HCI Group Inc

Previous wording

For the three months ended March 31, 2024 and 2023, revenues from HCPCI insurance operations before intracompany elimination represented 63.7% and 61.2%, respectively, and revenues from TypTap Group represented 33.8% and 36.5%, respectively, of total revenues of all operating segments. At March 31, 2024 and December 31, 2023, HCPCI insurance operations’ total assets represented 53.1% and 55.3%, respectively, and TypTap Group’s total assets represented 34.9% and 33.6%, respectively, of the combined assets of all operating segments. See Note 14 -- “Segment Information” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

For the three months ended June 30, 2024 and 2023, revenues from HCPCI insurance operations before intracompany elimination represented 57.3% and 65.1%, respectively, and revenues from TypTap Group represented 37.2% and 33.4%, respectively, of total revenues of all operating segments. For the six months ended June 30, 2024 and 2023, revenues from HCPCI insurance operations before intracompany elimination represented 60.2% and 63.3%, respectively, and revenues from TypTap Group represented 35.7% and 34.9%, respectively, of total revenues of all operating segments. At June 30, 2024 and December 31, 2023, HCPCI insurance operations’ total assets represented 54.9% and 55.3%, respectively, and TypTap Group’s total assets represented 32.0% and 33.6%, respectively, of the combined assets of all operating segments. See Note 14 -- “Segment Information” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

We have a Bermuda domiciled wholly-owned reinsurance subsidiary, Claddaugh Casualty Insurance Company Ltd (“Claddaugh”). We selectively retain risk in Claddaugh, reducing the cost of third-party reinsurance. Claddaugh fully collateralizes its exposure to affiliates by depositing funds into a trust account. Claddaugh may mitigate a portion of its risk through retrocession contracts, however Claddaugh did not enter into any retrocession contracts for the 2023-2024 treaty year. Currently, Claddaugh does not provide reinsurance to non-affiliates. Other auxiliary operations also include claim adjusting and processing services.

Current wording

We have a Bermuda domiciled wholly-owned reinsurance subsidiary, Claddaugh Casualty Insurance Company Ltd (“Claddaugh”). We selectively retain risk in Claddaugh, reducing the cost of third-party reinsurance. Claddaugh fully collateralizes its exposure to HCPCI, TypTap, and CORE by depositing funds into a trust account. Claddaugh may mitigate a portion of its risk through retrocession contracts, however Claddaugh did not enter into any retrocession contracts for the 2024-2025 treaty year. Currently, Claddaugh does not provide reinsurance to non-affiliates. Other auxiliary operations also include claim adjusting and processing services.

Previous wording

TypTap Insurance Group, Inc. (“TTIG”), our majority-owned subsidiary, currently has four subsidiaries: TypTap Insurance Company (“TypTap”), TypTap Management Company, Exzeo USA, Inc., and Cypress Tech Development Company which also owns Exzeo Software Private Limited, a subsidiary domiciled in India. TTIG is primarily engaged in the property and casualty insurance business and uses internally developed software technologies to drive efficiency in claim processing and claims settlements, identify profitable underwriting opportunities, generate savings and streamline operations across its insurance operations. In addition, software is also used to analyze potential and current properties based on statistical models for catastrophic events, allowing us to pursue the optimal candidates for insurance coverage.

Current wording

TypTap Insurance Group, Inc. (“TTIG”), our majority-owned subsidiary, currently has five subsidiaries: TypTap Insurance Company (“TypTap”), TypTap Management Company, Exzeo USA, Inc., Dark Horse Re, LLC (“Dark Horse”), and Cypress Tech Development Company which also owns Exzeo Software Private Limited, a subsidiary domiciled in India. TTIG is primarily engaged in the property and casualty insurance business and uses internally developed software technologies to drive efficiency in claim processing and claims settlements, identify profitable underwriting opportunities, generate savings and streamline operations across its insurance operations. In addition, software is also used to analyze potential and current properties based on statistical models for catastrophic events, allowing us to pursue the optimal candidates for insurance coverage. Dark Horse is a recently formed subsidiary that specializes in providing expert reinsurance brokerage services.

Previous wording

TypTap, TTIG’s insurance subsidiary, has been the primary source of our organic growth in gross written premium. TypTap’s policies in force have increased from 6,721 in January 2018 to 99,608 at March 31, 2024. TypTap has been successful in using internally developed proprietary technology to underwrite, select and write policies efficiently. Since TypTap began applying for approval to offer homeowners coverage in states outside of Florida in October 2020, TypTap has received approvals from 31 states.

Current wording

TypTap, TTIG’s insurance subsidiary, has been the primary source of our organic growth in gross written premium. TypTap’s policies in force have increased from 6,721 in January 2018 to 97,004 at June 30, 2024. TypTap has been successful in using internally developed proprietary technology to underwrite, select and write policies efficiently. Since TypTap began applying for approval to offer homeowners coverage in states outside of Florida in October 2020, TypTap has received approvals from 31 states.

Previous wording

Our real estate operations consist of multiple properties we own and operate for investment purposes and also properties we own and use for our own operations. Properties used in operations consist of two Tampa office buildings and an insurance operations site in Ocala, Florida. Our investment properties include retail shopping centers, two marinas, and undeveloped land in Tampa and Haines City.

Current wording

Our real estate operations consist of multiple properties we own and operate for investment purposes and also properties we own and use for our own operations. Properties used in operations consist of two Tampa office buildings and an insurance operations site in Ocala, Florida. Our investment properties include retail shopping centers, two marinas, undeveloped land in Tampa and land under development in Haines City, Florida.

