HCI Group (HCI) investor relations material

Executive summary

• Pre-tax income reached $144 million in Q4 and $429 million for the full year, with net income of $108 million in Q4 and $320 million for the year; diluted EPS was $7.25 for Q4 and $22.72 for the year, all significantly higher year-over-year.

• Gross premiums earned rose 12% year-over-year in Q4 and 14% for the full year, reaching $332 million in Q4 and $1,236 million for the year.

• Loss and expense ratios continued to decline, reflecting lower claims, litigation frequency, and disciplined underwriting.

• Shareholder equity surpassed $1 billion, tripling in two years, and book value per share exceeded $80.

• Completed the IPO of Exio/Exzeo, retaining a controlling stake valued at nearly $1.2 billion.

Financial highlights

• Gross loss ratio in Q4 was 15.6%; normalized to 17.5% after adjusting for favorable development; full-year gross loss ratio was 19.6%.

• Combined ratio was under 45% in Q4; normalized combined ratio below 60%.

• Cash flow from operations exceeded $750 million over two years; consolidated cash at year-end was over $1.2 billion.

• Gross written premiums in Q4 were $333 million; full year gross written premiums were $1,236 million.

• Net premiums earned in Q4 were $225.8 million; full year net premiums earned were $821.7 million.

Outlook and guidance

• Gross premiums earned in Q1 2026 expected to be higher than Q4 2025 due to full impact of policy assumptions.

• Management anticipates continued organic and acquisition-driven growth, with a focus on maintaining stable rates and exploring new growth areas.

• Expense ratios expected to normalize to Q2/Q3 levels, as Q4 was impacted by bonus accounting.

• Reinsurance market softening is expected to support and potentially improve margins.

• Plans to invest in a share buyback program to enhance shareholder value.