TAMPA, Fla., July 05, 2016 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI) recently disclosed in reports filed with the Securities and Exchange Commission that its wholly owned subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., which is a Florida based provider of homeowners insurance, has completed its reinsurance program for the 2016-17 reinsurance year, which runs from June 1, 2016 through May 31, 2017.
Homeowners Choice purchases insurance called reinsurance from other insurance companies and institutions to cover losses associated with hurricanes and other catastrophes. The 2016-17 program provides coverage up to $972 million for catastrophic losses in a single event, excluding flood losses, which according to catastrophe models approved by the Florida Office of Insurance Regulation is sufficient to cover the company’s probable maximum loss resulting from a 1 in 165-year storm based on projected exposure at September 30, 2016.
According to Paresh Patel, HCI’s chief executive officer, the company expects to recognize net reinsurance costs of approximately $113 million for the 2016-17 reinsurance year, or approximately 32 percent of the company’s estimated gross premiums earned for that year, compared with approximately $161 million, or 40 percent of gross premiums earned, in the 2015-16 reinsurance year.
“While it is difficult to compare reinsurance coverages year to year, we expect to reduce our reinsurance spend by approximately $48 million this contract year when compared with the prior contract year,” said Patel. “In addition, we replaced a large portion of our participation in the Florida Hurricane Catastrophe Fund with broader private coverage and reduced by approximately $14 million our overall retention of catastrophic risk, including risk retained through HCI’s reinsurance subsidiary, Claddaugh Casualty Insurance Company. We believe our company and our policyholders will remain well protected at a much lower cost.”
The company released a chart describing its reinsurance structure: http://www.globenewswire.com/NewsRoom/AttachmentNg/895309af-d7e0-4568-b030-8470db1d669d
About Homeowners Choice
Headquartered in Tampa, Florida, Homeowners Choice provides property and casualty homeowners' insurance, condominium owners' insurance and tenants' insurance to Florida property owners. Homeowners Choice serves approximately 152,000 policyholders throughout Florida. Homeowners Choice is a wholly owned subsidiary of HCI Group, Inc. For more information about Homeowners Choice, visit www.hcpci.com.
About HCI Group, Inc.
HCI Group, Inc. owns subsidiaries engaged in diverse, yet complementary business activities, including homeowners insurance, reinsurance, real estate and information technology. The company's largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., is a leading provider of property and casualty insurance in the state of Florida.
The company's common shares trade on the New York Stock Exchange under the ticker symbol "HCI" and are included in the Russell 2000 and S&P SmallCap 600 Index. Its 8% Senior Notes trade on the New York Stock Exchange under the ticker symbol "HCJ." For more information about HCI Group, visit www.hcigroup.com.
Forward-Looking Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "estimate," "expect," "intend," "plan," "confident," "prospects" and "project" and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. There can be no assurance, for example, that competition and regulation will not materially impact pricing and policy retention so as to reduce gross premiums earned and consequently increase the ratio of reinsurance cost to gross premiums earned or that all reinsurers will fulfil their obligations to the company in the event of a catastrophe. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company's business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.