Nat cats push HCI Q3 combined ratio to 258.2%
Homeowners insurer HCI Group reported a net loss of $40.5 million for the third quarter of 2017 compared with a net income of $11.3 million in the same period a year ago.
The company’s results of operations for the third quarter of 2017 were significantly impacted by Hurricane Irma, which crossed Florida from south to north in early September. The results include $53.6 million of retained losses from Hurricane Irma as well as a $15.6 million reduction in benefits under retrospective provisions within multi-year reinsurance contracts. The combined loss and expense ratio was 258.2 percent compared with 78.6 percent for the third quarter of 2016.
Commenting on the impact of hurricane Irma, CEO Paresh Patel said: “We used only about one-third of our reinsurance tower and neither HCI nor any of its three insurance related companies requires additional operating capital.”
Gross premiums earned for the third quarter 2017 decreased to $88.7 million from $92.5 million in the same period in 2016. The decrease in 2017 was attributable to policy attrition, policy mix, and rate reductions. Gross premiums written were $94.9 million compared with $93.2 million in the same quarter of 2016, driven by strong growth in the company’s flood insurance business.
Premiums ceded increased to $44.7 million or 50.4 percent of gross premiums earned from $29.2 million or 31.6 percent of gross premiums earned in the third quarter of 2016. The increase was primarily attributable to the adjustment to benefits and deferred reinsurance premiums related to retrospective provisions under certain reinsurance contracts.
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