Porch Group posted a 27% gross loss ratio for 2025 in its homeowners' insurance reciprocal exchange, sharply outperforming an industry that averaged 65% in 2024 and deteriorated to nearly 79% in the first half of 2025 amid severe storms and California wildfires.
The Seattle-based company reported fourth-quarter revenue of $112.3 million and a net loss attributable to Porch Group of $3.5 million, while adjusted EBITDA reached $23.5 million for the quarter ended December 31, 2025.
The performance comes as Porch Group completed a structural shift to a commission- and fee-based model through the Porch Insurance Reciprocal Exchange (PIRE), formed in January 2025.
Under the reciprocal model, policyholders own the insurance entity and pool their risks, while a Porch subsidiary serves as attorney-in-fact and receives commissions for operating the exchange – typically a percentage of premiums, industry data shows.
That structure allows Porch to earn roughly 20% of gross written premiums in fees while shedding direct exposure to weather-driven underwriting losses, a shift that may appeal to investors burned by homeowners insurance volatility.
Triple-I reported that 2024 marked the sector's first annual underwriting profit since 2019, with combined ratios of 99.3%, down from 110.5% in 2023.
The reciprocal model, used successfully by Farmers Insurance, Erie Insurance and USAA, has lower capital requirements than traditional insurance companies, research from industry analysts suggests.
For Porch, the structure means it consolidates PIRE's financial results for reporting purposes but does not own the exchange itself, a disclosure that reflects the reciprocal's policyholder-member ownership.
Statutory surplus at the Porch Reciprocal Exchange reached $155.1 million in the fourth quarter, up $49.4 million from the prior-year quarter. Combined with non-admitted assets, total surplus stood at $289.4 million, an increase of $131.4 million year-over-year.
Matt Ehrlichman (pictured above), chief executive officer, chairman and founder, said the company executed its transition to the simpler commission model in 2025 and is now positioned to scale. Porch is targeting $600 million of reciprocal written premium in 2026, representing 25% year-over-year organic growth.
Active agencies and quotes each rose more than 100% in the fourth quarter of 2025 compared to the same period in 2024, well above industry-wide homeowners insurance direct written premium growth of 13.4% in 2024.
Reciprocal written premium from new customers accelerated 61% in November and 104% in December compared to the January-to-October monthly average, following targeted actions Porch did not detail.
The triple-digit growth rates likely represent catch-up after what the company previously described as managing premiums roughly flat for a couple of years. Porch renewed its partnership with Goosehead in June 2025 to scale the Reciprocal Exchange, with the commission structure expected to make up approximately 20% of gross written premiums.
Porch reported cash, cash equivalents, restricted cash and investments of $121.2 million as of December 31, 2025, driven by operating cash flow of $65.4 million. Outstanding convertible debt totaled $475.1 million, including $7.8 million due in September 2026.
For 2026, Porch issued revenue guidance of $475 million to $490 million, representing 13% to 17% growth, and adjusted EBITDA guidance of $98 million to $105 million, reflecting 28% to 37% growth.
