Good morning and welcome to HCI Group’s Third Quarter 2021 Earnings Call. My name is Kate and I will be your conference operator this morning. Before we begin today’s call, I would like to remind everyone that this conference call is being recorded and will be available for replay through December 9, 2021 starting later today. This call is also being broadcast live via webcast and available via webcast replay until November 9, 2022 on the Investor Information section of HCI Group’s website. I would now like to turn the call over to Matt Glover, Gateway Investor Relations. Matt, please proceed.

Thank you and good morning. Welcome to HCI Group’s third quarter 2021 earnings call. On today’s call is Karin Coleman, HCI’s Chief Operating Officer; Mark Harmsworth, HCI’s Chief Financial Officer; and Paresh Patel, HCI’s Chairman and Chief Executive Officer. Following Karin’s opening remarks, Mark will review our financial performance for the third quarter of 2021, and then Paresh will provide an operational outlook. Before we begin, I would like to take the opportunity to remind our listeners that today’s presentation and responses to questions may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipate, estimate, expect, intend, plan 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. Some of these risks and uncertainties are identified in the company’s filings with the SEC. Should any risks or uncertainties develop into actual events these developments could have material adverse effects on the company’s business, financial conditions and results of operations. HCI Group disclaims all the obligations to update any forward-looking statements. And with that, I’d like to turn the call over to Karin Coleman, Chief Operating Officer. Karin?

Thank you, Matt, and welcome everyone. I’d like to provide a brief update on the quarter. For anyone new to our story, HCI Group is comprised of four main divisions: our real estate operations, Greenleaf Capital; our captive reinsurer, Claddaugh; and our two insurance subsidiaries, Homeowners Choice, our traditional insurance company and TypTap, our technology-driven homeowners insurance company, which includes Exzeo, the software development company. My remarks on this call will focus primarily on our insurance operations and events at the HCI Group parent company level. As for highlights this quarter, our insurance divisions reached another milestone as consolidated annualized gross premiums reached approximately $615 million in the quarter. The pace of growth at both of our insurance subsidiaries, Homeowners Choice and TypTap again exceeded our expectations. At Homeowners Choice, strong policy retention combined with incremental growth from strategic opportunities in Florida, including transitioning business from Gulfstream Property and Casualty Insurance Company contributed to double-digit growth in the quarter. At the end of Q3, TypTap’s annualized premiums were approximately $214 million, which compares to $87 million in the prior year quarter. A number of weather events in the third quarter of 2021 had an adverse impact on profitability for the property industry. These events included tropical storms Elsa, Fred, and Henri as well as hurricanes Ida and Nicholas. Even with the weather challenges in the third quarter, HCI incurred only $6.5 million in gross weather-related losses in the quarter, and we did not have any reinsurance recoveries for current quarter weather losses. Of this amount, $2.9 million of losses are for TypTap and the remainder is for HCI. Two additional points: first, the stronger-than-expected premium growth in the quarter resulted in both of our insurance subsidiaries having a reinsurance true-up. Also this quarter, we received approval on rate increases of 6.2% for Homeowners Choice and 9.9% for TypTap. Both of these rate increases become effective December 1 of this year. Florida Senate Bill 76 insurance litigation reform became effective July 1. In line with my prior comments, it’s too early to see any real trends. However, we remain cautiously optimistic. In the third quarter, we did observe a decline in the number of lawsuits received. Despite profitability challenges across the industry in the quarter, our superior technology allows both of our insurance subsidiaries to deliver superior results. The proprietary technology I’m speaking about was developed by our subsidiary, Exzeo. Now moving to the HCI Group level, we recently declared our regular quarterly cash dividend of $0.40 per share, our 44th consecutive quarterly dividend, that is 11 years and counting of dividends. Lastly, in my report, also during the quarter, a number of holders of our convertible notes converted or exchanged their notes for common shares. This increased our book value by $4 per share and cut our long-term debt in half. We think this is a great outcome for the company. And with that, I’ll turn it over to Mark to discuss the details of our financial results for the third quarter and the 9 months of 2021. Mark?

