We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HCI Group (HCI) Q3 Earnings Miss Estimates, Revenues Beat
Read MoreHide Full Article
HCI Group, Inc. (HCI - Free Report) reported third-quarter 2021 operating loss per share of 64 cents in contrast to the Zacks Consensus Estimate of earnings of 9 cents. However, the loss was narrower than $1.64 per share incurred in the year-ago quarter.
The company’s results reflect improved revenues and sustained expansion across its insurance operation — TypTap Insurance Company. The upside was partly offset by escalating costs.
Gross premiums written of $174.3 million rose 49.6% year over year in the quarter under review driven by the continued growth of TypTap Insurance Company, policies transitioned from Gulfstream Property & Casualty Insurance Company and a quota share reinsurance arrangement with United Property & Casualty Insurance Company.
Operating revenues declined 4.8% year over year to $99 million on account of the rise in net premiums earned, net investment income and policy fee income. The top line however outpaced the Zacks Consensus Estimate by 4%.
Net investment income of $2.6 million surged 38.9% year over year in the third quarter. The upside stemmed from an increase in income from limited partnership investments, real estate investments and an investment in an unconsolidated joint venture.
Total expenses escalated 28.2% year over year to $105.7 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 21.3% 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 64.1% 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 the third quarter with cash and cash equivalents of $569.1 million, which grew 31.9% from the 2020-end level. Total investments declined 13% from the figure at 2020 end to $196.3 million as of Sep 30, 2021.
The company’s long-term debt amounted to $78 million, down 50.1% from the 2020-end figure.
As of Sep 30, 2021, total shareholders’ equity totaled $292.5 million, which increased 45.4% from the level at 2020 end.
Performance of Other Property and Casualty Insurers
Among other insurance industry players, which have reported third-quarter earnings so far, the bottom line of RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the Zacks Consensus Estimate while that of The Progressive Corporation (PGR - Free Report) missed estimates.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
HCI Group (HCI) Q3 Earnings Miss Estimates, Revenues Beat
HCI Group, Inc. (HCI - Free Report) reported third-quarter 2021 operating loss per share of 64 cents in contrast to the Zacks Consensus Estimate of earnings of 9 cents. However, the loss was narrower than $1.64 per share incurred in the year-ago quarter.
The company’s results reflect improved revenues and sustained expansion across its insurance operation — TypTap Insurance Company. The upside was partly offset by escalating costs.
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 written of $174.3 million rose 49.6% year over year in the quarter under review driven by the continued growth of TypTap Insurance Company, policies transitioned from Gulfstream Property & Casualty Insurance Company and a quota share reinsurance arrangement with United Property & Casualty Insurance Company.
Operating revenues declined 4.8% year over year to $99 million on account of the rise in net premiums earned, net investment income and policy fee income. The top line however outpaced the Zacks Consensus Estimate by 4%.
Net investment income of $2.6 million surged 38.9% year over year in the third quarter. The upside stemmed from an increase in income from limited partnership investments, real estate investments and an investment in an unconsolidated joint venture.
Total expenses escalated 28.2% year over year to $105.7 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 21.3% 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 64.1% 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 the third quarter with cash and cash equivalents of $569.1 million, which grew 31.9% from the 2020-end level. Total investments declined 13% from the figure at 2020 end to $196.3 million as of Sep 30, 2021.
The company’s long-term debt amounted to $78 million, down 50.1% from the 2020-end figure.
As of Sep 30, 2021, total shareholders’ equity totaled $292.5 million, which increased 45.4% from the level at 2020 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
Among other insurance industry players, which have reported third-quarter earnings so far, the bottom line of RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the Zacks Consensus Estimate while that of The Progressive Corporation (PGR - Free Report) missed estimates.