Published on 6 May 2024 on Zacks via Yahoo Finance

Here's What to Expect From HCI Group (HCI) in Q1 Earnings

HCI Group HCI is set to report first-quarter 2024 earnings on May 8, after market close. This Florida-focused insurance company delivered an earnings surprise in each of the last four reported quarters.Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.HCI’s first-quarter results are likely to benefit from solid performances across all its business units.Premiums are likely to have improved attributable to policies assumed from Citizen through TypTap, the addition of Condo Owners Reciprocal Exchange and a higher average premium per policy. HCI formed Condo Owners Reciprocal Exchange to write commercial residential insurance in Florida. The Zacks Consensus Estimate for net premiums earned is pegged at $177 million, up 61% from the year-ago reported number. Premiums in force are likely to have benefited from all these strategic actions.Investment income is likely to have benefited from increased yields as well as an increase in invested base due to higher cash balance. The Zacks Consensus Estimate for net premiums earned is pegged at $10.6 million.Higher premiums coupled with increased investment income are likely to have fueled revenues. The Zacks Consensus Estimate for revenues is pegged at $189.2 million, indicating an increase of 46.6% from the year-ago reported quarter.Better claim experience is likely to have lowered losses and loss adjustment expenses. This, combined with better pricing and prudent underwriting, is likely to have improved the loss ratio in the to-be-reported quarter. Continued efforts to control costs are likely to have added to the upside. The Zacks Consensus Estimate for loss ratio is pegged at 45.6.The expense ratio is likely to have improved owing to higher premiums earned and lower policy acquisition, underwriting and personnel expenses. The Zacks Consensus Estimate for loss ratio is pegged at 25.4.A higher top line coupled with lower expense is likely to have boosted the bottom line in the to-be-reported quarter. The Zacks Consensus Estimate for the bottom line is pegged at $2.74, indicating an increase of 82.7% from the year-ago reported number.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for HCI Group this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case, as you can see below.Earnings ESP: HCI’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.