HCI Group
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Estimates were revised from $845mn to $740mn.
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HCI is offering one million common stock shares priced at $78 per share.
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The Floridian was approved for 75,000 policies, made 72,958 offers and assumed 53,750 policies – a 74% acceptance rate.
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Awaiting FLOIR approval, the move will mark the Floridian’s entry into the commercial residential insurance space, CEO Paresh Patel told analysts Tuesday.
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The insurance company had set out plans last summer to expand its market share in Florida.
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The group is looking to grow in Florida and has applied for a November take-out of 75,000 policies from Florida Citizens.
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The carrier is obligated to use the RAP program and upped its ceded premiums.
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HCI is modelling a decrease in claim frequency of about 15%-20% and in litigation frequency of about 3% owing to Florida legal reforms.
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The company is confident it has sufficient additional reinsurance capacity should claims begin to develop outside of initial expectations.
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The Florida carrier suggested that Ian will not exhaust the state’s reinsurance Cat Fund.
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The company sees and opportunity to grow market share in the state.
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The ceded premium ratio declined by 2.1 points to 31%.
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The chunky deal comes as many reinsurers are heavily cutting their Florida cat books.
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The Florida carrier has yet to finalise its programs as it awaits potential reforms.
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The company’s convertible notes now have $24mn outstanding.
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The deal follows a similar transaction on northeast business in January.
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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.
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Storm losses were down 30% to $13mn, but the prior-year result had benefitted from a one-off gain.
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The insurer had a record quarter for earned premiums, linking the boost to the growth of TypTap, which recorded $39mn in earned premiums.
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Its reinsurance premiums ceded are expected to reach $207mn, up from $175mn a year earlier.
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The Floridian reported a higher loss ratio after making recent portfolio acquisitions but benefited from premium growth.
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After launching as a flood underwriter, now more than 85% of TypTap’s book is homeowners’ business.
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HCI reported diluted earnings per share of $1.60 in Q3, compared to $1.02 a year earlier.
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The tally surpassed its $16mn retention, but this was the first hurricane of 2020 for which it pre-announced a loss.