HCI - HCI Group Reports Fourth Quarter and Full Year 2022 Results
Florida Passes Historic Tort Reforms
Fourth Quarter Gross Loss Ratio Declined to 39.4%
TAMPA, Fla., March 09, 2023 (GLOBE NEWSWIRE) -- HCI Group, Inc. (NYSE:HCI) , a holding company with operations in homeowners insurance, information technology services, real estate, and reinsurance, reported net income of $2.7 million, or $0.18 diluted earnings per share in the fourth quarter of 2022, compared with net income of $1.4 million, or $0.01 diluted earnings per share, in the fourth quarter of 2021.
Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the fourth quarter of 2022 was $1.6 million, or $0.06 diluted earnings per share, compared with adjusted net loss of $0.1 million, or $0.14 loss per share, in the fourth quarter of 2021. This press release includes an explanation of adjusted net income as well as a reconciliation to net income and earnings per share calculated in accordance with generally accepted accounting principles (known as “GAAP”).
Management Commentary
“We were pleased to see further improvement in our underlying profitability this quarter,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “The bills passed by the Florida Legislature in 2022 squarely address the rising cost of litigation and social inflation in the Florida homeowners industry. We believe these reforms will support a healthier market for private insurance in Florida in the years to come.”
Fourth Quarter 2022 Commentary
Consolidated gross premiums earned of $183.0 million increased 16.6% from $156.9 million in the fourth quarter of 2021, reflecting higher average premium per policy.
Premiums ceded for reinsurance of $77.0 million increased from $54.6 million in the fourth quarter of 2021. Ceded premiums represented 42.1% and 34.8% of gross premiums earned in the fourth quarters of 2022 and 2021, respectively.
Net investment income of $7.4 million increased from $2.6 million in the fourth quarter of 2021 as the company repositioned the investment portfolio to take advantage of higher interest rates.
Losses and loss adjustment expenses of $72.1 million increased from $63.2 million in the same period of 2021. Losses and loss adjustment expenses as a percent of gross premiums earned declined to 39.4% from 40.3% in the fourth quarter of 2021.
Policy acquisition and other underwriting expenses of $24.0 million decreased from $24.2 million in the same quarter of 2021 and declined from 15.4% of gross premiums earned to 13.1%, reflecting a higher mix of renewal policies, lower commissions, and lower policy acquisition costs related to United Property and Casualty Insurance Company (UPC) policies.
General and administrative personnel expenses of $11.3 million decreased from $13.7 million for the fourth quarter of 2021 due primarily to a reduction in stock-based compensation and a decrease in employee and executive bonuses.
Full Year 2022 Results
For the year ended December 31, 2022, the company reported a net loss of $54.6 million, or $6.24 loss per share, compared with net income of $7.2 million, or $0.21 diluted earnings per share, for the year ended December 31, 2021.
Adjusted net loss (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the twelve-month period was $47.5 million, or $5.48 loss per share compared with adjusted net income of $6.2 million, or $0.10 diluted earnings per share, in the same period of 2021. An explanation of this non-GAAP financial measure and reconciliations to the applicable GAAP numbers accompany this press release.
Consolidated gross premiums earned of $724.7 million increased 25.6% from $577.0 million in the year ended December 31, 2021, reflecting higher average premium per policy.
Premiums ceded for reinsurance of $261.1 million increased from $199.7 million in the twelve months of 2021. The increase over last year also included an adjustment to reduce benefits under a multi-year reinsurance contract with retrospective provisions as a result of Hurricane Ian. Ceded premiums increased as a percentage of gross premiums earned from 34.6% to 36.0% in the twelve months of 2022.
Net investment income of $32.4 million increased from $12.3 million in the year ended December 31, 2021 as the company repositioned the investment portfolio to take advantage of higher interest rates. The increase also included a gain of $13.4 million on the sale of a portion of one of the properties in the Greenleaf portfolio.
Net realized and unrealized investment losses were $8.3 million compared with net realized and unrealized investment gains of $7.8 million in the year ended December 31, 2021. The decrease was due to an overall decline in the market for equity securities compared with the year ended December 31, 2021.
Losses and loss adjustment expenses of $371.5 million increased from $227.5 million in the year ended December 31, 2021. The increase in losses and loss adjustment expenses was due to Hurricane Ian, growth at TypTap, and policies assumed or renewed from UPC.
Policy acquisition and other underwriting expenses of $105.0 million increased from $93.7 million in the year ended December 31, 2021 but declined from 16.2% of gross premiums earned to 14.5%, reflecting a higher mix of renewal policies, lower commissions, and lower policy acquisition costs related to UPC policies.
