’t qualify for loans because their loan-to-value (LTV) ratios were too high due to insurance costs. We wanted to give customers better options, help them save money, and make the insurance buying process simpler. The goal was to create technology that would streamline the insurance process for customers, enhancing their experience with the lender.
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Learn MoreOutside of major disaster states like California and Florida, what are the main trends in the insurance market across the nation?
A: We’re seeing several trends impacting the market. Severe weather and climate change are increasing claims and losses, driving up premiums and leading to more restrictive policies. Higher interest rates, inflation, and overall homeownership costs are also making insurance more expensive and harder to obtain, with many insurers reducing coverage areas or imposing stricter criteria. This is a trend we’ve seen since 2023 and hit a low point in early 2024. Homeowners are also opting for higher deductibles to cope with rising costs. As an example, we saw a 44% increase in policies with deductibles over $2,000 in 2023. Additionally, more homeowners without mortgages are choosing to forgo insurance, posing significant risks to the market and regulatory stability.
Does Matic focus more on existing homeowners or new home buyers?
A: We focus more on existing homeowners because they represent a larger market segment. Insurance needs change over time, and it’s beneficial for homeowners to re-shop and find better coverage periodically. However, our platform helps both new and existing homeowners by providing a digital marketplace that compares pricing and coverage from over 50 carriers, ensuring they get the best possible policy for them. New home buyers do benefit from shopping with Matic because our platform is embedded directly into the mortgage experience, reducing the time it takes to close and potentially lowering their DTI.
Why should loan originators care about insurance, especially since it’s something buyers have to get on their own?
A: Loan originators should care because it directly affects their ability to close loans smoothly. Customers appreciate our digital marketplace, which helps them find policies that allow them to qualify for loans and avoid delays. Our technology is built specifically for the mortgage industry, ensuring policies meet GSE requirements and other guidelines. We also offer ongoing support for any last-minute changes needed to close a loan. Integrating with Matic can help lenders provide a seamless experience for their customers and enhance their overall satisfaction.
Can you explain Matic’s technology and how it addresses specific issues faced by the mortgage industry and homeowners?
A: Our core system is our agency management platform, which integrates product and pricing eligibility from various carriers seamlessly and quickly. It functions like a PPE within a loan origination system. We developed all the customer experiences, from getting an insurance estimate to customizing and purchasing a policy, to be seamless and user-friendly. Our backend integrations also streamline processes, such as document delivery, for loan officers, processors, and closing departments, reducing errors and making the entire process more efficient.
For those interested in learning more, what are the best next steps?
A: If you’re interested in learning more, feel free to request more information through our website. We’d love to discuss how we can help you.
