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HCI Group (HCI) Q4 Earnings Beat Estimates, Revenues Lag

HCI Group HCI reported fourth-quarter 2022 earnings of 6 cents per share against the Zacks Consensus Estimate of a loss of 36 cents per share. Quarterly earnings rebounded from the year-ago loss of 14 cents per share.

The results reflect better performance at TypTap Insurance Company.

HCI Group, Inc. Price, Consensus and EPS Surprise



HCI Group, Inc. Price, Consensus and EPS Surprise
HCI Group, Inc. Price, Consensus and EPS Surprise

HCI Group, Inc. price-consensus-eps-surprise-chart | HCI Group, Inc. Quote

Behind the Headlines

Gross premiums earned of $183 million increased 16.6% year over year, reflecting a higher average premium per policy. Both TypTap Insurance Company and Homeowners Choice performed well in the quarter.

Net premiums earned increased 3.6% year over year to $105.9 million.

Operating revenues increased 6.9% year over year to about $120 million on account of the rise in net premiums earned, net investment income and policy fee income. The top line however missed the Zacks Consensus Estimate by 2.7%.

Net investment income was $7.4 million, up nearly three-fold as the insurer repositioned its investment portfolio to take advantage of higher interest rates.

Total expenses increased 6.8% year over year to $117.2 million due to increased losses and loss adjustment expenses and interest expense.

Losses and loss adjustment expenses were $72.1 million, up 14.1% year over year. Losses and loss adjustment expenses as a percent of gross premiums earned improved to 39.4% from 40.3% in the year-ago quarter.

Financial Update

HCI Group exited 2022 with cash and cash equivalents of $237.8 million, which dropped 62.3% from the 2021-end level. Total investments increased more than threefold from 2021 end to $625.6 million at quarter end.  

Long-term debt of $211.7 million increased more than fourfold from the 2021-end figure.

As of Dec 31, 2022, total shareholders’ equity was $292.5 million, which decreased 50% from the level at 2021 end.

Book value per share dropped 40.8% from year-end 2021 to $18.19 at 2022 end.

Zacks Rank

HCI Group currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property and Casualty Insurers

The Travelers Companies, Inc. TRV reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.

Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year.  The combined ratio deteriorated 650 bps year over year to 94.5.

The Progressive Corporation’s PGR fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year

Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.

RLI Corp. RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.

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