Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

Note 14 -- Segment Information

The Company identifies its operating divisions or segments based on managerial emphasis, organizational structure and revenue source. In the first quarter of 2021, the Company reorganized its operations to focus on specific business segments, resulting in the creation of TTIG with a separate workforce, board of directors and financial reporting structure. Companies under TTIG include TypTap, TypTap Management Company, Exzeo USA, Inc., and Cypress Tech Development Company, Inc., the parent company of an India company, Exzeo Software Private Limited. TTIG and its subsidiaries are considered a new reporting segment known as TypTap Group. The Company now has four reportable segments: HCPCI insurance operations, TypTap Group, real estate operations, and corporate and other. Due to their economic characteristics, the Company’s property and casualty insurance division and reinsurance operations, excluding the insurance operations under TypTap Group, are grouped together into one reportable segment under HCPCI insurance operations. The TypTap Group segment includes its property and casualty insurance operations, information technology operations and its management company’s activities. The real estate operations segment includes companies engaged in operating commercial properties the Company owns for investment purposes or for use in its own operations. The corporate and other segment represents the activities of the holding companies and any other companies that do not meet the quantitative and qualitative thresholds for a reportable segment. The determination of segments may change over time due to changes in operational emphasis, revenues, and results of operations. The Company’s chief executive officer, who serves as the Company’s chief operating decision maker, evaluates each division’s financial and operating performance based on revenue and operating income.

For the three months ended September 30, 2021 and 2020, revenues from the HCPCI insurance operations segment before intracompany elimination represented 73.9% and 59.1%, respectively, and revenues from the TypTap Group segment represented 24.0% and 12.6%, respectively, of total revenues of all operating segments. For the nine months ended September 30, 2021 and 2020, revenues from the HCPCI insurance operations segment before intracompany elimination represented 76.4% and 73.8%, respectively, and revenues from the TypTap Group segment represented 20.7% and 12.7%, respectively, of total revenues of all operating segments. At September 30, 2021 and December 31, 2020, HCPCI insurance operations’ total assets represented 60.2% and 68.9%, respectively, and TypTap Group’s total assets represented 26.3% and 16.7%, respectively, of the combined assets of all operating segments.

The following tables present segment information reconciled to the Company’s consolidated statements of income. Intersegment transactions are not eliminated from segment results. However, intracompany transactions are eliminated in segment results below.

	HCPCI
	Insurance			TypTap			Real		Corporate/			Reclassification/
For Three Months Ended September 30, 2021	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned	$	98,256		$	51,553		$	—	$	—		$	—		$	149,809
Premiums ceded		(36,955	)		(20,135	)		—		—			1,513			(55,577	)
Net premiums earned		61,301			31,418			—		—			1,513			94,232
Net income from investment portfolio		831			102			—		172			778			1,883
Policy fee income		693			307			—		—			—			1,000
Other		2,087			480			2,336		489			(3,290	)		2,102
Total revenue		64,912			32,307			2,336		661			(999	)		99,217
Expenses:
Losses and loss adjustment expenses		36,928			24,224			—		—			1,512			62,664
Amortization of deferred policy acquisition costs		12,402			9,250			—		—			—			21,652
Other policy acquisition expenses		633			1,110			—		—			(55	)		1,688
Interest expense		—			1			231		1,432			—			1,664
Depreciation and amortization		18			342			576		171			(603	)		504
Debt conversion expense		—			—			—		1,273			—			1,273
Personnel and other operating expenses		5,896			7,685			814		3,734			(1,853	)		16,276
Total expenses		55,877			42,612			1,621		6,610			(999	)		105,721
Income (loss) before income taxes	$	9,035		$	(10,305	)	$	715	$	(5,949	)	$	—		$	(6,504	)
Total revenue from non-affiliates (c)	$	65,629		$	32,701		$	1,997	$	402
Gross premiums written	$	118,280		$	55,987

(a)Other revenue under real estate primarily consisted of rental income from investment properties.

(b)Other revenue under corporate and other primarily consisted of revenue from marina business.

(c)Represents amounts before reclassification of certain revenue and expenses to conform with an insurance company’s presentation.

	HCPCI
	Insurance			TypTap			Real		Corporate/			Reclassification/
For Three Months Ended September 30, 2020	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned (c)	$	89,283		$	19,854		$	—	$	—		$	(2,443	)	$	106,694
Premiums ceded		(36,503	)		(10,171	)		—		—			2,443			(44,231	)
Net premiums earned		52,780			9,683			—		—			—			62,463
Net income from investment portfolio		1,866			363			—		1,340			(290	)		3,279
Policy fee income		684			211			—		—			—			895
Other		759			24			39,353		290			(3,036	)		37,390
Total revenue		56,089			10,281			39,353		1,630			(3,326	)		104,027
Expenses:
Losses and loss adjustment expenses		44,338			7,405			—		—			—			51,743
Amortization of deferred policy acquisition costs		10,433			3,536			—		—			—			13,969
Other policy acquisition expenses		160			531			—		—			56			747
Interest expense		—			—			463		2,631			(238	)		2,856
Depreciation and amortization		21			279			567		179			(585	)		461
Loss on repurchases of convertible senior notes		—			—			—		—			—			—
Loss on extinguishment of debt		—			—			98		—			—			98
Personnel and other operating expenses		5,896			4,527			1,325		3,428			(2,559	)		12,617
Total expenses		60,848			16,278			2,453		6,238			(3,326	)		82,491
(Loss) income before income taxes	$	(4,759	)	$	(5,997	)	$	36,900	$	(4,608	)	$	—		$	21,536
Total revenue from non-affiliates (d)	$	55,227		$	10,778		$	38,859	$	1,208
Gross premiums written	$	89,102		$	27,349

(a)Other revenue under real estate primarily consisted of rental income from investment properties.

