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HCI Group (HCI - Free Report) reported fourth-quarter 2023 earnings of $3.22 per share, which beat the Zacks Consensus Estimate by 128.4%. Quarterly earnings rose from 6 cents in the year-ago quarter.
The quarterly results reflected better performance at Homeowner Choice and TypTap Insurance Company as well as an increase in net investment income, partially offset by higher expenses.
Behind the Headlines
Gross premiums earned of $215.2 million increased 17.6% year over year. Quarterly results include $23 million of premium from the assumption of policies from Citizens.
Net premiums earned increased 40.3% year over year to $148.6 million.
Operating revenues increased 35.7% year over year to $162.7 million on account of the rise in net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 11.4%.
Net investment income was $10.3 million, up 39.2% year over year, driven by higher yields on fixed maturity securities, cash and cash equivalents, and higher cash balance.
Total expenses decreased 7.4% year over year to $108.5 million due to decreased losses and loss adjustment expenses, and policy acquisition and other underwriting expenses.
Losses and loss adjustment expenses were $65.4 million, down 9.3% year over year, primarily due to the continued improvement in claims experience in Florida including lower claims and litigation frequency.
Losses and loss adjustment expenses, as a percent of gross premiums earned, declined to 30.4% from 39.4% in the year-ago quarter.
Financial Update
HCI Group exited 2023 with cash and cash equivalents of $536.5million, which surged 128.4% from the 2022-end level. Total investments decreased 15.5% from 2022-end to $520.3 million at the end of 2023.
Long-term debt of $208.5 million decreased 0.2% from the 2022-end figure.
As of Dec 31, 2023, total shareholders’ equity was $188.4 million, nearly doubled from the level at 2022-end.
Book value per share increased 76.4% from 2022-end to $33.36 at 2023-end.
Performance of Other Property and Casualty Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top line beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
The combined ratio —percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
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HCI Group (HCI) Q4 Earnings & Revenues Top, Premiums Rise Y/Y
HCI Group (HCI - Free Report) reported fourth-quarter 2023 earnings of $3.22 per share, which beat the Zacks Consensus Estimate by 128.4%. Quarterly earnings rose from 6 cents in the year-ago quarter.
The quarterly results reflected better performance at Homeowner Choice and TypTap Insurance Company as well as an increase in net investment income, partially offset by higher expenses.
Behind the Headlines
Gross premiums earned of $215.2 million increased 17.6% year over year. Quarterly results include $23 million of premium from the assumption of policies from Citizens.
Net premiums earned increased 40.3% year over year to $148.6 million.
Operating revenues increased 35.7% year over year to $162.7 million on account of the rise in net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 11.4%.
HCI Group, Inc. Price, Consensus and EPS Surprise
HCI Group, Inc. price-consensus-eps-surprise-chart | HCI Group, Inc. Quote
Net investment income was $10.3 million, up 39.2% year over year, driven by higher yields on fixed maturity securities, cash and cash equivalents, and higher cash balance.
Total expenses decreased 7.4% year over year to $108.5 million due to decreased losses and loss adjustment expenses, and policy acquisition and other underwriting expenses.
Losses and loss adjustment expenses were $65.4 million, down 9.3% year over year, primarily due to the continued improvement in claims experience in Florida including lower claims and litigation frequency.
Losses and loss adjustment expenses, as a percent of gross premiums earned, declined to 30.4% from 39.4% in the year-ago quarter.
Financial Update
HCI Group exited 2023 with cash and cash equivalents of $536.5million, which surged 128.4% from the 2022-end level. Total investments decreased 15.5% from 2022-end to $520.3 million at the end of 2023.
Long-term debt of $208.5 million decreased 0.2% from the 2022-end figure.
As of Dec 31, 2023, total shareholders’ equity was $188.4 million, nearly doubled from the level at 2022-end.
Book value per share increased 76.4% from 2022-end to $33.36 at 2023-end.
Zacks Rank
HCI Group currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Property and Casualty Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top line beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
The combined ratio —percentage of premiums paid out as claims and expenses — improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.