Homeowners Choice Inc. overcame an increase in reinsurance costs to remain barely profitable in the first quarter of 2010.
The company posted a net income of $698,000 for the first three months of 2010, down nearly 90% from 2009's first quarter total of $6.28 million.
While premiums remained essentially flat for the Clearwater-based insurance company, reinsurance costs increased by more than $5 million, up to $14.1 million from $9 million the year before, contributing to the decrease in net gains.
The company also saw an increase in policy acquisition expense, which cost the company $4.3 million in the quarter, compared to $920,000 in the first quarter of 2009. That change was attributable to the number of renewal policies processed by the company.
F.X. McCahill, CEO, said he was satisfied with HCI's performance in a release. “Given the high-rate reinsurance contracts covering the 2009 hurricane season, we are pleased to report another consecutive profitable quarter,” he said.
HCI's balance sheet shows that the company remains highly liquid, with $54.4 million in cash and cash equivalents as of March 31.