(b)Other revenue under corporate and other primarily consisted of revenue from restaurant and marina businesses.

(c)Gross premiums earned consist of $86,840 from HCPCI and $2,443 from a reinsurance company.

(d)Represents amounts before reclassification of certain revenue and expenses to conform with an insurance company’s presentation.

	HCPCI
	Insurance			TypTap			Real		Corporate/			Reclassification/
For Nine Months Ended September 30, 2021	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned	$	300,827		$	119,364		$	—	$	—		$	—		$	420,191
Premiums ceded		(104,236	)		(42,229	)		—		—			1,353			(145,112	)
Net premiums earned		196,591			77,135			—		—			1,353			275,079
Net income from investment portfolio		5,261			933			—		4,059			3,799			14,052
Policy fee income		2,106			856			—		—			—			2,962
Other		3,420			1,130			9,849		1,316			(12,213	)		3,502
Total revenue		207,378			80,054			9,849		5,375			(7,061	)		295,595
Expenses:
Losses and loss adjustment expenses		110,008			52,976			—		—			1,348			164,332
Amortization of deferred policy acquisition costs		43,906			20,541			—		—			—			64,447
Other policy acquisition expenses		2,170			3,071			—		—			(114	)		5,127
Interest expense		—			91			972		4,950			(270	)		5,743
Depreciation and amortization		56			942			1,737		711			(1,841	)		1,605
Debt conversion expense		—			—			—		1,273			—			1,273
Personnel and other operating expenses		17,317			21,007			3,332		8,901			(6,184	)		44,373
Total expenses		173,457			98,628			6,041		15,835			(7,061	)		286,900
Income (loss) before income taxes	$	33,921		$	(18,574	)	$	3,808	$	(10,460	)	$	—		$	8,695
Total revenue from non-affiliates (c)	$	206,743		$	80,893		$	8,833	$	4,641
Gross premiums written	$	323,490		$	161,602

(a)Other revenue under real estate primarily consisted of rental income from investment properties.

(b)Other revenue under corporate and other primarily consisted of revenue from marina business.

(c)Represents amounts before reclassification of certain revenue and expenses to conform with an insurance company’s presentation.

	HCPCI
	Insurance			TypTap			Real		Corporate/			Reclassification/
For Nine Months Ended September 30, 2020	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned (c)	$	255,273		$	54,829		$	—	$	—		$	(3,240	)	$	306,862
Premiums ceded		(93,466	)		(19,078	)		—		—			3,240			(109,304	)
Net premiums earned		161,807			35,751			—		—			—			197,558
Net income (loss) from investment portfolio		3,787			383			3		(1,714	)		(1,024	)		1,435
Policy fee income		1,987			584			—		—			—			2,571
Other		1,431			87			44,331		1,695			(8,984	)		38,560
Total revenue		169,012			36,805			44,334		(19	)		(10,008	)		240,124
Expenses:
Losses and loss adjustment expenses		97,621			22,043			—		—			—			119,664
Amortization of deferred policy acquisition costs		27,103			9,222			—		—			—			36,325
Other policy acquisition expenses		1,789			1,419			—		—			—			3,208
Interest expense		—			1			1,434		8,090			(679	)		8,846
Depreciation and amortization		63			820			1,862		466			(1,793	)		1,418
Loss on repurchases of convertible senior notes		—			—			—		150			—			150
Loss on extinguishment of debt		—			—			98		—			—			98
Personnel and other operating expenses		16,161			13,244			3,982		10,548			(7,536	)		36,399
Total expenses		142,737			46,749			7,376		19,254			(10,008	)		206,108
Income (loss) before income taxes	$	26,275		$	(9,944	)	$	36,958	$	(19,273	)	$	—		$	34,016
Total revenue from non-affiliates (d)	$	167,891		$	37,421		$	42,907	$	(996	)
Gross premiums written	$	302,142		$	62,708

(a)Other revenue under real estate primarily consisted of rental income from investment properties.

(b)Other revenue under corporate and other primarily consisted of revenue from restaurant and marina businesses.

(c)Gross premiums earned consist of $252,033 from HCPCI and $3,240 from a reinsurance company.

(d)Represents amounts before reclassification of certain revenue and expenses to conform with an insurance company’s presentation.

The following table presents segment assets reconciled to the Company’s total assets in the consolidated balance sheets:

	September 30,			December 31,
	2021			2020
Segments:
HCPCI Insurance Operations	$	616,948		$	648,600
TypTap Group		294,931			157,581
Real Estate Operations		129,198			128,383
Corporate and Other		61,629			29,022
Consolidation and Elimination		(26,592	)		(22,273	)
Total assets	$	1,076,114		$	941,313