Hci Group, Inc. · NYSE:HCI
Hci — Q4 2024 Earnings Presentation
30 slides from Hci's earnings presentation, Feb 27, 2025
Slide 1: Investor Presentation
Investor Presentation NYSE: HCI | APRIL 2025
Slide 2: Forward-Looking Statement
This presentation includes certain forward‐looking statements and information, including statements regarding plans, strategies and expectations of HCI Group, Inc. (“HCI” or the “Company”). When used in this presentation, words such as “believes,” “anticipates,” “expects,” “estimates,” Forward-Looki
Slide 3: About Us
About Us $1.2B $42.10 34.6% Premiums In-Force Book Value Per Share Gross Loss Ratio (as of 12/31/24) (as of 12/31/24) (as of 12/31/24) $8.89 $127.6M 34% Diluted Earnings Per Share Net Income Debt to Capital Ratio (full year 2024) (full year 2024) (as of 12/31/24) 2
Slide 4: Highlights
Highlights A holding company that operates two distinct operating units, with each unit have defined management teams and operational objectives. 2006 founded Combining technology and industry knowledge to drive profitable growth consecutive quarters Allocating capital with purpose and discipline wh
Slide 5: Growing Through Investment & Innovation
Growing Through Investment & Innovation Tailrow Insurance Exchange commences operations HCI Group premium TypTap launches in force exceeds Executed Launched Launched $1 billion TypTap Insurance nationwide expansion first Citizens real estate TypTap insurance Group rebranded to assumption division bu
Slide 6: HCI Operational Units
HCI Operational Units Remaining Operating Structure New Operating Unit INSURANCE CLAIMS ADVANCED UNDERWRITING DATA & ANALYTICS REINSURANCE REAL ESTATE INSURANCE MANAGEMENT SERVICES 5
Slide 7: HCI Divisions
HCI Divisions 6
Slide 8: HCI's Operating Divisions
HCI’s Operating Divisions Insurance Companies Reinsurance • HCI currently owns or controls four insurance companies. • Class 3 captive Bermuda reinsurer. • Insurance companies control over $1.2 billion of premium- • Opportunistically participates on reinsurance towers for the in-force. four insuranc
Slide 9: Overview of Insurance Companies
Overview of Insurance Companies Launched in 2007 Launched in 2016 Commenced operations in Commenced operations in 2024 as reciprocal exchange 2025 as reciprocal exchange Homeowners and Technology-driven condominium owners homeowners insurance Writes Florida-based Writes Florida-based personal insura
Slide 10: A Growing Business
A Growing Business 1 Premium in Force (in $M) Geographic Footprint $1,226 $995 $719 $737 $528 $353 $338 $369 2017 2018 2019 2020 2021 2022 2023 2024 Best-in-class Proactively Deploying Excess Opportunistically Underwriter in the Managing Risk Capital Into Investments Add Policies Florida Market and
Slide 11: A Profitable Homeowners Business
A Profitable Homeowners Business Loss Ratio 1 Leverage Impact technology to of Legislative constantly Reforms in evaluate Florida underwriting criteria Gross loss ratio has benefitted from a: • Rate adequacy 51.3% • Exposure • 25% decline management in claims frequency Hurricane Ian •Legislative 35%
Slide 12: Steady Improvement
Steady Improvement Shareholders Equity (in $M) Invested Assets (in $M) $453 $1,407 $325 $1,057 $850 $163 2022 2023 2024 2022 2023 2024 Book Value Per Share Debt Leverage (%) 1 $42.10 57% $33.36 39% 34% $18.91 2022 2023 2024 2022 2023 2024 11 (1) Excludes preferreds
Slide 13: Exzeo
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Slide 14: Overview of Exzeo
Overview of Advanced Underwriting Insurance Management Data & Analytics Solutions Solutions • Over a decade of expertise in • Exzeo transforms both structured and • Exzeo designs, markets, underwrites, developing and training underwriting unstructured data into an actionable and administers insuranc
Slide 15: Exzeo Product Ecosystem
Exzeo Product Ecosystem • Improve risk selection • Streamline operations and drive • Faster quoting efficiency • Better agent experience • Integrated, digital solution + g Ma Po g • Real-time visibility n ritin na lic me de i Un uot rw ge y Q nt • Leverage big data Designed to Serve • Efficient clai
Slide 16: HCI Developed its Own Technology
