HCI Group, Inc. Reports Significant Changes in Q4 2024 Financial Performance

Overview of Financial Performance for Q4 2024

HCI Group, Inc., a Florida-based insurtech company, announced a notable increase in consolidated gross premiums earned for the fourth quarter of 2024, reaching $297.5 million. This marks a 38% rise from the $215.2 million reported in Q4 2023. This growth is largely attributed to policy assumptions from Citizens Property Insurance Corporation, Florida’s state-backed insurer of last resort.

Despite the surge in premiums, the company’s pre-tax income for Q4 2024 fell to $5.9 million, with net income declining to $4.1 million, down significantly from Q4 2023 figures of $54.1 million and $40.9 million, respectively. This decrease is primarily due to higher loss and loss adjustment expenses.

Impact of Natural Disasters on Financials

The financial results for Q4 2024 were heavily impacted by Hurricane Milton, with losses and loss adjustment expenses escalating to $110.7 million, compared to $65.4 million in Q4 2023. This includes a net loss of $78 million from Hurricane Milton, counterbalanced by $24.5 million of favorable developments, mainly related to the 2024 accident year.

Total expenses for the quarter rose to $155.9 million, up from $108.5 million the previous year. Reinsurance premiums ceded were $151.1 million, compared to $66.6 million in Q4 2023, partially due to a reversal of $50.6 million in previously accrued benefits linked to Hurricane Milton-related losses.

Investment Income and Expense Management

Net investment income for Q4 2024 increased to $14.5 million from $10.3 million in the same quarter last year, driven by higher interest income from cash and available-for-sale fixed maturity securities.

Policy acquisition and other underwriting expenses climbed to $27.7 million, compared to $22.7 million in Q4 2023. However, general and administrative personnel expenses decreased to $10.2 million from $12.2 million due to reduced stock-based compensation and enhanced reinsurance recoveries related to Hurricane Milton claims.

Full Year 2024 Performance Highlights

For the full year 2024, HCI Group’s consolidated gross premiums earned surged by 41.5% to $1,083.2 million, up from $765.5 million in 2023. The growth was primarily driven by increased policy assumptions from Citizens Property Insurance Corporation in Florida.

For FY 2024, premiums ceded for reinsurance amounted to $405.7 million, compared with $269.6 million the prior year. This includes a reversal of $62.9 million in accrued benefits related to retrospective reinsurance provisions due to Hurricanes Helene and Milton.

HCI reported a full-year pre-tax income of $173.4 million and net income of $127.6 million. Adjusted net income stood at $125.6 million, or $8.75 per diluted share, compared with $86.8 million, or $7.41 per diluted share in 2023.

Total expenses for FY 2024 rose to $576.6 million, compared to $433 million in the previous year. Losses and loss adjustment expenses were $374.7 million, which included $78 million from Hurricane Milton, $43 million from Hurricane Helene, and $6.5 million from Hurricane Debby.

Net investment income for the year increased to $59.1 million from $46.2 million, driven by enhanced interest income, albeit offset by a reduction in real estate investment income. Policy acquisition and other underwriting expenses stood at $99.4 million, compared to $90.8 million in the previous year.

HCI’s Group Chairman and CEO, Paresh Patel, highlighted the company’s steadfast commitment to supporting Florida policyholders despite the challenging year marked by multiple hurricanes. Patel announced future plans to maintain stable rates and expand the company’s technology offerings to other carriers and regions.