Florida-based insurtech HCI Group reported consolidated gross premiums earned of $265.5 million for Q3 2024, an increase from last year’s $188.3 million, driven primarily by growth in Florida.
The firm’s Q3 2024 net income was $9.4 million as compared to $15.7 million last year. The adjusted net income for Q3 2024 was $8.9 million, compared to last year’s $16.5 million.
HCI explained that premiums ceded for reinsurance in Q3 2024 represented 41.3% of gross premiums earned, totalling $109.7 million, compared to $66.2 million in Q3 2023.
This increase was driven by expanded reinsurance coverage due to growth in the number of policies in force and total insured value, as well as the reversal of $12.3 million in previously accrued benefits related to retrospective provisions following the impact of Hurricane Helene.
Net investment income for Q3 2024 was $13.7 million, up from $9.4 million in Q3 2023. This $4.3 million increase was due to higher interest income from cash, cash equivalents, and available-for-sale securities.
Finally, Q3 2024’s losses and loss adjustment expenses were $105.7 million compared with $66.7 million last year. The loss ratio, as a percentage of gross premiums earned, in Q3 was 39.8% compared to 35.4% in Q3 2023. The expenses included $40 million from Hurricane Helene and $6.5 million from Hurricane Debby.
For the first nine months of 2024, HCI reported a net income of $123.4 million and an adjusted net income of $120.6 million.
Consolidated gross premiums earned for the first nine months of 2024 increased to $785.7 million from $550.3 million in the same period of 2023.
Premiums ceded for reinsurance in the first nine months of 2024 were $254.5 million, compared to $203.1 million last year.
This increase was driven by expanded reinsurance coverage due to growth in the number of policies in force and total insured value, along with the reversal of $12.3 million in previously accrued benefits related to retrospective provisions following Hurricane Helene.
Premiums ceded represented 32.4% of gross premiums earned for the first nine months of 2024, compared to 36.9% in 2023, according to HCI.
Net investment income for the first nine months of 2024 was $44.7 million, compared to $35.9 million last year. This increase was driven by higher interest income from cash, cash equivalents, and available-for-sale securities, partially offset by a decrease in income from real estate investments.
For the first nine months of 2024, losses and loss adjustment expenses were $264 million, compared to $189.2 million last year. The loss ratio, as a percentage of gross premiums earned, declined to 33.6% from 34.4% in 2023. This decline in the gross loss ratio was primarily due to the continued decrease in claims and litigation frequency in Florida.
Paresh Patel, Chairman and Chief Executive Officer, HCI Group commented, “Despite Hurricanes Debby and Helene making landfall in the third quarter, the company reported positive earnings.
“Our balance sheet remains strong, our underlying business is performing well and we continue to grow. For example, in October we assumed approximately 42,000 policies from Citizens.”
