HCI Group Files Q2 2024 10-Q

TL;DR

HCI Group's Q2 10-Q is in: financials updated, check for insurance and investment details.

AI Summary

HCI Group, Inc. filed its 10-Q for the period ending June 30, 2024. The company reported its financial performance and position, including details on its insurance operations and investments. Key financial data and disclosures relevant to its business segments and debt obligations were provided.

Why It Matters

This filing provides investors with an update on HCI Group's financial health and operational performance for the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The filing contains detailed financial information, including debt and investment disclosures, which can carry inherent risks for investors.

Key Numbers

• 2024-06-30 — Period End Date (The end of the fiscal quarter reported in the 10-Q.)
• 2024-08-09 — Filing Date (The date the 10-Q was officially submitted to the SEC.)
• 2023-12-31 — Prior Year End Date (Provides a comparative point for financial performance.)

Key Players & Entities

• HCI Group, Inc. (company) — Filer of the 10-Q
• 20240630 (date) — Period of report for the 10-Q
• Homeowners Choice, Inc. (company) — Former company name of HCI Group, Inc.
• TypTap Insurance Group, Inc. (company) — Mentioned in relation to Series A Preferred Stock
• TypTap Group (company) — Associated with segment concentration risk for assets and revenue

FAQ

Filing Documents

• hci-20240630.htm (10-Q) — 4825KB
• hci-ex10_8.htm (EX-10.8) — 308KB
• hci-ex10_9.htm (EX-10.9) — 319KB
• hci-ex10_10.htm (EX-10.10) — 391KB
• hci-ex10_11.htm (EX-10.11) — 233KB
• hci-ex10_12.htm (EX-10.12) — 400KB
• hci-ex10_13.htm (EX-10.13) — 237KB
• hci-ex10_14.htm (EX-10.14) — 352KB
• hci-ex10_15.htm (EX-10.15) — 339KB
• hci-ex10_16.htm (EX-10.16) — 427KB
• hci-ex10_17.htm (EX-10.17) — 254KB
• hci-ex10_18.htm (EX-10.18) — 402KB
• hci-ex10_19.htm (EX-10.19) — 251KB
• hci-ex10_20.htm (EX-10.20) — 434KB
• hci-ex10_21.htm (EX-10.21) — 262KB
• hci-ex10_22.htm (EX-10.22) — 415KB
• hci-ex10_23.htm (EX-10.23) — 393KB
• hci-ex31_1.htm (EX-31.1) — 13KB
• hci-ex31_2.htm (EX-31.2) — 13KB
• hci-ex32_1.htm (EX-32.1) — 5KB
• hci-ex32_2.htm (EX-32.2) — 5KB
• img108006941_0.jpg (GRAPHIC) — 11KB
• img108006941_1.jpg (GRAPHIC) — 2KB
• img108006941_2.jpg (GRAPHIC) — 2KB
• img108930462_0.jpg (GRAPHIC) — 13KB
• img108930462_1.jpg (GRAPHIC) — 3KB
• img108930462_2.jpg (GRAPHIC) — 3KB
• img108930462_3.jpg (GRAPHIC) — 3KB
• img198823140_0.jpg (GRAPHIC) — 42KB
• img199746661_0.jpg (GRAPHIC) — 5KB
• img199746661_1.jpg (GRAPHIC) — 5KB
• 0000950170-24-094718.txt ( ) — 29622KB
• hci-20240630.xsd (EX-101.SCH) — 2665KB
• hci-20240630_htm.xml (XML) — 6015KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1

Financial Statements

Financial Statements Consolidated Balance Sheets: June 30, 2024 (unaudited) and December 31, 2023 1 - 2 Consolidated Statements of Income: Three and six months ended June 30, 2024 and 2023 (unaudited) 3 Consolidated Statements of Comprehensive Income: Three and six months ended June 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Equity: Three and six months ended June 30, 2024 and 2023 (unaudited) 5 - 8 Consolidated Statements of Cash Flows: Three and six months ended June 30, 2024 and 2023 (unaudited) 9 - 11

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 12 - 47 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 48 - 60 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 61 - 62 Item 4

Controls and Procedures

Controls and Procedures 63

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 64 Item 1A

Risk Factors

Risk Factors 64 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 64 - 65 Item 3 Defaults Upon Senior Securities 65 Item 4 Mine Safety Disclosures 65 Item 5 Other Information 65 Item 6 Exhibits 66 - 72

