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HCI Group (HCI) Q4 Earnings Beat Estimates, Revenues Lag
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HCI Group (HCI - Free Report) 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.
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.
Performance of Other Property and Casualty Insurers
The Travelers Companies, Inc. (TRV - Free Report) 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 - Free Report) 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 - Free Report) 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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HCI Group (HCI) Q4 Earnings Beat Estimates, Revenues Lag
HCI Group (HCI - Free Report) 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-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 - Free Report) 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 - Free Report) 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 - Free Report) 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%.