General and administrative personnel expenses of $56.5 million increased from $45.4 million in the year ended December 31, 2021 due primarily to an increase in personnel related expenses and benefits.
Conference Call
HCI Group will hold a conference call later today, March 9, 2023, to discuss these financial results. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the call starting at 4:45 p.m. Eastern time.
Interested parties can listen to the live presentation by dialing the listen-only number below or by clicking the webcast link available on the Investor Information section of the company's website at www.hcigroup.com .
Listen-only toll-free number: (877) 545-0523
Listen-only international number: (973) 528-0016
Entry Code: 228446
Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
A replay of the call will be available by telephone after 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at www.hcigroup.com through March 9, 2024.
Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 47646
About HCI Group, Inc.
HCI Group, Inc. owns subsidiaries engaged in diverse, yet complementary business activities, including homeowners insurance, information technology services, insurance management, real estate, and reinsurance. HCI’s leading insurance operation, TypTap Insurance Company, is a technology-driven homeowners insurance company. 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, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. 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 company's business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.
Company Contact:
Simon Rosenberg
Investor Relations
HCI Group, Inc.
Tel (813) 405-5261
srosenberg@hcigroup.com
Investor Relations Contact:
Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
HCI@gatewayir.com
- Tables to follow -
| HCI GROUP, INC. AND SUBSIDIARIES Selected Financial Metrics (Dollar amounts in thousands, except per share amounts) |
| FY 2022 |
| Q4 2022 |
| Q3 2022 |
| Q2 2022 |
| Q1 2022 |
| FY 2021 |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| (Unaudited) |
| Insurance Operations |
| Gross Written Premiums: |
| Homeowners Choice |
| $ |
| 377,860 |
| $ |
| 54,180 |
| $ |
| 119,400 |
| $ |
| 113,139 |
| $ |
| 91,141 |
| $ |
| 426,910 |
| TypTap Insurance Company |
| 348,159 |
| 117,212 |
| 71,781 |
| 73,013 |
| 86,153 |
| 247,479 |
| Total Gross Written Premiums |
| 726,019 |
| 171,392 |
| 191,181 |
| 186,152 |
| 177,294 |
| 674,389 |
| Gross Premiums Earned: |
| Homeowners Choice |
| 426,502 |
| 95,533 |
| 98,985 |
| 113,681 |
| 118,303 |
| 401,137 |
| TypTap Insurance Company |
| 298,214 |
| 87,421 |
| 82,728 |
| 67,443 |
| 60,622 |
| 175,907 |
| Total Gross Premiums Earned |
| 724,716 |
| 182,954 |
| 181,713 |
| 181,124 |
| 178,925 |
| 577,044 |
| Gross Premiums Earned Loss Ratio |
| 51.3 |
| % |
| 39.4 |
| % |
| 76.9 |
| % |
| 47.9 |
| % |
| 40.6 |
| % |
| 39.4 |
| % |
| Per Share Metrics |
| GAAP Diluted EPS |
| $ |
| (6.24 |
| ) |
| $ |
| 0.18 |
| $ |
| (5.66 |
| ) |
| $ |
| (1.04 |
| ) |
| $ |
| 0.09 |
| $ |
| 0.21 |
| Non-GAAP Adjusted Diluted EPS |
| $ |
| (5.48 |
| ) |
| $ |
| 0.06 |
| $ |
| (5.62 |
| ) |
| $ |
| (0.71 |
| ) |
| $ |
| 0.34 |
| $ |
| 0.10 |
| Dividends per share |
| $ |
| 1.60 |
| $ |
| 0.40 |
| $ |
| 0.40 |
| $ |
| 0.40 |
| $ |
| 0.40 |
| $ |
| 1.60 |
| Book value per share at the end of period |
| $ |
| 18.91 |
| $ |
| 18.91 |
| $ |
| 19.52 |
| $ |
| 26.39 |
| $ |
| 31.66 |
| $ |
| 31.92 |
| Shares outstanding at the end of period |
| 8,598,682 |
| 8,598,682 |
| 8,926,845 |
| 9,047,972 |
| 10,125,927 |
| 10,131,399 |
| HCI GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollar amounts in thousands) |
| December 31, 2022 |
| December 31, 2021 |
| Assets |
| Fixed-maturity securities, available for sale, at fair value (amortized cost: $494,197 and $41,953, respectively and allowance for credit losses: $0 and $0, respectively) |