Signatures

Signatures 73 Certifications

– FINANCI AL INFORMATION

PART I – FINANCI AL INFORMATION

– Financ ial Statements

Item 1 – Financ ial Statements HCI GROUP, INC. AND SUBSIDIARIES Consolidated B alance Sheets (Dollar amounts in thousands) June 30, December 31, 2024 2023 (Unaudited) Assets Fixed-maturity securities, available for sale, at fair value (amortized cost: $ 643,892 and $ 387,687 , respectively and allowance for credit losses: $ 0 and $ 0 , respectively) $ 640,242 $ 383,238 Equity securities, at fair value (cost: $ 49,192 and $ 44,011 respectively) 53,886 45,537 Limited partnership investments 21,856 23,583 Real estate investments 73,507 67,893 Total investments 789,491 520,251 Cash and cash equivalents (a) 445,829 536,478 Restricted cash (a) 3,303 3,287 Receivable from maturities of fixed-maturity securities 500 91,085 Accrued interest and dividends receivable 7,067 3,507 Income taxes receivable (a) 2,820 — Deferred income taxes, net — 512 Premiums receivable, net (allowance: $ 4,321 and $ 3,152 , respectively) (a) 58,114 38,037 Assumed premiums receivable (a) 7,562 19,954 Prepaid reinsurance premiums (a) 123,955 86,232 Reinsurance recoverable, net of allowance for credit losses: Paid losses and loss adjustment expenses (allowance: $ 0 and $ 0 , respectively) 23,367 19,690 Unpaid losses and loss adjustment expenses (allowance: $ 66 and $ 118 , respectively) 279,795 330,604 Deferred policy acquisition costs (a) 52,564 42,910 Property and equipment, net 29,449 29,251 Right-of-use assets - operating leases 1,296 1,407 Intangible assets, net 6,432 7,659 Funds withheld for assumed business 14,353 30,087 Other assets (a) 65,484 50,365 Total assets $ 1,911,381 $ 1,811,316 (a) See Note 13 for details of balances associated with consolidated variable interest entity. (continued) 1 HCI GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets – (Continued) (Dollar amounts in thousands) June 30, Decemb

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) (Amounts in thousands, except share and per share amounts, unless otherwise stated) Note 1 -- Nat ure of Operations HCI Group, Inc., together with its subsidiaries ("HCI" or the "Company"), is primarily engaged in the property and casualty insurance business through two Florida domiciled insurance companies, Homeowners Choice Property & Casualty Insurance Company, Inc. ("HCPCI") and TypTap Insurance Company ("TypTap"). Both HCPCI and TypTap are authorized to underwrite various homeowners' property and casualty insurance products and allied lines business in the state of Florida and in other states. The operations of each insurance subsidiary are supported by HCI Group, Inc. and certain HCI subsidiaries. The operations of TypTap are also supported by TypTap Insurance Group, Inc. ("TTIG"), the Company's majority-owned subsidiary, and certain TTIG subsidiaries. The Company emphasizes the use of internally developed technologies to collect and analyze claims and other supplemental data to assist in the underwriting process and generate savings as well as efficiency for the operations of the insurance subsidiaries and other insurance-related businesses. The Company also provides an attorney-in-fact ("AIF") service. The Company's subsidiary, Core Risk Managers, LLC ("CRM"), serves as the AIF for Condo Owners Reciprocal Exchange ("CORE"), a reciprocal insurance exchange owned by its policyholders. Although the Company does not have any equity interest in CORE, the Company is required to consolidate CORE as its primary beneficiary. See Note 13 -- "Variable Interest Entity" for additional information. In addition, Greenleaf Capital, LLC, the Company's real estate subsidiary, is primarily engaged in the business of owning and leasing real estate and operating marina facilities. Assumed Business Citizens Assumption During the second quarter of 2024, the Company continued to participate in a take-out program thr

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) (Amounts in thousands, except share and per share amounts, unless otherwise stated) In preparing the interim unaudited consolidated financial statements, management was required to make certain judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective and complex, and consequently actual results may differ from these estimates. Material estimates that are particularly susceptible to significant change in the near term are related to the Company's losses and loss adjustment expenses, which include amounts estimated for claims incurred but not yet reported. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make these estimates. In addition, accounting policies specific to reinsurance with retrospective provisions, reinsurance recoverable, deferred income taxes, limited partnership investments, allowance for credit losses, and stock-based compensation expense involve significant judgments and estimates material to the Company's consolidated financial statements. In the case of assumed business, the Company relies entirely on the ceding insurance company to provide information about premiums, losses, and loss adjustment expenses. When the information is not available at the reporting date, the Company will make estimates based on all recent available data. Accordingly, the actual results could differ significantly from those estimates. All significant intercompany balances and transactions have been eliminated. Revenue from Claims Processing Services Revenue related to claims processing services is included in other revenue in the consolidated statements of income. For the three and six months ended June 30, 2024 ,

View Full Filing

View this 10-Q filing on SEC EDGAR