Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Note 13 -- 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 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, 2022 and 2021, revenues from the HCPCI insurance operations segment before intracompany elimination represented 60.5% and 73.9%, respectively, and revenues from the TypTap Group segment represented 29.9% and 24.0%, respectively, of total revenues of all operating segments. For the nine months ended September 30, 2022 and 2021, revenues from the HCPCI insurance operations segment before intracompany elimination represented 66.6% and 76.4%, respectively, and revenues from the TypTap Group segment represented 28.7% and 20.7%, respectively, of total revenues of all operating segments. At September 30, 2022 and December 31, 2021, HCPCI insurance operations’ total assets represented 55.9% and 58.7%, respectively, and TypTap Group’s total assets represented 36.7% and 29.3%, 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, 2022	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned (c)	$	104,671		$	82,728		$	—	$	—		$	(5,686	)	$	181,713
Premiums ceded		(46,157	)		(33,236	)		—		—			4,652			(74,741	)
Net premiums earned		58,514			49,492			—		—			(1,034	)		106,972
Net income from investment portfolio		1,143			1,144			—		1,338			13,674			17,299
Policy fee income		613			458			—		—			—			1,071
Gain on involuntary conversion		—			—			13,402		—			(13,402	)		—
Other		1,246			512			2,785		717			(3,948	)		1,312
Total revenue		61,516			51,606			16,187		2,055			(4,710	)		126,654
Expenses:
Losses and loss adjustment expenses		73,228			62,153			—		—			4,413			139,794
Amortization of deferred policy acquisition costs		11,333			12,176			—		—			—			23,509
Other policy acquisition expenses		748			450			—		—			(29	)		1,169
Stock-based compensation expense		1,049			869			—		2,212			—			4,130
Interest expense		—			222			221		2,591			(221	)		2,813
Depreciation and amortization		166			865			651		186			(596	)		1,272
Personnel and other operating expenses		14,240			8,497			1,583		1,526			(8,277	)		17,569
Total expenses		100,764			85,232			2,455		6,515			(4,710	)		190,256
(Loss) income before income taxes	$	(39,248	)	$	(33,626	)	$	13,732	$	(4,460	)	$	—		$	(63,602	)
Total revenue from non-affiliates (d)	$	55,801		$	55,803		$	15,848	$	1,440
Gross premiums written	$	119,400		$	71,781

(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)Gross premiums earned under HCPCI Insurance Operations consist of $98,985 from HCPCI and $5,686 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 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
Stock-based compensation expense		662			471			—		1,599			—			2,732
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		5,234			7,214			814		2,135			(1,853	)		13,544
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 Nine Months Ended September 30, 2022	Operations			Group			Estate (a)		Other (b)			Elimination			Consolidated
Revenue:
Gross premiums earned (c)	$	339,612		$	210,793		$	—	$	—		$	(8,643	)	$	541,762
Premiums ceded		(120,089	)		(70,798	)		—		—			6,779			(184,108	)
Net premiums earned		219,523			139,995			—		—			(1,864	)		357,654
Net (loss) income from investment portfolio		(1,760	)		1,411			—		426			15,644			15,721
Policy fee income		1,895			1,285			—		—			—			3,180
Gain on involuntary conversion		—			—			13,402		—			(13,402	)		—
Other		2,907			1,513			7,953		3,025			(12,333	)		3,065
Total revenue		222,565			144,204			21,355		3,451			(11,955	)		379,620
Expenses:
Losses and loss adjustment expenses		165,915			129,833			—		—			3,580			299,328
Amortization of deferred policy acquisition costs		46,339			31,403			—		—			—			77,742
Other policy acquisition expenses		2,090			1,230			—		—			(113	)		3,207
Stock-based compensation expense		3,380			2,651			—		6,678			—			12,709
Interest expense		—			633			672		4,256			(632	)		4,929
Depreciation and amortization		433			2,200			1,862		660			(1,819	)		3,336
Personnel and other operating expenses		29,296			24,516			3,516		5,173			(12,971	)		49,530
Total expenses		247,453			192,466			6,050		16,767			(11,955	)		450,781
(Loss) income before income taxes	$	(24,888	)	$	(48,262	)	$	15,305	$	(13,316	)	$	—		$	(71,161	)
Total revenue from non-affiliates (d)	$	213,810		$	149,635		$	20,339	$	1,530
Gross premiums written	$	323,680		$	230,947

(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)Gross premiums earned under HCPCI Insurance Operations consist of $330,969 from HCPCI and $8,643 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
Stock-based compensation expense		2,360			2,438			—		4,431			—			9,229
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		14,957			18,569			3,332		4,470			(6,184	)		35,144
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.

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

	September 30,			December 31,
	2022			2021
Segments:
HCPCI Insurance Operations	$	1,141,660		$	676,509
TypTap Group		813,543			369,600
Real Estate Operations		125,992			127,651
Corporate and Other		159,569			65,349
Consolidation and Elimination		(96,021	)		(62,252	)
Total assets	$	2,144,743		$	1,176,857