HCI Group Q2 Earnings Call Highlights

HCI Group NYSE: HCI reported higher second-quarter earnings and revenue as policy growth, service revenue and underwriting performance supported results despite what management described as a softening insurance market. Chief Financial Officer Mark Harmsworth said pre-tax income exceeded $110 million in the second quarter, up 18% from the prior-year period. Diluted earnings per share rose to $5.60 from $5.18 a year earlier. For the first six months of 2026, pre-tax income reached $226 million, a 16% increase from the first half of 2025, while year-to-date diluted EPS was $11.05. Gross premiums earned increased 6% from the second quarter of 2025, driven by policy growth, while average premium per policy was flat, Harmsworth said. Total revenue rose 11%, reflecting premium growth and increased services revenue from new clients at Exzeo. HCI recorded a 22% loss ratio during the quarter, slightly above the first-quarter level but within the company’s stated 20% to 25% target range. Its combined ratio was 61%, within management’s 60% to 65% range absent catastrophe activity. Harmsworth said the company ended the quarter with more than $2 billion in cash and investments, stockholders’ equity above $1 billion, and a debt-to-capital ratio below 6%. Book value per share was $86.60. Management also said that book value does not include unrealized gains associated with its Exzeo ownership or real estate portfolio. Adding the fair value of those assets would put pro forma book value per share above $150, according to Harmsworth. Over the past 36 months, HCI generated an after-tax return on equity of 35%, a period that included Hurricanes Milton and Helene, Harmsworth said. The company completed the $80 million share repurchase plan it announced in March. HCI repurchased 504,000 shares, representing about 4% of its outstanding shares, management said. Harmsworth said approximately $75 million of the authorization had been used by the end of the second quarter, with the remainder completed during the first week of July. HCI does not currently have an active repurchase authorization, though Harmsworth said management continues to view the stock as an attractive investment. Holding-company liquidity stood at just over $160 million, excluding the company’s 75 million shares of publicly traded Exzeo, Harmsworth said. Chief Operating Officer Karin Coleman said HCI has maintained retention rates above 90% by prioritizing its existing policyholders and maintaining consistency in pricing and coverage. She said the company does not sharply raise rates during harder market conditions and then seek to reduce them during softer periods. Coleman also pointed to HCI’s continued broa...