HCI Group Reports Third Quarter 2022 Results

Claims from Hurricane Ian Remain Consistent with Prior Disclosure
Gross Premiums Earned Grew 21% Over Last Year
Third Quarter Loss Ratio Declined to 41.4% Excluding Ian

TAMPA, Fla., Nov. 08, 2022 (GLOBE NEWSWIRE) — HCI Group, Inc. (NYSE:HCI), a holding firm with operations in owners insurance, info expertise companies, actual property, and reinsurance, reported a web lack of $51.5 million, or $5.66 loss per share, within the third quarter of 2022 in contrast with web lack of $4.9 million, or $0.72 loss per share, within the third quarter of 2021. Adjusted web loss (a non-GAAP measure which excludes web unrealized features or losses on fairness securities) was $51.2 million, or $5.62 loss per share, within the third quarter of 2022 in contrast with adjusted web lack of $3.5 million, or $0.64 loss per share, within the third quarter of 2021. This press launch consists of a proof of adjusted web earnings in addition to a reconciliation to web earnings and earnings per share calculated in accordance with typically accepted accounting ideas (often known as “GAAP”).

Management Commentary
“Our deepest sympathies go out to those who have been impacted by Hurricane Ian,” mentioned HCI Group Chairman and Chief Executive Officer Paresh Patel. “We responded swiftly to the storm, marshaling the resources of our entire organization. Our execution highlights the investments we’ve made in technology and our ability to deliver on our commitment to policyholders.”

“Claims from Ian remain consistent with views we disclosed in October. We have adequate reinsurance to cover Ian claims and liquidity to support our business and growth plans. Excluding Ian, our insurance divisions produced solid results this quarter as gross premiums grew more than 20% and our gross loss ratio improved to 41.4%, a decline of 6.5 points from second quarter 2022. Ian underscores the value of homeowners insurance and the importance of a healthy insurance industry.”

Third Quarter 2022 Commentary
Consolidated gross written premiums of $191.2 million elevated from $174.3 million within the third quarter of 2021. Homeowners Choice gross written premiums of $119.4 million elevated from $118.3 million. TypTap Insurance Company gross written premiums grew to $71.8 million from $56.0 million.

Consolidated gross premiums earned of $181.7 million elevated 21.3% from $149.8 million within the third quarter of 2021. Homeowners Choice gross premiums earned grew to $99.0 million from $98.3 million, and TypTap gross premiums earned grew to $82.7 million from $51.5 million.

Premiums ceded for reinsurance of $74.7 million elevated from $55.6 million within the third quarter of 2021 primarily as a result of development of each Homeowners Choice and TypTap and a $12.6 million adjustment to scale back advantages beneath a multi-year reinsurance contract with retrospective provisions on account of Hurricane Ian. Ceded premiums represented 41.1% and 37.1% of gross premiums earned within the third quarters of 2022 and 2021, respectively.

Net funding earnings of $18.5 million elevated from $2.5 million within the third quarter of 2021. The enhance was resulting from a web achieve of $13.4 million on the sale of a portion of one of many properties in our Greenleaf portfolio in addition to a rise in curiosity earnings from available-for-sale fastened maturity securities.

Losses and loss adjustment bills of $139.8 million elevated from $62.7 million in the identical interval of 2021. The enhance in losses and loss adjustment bills was primarily resulting from Hurricane Ian. Excluding the influence of Hurricane Ian, losses and loss adjustment bills had been $75.2 million, or 41.4% of gross premiums earned, within the third quarter of 2022 down from $86.8 million, or 47.9% of gross premiums earned, within the second quarter of 2022.

Policy acquisition and different underwriting bills of $24.7 million elevated from $23.3 million in the identical quarter of 2021 however declined from 15.6% of gross premiums earned to 13.6% reflecting decrease fee charges at TypTap.

General and administrative personnel bills of $15.8 million elevated from $11.5 million for the third quarter of 2021 resulting from a rise in personnel and associated bills in reference to the expansion of the business together with increased stock-based compensation.

Year-to-Date 2022 Results
For the 9 months ended September 30, 2022, the corporate reported a web lack of $57.3 million, or $6.26 loss per share, in contrast with web earnings of $5.8 million, or $0.22 diluted earnings per share, for the 9 months ended September 30, 2021. Adjusted web loss (a non-GAAP measure which excludes web unrealized features or losses on fairness securities) for the nine-month interval was $49.1 million, or $5.42 loss per share in contrast with adjusted web earnings of $6.3 million, or $0.15 diluted earnings per share, in the identical interval of 2021. An rationalization of this non-GAAP monetary measure and reconciliations to the relevant GAAP numbers accompany this press launch.

Consolidated gross written premiums of $554.6 million elevated 14.3% from $485.1 million within the 9 months ended September 30, 2021. Homeowners Choice gross written premiums had been $323.7 million in contrast with $323.5 million. TypTap Insurance Company gross written premiums grew to $230.9 million from $161.6 million. The enhance was primarily as a result of UPC quota share preparations and natural development.

Consolidated gross premiums earned of $541.8 million elevated 28.9% from $420.2 million within the 9 months ended September 30, 2021. Homeowners Choice gross premiums earned grew to $331.0 million from $300.8 million, and TypTap gross premiums earned grew to $210.8 million from $119.4 million.

Premiums ceded for reinsurance of $184.1 million elevated from $145.1 million within the first 9 months of 2021 primarily as a result of development of each Homeowners Choice and TypTap and a $12.6 million adjustment to scale back advantages beneath a multi-year reinsurance contract with retrospective provisions on account of Hurricane Ian. Ceded premiums declined as a share of gross premiums earned from 34.5% to 34.0% within the first 9 months of 2022.

