HCI reports gross premiums earned increase of 38% in Q4’24

Florida-domiciled insurtech HCI Group, Inc. has reported that consolidated gross premiums earned increased by 38% to $297.5 million for Q4’24, up from $215.2 million in Q4 2023, driven primarily by assumptions of policies from Citizens Property Insurance Corporation, the state’s insurer of last resort.

The insurer’s pre-tax income for Q4 2024 was $5.9 million and net income was $4.1 million, down considerably from $54.1 million and $40.9 million, respectively, in the same periods in 2023.

The year-on-year dip in net income reflects higher losses and loss adjustment expenses for both periods, with total expenses higher in 2024 when compared with 2023.

Losses and loss adjustment expenses for Q4 2024 were $110.7 million compared with $65.4 million in Q4 2023, which include a net loss of $78 million from Hurricane Milton, partially offset by $24.5 million of favourable development mostly related to the 2024 accident year.

The total expenses for Q4 2024 stand at $155.9 million, a rise from $108.5 million in Q4 2023.

Premiums ceded for reinsurance in the quarter were $151.1 million compared with $66.6 million in Q4 2023, with a reversal of $50.6 million of previously accrued benefits related to retrospective reinsurance provisions due to losses caused by Hurricane Milton.

The adjusted net income for Q4 2024 was $5 million, or $0.31 diluted earnings per share, compared with adjusted net income of $38.8 million, or $3.22 diluted earnings per share, in Q4 2023.

Finally, net investment income in the fourth quarter was $14.5 million compared with $10.3 million in the comparative quarter. The increase was driven by growth in interest income from cash, cash equivalents and available-for-sale fixed maturity securities.

Policy acquisition and other underwriting expenses for Q4 2024 were $27.7 million compared with $22.7 million in Q4 2023.

HCI explained that the general and administrative personnel expenses in the quarter decreased to $10.2 million from $12.2 million in Q4 2023, due to lower stock-based compensation and higher reinsurance recoveries related to claims processing for Hurricane Milton.

For the full year (FY) 2024, consolidated gross premiums earned increased by 41.5% to $1,083.2 million from $765.5 million in 2023, driven primarily by growth in Florida due to assumptions of policies from Citizens Property Insurance Corporation.

Premiums ceded for reinsurance for FY’24 were $405.7 million compared with $269.6 million for FY’23, with a reversal of $62.9 million of previously accrued benefits related to retrospective reinsurance provisions as a result of losses caused by Hurricanes Helene and Milton.

For FY’24, HCI reported pre-tax income of $173.4 million and net income of $127.6 million. The adjusted net income for 2024 was $125.6 million, or $8.75 diluted earnings per share compared with $86.8 million, or $7.41 diluted earnings per share in FY’23. Similar to the Q4 2024 segment, the total expenses for FY’24 rose to $576.6 million compared to $433 million in Fy’23.

Losses and loss adjustment expenses for the year were $374.7 million compared with $254.6 million in FY’23, this included $78 million from Hurricane Milton, $43 million from Hurricane Helene and $6.5 million from Hurricane Debby.

The net investment income for FY’24 was $59.1 million compared with $46.2 million last year, driven by an increase in interest income from cash, cash equivalents, and available-for-sale fixed maturity securities, offset by a decrease in income from real estate investments.

Meanwhile, policy acquisition and other underwriting expenses for 2024 were $99.4 million compared with $90.8 million last year.

Paresh Patel, Group Chairman and Chief Executive Officer, HCI, commented, “Even with the hurricanes in 2024, HCI Group is unwavering in its commitment to Florida and supporting our existing and new policyholders. As part of our ongoing efforts, we plan to keep rates flat for the foreseeable future. Given an increased level of catastrophe activity across the country, we are taking initial steps to make our best-in-class technology available to other carriers and in additional geographies.”

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