Florida-based HCI Group has reported a net income of $2.7 million in the fourth quarter of 2022, compared with a net income of $1.4 million, from the fourth quarter of 2021.
At the same time, the company’s net loss for the year so far currently stands at $54.6 million compared to a net income of $7.2 million from the same period in the previous year.
Consolidated gross premiums earned of $156.9 million in Q4 2021 increased to $183 million in Q4 2022. This figure reflects, according to the firm higher average premium per policy
TotalGross Written Premiums in Q4 2022 for its insurance operations was $171.4 million. Homeowners Choice GWP was $24.2 million, and TypTap Insurance Company GWP was $117.2 million.
Meanwhile, premiums ceded for reinsurance of $77.0 million increased from $54.6 million in the fourth quarter of 2021. Ceded premiums represented 42.1% and 34.8% of gross premiums earned in the fourth quarters of 2022 and 2021, respectively.
Net investment income of $7.4 million increased from $2.6 million in the fourth quarter of 2021 as the company repositioned the investment portfolio to take advantage of higher interest rates, HCI Group noted.
Additionally, losses and loss adjustment expenses of $72.1 million increased from $63.2 million in the same period of 2021. Losses and loss adjustment expenses as a percent of gross premiums earned declined to 39.4% from 40.3% in Q4 2021.
HCI Group’s adjusted net loss for the full year of 2022 was $47.5 million which compares to the $6.2 million reported in the same period of 2021.
Consolidated gross premiums earned of $724.7 million increased 25.6% from $577.0 million in the year ended December 31, 2021, which according to the company, reflects higher average premium per policy.
Premiums ceded for reinsurance of $261.1 million increased from $199.7 million reported at the end of 2021. The increase over last year, HCI Group explained, also included an adjustment to reduce benefits under a multi-year reinsurance contract with retrospective provisions as a result of Hurricane Ian.
Ceded premiums increased as a percentage of gross premiums earned from 34.6% to 36.0% in the twelve months of 2022.
Additionally, the company’s losses and loss adjustment expenses of $371.5 million increased from $227.5 million in 2021. The company noted that this increase was due to Hurricane Ian, growth at TypTap, and policies assumed or renewed from UPC.
HCI Group Chairman and Chief Executive Officer Paresh Patel, commented: “We were pleased to see further improvement in our underlying profitability this quarter.
“The bills passed by the Florida Legislature in 2022 squarely address the rising cost of litigation and social inflation in the Florida homeowners industry. We believe these reforms will support a healthier market for private insurance in Florida in the years to come.”
