Shares of HCI Group (HCI Quick QuoteHCI - Free Report) gained 7.8% in the last trading session after the insurer posted a narrower-than-estimated loss for the fourth quarter of 2021. The top line too beat estimates.

Fourth-quarter 2021 operating loss per share was 14 cents compared with the Zacks Consensus Estimate of a loss of 50 cents.  In the year-ago quarter, the company had reported earnings of 22 cents per share.

The results reflect improved revenues, growing Homeowners Choice and sustained expansion across its insurance operation — TypTap Insurance Company. Escalating costs weighed on the upside.

Behind the Headlines

Gross premiums written of $189.3 million rose 35.9% year over year driven by the continued growth of TypTap Insurance Company and Homeowners Choice.

Operating revenues increased 60% year over year to $112 million on account of the rise in net premiums earned, net investment income and policy fee income. The top line also outpaced the Zacks Consensus Estimate by 5.3%.

Net investment income of $2.6 million doubled year over year. The upside was driven by an increase in income from limited partnership investments, real estate investments and an investment in an unconsolidated joint venture. However, a decrease in interest income from fixed-maturity security investments was a partial offset.

Total expenses escalated 62.9% year over year to $109.8 million due to increased losses and loss adjustment expenses, policy acquisition and other underwriting expenses, general and administrative personnel expenses and other operating expenses.

The 56.4% year-over-year rise in losses and loss adjustment expenses was the result of growth in the premium base and storm-related losses. Policy acquisition and other underwriting expenses soared 63.5% year over year due to the growth of TypTap and the amortization of increased costs associated with the quota share arrangement with United Property & Casualty Insurance Company.

Financial Update

HCI Group exited 2021 with cash and cash equivalents of $631.3 million, which grew 45.6% from the 2020-end level. Total investments declined 13% from the figure at 2020 end to $196.7 million as of Dec 31, 2021.

Long-term debt amounted to $45.5 million, down 70.9% from the 2020-end figure.

As of Dec 31, 2021, total shareholders’ equity totaled $292.5 million, which increased 61.3% from the level at 2020 end.

Zacks Rank

HCI Group currently has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property and Casualty Insurers

Of the insurance industry players that have reported fourth-quarter results, The Travelers Companies (TRV Quick QuoteTRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR Quick QuoteRNR - Free Report) and The Progressive Corporation (PGR Quick QuotePGR - Free Report) beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.

RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.

Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.

Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.