HCI Group, Inc. (HCI) SEC Filings & Earnings Calls

Florida hurricane exposure

“The Company provides various homeowners’ property and casualty insurance products for properties located in Florida, which is the Company's primary market.” · word for word

Reinsurer credit risk

“Failure of reinsurers to honor their obligations could result in losses to the Company.” · word for word

Catastrophe reinsurance cost reduction may not persist; exposure to weather-related losses.

“Premiums ceded for reinsurance ... decrease was a result of the lower costs associated with the company’s new 2026-2027 catastrophe reinsurance programs”

Personnel and stock-based compensation expenses increasing.

“General and administrative personnel expenses ... increase was driven by additional personnel, annual merit increases, and stock-based compensation.”

Catastrophe risk mitigated through reinsurance, but retained risk via Claddaugh and Fortex Re up to $139.8M first event.

“Claddaugh’s and Fortex Re’s estimated maximum retained loss on a combined basis is approximately $139.8 million for the first event and $52.3 million for the second event.”

Florida hurricane catastrophe exposure

“The Company provides various homeowners’ property and casualty insurance products for properties located in the State of Florida, which is the Company's primary market” · word for word

Reinsurer credit risk

“As of March 31 2026, approximately 67.8% of the reinsurance recoverable balance was receivable from six reinsurers”

Weather-related losses in Northeast; potential for catastrophe losses.

“Losses increased due to some weather in the Northeast”

Hurricane/Catastrophe Exposure

“The most material environmental risk to the Company is that of extreme weather.” · word for word

Concentration in Florida

“The Company's core homeowners insurance business is concentrated in Florida, which is exposed to hurricanes.”

Florida Concentration Risk

“Any catastrophic event or other condition affecting losses in Florida could adversely affect our financial condition and results of operations.” · word for word

Catastrophe Loss Exposure

“The occurrence of any such catastrophes could have a significant adverse effect on our business, results of operations, and financial condition.” · word for word

Regulatory Risk in Florida

“Changes in Florida’s or any other states’ regulatory climate... could make the property and casualty insurance marketplace more competitive” · word for word

Lack of A.M. Best Rating

“Mortgage companies may require homeowners to obtain property insurance from an insurance company with an acceptable A.M. Best rating, which none of our insurance subsidiaries currently have.” · word for word

Reserve Estimation Uncertainty

“The process of establishing adequate reserves is complex and inherently uncertain, and the ultimate cost of a claim may vary materially from the amounts reserved.” · word for word

Catastrophe loss exposure remains; prior year included $128M from hurricanes

“Losses and loss adjustment expenses in 2024 included net losses of $128 million from Hurricanes Milton, Helene, and Debby” · word for word

Key-man dependency on CEO Paresh Patel; large cash bonus may signal retention concerns.

“CEO employment agreement with severance and non-compete; $3.75M bonus paid before year-end.”

Catastrophe Loss Exposure

“Our insurance business is seasonal as hurricanes and tropical storms affecting Florida, our primary market, and other southeastern states typically occur during the period from June 1st through November 30th of each year.” · word for word

Reinsurance Cost Volatility

“any variation in the cost of our reinsurance, whether due to changes in reinsurance rates, coverage levels or changes in the total insured value of our policy base, will occur and be reflected in our financial results beginning on June 1st of each year.” · word for word

Catastrophe loss exposure remains a key risk, though lower this quarter.

“Losses and loss adjustment expenses in the third quarter of 2024 included net losses of $40.0 million from Hurricane Helene.” · word for word