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HCI Group Reports Fourth Quarter and Full Year 2017 Results
TAMPA, Fla. March 6, 2018 HCI Group, Inc. (NYSE:HCI), a holding company primarily engaged in homeowners insurance, with additional operations in reinsurance, real estate and information technology, reported results for the three and twelve months ended December 31, 2017.
Fourth Quarter 2017 - Financial Results
Net income for the fourth quarter of 2017 totaled $12.1 million or $1.14 diluted earnings per share compared with $4.6 million or $0.47 diluted earnings per share in the fourth quarter of 2016.
Gross premiums earned totaled $87.9 million compared with $92.4 million in the same period in 2016. The decrease in 2017 was attributable primarily to policy attrition. Gross premiums written were $46.6 million compared with $58.9 million in the same quarter in 2016, due primarily to a smaller number of policies assumed from Citizens Property Insurance Corporation in the fourth quarter of 2017 compared with the fourth quarter of 2016.
Premiums ceded increased to $32.1 million or 36.5% of gross premiums earned from $29.1 million or 31.4% of gross premiums earned in the fourth quarter of 2016. The increase was primarily attributable to the adjustment to benefits and deferred reinsurance premiums related to retrospective provisions under certain reinsurance contracts.
Net premiums earned (defined as gross premiums earned less premiums ceded to reinsurance) were $55.8 million compared with $63.4 million in the same period in 2016.
Net premiums written (defined as gross premiums written less premiums ceded to reinsurance) were $14.5 million compared with $29.8 million in the same period in 2016.
Investment related income was $5.0 million compared with $4.8 million in the same period in 2016. Additionally, the company recognized net non-cash charges of $0.6 million in the fourth quarter of 2017 and $1.0 million in the fourth quarter of 2016 due to declines in the fair value of securities determined to be other than temporary.
Losses and loss adjustment expenses were $23.2 million compared with $45.4 million in the same period in 2016. The decrease was due to the impact of Hurricane Matthew and reserve strengthening in the fourth quarter of 2016.
Interest expense was $4.4 million compared with $3.0 million in the same period in 2016. The increase resulted from the issuance of $143.75 million of 4.25% convertible senior notes in March 2017, offset in part by the redemption of the companys 8% senior notes in the amount of $40.25 million in April 2017.
Fourth Quarter 2017 - Financial Ratios
The loss ratio (defined as losses and loss adjustment expenses related to net premiums earned) for the fourth quarter of 2017 was 41.6% compared with 71.7% for the fourth quarter of 2016.
The expense ratio (defined as underwriting expenses, general and administrative personnel expenses, interest expenses, and other operating expenses related to net premiums earned) was 38.5% compared with 33.2% in the same prior year period.
Expressed as a total of all expenses related to net premiums earned, the combined loss and expense ratio was 80.1% compared with 104.9% in the same prior year period.
The following information was filed by Hci Group, Inc. (HCI) on Tuesday, March 6, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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