Reinsurance News

HCI Group grows premiums by 50% in Q3

10th November 2021 - Author: Luke Gallin

Florida-based insurtech HCI Group has announced consolidated gross written premium (GWP) growth to $174.3 million for the third quarter of 2021, driven in part by the continued expansion of TypTap Insurance Company.

HCIHCI Group’s GWP increased by almost 50% from the $116.5 million reported for the third quarter of 2020, primarily as a result of growth at TypTap, policies transitioned from Gulfstream Property & Casualty Insurance Company, and a quota share reinsurance arrangement with United Property & Casualty Insurance Company.

At the same time, consolidated gross premiums earned increased by 40.4%, year-on-year, to $149.8 million for the third quarter of 2021, compared with $106.7 million for the prior year period.

HCI attributes the growth in gross premiums earned to growth in Homeowners Choice gross premiums earned from $86.8 million to $98.3 million, as well as growth of gross premiums earned to $51.5 million at TypTap.

Premiums ceded for reinsurance for Q3 2021 increased, year-on-year, by more than $10 million to $55.6 million, again as a result of the growth in both TypTap and Homeowners Choice.

During the third quarter of 2021, HCI has reported loss and loss adjustment expenses (LAE) of $62.7 million, which is up on the $51.7 million for the prior year quarter.

HCI attributes this increase in losses to its growing premium base, storm-related losses of $6.5 million from events in its four northeastern states, and $6.5 million of losses from the re-estimation of losses from both Hurricane Sally and Tropical Storm Eta.

Policy acquisition and other underwriting expenses for Q3 2021 amounted to $23.3 million compared with $14.2 million in the same quarter a year earlier.

On the asset side of the balance sheet, HCI has announced net investment income growth to $2.5 million for the third quarter, driven by a rise in income from limited partnership investments, real estate investments and an investment in an unconsolidated joint venture.

Overall, HCI has fallen to a net loss of $4.9 million for the third quarter of 2021, compared with net income of $15.4 million for the prior year quarter. HCI notes that the third quarter of 2020 included a one-off gain of $37 million from an involuntary sale of real estate.

HCI Group Chairman and Chief Executive Officer (CEO), Paresh Patel, commented: “As TypTap continues to expand, we are making important investments to maximize TypTap’s opportunity. We are confident the long-term payback on these investments will outweigh any short-term impact.”

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