HCI Group Expects to Pay $600M to $750M in Claims from Recent Hurricanes

Publicly traded HCI Group, the Tampa-based holding company for Homeowners Choice Property & Casualty, TypTap and a new condominium insurance reciprocal, is one of the first Florida insurers to report estimated losses after recent hurricanes.

HCI said in a statement Wednesday that the company expects to pay out $600 million to $750 million to policyholders as a result of claims from Hurricanes Debby, Helene and Milton. That translates to a third-quarter expense of about $60 million, and about $125 million for Q4.

But after reinsurance recoveries, HCI should still report a profit in Q3 and should be able to absorb the expense in the fourth quarter, CEO Paresh Patel said in a statement.

“The company is able to absorb these losses because of our strong balance sheet, our conservative reinsurance program with over $2 billion of occurrence reinsurance limit and over $3 billion of aggregate reinsurance limit, and our profitability,” said HCI Chairman and Chief Executive Officer Paresh Patel. “We are continuing our participation in Citizens’ Depopulation Program in the fourth quarter and early indications show a strong rate of adoption.”

TypTap assumed 300 Citizens policies and HCI’s CORE, or Condominium Owners Reciprocal Exchange, took on 10,100 Citizens policies in the first half of this year, according to HCI financial statements. Overall, the muti-state HCI Group reported some 242,500 policies in force in June of this year, a significant increase from the year before.

The number of expected claims from Hurricane Milton was not reported.

The group will hold an earnings call on Nov. 7 to discuss Q3 results.

HCI reported a net profit of $57 million for the second quarter this year and a first-quarter net income of $47 million.

The expense projections for the recent hurricanes appear to be in line with overall loss estimates for the industry. Insurers and analytics firms have said insured losses from Milton will be manageable, but may result in higher reinsurance prices for carriers and rate hikes for policyholders. Karen Clark & Co., a catastrophe modeling firm has estimated that insured losses from Milton will reach about $36 billion.

Allstate reported $630 million in pretax catastrophe losses from Helene.

Top photo: Hurricane Milton damage. Source: Sarasota County.