HCI Group

The Florida carrier said ceded premiums will rise slightly to $106mn in Q3.

HCI secured three towers with $3.5bn in XoL coverage.

With plenty of reinsurance capacity, CEO Patel said it’s been a “boring year” for treaty negotiations.

HCI will now consist of two operating units – the other being its four underwriting entities.

The Florida carrier reported a 103.5% combined ratio in Q3.

The policies assumed represent $200mn of in-force premium.

HCI is estimated to incur a net expense of $125mn for Milton in Q4 2024.

Subsidiaries Core and Typtap have applied to participate in the November Citizens policies assumption.

The Floridian secured $2.7bn in aggregate limit across two towers.

Estimates were revised from $845mn to $740mn.

HCI is offering one million common stock shares priced at $78 per share.

The Floridian was approved for 75,000 policies, made 72,958 offers and assumed 53,750 policies – a 74% acceptance rate.

Awaiting FLOIR approval, the move will mark the Floridian’s entry into the commercial residential insurance space, CEO Paresh Patel told analysts Tuesday.

The insurance company had set out plans last summer to expand its market share in Florida.

The group is looking to grow in Florida and has applied for a November take-out of 75,000 policies from Florida Citizens.

The carrier is obligated to use the RAP program and upped its ceded premiums.

HCI is modelling a decrease in claim frequency of about 15%-20% and in litigation frequency of about 3% owing to Florida legal reforms.

The company is confident it has sufficient additional reinsurance capacity should claims begin to develop outside of initial expectations.

The Florida carrier suggested that Ian will not exhaust the state’s reinsurance Cat Fund.

The company sees and opportunity to grow market share in the state.

The ceded premium ratio declined by 2.1 points to 31%.

The chunky deal comes as many reinsurers are heavily cutting their Florida cat books.

The Florida carrier has yet to finalise its programs as it awaits potential reforms.

The company’s convertible notes now have $24mn outstanding.

The deal follows a similar transaction on northeast business in January.

The financials from the listed Floridians show them plotting a path through challenges by exposure management and rate rises, but reinsurers are still picking up notable storm losses from this reinsurance-reliant group.

Storm losses were down 30% to $13mn, but the prior-year result had benefitted from a one-off gain.

The insurer had a record quarter for earned premiums, linking the boost to the growth of TypTap, which recorded $39mn in earned premiums.

Its reinsurance premiums ceded are expected to reach $207mn, up from $175mn a year earlier.

The Floridian reported a higher loss ratio after making recent portfolio acquisitions but benefited from premium growth.

After launching as a flood underwriter, now more than 85% of TypTap’s book is homeowners’ business.

HCI reported diluted earnings per share of $1.60 in Q3, compared to $1.02 a year earlier.

The tally surpassed its $16mn retention, but this was the first hurricane of 2020 for which it pre-announced a loss.

The company increased non-cat reserves by $26mn in the second quarter.