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HCI Group's (HCI) HCPCI Takes Over 53,000 Policies From Citizens

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HCI Group, Inc. (HCI - Free Report) recently revealed that its subsidiary, Homeowners Choice Property & Casualty Insurance Company (“HCPCI”), has assumed around 53,750 policies from the state-backed insurer in Florida, Citizens Property Insurance Corporation.

The approval was received from the Florida Office of Insurance Regulation in September, while the effective assumption date is Nov 21, 2023. It received approval for 75,000 policies and garnered an acceptance rate of 74%. The move highlights HCPCI’s ability to offer policyholders a competitively priced renewal policy and enhanced coverage as compared with the alternative.

The assumed policies represent an in-force premium of around $196 million. Last year, the largest HCI subsidiary witnessed a $377 million in-force premium, which rose to $423 million in the third quarter of 2023. The segment earned total revenues of $72 million in the third quarter, up from $61.5 million a year ago.

Another subsidiary of HCI Group, TypTap, is anticipated to take over policies from Citizens Property Insurance Corporation next month and in the first month of 2024. These moves are likely to encourage private firms to assume policies from the state-backed insurance company, which is related to the state’s legislatively mandated depopulation program.

Since its launch in 2016, TypTap has experienced substantial organic growth, driven by advancements in its technology. It is now operating in 13 states. Refining risk evaluation and improving efficiency in the subsidiary are boosting TypTap’s profit levels. During the 2018-2022 period, TypTap recorded a gross written premium CAGR of 121%.

Price Performance

Over the past year, shares of HCI have surged 121.1%, outperforming the industry’s 11.3% growth.

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Zacks Rank & Other Key Picks

HCI Group currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader Finance space are Assurant, Inc. (AIZ - Free Report) , Employers Holdings, Inc. (EIG - Free Report) and Brown & Brown, Inc. (BRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Assurant’s current-year earnings indicates a 27.5% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 42.4%. Also, the consensus mark for AIZ’s 2023 revenues suggests 5% year-over-year growth.

The consensus mark for Employers Holdings’ current-year earnings indicates a 17.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 26.5%. Furthermore, the consensus estimate for EIG’s 2023 revenues suggests 17.5% year-over-year growth.

The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $2.75 per share, which indicates 20.6% year-over-year growth. It has witnessed four upward estimate revisions against none in the opposite direction during the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%.

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