HCI Group
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Pressure on Root cools following stock price dips, but persistent short interest in InsurTechs suggests that prices haven’t bottomed out yet. -
The Inside P&C Select Index outperformed the S&P 500 (5.7% to 2.9%) in August, despite Hurricane Ida making landfall.
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Pressure on the InsurTechs – specifically Root and Lemonade – is intensifying.
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InsurTech short interest dwarfs legacy insurers as they come under pressure to produce profits.
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The insurer had a record quarter for earned premiums, linking the boost to the growth of TypTap, which recorded $39mn in earned premiums.
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The move follows a $100mn capital raise in February from private equity house Centerbridge Partners that valued the InsurTech at $850mn.
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Its reinsurance premiums ceded are expected to reach $207mn, up from $175mn a year earlier.
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Changes in short interest were muted despite large stock moves, including big rises at HCI and Lemonade.
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Following strong year-to-date performance, P&C stocks were down in June after a change of tone in a Fed meeting.
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Management should examine the relationship between company strategy, broader market cycles and short interest.
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The Floridian reported a higher loss ratio after making recent portfolio acquisitions but benefited from premium growth.
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Senator Jeff Brandes and local insurance law experts tell this publication that the state’s insurance market will be hugely vulnerable without reform.
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