HCI Group to Acquire Insurance Business in Four Northeast States from United Insurance Holdings Corp.

TAMPA, Fla., Dec. 17, 2020 (GLOBE NEWSWIRE) — HCI Group, Inc. (NYSE: HCI), an InsurTech company with operations in insurance, software development and real estate, and United Insurance Holding Corp. (NASDAQ: UIHC) have reached an agreement in principle for United’s primary insurance subsidiary, United Property & Casualty Insurance Company, to transfer all its personal lines insurance business in the states of Connecticut, New Jersey, Massachusetts and Rhode Island to HCI. The business to be transferred represents approximately $130 million of annual premiums. HCI’s insurance operations are primarily in Florida. However, it recently announced plans to expand nationwide.

Under the agreement, HCI will provide 69.5% quota share reinsurance on all of United’s in-force, new and renewal policies in Connecticut, Massachusetts, New Jersey, and Rhode Island from December 31, 2020 through May 31, 2021. In exchange, HCI will pay United an allowance of $4.4 million towards already purchased catastrophe reinsurance and a provisional ceding commission of 25% of premium. That percentage could increase up to 31.5% depending on the direct loss ratio results for the reinsured business.

In addition, United and HCI will enter into a policy replacement agreement pursuant to which HCI will replace all of United’s personal lines policies in the four states. As part of the transaction, HCI will provide United 100,000 shares of HCI common stock. HCI will also pay United a cash payment of up to $3.1 million depending on the amount of premium transitioned to HCI. In connection with the transaction, United will agree not to compete with HCI for the issuance of personal lines for homeowners business in the four states until July 1, 2024.

The transaction is subject to negotiation of definitive agreements and customary closing conditions, including receipt of all applicable regulatory approvals.

“This transaction with United is a win for both HCI and United,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “It accelerates HCI’s plan to expand nationally by acquiring a seasoned book of business, established agent network and associated data. HCI has the financial strength to support and grow these new business opportunities.”

About HCI Group, Inc.
HCI Group, Inc. is an InsurTech company with operations in insurance, software development and real estate. HCI’s leading insurance operation, TypTap Insurance Company, is a rapidly growing, technology-driven insurance company, which provides homeowners’ insurance and flood insurance primarily in Florida. TypTap’s operations are powered in large part by insurance-related information technology developed by HCI’s software subsidiary, Exzeo USA, Inc. HCI’s largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., provides homeowners’ insurance primarily in Florida. HCI’s real estate subsidiary, Greenleaf Capital, LLC, owns and operates multiple properties in Florida, including office buildings, retail centers and marinas.

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. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company’s website. For more information about HCI Group and its subsidiaries, 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. For example, there can be no assurance that insurance regulators will permit HCI to operate in the applicable states and approve the proposed terms of the transaction. 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 proposed transaction and HCI’s business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.

Company Contact:
Rachel Swansiger, Esq.
HCI Group, Inc.
Tel (813) 405-3206

Investor Relations Contact:
Matt Glover
Gateway Investor Relations
Tel (949) 574-3860

Media Contact:
Amber Brinkley
Kippen Communications
Tel (727) 466-7695