| $ |
| 483,901 |
| $ |
| 42,583 |
| Equity securities, at fair value (cost: $36,272 and $46,276, respectively) |
| 34,583 |
| 51,740 |
| Limited partnership investments |
| 25,702 |
| 28,133 |
| Investment in unconsolidated joint venture, at equity |
| 18 |
| 363 |
| Real estate investments |
| 71,388 |
| 73,896 |
| Total investments |
| 615,592 |
| 196,715 |
| Cash and cash equivalents |
| 234,863 |
| 628,943 |
| Restricted cash |
| 2,900 |
| 2,400 |
| Accrued interest and dividends receivable |
| 1,952 |
| 353 |
| Income taxes receivable |
| 2,807 |
| 4,084 |
| Premiums receivable, net (allowance: $5,362 and $1,750, respectively) |
| 34,998 |
| 68,157 |
| Prepaid reinsurance premiums |
| 66,627 |
| 26,355 |
| Reinsurance recoverable, net of allowance for credit losses: |
| Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively) |
| 71,594 |
| 11,985 |
| Unpaid losses and loss adjustment expenses (allowance: $454 and $90, respectively) |
| 616,765 |
| 64,665 |
| Deferred policy acquisition costs |
| 45,522 |
| 57,695 |
| Property and equipment, net |
| 17,910 |
| 14,232 |
| Right-of-use-assets - operating leases |
| 777 |
| 2,204 |
| Intangible assets, net |
| 10,578 |
| 10,636 |
| Funds withheld for assumed business |
| 48,772 |
| 73,716 |
| Other assets |
| 31,671 |
| 14,717 |
| Total assets |
| $ |
| 1,803,328 |
| $ |
| 1,176,857 |
| Liabilities and Equity |
| Losses and loss adjustment expenses |
| $ |
| 863,765 |
| $ |
| 237,165 |
| Unearned premiums |
| 368,047 |
| 366,744 |
| Advance premiums |
| 18,587 |
| 13,771 |
| Reinsurance payable on paid losses and loss adjustment expenses |
| 8,606 |
| 4,017 |
| Ceded reinsurance premiums payable |
| 17,646 |
| 19,318 |
| Accrued expenses |
| 14,534 |
| 15,453 |
| Reinsurance recovered in advance on unpaid losses |
| 19,863 |
| — |
| Deferred income taxes, net |
| 1,704 |
| 11,739 |
| Revolving credit facility |
| — |
| 15,000 |
| Long-term debt |
| 211,687 |
| 45,504 |
| Lease liabilities - operating leases |
| 721 |
| 2,203 |
| Other liabilities |
| 23,361 |
| 31,485 |
| Total liabilities |
| 1,548,521 |
| 762,399 |
| Commitments and contingencies |
| Redeemable noncontrolling interest |
| 93,553 |
| 89,955 |
| Equity: |
| Common stock, (no par value, 40,000,000 shares authorized, 8,598,682 and 10,131,399 shares issued and outstanding in 2022 and 2021, respectively) |
| — |
| — |
| Additional paid-in capital |
| — |
| 76,077 |
| Retained income |
| 172,482 |
| 246,790 |
| Accumulated other comprehensive (loss) income, net of taxes |
| (9,886 |
| ) |
| 498 |
| Total stockholders' equity |
| 162,596 |
| 323,365 |
| Noncontrolling interests |
| (1,342 |
| ) |
| 1,138 |
| Total equity |
| 161,254 |
| 324,503 |
| Total liabilities, redeemable noncontrolling interest, and equity |
| $ |
| 1,803,328 |
| $ |
| 1,176,857 |
| HCI GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) (Dollar amounts in thousands, except per share amounts) |
| Three Months Ended |
| Years Ended |
| December 31, |
| December 31, |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| (Unaudited) |
| (Unaudited) |
| Revenue |
| Gross premiums earned |
| $ |
| 182,954 |
| $ |
| 156,853 |
| $ |
| 724,716 |
| $ |
| 577,044 |
| Premiums ceded |
| (77,036 |
| ) |
| (54,629 |
| ) |
| (261,144 |
| ) |
| (199,741 |
| ) |
| Net premiums earned |
| 105,918 |
| 102,224 |
| 463,572 |
| 377,303 |
| Net investment income |
| 7,365 |
| 2,586 |
| 32,447 |
| 12,335 |
| Net realized investment gains (losses) |
| 17 |
| 1,520 |
| (1,187 |
| ) |
| 6,472 |
| Net unrealized investment gains (losses) |
| 1,004 |
| 2,012 |
| (7,153 |
| ) |
| 1,363 |
| Policy fee income |
| 1,099 |
| 1,033 |
| 4,279 |
| 3,995 |
| Gain from remeasurement of contingent liabilities |
| 3,117 |
| — |
| 3,117 |
| — |