Thanks, Karin. As shown in the press release, diluted earnings per share reflect a loss of $0.72 in the third quarter. Results were impacted by current quarter cat events as well as some adverse development on cat events from prior periods. In addition, there were some expenses related to the conversion of a sizable portion of our convertible debt into equity, which I’ll discuss in a minute. Q3 was another quarter of strong growth. Gross written premiums were up 50% from the same quarter last year and are up 33% year-to-date. Gross premiums earned were up 40% over the same quarter last year and are up 37% year-to-date. We are driving growth in both of our insurance companies. Homeowners Choice gross written premiums were up 33% this quarter, and gross premiums earned were up 13%. TypTap gross written premiums were up more than 100% over the same quarter last year and gross premiums earned were up 160%. Consolidated gross premiums earned of just under $150 million this quarter were another record for the company. I wanted to give a little color on our loss expense for the quarter. When looking at loss expense, it is helpful to separate cat claims from normal daily claims. If we do that separation this quarter, the $62.7 million breaks down into $13 million of cat expense and $49.7 million of daily loss expense. The $13 million of cat expense was made up of $6.5 million of gross losses for storms that happened in the quarter, Hurricane Ida, and Tropical Storm Henri, and $6.5 million of development on two storms from last year, Hurricane Sally and Tropical Storm Ida. The driver on these two being litigation. These storms happened before the change in the Florida litigation rules. So let’s come back to the $49.7 million of daily loss expense. The best way to look at this is as a percentage of gross premiums earned. In Q3, the daily loss expense was – as a percentage of gross premiums earned was 31%, which was better than expected. Why? On the last call last quarter, I talked about loss ratios by company and by line of business, and this quarter performed better than expected. The biggest improvement was in TypTap. We discussed the 45% attritional loss ratio for TypTap’s homeowners line many times, but it has been performing better than expected. And in the third quarter, the attritional loss ratio was only 37.5%. This lower loss ratio for TypTap was the main driver in the consolidated loss ratio being lower than expected this quarter. Okay. So I wanted to come back to something that I mentioned at the top related to the balance sheet. As you know, we had about $139 million of convertible debt on our balance sheet at the end of the second quarter. During the third quarter, we exchanged $82.8 million in principal for 1.36 million shares of the company’s common shares. These transactions have a number of material positive impacts. Long-term debt is down more than $82 million from $160 million at the end of the second quarter to $78 million at the end of the third quarter. Shareholder equity is up by a similar amount. Book value increased by about $4 per share, our debt-to-cap ratio dropped from 53% to 36%, and finally, our share count increased from 8,265,000 at the end of June to 9,591,000 at the end of September. I should also mention that we booked a $1.3 million expense in the third quarter related to these exchanges. It’s important to note that this de-leveraging is an ongoing process. At the end of Q3, after the transactions I just mentioned, there was about $56 million of principal outstanding on our converts. In October, we converted an additional $27.7 million, bringing the balance outstanding as of October 31 down to just $28 million for a total de-leveraging of about $110 million. Now I wanted to make a few comments on cash flow and liquidity. Consolidated cash is up $137 million so far this year, and cash flow from operations is over $48 million. Cash flow from operations consist of $12 million of cash flow from TypTap Insurance Group and $36 million of cash flow from other HCI entities. I should mention that the $48 million of consolidated cash flow from operations is a conservative number as it excludes the operational impact of the quota share arrangement with UPC, since that cash is flowing through a trust account that we classify as other assets rather than cash. If it were included, cash flow from operations would be over $128 million year-to-date. The strong cash flow performance is driven, of course, by higher unearned premium, but also because net reserves are increasing. We continue to expense significantly more in loss expense than we’re paying out. In terms of liquidity, both of our insurance companies are in a strong surplus position and at the holding company, we have just over $95 million in cash and liquid investments and full access to the $65 million available on the line of credit with Fifth Third for total holding company liquidity of about $160 million. To summarize, the company continues to grow. We are strengthening reserves, strengthening an already strong balance sheet, cash is going up, debt is going down. We are investing in the future, and we are profitable year-to-date. And with that, I’ll hand it over to Paresh.

Thanks, Mark. Karin and Mark made important points in their remarks. HCI has achieved growth ahead of our expectations with both Homeowners Choice and TypTap contributing. And the attritional loss continues to improve even with our current growth trajectory. And this is all possible because of the technology that we have developed at our subsidiary, Exzeo. TypTap’s current growth plan targets a compound annual growth rate in gross written premium of approximately 95% from 2020 through 2023. Of course, to have this level of growth, we need to invest in the business, including people and technology. In order to maximize the opportunity, we anticipate that TypTap Insurance Group will incur slight operating losses through 2023. For clarity, TypTap Insurance Group includes TypTap’s insurance operations and our technology division, Exzeo. And speaking of TypTap Insurance Group’s future, typically, we use our quarterly earnings as an opportunity for investors to answer questions and provide additional commentary on the future of HCI. We value the transparency with our investors, but recent events require this quarter to be a little different. Let me explain. Last night, we publicly filed the Form S-1 registration statement to take TypTap public. Now that registration statement has been filed, securities laws restrict what we can discuss. So under advisement from our legal counsel, we cannot take additional questions at this time. I hope you understand. Thank you. And we look forward to reengaging next quarter when we can take questions consistent with our normal practice.

Thank you for joining us today for our presentation. This concludes today’s call. You may now disconnect.