HCI Group (NYSE:HCI) reported higher third-quarter earnings as investment income rose, reinsurance expenses declined and operating costs grew more slowly than revenue, executives said on the company’s earnings call.
Pre-tax income exceeded $116 million, up from $91 million a year earlier, while diluted earnings per share increased to $6.45 from $4.90. Earnings per share also rose from $5.60 in the second quarter of 2026, Chief Financial Officer Mark Harmsworth said.
Gross premiums earned rose 5% year over year, while net income climbed 27%. Harmsworth attributed the difference to operational leverage, including investment income growth of more than 20%, lower reinsurance expenses and slower expense growth.
Hurricane Isaias and reinsurance
Chief Operating Officer Karin Coleman said Hurricane Isaias made landfall in Florida on October 9 as a Category 2 storm. HCI had received more than 1,300 related claims and distributed more than 3,000 checks, she said.
Harmsworth said the company expects a $15 million net loss from the storm in the fourth quarter, and that the figure will not change even if the gross loss changes because of how its reinsurance works. He said it was too early to publish a gross loss estimate and that the company would provide one in its annual report.
Coleman said HCI’s use of multiple reinsurance towers helps mitigate potential losses from an individual storm. She also said the company expects its book value to recover from Isaias in two weeks, compared with three months after Hurricanes Helene and Milton, 15 months after Hurricane Ian and 36 months after Hurricane Irma.
CORE growth and the rate outlook
Gross written premiums increased 12% year over year, supported by residential business at CORE, Coleman said. The new business has more than doubled since the prior quarter and is averaging more than $8 million a month, she said.
Chairman and CEO Paresh Patel said HCI has narrowed the gap toward organic policy growth, but it would be a “close-run race” whether it achieves that by year-end. Harmsworth said CORE’s monthly written premium had exceeded the approximately $6 million the company had expected on its previous call.
Harmsworth said policy attrition over the past 12 months has been approximately 8% to 8.5% and has remained fairly consistent throughout the year. Coleman said the company anticipates insurance rates will fall somewhat, citing reforms and other factors over the past few years.
HCI continues to expect a loss ratio of 20% to 25%, Harmsworth said. The ratio for the first nine months of 2026 was 21%, unchanged from the same period a year earlier. He said claim frequency and severity have generally remained consistent since legislative changes took effect, aside from some inflation in materials costs and quarterly variation from weather.
Capital and investment income
HCI had more than $2.1 billion in cash and investments, more than $1 billion in stockholders’ equity and a debt-to-capital ratio below 6%, Harmsworth said. Book value exceeded $90 per share; including unrealized gains associated with Exzeo and the real estate portfolio, pro forma book value was more than $160 per share, he said.
The company has repurchased 4% of its shares so far this year. Harmsworth said HCI had more than $150 million of holding company liquidity after the $80 million buyback, while its insurance carriers held more than $750 million in combined surplus.
Harmsworth said HCI was generating approximately $75 million in positive cash flow per quarter. At a yield of roughly 4%, each quarter’s cash flow would generate about $3 million in additional annual investment income, he said. He put the overall yield on invested balances at approximately 4.25%.
Patel said HCI plans to maintain a stable level of business in 2027 while seeking further earnings-per-share leverage through a lower share count. He also said the company is working on insurance and technology innovations, with artificial intelligence expected to change the homeowners insurance market.
About HCI Group (NYSE:HCI)
HCI Group, Inc is a Florida-based holding company focused primarily on property and casualty insurance. Through its insurance subsidiaries, the company provides residential property insurance products, including homeowners, condominium, renters and dwelling coverage, designed to protect policyholders against risks such as wind, fire, theft and other covered losses.
HCI’s insurance operations have historically been concentrated in Florida, one of the largest and most challenging residential property-insurance markets in the United States.
