Slide 1: Investor Presentation
Investor Presentation NYSE: HCI | MARCH 2024
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: HCI at a Glance
Stock Price2 $116.08 Est. Market Capitalization2 $1.1B Property & Casualty Insurance Insurance Technology Book Value/Share $33.36 Dividend Yield2 1.4% HCI at a Glance In-Force Premium $1,005M Debt to Capital3 39% Founded/IPO 2006/2008 Management Tenure 13 years Reinsurance Real Estate Insider Owners
Slide 4: Investment Thesis
Investment Thesis An insurance holding company with operations in Homeowners Insurance, Information Technology Services, Reinsurance, and Real Estate 2006 founded Combining technology and industry knowledge to drive profitable growth Allocating capital with purpose and discipline while managing risk
Slide 5: Growing Through Investment & Innovation
Growing Through HCI transitions polices HCI Group premium in 4 Northeast states in force exceeds Investment & Innovation from UIHC $700 million HCI transitions all TypTap approved policies from Anchor in 20 states Insurance TypTap insurance group raises Executed Launched Launched $100M in capital fi
Slide 6: Overview of HCI Business Divisions
Overview of HCI Business Divisions PROPERTY & CASUALTY INSURANCE TECHNOLOGY RECIPROCAL EXCHANGE REINSURANCE Homeowners and Technology-driven Writing Florida-based Provides Reinsurance Flexibility condominium insurance homeowners insurance commercial residential lines primarily in Florida Nationwide
Slide 7: A Growing Homeowners Business
A Growing Homeowners Business Two Carriers in 13 States With Over $810M(1) in Annual Premium Premium in Force (in $M) Loss Ratio 2 $1,005 42% 33% $719 $737 $528 $353 $338 $369 2017 2018 2019 2020 2021 2022 2023 FY2022 FY2023 Premium growth… …with profitability (1) Trailing twelve-months gross premiu
Slide 8: Property & Casualty Insurance
Property & Casualty Insurance 7
Slide 9: Florida Focused Insurance Business with Strong Operating Performance
Florida Focused Insurance Business with Strong Operating Performance Homeowners Choice In-Force Premiums (in $M) 2 $620 $482 $422 1 $378 $323 $309 2018 2019 2020 2021 2022 2023 Best-in-class Opportunistically Proactively Deploying Excess Underwriter in the Acquiring Profitable Managing Risk Capital
Slide 10: Customer Centric Model Delivers High Customer Retention
Customer Centric Model Delivers High Customer Retention High Retention of In-Force Premium Strict underwriting, exposure management, and industry-leading 50% Includes claims technology support risk selection, Citizens % OF IN-FORCE PREMIUM customer retention and loss control assumption 33% Includes
Slide 11: Value-Added Portfolio Acquisitions
Value-Added Portfolio Acquisitions DECEMBER 2021 AUGUST 2021 Has acquired Has selected policies of ~$300M of in-force premiums acquired for $12M, resulting in earnings accretion Georgia, North Carolina & South Carolina Florida insurance policies personal insurance lines $87 million of $3.1 million c
Slide 12: Insurance Technology
Insurance Technology
Slide 13: U.S. Homeowners Insurance is a Massive Opportunity
U.S. Homeowners Insurance is a Massive Opportunity… …with Attractive Features Homeowners market is large and growing Fragmented with one company > 10% share High average premium and strong retention Incumbents under-investing in technology Opportunity to capture market share $130B Total U.S. market
Slide 14: Technology-Driven Insurance Company
Technology-Driven Insurance Company Proprietary National Superior Positive Experienced Technology Expansion Underwriting Cash Flow Management 13
Slide 15: We Use Technology to Underwrite at the Individual Property Level
We Use Technology to Underwrite at the 72%1 Individual Property Level industry average loss ratio TypTap’s 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 t
Slide 16: Individual Level Risk Evaluation Results
Individual Level Risk Evaluation Results in TypTap’s Lower Loss Ratio RED PROPERTIES (not approved): Risks that we expect Property level to be unprofitable and (TypTap) vs. zip code will not bind level (industry) GREEN PROPERTIES TypTap’s algorithms (approved): Those that meet our return can determi
Slide 17: HCI Developed its Own Technology
HCI Developed its Own Technology Exzeo Was Launched in 2012 to Build and Develop TypTap’s Entire Technology Stack Wholly-owned technology subsidiary Started writing flood Launched policies after Launched A team of over 150 Exzeo Launched Casaclue and 4 years of Launched homeowners National experienc
Slide 18: Exzeo's Full-stack Tech Platforms Power TypTap
Exzeo’s Full-stack Tech Platforms Power TypTap Simplified Customer Experience… … Powered by a Full Suite Solution Intuitive agent interface Enter an address to start a quote, and then answer 4-8 simple questions HARMONY Quoting & policy administration Intelligent data repository Casaclue, our intell
