HCI Group (HCI) Q4 2024 earnings summary

Executive summary

• Overcame significant hurricane losses in Florida, handling 22,600 claims and paying over $500 million for three major hurricanes in 2024.

• Q4 2024 pre-tax income was $5.9 million and net income $4.1 million; full-year pre-tax income reached $173.4 million and net income $127.6 million.

• Maintained strong customer retention at 90% and transitioned nearly 53,000 Citizens policyholders, achieving a 77% success rate.

• Launched new insurance entities, including Condo Owners Reciprocal Exchange and Tailrow, expanding in-force premium to over $1.2 billion, up 22% year-over-year.

• Paid a $0.40 per share dividend in Q4, marking the 57th consecutive quarterly dividend.

Financial highlights

• Full-year 2024 gross premiums earned increased 41.5% to $1.08 billion from $765.5 million in 2023.

• Book value per share at year-end 2024 was $42.10, up from $33.36 at year-end 2023.

• Net investment income for 2024 was $59.1 million, up from $46.2 million in 2023.

• Losses and loss adjustment expenses for 2024 were $374.7 million, including $127.5 million from hurricanes.

• Dividends per share remained steady at $1.60 for the year.

Outlook and guidance

• Combined ratio expected in the mid-60% range for the first half of 2025, normalizing to about 75% in the second half as reinsurance and commissions increase.

• Management expects to maintain flat rates for the foreseeable future despite increased catastrophe activity.

• Exzeo Group, the technology platform, is expected to grow pre-tax income significantly in 2025, building on $35 million earned in 2024.

• Plans to leverage proprietary technology for other carriers and expand into new geographies.