HCI

• Balance Sheet Strength

• The company holds over $2 billion in cash and investments, with stockholder equity exceeding $1 billion, a debt-to-cap ratio under 6%, and a reported book value per share of $86.60. Pro forma book value per share including unrealized gains on Exio and the real estate portfolio exceeds $150.00.
• Over the past 36 months, after-tax return on equity hit 35%, a result that includes two major hurricanes. The company completed its $80 million authorized share buyback program, repurchasing 504,000 shares (4% of outstanding shares).
• Holding company liquidity at HCI is just over $160 million, not including 75 million publicly traded Exio shares owned by the firm.

• Cycle Navigation Strategy

• In the current softening market, management's top priority is retaining existing policyholders, with retention rates consistently above 90%. The firm maintains consistent, fair pricing (avoiding dramatic hikes during hard markets that force cuts during soft markets) and retains full comprehensive coverage, unlike competitors that limit coverages such as capping water damage claims to improve short-term profitability.
• Management pursues opportunistic growth: CORE was pivoted from commercial condo business to the residential market in Q2, and has already achieved significant month-over-month growth, positioning it as a new source of business in H2 2026.
• The company remains focused on its core Florida market; while it is interested in expanding to California due to market similarities, entry will be timed based on the long-term rate environment.

• Reinsurance and Innovation Updates

• The 2026-2027 catastrophe reinsurance program was completed, with more and better coverage purchased while seeded premiums were cut by over 10%, generating over $10 million in quarterly savings.
• The company's new second reinsurer, Fortex Re, was used for the new reinsurance program and for a pilot digital tokenized reinsurance security project. Three token offerings mirroring portions of Fortex's excess of loss programs were completed in June. The pilot aims to open catastrophe reinsurance investment to a broader market, creating a more efficient reinsurance pricing and placement market.

• New Business Development

• In July 2026, HCI signed a distribution agreement with GEICO for its new product, and GEICO has already begun selling policies. This new business will not appear in Q2 results and will start contributing to results in Q3 2026. The Exio technology platform enables rapid scaling of this new business.

• Management confirmed that the Q2 2026 loss ratio of 22% remains within the previously stated 20% to 25% target range, and the combined ratio of 61% is within the 60% to 65% target range for periods without catastrophic activity.

• Management expects CORE's residential business pivot to deliver solid new business growth in the second half of 2026, and projects that organic policy growth could be achieved by the end of 2026 without acquisitions or new market entry.
• Reinsurance cost savings of over $10 million per quarter from the new 2026-2027 program will flow to both top and bottom line results going forward.
• No formal full-year 2026 financial guidance was explicitly revised or reaffirmed beyond these expectations.

The transcript does not break out financial performance for multiple distinct product segments with absolute revenue and revenue contribution percentage figures. Overall company performance for Q2 2026 is: pre-tax income of over $110 million, up 18% year-over-year; diluted earnings per share of $5.60, up from $5.18 YoY; gross premiums earned grew 6% YoY driven by policy growth, with average premium per policy flat; total revenue grew 11% YoY driven by premium growth and increased services revenue from new Exio clients. Year-to-date 2026 performance: pre-tax income of $226 million, up 16% over the first half of 2025; diluted EPS of $11.05. The CORE segment, after pivoting from commercial to residential condo business, is now writing an average of $6 million per month of new HO3 residential business.

• Management noted that current market conditions are challenging, with a softening property insurance market, increased competition, and downward pressure on industry pricing. Chasing declining market rates to retain market share would erode profitability.

• All forward-looking statements are subject to inherent risks and uncertainties that could lead to materially worse actual results than projected, as outlined in the company's SEC filings.
• Expansion into new states such as California carries risks due to differing market characteristics, so timing of entry requires careful consideration of long-term rate conditions.
• The tokenized reinsurance pilot is an unproven new market; successful development of this third reinsurance channel is not guaranteed.

Q: Analyst Mark Hughes asked for details on the tokenized reinsurance pilot: what are its short and long-term financial and operational implications? / A: Management confirmed the pilot is being run on a small non-material scale in the short term to test processes and regulatory compliance, with all initial token offerings already completed. In the long term, if successful, it will create a third complementary channel for sourcing catastrophe reinsurance, alongside traditional reinsurance markets and existing CAT bonds. Management noted this could be as revolutionary for the industry as CAT bonds were when first launched, opening access to a new pool of investor capital.