HCI Group reports first quarter 2026 results
HCI Group reported first quarter 2026 pretax income of $115 million, up 15% year-over-year, alongside net income of $85 million and diluted earnings per share of $5.45. The company described the quarter as the best first quarter in its history, supported by underwriting profitability, investment income growth, and continued share repurchases.
Gross premiums earned increased to $326 million from $300 million a year earlier, while total revenue rose around 12%. The combined ratio was 57%, with a gross loss ratio of 20.1%, remaining well below management’s long-term target of 60% plus or minus five points.
Chairman and CEO Paresh Patel said the company is using its earnings to simultaneously repurchase stock and strengthen the balance sheet ahead of future opportunities.
“At the current rate, we are buying back about 2% of the company every quarter,” Patel said during the earnings call. “This means that every shareholder on this call will effectively own 2% more of the company at the end of every quarter than they did at the start.”
On the reinsurance side, HCI said it recently licensed a Cayman Islands-based reinsurer, Fortex Re, adding to its Bermuda-based Claddaugh Re platform and giving the company additional flexibility around risk retention. Management said the June 1 reinsurance renewal was in its final stages and pointed to continued softening in the reinsurance market.
The company also highlighted Exzeo, its publicly traded technology subsidiary, which management said is valued at around $1.5 billion. Revenue from Exzeo is now flowing through HCI’s “other income” segment.
Looking ahead, management said it is evaluating two to three additional “Exzeo-scale” opportunities across insurance-adjacent sectors and other parts of the insurance value chain. HCI also noted that all four of its insurance carriers remain profitable inception-to-date, with approximately $1.3 billion in premiums in force entering the second quarter.
“We grew Exzeo from about an idea — from just an idea to a $1.5 billion current valuation. And what we’re doing is we’re working on the next thing. We are looking at 2 or 3 things that have the potential to be the next Exzeo like asset. We have the resources to nurture these things to their full potential. Outcomes are not always certain. But given our track record, I am very excited about the possibilities.” – CEO Paresh Patel.
Management positioned the company for opportunistic M&A activity, particularly following any future market dislocation or major storm event rather than ahead of one. “We would like to do M&A the day after the storm as opposed to do an M&A the day before the storm. One creates a lot more headaches than the other one does.”