| Other |
| 1,423 |
| 2,945 |
| 4,488 |
| 6,447 |
| Total revenue |
| 119,943 |
| 112,320 |
| 499,563 |
| 407,915 |
| Expenses |
| Losses and loss adjustment expenses |
| 72,135 |
| 63,193 |
| 371,463 |
| 227,525 |
| Policy acquisition and other underwriting expenses |
| 24,028 |
| 24,158 |
| 104,977 |
| 93,732 |
| General and administrative personnel expenses |
| 11,328 |
| 13,695 |
| 56,511 |
| 45,428 |
| Interest expense |
| 2,839 |
| 657 |
| 7,768 |
| 6,400 |
| Impairment loss |
| 2,284 |
| — |
| 2,284 |
| — |
| Debt conversion expense |
| — |
| 481 |
| — |
| 1,754 |
| Other operating expenses |
| 4,586 |
| 7,598 |
| 24,978 |
| 21,843 |
| Total expenses |
| 117,200 |
| 109,782 |
| 567,981 |
| 396,682 |
| Income (loss) before income taxes |
| 2,743 |
| 2,538 |
| (68,418 |
| ) |
| 11,233 |
| Income tax expense (benefit) |
| 92 |
| 1,103 |
| (13,815 |
| ) |
| 3,991 |
| Net income (loss) |
| $ |
| 2,651 |
| $ |
| 1,435 |
| $ |
| (54,603 |
| ) |
| $ |
| 7,242 |
| Net income attributable to redeemable noncontrolling interest |
| (2,305 |
| ) |
| (2,224 |
| ) |
| (9,106 |
| ) |
| (7,399 |
| ) |
| Net loss attributable to noncontrolling interests |
| 1,180 |
| 817 |
| 5,198 |
| 2,013 |
| Net income (loss) after noncontrolling interests |
| $ |
| 1,526 |
| $ |
| 28 |
| $ |
| (58,511 |
| ) |
| $ |
| 1,856 |
| Basic earnings (loss) per share |
| $ |
| 0.18 |
| $ |
| 0.01 |
| $ |
| (6.24 |
| ) |
| $ |
| 0.23 |
| Diluted earnings (loss) per share |
| $ |
| 0.18 |
| $ |
| 0.01 |
| $ |
| (6.24 |
| ) |
| $ |
| 0.21 |
| Dividends per share |
| $ |
| 0.40 |
| $ |
| 0.40 |
| $ |
| 1.60 |
| $ |
| 1.60 |
HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)
A summary of the numerator and denominator of basic and diluted earnings (loss) per common share calculated in accordance with GAAP is presented below.
| Three Months Ended |
| Year Ended |
| GAAP |
| December 31, 2022 |
| December 31, 2022 |
| Income (Numerator) |
| Shares (a) (Denominator) |
| Per Share Amount |
| Loss (Numerator) |
| Shares (a) (Denominator) |
| Per Share Amount |
| Net income (loss) |
| $ |
| 2,651 |
| $ |
| (54,603 |
| ) |
| Less: Net income attributable to redeemable noncontrolling interest |
| (2,305 |
| ) |
| (9,106 |
| ) |
| Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities |
| 1,182 |
| 5,198 |
| Net income (loss) attributable to HCI |
| 1,528 |
| (58,511 |
| ) |
| Less: Income (loss) attributable to participating securities |
| (42 |
| ) |
| 3,463 |
| Basic Earnings (Loss) Per Share: |
| Income (loss) allocated to common stockholders |
| 1,486 |
| 8,356 |
| $ |
| 0.18 |
| (55,048 |
| ) |
| 8,817 |
| $ |
| (6.24 |
| ) |
| Effect of Dilutive Securities:* |
| Stock options |
| — |
| — |
| — |
| — |
| Convertible senior notes |
| — |
| — |
| — |
| — |
| Warrants |
| — |
| — |
| — |
| — |
| Diluted Earnings (Loss) Per Share: |
| Income (loss) available to common stockholders and assumed conversions |
| $ |
| 1,486 |
| 8,356 |
| $ |
| 0.18 |
| $ |
| (55,048 |
| ) |
| 8,817 |
| $ |
| (6.24 |
| ) |
| (a) Shares in thousands. |
| * Convertible senior notes, stock options, and warrants were excluded due to antidilutive effect. |
Non-GAAP Financial Measures
Adjusted net income (loss) is a Non-GAAP financial measure that removes from net income (loss) of HCI's portion of the effect of unrealized gains or losses on equity securities required to be included in results of operations in accordance with Accounting Standards Codification 321. HCI Group believes net income without the effect of volatility in equity prices more accurately depicts operating results. This financial measurement is not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of GAAP Net income (loss) to Non-GAAP Adjusted net income (loss) and GAAP diluted earnings (loss) per share to Non-GAAP Adjusted diluted earnings (loss) per share is provided below.
