Trendsetters: May 2009

Michael Gold [Photo: Palm Beach Post]

January found a confident Michael Gold sketching a future as one of Florida’s larger property insurers and the solution to Florida’s homeowner insurance woes. His People’s Trust Insurance sells direct, cutting out agents, to save money — as much as 20% to 25% per annual premium, he says. Gold’s other innovations include building his own contractor network that inspects damage and does repairs when customers make a claim. “We have invented and created a whole new mousetrap,” Gold says.

And regulators beat a path to his door. In March, state CFO Alex Sink issued an order threatening to pull his agency license for using unlicensed people in his call center to sell insurance. Insurance Commissioner Kevin McCarty, separately, found other violations at People’s and shut down new sales. He set a deadline to comply with state law, ordered People’s to buy more reinsurance, fined it $155,000 and ordered it to deposit $500,000 with the state. McCarty also offered some encouragement: “The company has expressed some ideas that, if implemented, would address some of the most difficult issues in the property insurance market.”

McCarty won applause from those whom Gold bypasses, the Florida Association of Insurance and Financial Advisors, which pushed McCarty to investigate People’s. “The marketing tactics of People’s Trust remind one of the saying, ‘If it’s too good to be true, it probably is,’ ” says association spokesman Bob Lotane.

Gold, 56, sold an office automation products business in 1997 to retire to Florida. He started People’s after his own homeowner’s premium went up 400%. People’s grew in a year to 35,000 policies, and Gold projected 500,000 policies in five years. But at $22.7 million in premiums for 2008, Gold was $5 million ahead of the schedule People’s filed with the state. Now, People’s has agreed not to top $27.9 million for 2010.

Gold says carrying out McCarty’s orders will make People’s stronger.

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