HCI takes $4.9mn Q3 net loss as premium growth continues
HCI fell to a $4.9mn net loss for Q3, versus a $15.4mn profit in the year-ago period, reflecting increased expenses and the comparison to a prior-year one-off gain.
The year-ago period had benefitted from a $37mn gain connected to a sale of property to the Florida Department of Transportation.
Premium: Gross written premiums rose nearly 50% to $174.3mn, due to ongoing growth at TypTap and policies transferred over from Gulfstream and UPC via quota share.
Ceded premiums were up 26% on a dollar basis to $55.6mn, although as a share of gross earned premium, the cessions were down to 37.1% from 41.5% a year ago.
The firm’s loss ratio dropped from nearly 83% to around 66%.
Catastrophes: The company took $13mn of storm losses, including $6.5mn related to northeastern losses, and $6.5mn in revisions to 2020 storm claims from Hurricane Sally and Tropical Storm Eta.
The driver of the prior-year development was litigation, as the storms happened before recent reform to Florida’s insurance regulation, the firm noted on its earnings call.
Last year it recognised $18.6mn of Hurricane Sally losses.
Commentary: On the earnings call, the firm explained that converting some of its debt into equity led to a $1.3mn expense, but brought down its long-term debt levels in what it described as an ongoing deleveraging process.
The carrier is in the process of taking its InsurTech subsidiary TypTap public.