HCI Developed its Own Technology Exzeo Was Launched in 2012 to Build Third insurance and Develop HCI’s Entire Technology Stack product is launched – Second commercial insurance residential product is condo Wholly-owned technology First insurance launched – insurance subsidiary product is homeowners
Slide 17: Technology Advantages
Turn-key insurance technology solution based on a proprietary platform of purpose built software and data-analytics applications Transforms structure and unstructured data into actional format for our advanced Technology underwriting models. Advantages Over a decade of expertise in developing and tr
Slide 18: Individual Level Risk Evaluation Results in Lower Loss Ratio
Individual Level Risk Evaluation Results in Lower Loss Ratio Property level (HCI insurance carriers) vs. zip code level (industry) Algorithms can determine “green properties” vs. “red properties” in the same neighborhood 17
Slide 19: Our differentiated data engine enables precise risk selection
Our differentiated data engine enables precise risk selection Satellite imaging to determine proportion of ‘hip’ vs. ‘gable’ roofs1 TypTap’s powerful data engine Extensive data fields Text mining of public litigation history In-house sourcing through proprietary research Satellite imaging to Careful
Slide 20: We Use Technology to Underwrite at the Individual Property Level
We Use Technology to Underwrite at the 73%1 Individual Property Level industry average loss ratio Differentiated Strategy Up to 1000 Data Points per Property Individual property level risk evaluation Individual Property Level Risk Selection Only write insurance for homes that are expected to be prof
Slide 21: Reinsurance
Reinsurance 20
Slide 22: Claddaugh Generating Profits for Our Shareholders
Claddaugh Generating Profits for Our Shareholders Cumulative Net Premium Earned Since 2008 $250 Claddaugh is used to $200 opportunistically manage reinsurance cycles for HCI’s insurance divisions. $150 $100 $50 Since its formation in 2008, Claddaugh has contributed 1 $45M in pre-tax income to HCI. $
Slide 23: Real Estate
Real Estate 22
Slide 24: Creating Value in Real Estate
Acquire properties with differentiated value drivers Creating Value in Real Estate Optimize Reinvest or capital harvest Greenleaf Capital owns and structure operates HCI’s real estate portfolio. Its holdings include a set of premier commercial assets in rapidly growing Florida. Develop or reposition
Slide 25: Recent Sales Transactions
Generating Gains from our Real Estate Portfolio PROPERTY LOCATION DATE PURCHASED GROSS PROCEEDS2 BOOK VALUE PRE-TAX GAIN1 Recent Sales Transactions Office Building Tampa 2010 $44.0M $7.0M $37.0M Office Building Tampa 2017 $14.5M $1.1M $13.4M Grocery Anchored Retail Eustis, FL 2016 $13.0M $10.6M $2.5
Slide 26: Florida Real Estate Portfolio With Embedded Value
Florida Real Estate Portfolio With Embedded Value PROPERTY APPRAISED VALUE (1) BOOK VALUE(3) DEBT ON PROPERTY Office Portfolio $25M $18M $4M OPERATING Anchored Retail 28M 17M $11M Waterfront Specialty Use Portfolio 40M 17M - DEVELOPMENT UNDER Properties Under Development 52M 48M - $145M1 $99M APPRAI
Slide 27: HCI Group Investment Portfolio
HCI Group Investment Portfolio A conservative allocation, positioned for higher rates and opportunistic investments 1% 4% 6% Fixed Income Cash 38% Real Estate & Other Total invested assets1 $1.4 billion Equity Limited Partnerships Fixed Income Average 51% Duration ~1.5 year (1) As of 12/31/24 26
Slide 28: Experienced & Focused Leadership Team
Experienced & Focused Leadership Team PARESH PATEL MARK HARMSW ORTH Chairman & Chief Executive Officer, HCI Group Chief Financial Officer, HCI Group ▪ Founder; Chairman since 2007 & CEO since 2011 ▪ CFO since 2017; previously SVP of Finance ▪ Designed HCI’s policy administration systems, leveraging
Slide 29: Delivering Shareholder Value
Delivering Shareholder Value capital returned to $444M shareholders since inception2 18% insider ownership >3700% Total Shareholder Return since IPO 10-year average 15% ROE1 1) As of 12/31/2024 2) Includes $269M buybacks and $175M dividends 28
Slide 30: Contact Us
Contact Us I N V E S T O R R E L AT I O N S HCI C O N TA C T G R O U P, I N C . Bill Broomall, CFA 3802 Coconut Palm Drive VP, Investor Relations Tampa, FL 33619 Tel (813) 776-1012 Tel (813) 849-9500 wbroomall@typtap.com www.hcigroup.com contactus@hcigroup.com 29