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HCI Group (HCI) Q2 Earnings, Revenues Top, Premiums Rise Y/Y
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HCI Group (HCI - Free Report) reported second-quarter 2024 earnings of $4.21 per share, which beat the Zacks Consensus Estimate by 17.6%. Quarterly earnings rose more than threefold year over year.
The quarterly results reflected solid underwriting experience, 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 $263.6 million increased 44.9% year over year, driven primarily by growth in Florida, including the assumption of policies from Citizens.
Net premiums earned increased 61.7% year over year to $186.8 million.
Operating revenues increased 62.2% year over year to $206 million, driven by net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 4.9%.
Net investment income was $16.9 million, up 92% year over year, driven by an increase in interest income from cash, cash equivalents, available-for-sale securities and an increase in income from real estate investments.
Total expenses increased 21.6% year over year to $130.2 million due to increased losses and loss adjustment expenses, policy acquisition and other underwriting expenses, general and administrative personnel expenses and interest expense.
Losses and loss adjustment expenses were $78.3 million, up 26.3% year over year. Losses and loss adjustment expenses, as a percent of gross premiums earned, declined to 29.7% from 34% in the year-ago quarter, primarily attributable to the continued decline in claims and litigation frequency in Florida.
Financial Update
HCI Group exited the second quarter of 2024 with cash and cash equivalents of $449.1 million, which declined 16.8% from the 2023-end level. Total investments increased 51.8% from 2023-end to $789.5 million at the end of the second quarter.
Long-term debt of $184.9 million decreased 11.3% from the 2023-end figure.
As of Jun 30, 2023, total shareholders’ equity was $188.4 million, up 38.5% from the level at 2023-end.
Book value per share increased more than threefold from 2023-end to $42.72 at second quarter-end.
Performance of Other Property and Casualty Insurers
The Travelers Companies (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Progressive’s net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate of earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income.
Selective Insurance’s total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
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HCI Group (HCI) Q2 Earnings, Revenues Top, Premiums Rise Y/Y
HCI Group (HCI - Free Report) reported second-quarter 2024 earnings of $4.21 per share, which beat the Zacks Consensus Estimate by 17.6%. Quarterly earnings rose more than threefold year over year.
The quarterly results reflected solid underwriting experience, 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 $263.6 million increased 44.9% year over year, driven primarily by growth in Florida, including the assumption of policies from Citizens.
Net premiums earned increased 61.7% year over year to $186.8 million.
Operating revenues increased 62.2% year over year to $206 million, driven by net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 4.9%.
HCI Group, Inc. Price, Consensus and EPS Surprise
HCI Group, Inc. price-consensus-eps-surprise-chart | HCI Group, Inc. Quote
Net investment income was $16.9 million, up 92% year over year, driven by an increase in interest income from cash, cash equivalents, available-for-sale securities and an increase in income from real estate investments.
Total expenses increased 21.6% year over year to $130.2 million due to increased losses and loss adjustment expenses, policy acquisition and other underwriting expenses, general and administrative personnel expenses and interest expense.
Losses and loss adjustment expenses were $78.3 million, up 26.3% year over year. Losses and loss adjustment expenses, as a percent of gross premiums earned, declined to 29.7% from 34% in the year-ago quarter, primarily attributable to the continued decline in claims and litigation frequency in Florida.
Financial Update
HCI Group exited the second quarter of 2024 with cash and cash equivalents of $449.1 million, which declined 16.8% from the 2023-end level. Total investments increased 51.8% from 2023-end to $789.5 million at the end of the second quarter.
Long-term debt of $184.9 million decreased 11.3% from the 2023-end figure.
As of Jun 30, 2023, total shareholders’ equity was $188.4 million, up 38.5% from the level at 2023-end.
Book value per share increased more than threefold from 2023-end to $42.72 at second quarter-end.
Zacks Rank
HCI Group currently has a Zacks Rank #4 (Sell).
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 second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Progressive’s net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. Combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate of earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income.
Selective Insurance’s total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.