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HCI Group (HCI) Q1 Earnings, Revenues Top Estimates, Rise Y/Y

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HCI Group (HCI - Free Report) reported first-quarter 2023 earnings of $1.50 per share that beat the Zacks Consensus Estimate of 9 cents per share. Quarterly earnings increased more than fourfold year over year.

The results reflect better performance at TypTap Insurance Company.

HCI Group, Inc. Price, Consensus and EPS Surprise 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 $180.1 million increased 0.7% year over year, reflecting a higher average premium per policy.

Net premiums earned increased 0.6% year over year to $180.1 million.

Operating revenues increased 1.6% year over year to about $129 million on account of the rise in net premiums earned, net investment income and policy fee income. The top line beat the Zacks Consensus Estimate by 9.1%.

Net investment income was $17.7 million, up more than three-fold, reflecting higher yields on fixed maturity securities, cash, and cash equivalents as well as a gain of $8.9 million from the sale of two real estate investment properties at Greenleaf.

Total expenses decreased 13.9% year over year to $105.9 million due to increased losses and loss adjustment expenses, policy acquisition and other underwriting expenses and general and administrative personnel expenses.

Losses and loss adjustment expenses were $60.6 million, down 16.6% year over year. Losses and loss adjustment expenses as a percent of gross premiums earned or gross loss ratio improved to 33.6% from 40.6% in the year-ago quarter.

Financial Update

HCI Group exited the quarter with cash and cash equivalents of $302 million, which increased 28.6% from the 2022-end level. Total investments increased 2.4% from 2022 end to $630.3 million at quarter end.  

Long-term debt of $196.2 million decreased 7.3% from the 2022-end figure.

As of Mar 31, 2022, total shareholders’ equity totaled $179.9 million, which increased 11.5% from the level at 2021 end.

Book value per share dropped 33.8% from year-end 2022 to $20.97 at first quarter 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 (TRV - Free Report) reported first-quarter 2022 core income of $4.11 per share, which beat the Zacks Consensus Estimate of $3.64 and our estimate of $3.41. However, the bottom line decreased 2.6% year over year. Travelers’ total revenues increased 10% from the year-ago quarter to $9.7 billion, primarily driven by higher premiums. The top-line figure however missed the Zacks Consensus Estimate of $9.8 billion.

Net written premiums increased 12% year over year to a record $9.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $8.9 billion.

Catastrophe losses totaled $422 million, wider than $36 million pre-tax in the prior-year quarter. Catastrophe losses primarily resulted from severe wind and hail storms in multiple states. Travelers witnessed an underwriting gain of $501 million, down 12.9% year over year.  The combined ratio deteriorated 410 bps year over year to 95.4.

The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.

Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and a 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.

Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion. The combined ratio deteriorated 450 bps from the prior-year quarter’s level to 99.

RLI Corp. (RLI - Free Report) reported first-quarter 2023 operating earnings of $1.63 per share, beating the Zacks Consensus Estimate by 34.7%. The bottom line improved 14% from the prior-year quarter. Operating revenues for the reported quarter were $335 million, up 19.4% year over year, driven by 14.3% higher net premiums earned and 51.5% higher net investment income. The top line however missed the Zacks Consensus Estimate by 2.2%.

Gross premiums written increased 15.6% year over year to $415 million. This uptick can be attributed to the solid performance of the Casualty (up 1%), Property (up 45%) and Surety segments (up 13.6%). Underwriting income of $67.9 million increased 14.1%, primarily due to higher profitability in its Property and Casualty segment. Combined ratio remained flat year over year at 77.9.

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