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net (Loss) Income
| Three Months Ended |
| Year Ended |
| December 31, 2022 |
| December 31, 2022 |
| GAAP Net income (loss) |
| $ |
| 2,651 |
| $ |
| (54,603 |
| ) |
| Net unrealized investment (gains) losses |
| $ |
| (1,004 |
| ) |
| $ |
| 7,153 |
| Less: Tax effect at 0%* |
| $ |
| - |
| $ |
| - |
| Net adjustment to Net income (loss) |
| $ |
| (1,004 |
| ) |
| $ |
| 7,153 |
| Non-GAAP Adjusted Net income (loss) |
| $ |
| 1,647 |
| $ |
| (47,450 |
| ) |
| *A valuation allowance was established as of December 31, 2022 on the deferred tax assets related to the 2022 pre-tax loss due to the impacts of Hurricane Ian. Consequently, there is no tax effect for net unrealized gains or losses. |
HCI GROUP, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share amounts)
A summary of the numerator and denominator of the basic and diluted earnings (loss) per common share calculated with the Non-GAAP financial measure Adjusted net income (loss) is presented below.
| Three Months Ended |
| Year Ended |
| Non-GAAP |
| December 31, 2022 |
| December 31, 2022 |
| Income (Numerator) |
| Shares (a) (Denominator) |
| Per Share Amount |
| Loss (Numerator) |
| Shares (a) (Denominator) |
| Per Share Amount |
| Adjusted net income (loss) (non-GAAP) |
| $ |
| 1,647 |
| $ |
| (47,450 |
| ) |
| Less: Net income attributable to redeemable noncontrolling interest |
| (2,305 |
| ) |
| (9,106 |
| ) |
| Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities |
| 1,190 |
| 5,156 |
| Net income (loss) attributable to HCI |
| 532 |
| (51,400 |
| ) |
| Less: (Income) loss attributable to participating securities |
| (1 |
| ) |
| 3,046 |
| Basic Earnings (Loss) Per Share before unrealized gains/losses on equity securities: |
| Income (loss) allocated to common stockholders |
| 531 |
| 8,356 |
| $ |
| 0.06 |
| (48,354 |
| ) |
| 8,817 |
| $ |
| (5.48 |
| ) |
| Effect of Dilutive Securities:* |
| Stock options |
| — |
| — |
| — |
| — |
| Convertible senior notes |
| — |
| — |
| — |
| — |
| Warrants |
| — |
| — |
| — |
| — |
| Diluted Earnings (Loss) Per Share before unrealized gains/losses on equity securities: |
| Income (loss) available to common stockholders and assumed conversions |
| $ |
| 531 |
| $ |
| 8,356 |
| $ |
| 0.06 |
| $ |
| (48,354 |
| ) |
| $ |
| 8,817 |
| $ |
| (5.48 |
| ) |
| (a) Shares in thousands. |
| * Convertible senior notes, stock options, and warrants were excluded due to antidilutive effect. |
Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS
| Three Months Ended |
| Year Ended |
| December 31, 2022 |
| December 31, 2022 |
| GAAP diluted Earnings (Loss) Per Share |
| $ |
| 0.18 |
| $ |
| (6.24 |
| ) |
| Net unrealized investment (gains) losses |
| $ |
| (0.12 |
| ) |
| $ |
| 0.76 |
| Less: Tax effect at 0%* |
| $ |
| - |
| $ |
| - |
| Net adjustment to GAAP diluted EPS |
| $ |
| (0.12 |
| ) |
| $ |
| 0.76 |
| Non-GAAP Adjusted diluted EPS |
| $ |
| 0.06 |
| $ |
| (5.48 |
| ) |
| *A valuation allowance was established as of December 31, 2022 on the deferred tax assets related to the 2022 pre-tax loss due to the impacts of Hurricane Ian. Consequently, there is no tax effect for net unrealized losses. |