Net funding earnings of $25.1 million elevated from $9.7 million within the 9 months ended September 30, 2021. The enhance was resulting from a web achieve of $13.4 million on the sale of a portion of one of many properties in our Greenleaf portfolio in addition to a rise in curiosity earnings from available-for-sale fastened maturity securities.

Net realized and unrealized funding losses had been $9.4 million in contrast with web realized and unrealized funding features of $4.3 million within the 9 months ended September 30, 2021. The lower was attributable to an total decline out there for fairness securities in contrast with the 9 months ended September 30, 2021.

Losses and loss adjustment bills of $299.3 million elevated from $164.3 million within the 9 months ended September 30, 2021. The enhance in losses and loss adjustment bills was resulting from Hurricane Ian, TypTap’s rising premium base, insurance policies assumed or renewed from United Property & Casualty Insurance Company in addition to prior yr loss improvement.

Policy acquisition and different underwriting bills of $80.9 million elevated from $69.6 million within the 9 months ended September 30, 2021 however declined from 16.6% of gross premiums earned to 14.9% reflecting decrease fee charges at TypTap.

General and administrative personnel bills of $45.2 million elevated from $31.7 million within the 9 months ended September 30, 2021 resulting from a rise in personnel and associated bills in reference to the expansion of the business together with increased stock-based compensation.

Conference Call
HCI Group will maintain a convention name later right now, November 8, 2022, to debate these monetary outcomes. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the decision beginning at 4:45 p.m. Eastern time.

Interested events can hearken to the reside presentation by dialing the listen-only quantity under or by clicking the webcast hyperlink out there on the Investor Information part of the corporate’s web site at www.hcigroup.com.

Listen-only toll-free quantity: (877) 545-0523
Listen-only worldwide quantity: (973) 528-0016
Entry Code: 135686

Please name the convention phone quantity 10 minutes earlier than the beginning time. An operator will register your identify and group. If you’ve gotten any issue connecting with the convention name, please contact Gateway Investor Relations at (949) 574-3860.

A replay of the decision will likely be out there by phone after 8:00 p.m. Eastern time on the identical day as the decision and by way of the Investor Information part of the HCI Group web site at www.hcigroup.com by means of November 8, 2023.

Toll-free replay quantity: (877) 481-4010
International replay quantity: (919) 882-2331
Replay ID: 46792

About HCI Group, Inc.
HCI Group, Inc. owns subsidiaries engaged in numerous, but complementary business actions, together with owners insurance, reinsurance, actual property and knowledge expertise companies. HCI’s main insurance operation, TypTap Insurance Company, is a quickly rising, technology-driven insurance firm that’s increasing nationwide to supply owners and flood insurance. TypTap’s operations are powered largely by insurance-related info expertise developed by HCI’s software program subsidiary, Exzeo USA, Inc. HCI’s largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., offers owners’ insurance primarily in Florida. HCI’s actual property subsidiary, Greenleaf Capital, LLC, owns and operates a number of properties in Florida, together with workplace buildings, retail facilities and marinas.

The firm’s frequent shares commerce on the New York Stock Exchange beneath the ticker image “HCI” and are included within the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. repeatedly publishes monetary and different info within the Investor Information part of the corporate’s web site. For extra details about HCI Group and its subsidiaries, go to www.hcigroup.com.

Forward-Looking Statements
This information launch might include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words equivalent to “anticipate,” “estimate,” “expect,” “intend,” “plan,” “confident,” “prospects” and “project” and different related phrases and expressions are meant to indicate forward-looking statements. Forward-looking statements should not ensures of future outcomes and situations, however somewhat are topic to varied dangers and uncertainties. For instance, the estimation of reserves for losses and loss adjustment bills is an inherently imprecise course of involving many assumptions and appreciable administration judgment. Some of those dangers and uncertainties are recognized within the firm’s filings with the Securities and Exchange Commission. Should any dangers or uncertainties become precise occasions, these developments may have materials adversarial results on the corporate’s business, monetary situation and outcomes of operations. HCI Group, Inc. disclaims all obligations to replace any forward-looking statements.

Company Contact:
Simon Rosenberg
Investor Relations
HCI Group, Inc.
Tel (813) 405-5261
[email protected]

Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
[email protected]

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HCI GROUP, INC. AND SUBSIDIARIES
Selected Financial Metrics
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HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets        
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HCI GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
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HCI GROUP, INC. AND SUBSIDIARIES
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A abstract of the numerator and denominator of fundamental and diluted earnings (loss) per frequent share calculated in accordance with GAAP is introduced under.

Non-GAAP Financial Measures

Adjusted web earnings (loss) is a Non-GAAP monetary measure that removes from web earnings (loss) of HCI’s portion of the impact of unrealized features or losses on fairness securities required to be included in outcomes of operations in accordance with Accounting Standards Codification 321. HCI Group believes web earnings with out the impact of volatility in fairness costs extra precisely depicts working outcomes. This monetary measurement is just not acknowledged in accordance with accounting ideas typically accepted within the United States of America (“GAAP”) and shouldn’t be considered as a substitute for GAAP measures of efficiency. A reconciliation of GAAP Net earnings (loss) to Non-GAAP Adjusted web earnings (loss) and GAAP diluted earnings (loss) per share to Non-GAAP Adjusted diluted earnings (loss) per share is supplied under.

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss

HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in hundreds, besides per share quantities)

A abstract of the numerator and denominator of the fundamental and diluted earnings (loss) per frequent share calculated with the Non-GAAP monetary measure Adjusted web earnings (loss) is introduced under.

Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS