HCI Earnings Rise as Premium Growth Slows
Second-quarter revenue rose 11.1% to $246.7 million.
HCI Group, Inc. (HCI), an insurance and technology company, lifted diluted earnings to $5.60 a share from $5.18 a year earlier and $5.45 in the first quarter.
The increase came as premium growth moderated and underwriting losses rose. Gross premiums earned increased 6.0%, slowing from 8.7% in the first quarter and 11.8% in the fourth quarter, while the gross loss ratio deteriorated to 22.2% from 20.1% sequentially and 21.3% a year earlier.
Revenue climbed from $221.9 million a year earlier, while net income rose 18.0% to $82.9 million. Pre-tax income increased 17.6% to $111.0 million, though both measures eased from the first quarter.
Tailrow drove the expansion in premiums, with gross premiums earned rising to $29.7 million from $8.8 million. Homeowners Choice posted a smaller increase, while earned premiums declined at TypTap and Condo Owners Reciprocal Exchange.
Net premiums earned grew 9.4% to $219.0 million, outpacing gross-premium growth as ceded reinsurance premiums declined slightly. Lower costs under its new catastrophe-reinsurance programs offset the effect of higher policy volume.
Losses and loss-adjustment expenses rose 10.3% to $71.1 million, largely because of higher policy volume, while personnel expense climbed 19.8% to $23.9 million. Higher investment income and a 71.0% drop in interest expense helped support earnings.
HCI completed its $80 million share-repurchase program in July after buying $57.0 million of stock during the quarter. Book value per share rose 47.9% to $86.60 as shares outstanding declined 3.8%.