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HCI Group (HCI) Gets Approval to Operate CORE in Florida
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HCI Group, Inc. (HCI - Free Report) recently revealed that it has obtained approval from the Florida Office of Insurance Regulation to operate Condo Owners Reciprocal Exchange (“CORE”) in the state. It plans to begin operations in February 2024 and assume $75 million worth of in-force premiums from Citizens Property Insurance Corporation.
The approval received from the Florida insurance regulators is likely to stimulate private firms to assume policies from the state-backed insurance company, which is related to the state’s legislatively mandated depopulation program. The creation of a Reciprocal Exchange bodes well for the company as it will mark HCI’s entry into the commercial residential insurance market in Florida. HCI’s management believes that a hard market exists for commercial residential insurance, and creating a reciprocal exchange will help it grow at a significant rate.
The company will benefit from management fees charged to CORE. Fee-based income is expected to create revenue stabilization and lower the amount of risk. In a reciprocal insurance exchange, policyholders own the company, and they have to compensate one another for losses, thereby limiting losses for HCI Group. HCI aims to deliver value to shareholders and the policyholders by providing them with competitive prices and customized coverage. It will also get federal tax benefits, positively impacting its results.
This move highlights the company’s focus on diversifying its operations and ventures into new revenue streams. It expects to cross $1 billion of in-force premiums in early 2024, and measures like these are expected to aid the company in achieving its goals.
Price Performance
Over the past year, shares of HCI have surged 131.4%, outperforming the industry’s 11.6% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
HCI Group currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for Assurant’s current-year earnings indicates a 30.8% 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 5.4% year-over-year growth.
The consensus mark for CNA Financial’s current-year earnings indicates a 14.8% year-over-year increase. It beat earnings estimates in three of the past four quarters, missing once, with an average surprise of 9.2%. Furthermore, the consensus estimate for CNA’s 2023 revenues suggests 10.6% year-over-year growth.
The Zacks Consensus Estimate for Arch Capital Group’s current-year earnings is pegged at $7.7 per share, which indicates 58.1% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction during the past month. ACGL beat earnings estimates in each of the past four quarters, with an average surprise of 35.2%.
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HCI Group (HCI) Gets Approval to Operate CORE in Florida
HCI Group, Inc. (HCI - Free Report) recently revealed that it has obtained approval from the Florida Office of Insurance Regulation to operate Condo Owners Reciprocal Exchange (“CORE”) in the state. It plans to begin operations in February 2024 and assume $75 million worth of in-force premiums from Citizens Property Insurance Corporation.
The approval received from the Florida insurance regulators is likely to stimulate private firms to assume policies from the state-backed insurance company, which is related to the state’s legislatively mandated depopulation program. The creation of a Reciprocal Exchange bodes well for the company as it will mark HCI’s entry into the commercial residential insurance market in Florida. HCI’s management believes that a hard market exists for commercial residential insurance, and creating a reciprocal exchange will help it grow at a significant rate.
The company will benefit from management fees charged to CORE. Fee-based income is expected to create revenue stabilization and lower the amount of risk. In a reciprocal insurance exchange, policyholders own the company, and they have to compensate one another for losses, thereby limiting losses for HCI Group. HCI aims to deliver value to shareholders and the policyholders by providing them with competitive prices and customized coverage. It will also get federal tax benefits, positively impacting its results.
This move highlights the company’s focus on diversifying its operations and ventures into new revenue streams. It expects to cross $1 billion of in-force premiums in early 2024, and measures like these are expected to aid the company in achieving its goals.
Price Performance
Over the past year, shares of HCI have surged 131.4%, outperforming the industry’s 11.6% growth.
Image Source: Zacks Investment Research
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) , CNA Financial Corporation (CNA - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . Each stock presently carries a Zacks Rank of 1. 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 30.8% 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 5.4% year-over-year growth.
The consensus mark for CNA Financial’s current-year earnings indicates a 14.8% year-over-year increase. It beat earnings estimates in three of the past four quarters, missing once, with an average surprise of 9.2%. Furthermore, the consensus estimate for CNA’s 2023 revenues suggests 10.6% year-over-year growth.
The Zacks Consensus Estimate for Arch Capital Group’s current-year earnings is pegged at $7.7 per share, which indicates 58.1% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction during the past month. ACGL beat earnings estimates in each of the past four quarters, with an average surprise of 35.2%.