HCI Group, Inc.

Good afternoon and welcome to HCI Group's first quarter 2020 earnings call. My name is Dagma and I will be your conference operator this afternoon. At this time, all participants will be in a listen-only mode. 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 June 7, 2020, starting later this evening. This call is also being broadcast live via webcast and available via webcast replay until August 7th, 2020 on the investor information section of HCI Group website at www.hcigroup.com. I would now like to turn the call over to Rachel Swanfiger, investor relations for HCI. Rachel, please proceed.

Thank you and good afternoon. Welcome to HCI Group's first quarter 2020 earnings call. With me on today's call is Parish Patel, our Chairman and Chief Executive Officer, and Mark Harmsworth, our Chief Financial Officer. Following Parish's opening remarks, Mark will review our financial performance for the first quarter of 2020, and then turn the call back to Parish for an operational update and business outlook. Finally, we will take your questions. To access today's webcast, please visit the investor information section of our corporate website at www.hcigroup.com. 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 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 conditions, and results of operations. HCI Group disclaims all the obligations to update any forward-looking statement. Now with that, I would like to turn the call over to Parish Patel, our Chairman and CEO. Parish?

Thank you, Rachel, and welcome, everyone. I'd like to start today's call by first addressing the impact of COVID-19 pandemic. The crisis has impacted companies and people all over the world, and our hearts and thoughts go out to those who have been affected by it. Since the beginning of the crisis, our priority has been the health and well-being of our employees and maintaining superior service to our policyholders. So in early March, we implemented our work-from-home arrangements, and I am pleased to report that we have done so without significant impact to our operational effectiveness or capabilities. Our adept and talented IT team enabled us to service our policyholders and handle claims normally. I can tell you that responding to a pandemic is not unlike responding to a weather catastrophe event. and we were well prepared. Also, to our knowledge, none of HCI's employees have tested positive for the virus so far. We have exceptional people who are vital to our success, and we are committed to supporting them through this critical time. Turning to the business. Outside of the decline in our investment portfolio, the COVID-19 pandemic has not materially affected our business, and nor do we expect it to do so. Our insurance companies have received a few COVID claims, but we believe that our exposure is very limited. We have also offered to defer some policyholder premium. We have also offered to defer some policyholder premium payments that are coming due. Homeowner's insurance premiums are usually paid annually and in most cases connected to a mortgage payment. We do not view premium collectability to be a significant issue at this time. Turning to Greenleaf, our real estate division, we are working with some tenants on the lease payments. Some of these tenants are restaurants, gyms, and retail establishments, and they've been hit hard by the crisis. But keep in mind that most of our anchor tenants are grocery stores and a large bank, which are doing just fine. Also, we own and operate two marinas and a restaurant. And while we continue to pay the employees at those facilities, those operations have been closed temporarily or running at very reduced capacity. So what is the combined impact of all of this stuff? The combined operational impacts are not material. For context, the total costs of all of these impacts equals about one major fire loss a month on a business that generates about 36 million of revenue a month, so not material at all. Incidentally, we have not applied for any government loans, including loans under the Payroll Protection Program, and nor do we expect to do so in the near future. As Mark will elaborate in a moment, our cash flow is healthy, our balance sheet is strong, and with the exception of the unrealized investment losses, We had a very good quarter, and we continue to pay our normal dividend of 40 cents per share. I will now turn the call over to our CFO, Mark Homsworth, who will walk us through the financial performance for the first quarter. Mark.