InsurTech HCI Group has reported a significant rise in net income for the first quarter of 2021 to $6.1 million, while consolidated gross written premiums (GWP) jumped by 64.4% to $125.8 million for the period.
HCI says that the rise in GWP was driven by growth of Homeowners Choice GWP to $81 million and growth of TypTap Insurance Company GWP to $44.9 million for Q1 2021.
At the same time, consolidated gross premiums earned (GPE) increased by 41.8%, year-on-year, to $130.9 million. Again, this was driven by growth in Homeowners Choice GPE to $102.1 million and the growth of TypTap Insurance Company GPE to $28.8 million.
Premiums ceded for reinsurance also spiked in Q1 2021 when compared with the prior year quarter, reaching $43.1 million or 32.9% of GPE.
As a result of the year-on-year growth in GPE, losses and loss adjustment expenses totalled $45.8 million for Q1 2021 against $28.1 million a year earlier.
At a gain of $4.6 million, the net investment result improved significantly for Q1 2021 from the net investment loss of $0.2 million in Q1 2020. HCI attributes this growth to an increase in limited partnership income as well as a lawsuit settlement in the real estate division.
Additionally, net realized investment gains reached $1.1 million compared with net realized investment losses of $2.2 million in Q1 2020. Net unrealized investment losses amounted to $0.3 million in Q1 2021, compared with net unrealized investment losses of $4.8 million in Q1 2020.
Lastly, policy acquisition and other underwriting expenses totalled $23.1 million compared with $11.8 million in the same quarter of 2020, driven by the growth in gross premiums earned.
HCI Group Chairman and Chief Executive Officer (CEO), Paresh Patel, said: “We are reaping the benefits of decisions we made in previous periods. We expect to report more benefits as 2021 progresses.”
