Following the catastrophic 2004 and 2005 Florida hurricane seasons, established insurance carriers raised rates, reduced exposure, or started looking for an exit. Homeowners sorely needed coverage -- and some two dozen intrepid new insurers saw an opportunity. Among them was Alexander Anthony and Albert Fernandez's Northern Capital Insurance. Anthony and Fernandez sold their 900-person security-guard company to fund the launch of Northern Capital -- so in a sense, they were trading one protection industry for another.

We got into the insurance industry when we bought an agency in 1999. It was a side business to our security-guard company, but it taught us about the shortcomings of the carriers. We would call an insurance company to make a change to a policy, and it would take weeks for them to get back to us. In most businesses, response time is everything; it's what the consumer cares about. We thought we could do better.

Launching an insurance company is a monumental task. Florida requires new property insurers start with at least $5 million. After selling our two companies and forming an investors' group, we had $8 million. Setting actuarially sound rates is complicated: You have to do market analysis, look at history, and make future projections. We searched diligently for senior executives with years of property and casualty experience in the Florida market. It took us six months to find Wayne Fletcher, our president. Fortunately, Wayne had worked with Lloyd's in the past, which was helpful, because reinsurers are as leery of Florida as regular carriers. He negotiated an arrangement with Lloyd's and a New York company to bring them aboard as subscribing reinsurers. Throughout this process, we had the support of Florida's Office of Insurance Regulation, which has been wonderful about welcoming start-ups such as ourselves, despite public opinion about smaller carriers being potential liabilities.

From the beginning, we wanted to surround the insurance company with ancillary businesses that could service Northern Capital and -- in some cases -- other insurance companies as well. We have a management company to operate the insurance business; that's typical for the industry. But we also launched our own claims-adjusting company, which allows us to make sure victims are compensated quickly and react to suspicious activities. Another business developed the software platform we run on.

Our inspection company verifies the information about homes provided when policies are written. An inspector goes out, meets the homeowner, and does a physical inspection of the property to make sure everything is as expected and meets code. There's no potential risk that was overlooked by an agent or a homeowner. If everything is correct, we proceed. If it's not, we give the homeowner an opportunity to correct the problem. That business lets us inspect a larger percentage of homes than the industry norm, and we're alert for troubling details others might miss. For example, we wouldn't cover a house with a trampoline in the back. Or if there's a dog, then we want to make sure the yard is secured. Those companies provide us with steady earnings and less risk than insurance. Over time, we expect them to account for more than half of our growth.

Our four-person analytical team spends most of its time looking for new opportunities: researching other states and product lines and the needs of independent agents. We've expanded coverage to commercial truck cargo and "nonstandard auto" -- that is, vehicle owners who are higher risk because they have a few speeding tickets or own Ferraris. Now we're looking into business-owner policies for small companies. Next year, we expect to be in a couple of other coastal states, though we haven't settled on which ones.

This being Florida, we have a very detailed catastrophe plan: a network of adjusters ready to go, lots of laptops so people can work from wherever, financial systems in place to rapidly disburse money to the victims. We've identified a number of alternate work sites we can use depending on the trajectory of a hurricane. The entire organization is ready to respond.

Larger companies aggressively market themselves on TV and radio. They want people to go on the Internet and perform transactions without ever talking to a person. We have 2,000 independent agents; for us, a transaction involves people talking to people. Our marketing team is out on the road supporting those agents, training them, explaining new products. As a rule of thumb, they have three meetings and a luncheon with agents every day and attend to them through e-mail and phone calls. You can trace a lot of our growth to the quality of our agent relationships.

Once, a large garbage truck veered off the road and ran into a house we insured, demolishing a wall. The family was displaced -- it was a tremendous hardship. It wasn't our liability, but still, we had our claims crew out there within the hour, put up the family in a hotel, paid for the repairs ourselves, and then worked it out with the waste-management company. Things like that remind you that insurance isn't just a numbers game. There's humanity involved.