Slide 19: Our Data Repository is Curated for Precise Risk Evaluation
Our Data Repository is Curated for Precise Risk Evaluation Satellite imaging to determine proportion of ‘hip’ v. ‘gable’ roofs1 Data sourced through in-house Text mining of proprietary research and 3rd public litigation party resources history Satellite imaging to Curated and validated data identify
Slide 20: Algorithms Transforming Data Into Profit
Algorithms Transforming Data Into Profit TypTap uses Which data data to refine points are & update predictive The curated data is fed into our algorithms underwriting, cost rating engines TypTap has a multi-year track Algorithm-enabled engines determine record of red or green properties improving an
Slide 21: TypTap delivers value for agents and consumers
Increased Better conversion of underwriting selected risks results and through attractive profit pricing TypTap delivers value Ability to selectively Investment in underwrite best technology for agents and risks VALUE PROPOSITION consumers Increased Ease of use for “first looks” at agents TypTap pol
Slide 22: Why TypTap Partners with Agents
Why TypTap Partners with Agents We partner with agents because Direct Written Premium by Distribution Channel that’s where most policies are written 93% Overwhelming majority of homeowners insurance is bought through the independent agent channel Independent agent model allows us to scale and we do
Slide 23: TypTap's Advantages
Purpose-built technology suite 100% owned by TypTap Differentiated data and proprietary analytics TypTap’s creating superior underwriting results Advantages Aggregation of profitable properties is enhanced by high customer retention rate Ease of use for a frictionless policyholder and agent experien
Slide 24: TypTap is Operating to Maximize Growth AND Profitability
TypTap is Operating to Maximize Growth AND Profitability TypTap Gross Written Premium (in $M) TypTap Insurance Group Loss Ratio2 $364M $348M TypTap CAGR: 90% (vs. 7.5% for U.S. homeowners insurance industry)1 58% $247M 40% $105M $60M $15M 2018 2019 2020 2021 2022 2023 FY2022 FY2023 (1) Direct Premiu
Slide 25: Reinsurance
CLADDAUGH Reinsurance 24
Slide 26: Claddaugh Generating Profits for Our Shareholders
Claddaugh Generating Profits for Our Shareholders Cumulative Net Premium Earned Since 2008 $200 $180 Claddaugh is used to $160 opportunistically manage reinsurance cycles for HCI’s $140 insurance divisions. $120 $100 $80 $60 $40 Since its formation in 2008, $20 Claddaugh has contributed 1 $58M in pr
Slide 27: Real Estate
GREENLEAF CAPITAL Real Estate
Slide 28: Creating Value in Real Estate
Acquire properties with unique value drivers Creating Value in Real Estate Optimize Reinvest or capital harvest Greenleaf Capital owns and structure operates HCI’s growing real estate portfolio. Its holdings include a set of premier commercial assets in rapidly growing Florida. Develop or reposition
Slide 29: Recent Sales Transactions
Generating Gains from our Real Estate Portfolio PROPERTY LOCATION DATE PURCHASED GROSS PROCEEDS2 BOOK VALUE PRE-TAX GAIN1 Recent Sales Transactions Downtown Office Building 2010 $44.0M $7.0M $37.0M Tampa Downtown Office Building 2017 $14.5M $1.1M $13.4M Tampa Grocery Anchored Retail Eustis, FL 2016
Slide 30: 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 $19M $4M OPERATING Anchored Retail 28M 17M $11M Waterfront Specialty Use Portfolio 40M 17M - DEVELOPMENT UNDER Properties Under Development 44M 36M - $137M1 $89M APPRAI
Slide 31: Homeowners Choice Investment Portfolio
Homeowners Choice Investment Portfolio A conservative allocation, positioned for higher rates and opportunistic investments 2% 9% Cash Fixed Income 40% Real Estate & Other Total invested assets1 $371 million Short Term Investments Equity Fixed Income Average 49% Duration ~1 year Limited Partnerships
Slide 32: TypTap Investment Portfolio
TypTap Investment Portfolio A conservative allocation, positioned for higher rates and opportunistic investments 1% 18% Cash Fixed Income Real Estate & Other Total invested assets1 $246 million Short Term Investments Equity Fixed Income Average Duration ~1 year Limited Partnerships 81% (1) As of 12/
Slide 33: Experienced & Focused Leadership Team
Experienced & Focused Leadership Team PARESH PATEL MARK HARMSW ORTH Chairman & Chief Executive Officer 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 software ▪
Slide 34: Delivering Shareholder Value
Delivering Shareholder Value capital returned to >$425M shareholders since inception2 19% inside ownership >2900% Total Shareholder Return since IPO 10-year average 12% ROE1 1) As of December 31, 2023 2) Includes $269M buybacks and $158M dividends 33
Slide 35: 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 34