Florida-based insurtech HCI Group has announced a net income for the second quarter of $8.9 million, up from the $7.6 million achieved in the prior year quarter.
Adjusted net income for the quarter was $6.8 million compared with $6.6 million in the second quarter of 2019.
Consolidated gross written premiums of $171.9 million for the second quarter of 2020 were up 28.9% from $133.4 million in the second quarter of 2019.
The increase was due to the continued growth of TypTap Insurance Company, HCI’s technology-driven insurance subsidiary and the policies transitioned from Anchor Property & Casualty Insurance Company through a policy replacement agreement in the second quarter of 2020.
In-force premiums for TypTap at June 30, 2020 stood at $75.5 million compared to $28.4 million at June 30, 2019.
Consolidated gross premiums earned of $107.8 million for the second quarter of 2020 were up 29.4% from $83.3 million in the second quarter of 2019, again driven by the growth of TypTap and the policies transitioned from Anchor.
Premiums ceded for the second quarter of 2020 increased to $34.4 million from $31.3 million in the second quarter of 2019 and represented 31.9% and 37.6%, respectively, of gross premiums earned.
The $3.1 million increase was attributable to increased reinsurance costs effective June 1, 2020 with the beginning of the new reinsurance year and a greater level of reinsurance coverage.
Net investment income was $1.6 million compared with $4.2 million in the second quarter of 2019.
The decrease was primarily due to lower income from limited partnership investments and cash equivalent instruments.
Net realized investment gains were $1.4 million in the second quarter of 2020 compared with $0.1 million of losses in the same period of 2019.
The gains in the second quarter of 2020 were primarily due to sales intended to rebalance the Company’s investment portfolio.
Net unrealized investment gains were $2.9 million in the second quarter of 2020 compared with $1.3 million in 2019.
The unrealized investment gains in the second quarter of 2020 reflect an increase in the fair value of equity securities resulting from an improved economic outlook since the disruption caused by COVID-19.
Losses and loss adjustment expenses were $39.8 million compared with $24.3 million in the same period in 2019. The increase of $15.5 million was primarily related to the increase in gross premiums earned, change in premium mix and reserves for weather-related losses in the quarter.
Policy acquisition and other underwriting expenses were $13.0 million compared with $10.1 million in the same quarter of 2019. The increase relates to premium growth in TypTap.
“Our second quarter results demonstrate that HCI has entered a period of revenue and income growth,” said HCI Group Chairman and Chief Executive Officer Paresh Patel.
“We expect this growth to accelerate in the coming years as we expand TypTap into additional states and more agents and prospective policyholders discover TypTap’s quick, simplified user experience.”