Previous wording

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023 (dollar amounts in thousands, except per share amounts):

Current wording

The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023 (dollar amounts in thousands, except per share amounts):

Previous wording

Our results of operations for the three months ended March 31, 2024 reflect net income of approximately $56,956,000 or $3.81 diluted earnings per share, compared with approximately $17,793,000 or $1.54 diluted earnings per share, for the three months ended March 31, 2023. The quarter-over-quarter increase was primarily due to an $78,979,000 increase in net premiums earned, offset by a $19,357,000 increase in losses and loss adjustment expenses, a $15,131,000 increase in income tax expense, and a $2,772,000 increase in general and administrative personnel expenses.

Current wording

Our results of operations for the three months ended June 30, 2024 reflect net income of approximately $57,099,000 or $4.24 diluted earnings per share, compared with net income of approximately $14,882,000 or $1.28 diluted earnings per share, for the three months ended June 30, 2023. The quarter-over-quarter increase was primarily due to a $71,292,0000 increase in net premiums earned and a $8,165,000 net increase in income from our investment portfolio (consisting of net investment income and net realized and unrealized gains or losses), offset by a $16,434,000 increase in losses and loss adjustment expenses and a $3,199,000 increase in general and administrative personnel expenses.

Previous wording

Gross Premiums Earned on a consolidated basis for the three months ended March 31, 2024 and 2023 were approximately $256,644,000 and $180,068,000, respectively. The $76,576,000 increase was primarily attributable to the policies assumed from Citizens and the effect of premium rate increases. Gross premiums earned from the policies assumed were $66,969,000 for the three months ended March 31, 2024 compared with $7,163,000 for the three months ended March 31, 2023. HCPCI gross premiums earned were $149,271,000 for the three months ended March 31, 2024 compared with $92,456,000 for the three months ended March 31, 2023. TypTap gross premiums earned for the three months ended March 31, 2024 were $103,748,000 compared with $87,612,000 for the three months ended March 31, 2023. CORE gross premiums earned were $3,625,000 for the three months ended March 31, 2024.

Current wording

Gross Premiums Earned on a consolidated basis for the three months ended June 30, 2024 and 2023 were approximately $263,561,000 and $181,946,000, respectively. The $81,615,000 increase was primarily attributable to the policies assumed from Citizens and some impact from premium rate increases. Gross premiums earned from policies assumed were $61,770,000 for the three months ended June 30, 2024 compared with $0 for the three months ended June 30, 2023. HCPCI gross premiums earned were $150,357,000 for the three months ended June 30, 2024 compared with $96,875,000 for the three months ended June 30, 2023. TypTap Group’s gross premiums earned were $107,055,000 compared with $85,071,000 for the same comparative period in 2023. Gross premiums earned from reciprocal exchange operations were $12,804,000 for the three months ended June 30, 2024 as opposed to $0 for the three months ended June 30, 2023.

Previous wording

Our premiums ceded represent costs of reinsurance to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts or to assume a proportional share of losses as defined in a quota share agreement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. Reinsurance costs can be decreased by a reduction in premiums ceded attributable to retrospective provisions under multi-year reinsurance contracts. For the three months ended March 31, 2024 and 2023, premiums ceded included a decrease of $6,993,000 related to retrospective provisions in each of the respective periods. See “Economic Impact of Reinsurance Contract with Retrospective Provisions” under “Critical Accounting Policies and Estimates.”

Current wording

Our premiums ceded represent costs of reinsurance to cover losses from catastrophes that exceed the retention levels defined by our catastrophe excess of loss reinsurance contracts or to assume a proportional share of losses as defined in a quota share agreement. The rates we pay for reinsurance are based primarily on policy exposures reflected in gross premiums earned. Reinsurance costs can be decreased by a reduction in premiums ceded attributable to retrospective provisions under reinsurance contracts. For each of the three months ended June 30, 2024 and 2023, premiums ceded included a decrease of $6,993,000 related to retrospective provisions. See “Economic Impact of Reinsurance Contracts with Retrospective Provisions” under “Critical Accounting Policies and Estimates.”

Previous wording

Net Premiums Written for the three months ended March 31, 2024 and 2023 totaled approximately $186,880,000 and $129,345,000, respectively. Net premiums written represent the premiums charged on policies issued during a fiscal period less any applicable reinsurance costs. The increase in 2024 primarily resulted from the policies assumed from Citizens and the decrease in premiums ceded to reinsurers as described above. We had approximately 250,500 policies in force at March 31, 2024 (direct and assumed) as compared with approximately 216,300 policies in force at March 31, 2023.

Current wording

Net Premiums Written for the three months ended June 30, 2024 and 2023 totaled approximately $230,189,000 and $113,593,000, respectively. Net premiums written represent the premiums charged on policies issued during a fiscal period less any applicable reinsurance costs. The increase in 2024 primarily resulted from an increase in premiums written resulting from increased policies in force, offset by increased premiums ceded to reinsurers as described above. We had approximately 242,500 policies in force at June 30, 2024 as compared with approximately 200,000 policies in force at June 30, 2023.

Previous wording

Net Premiums Earned for the three months ended March 31, 2024 and 2023 were approximately $188,538,000 and $109,559,000, respectively, and reflect the gross premiums earned less reinsurance costs as described above.

Current wording

Net Premiums Earned for the three months ended June 30, 2024 and 2023 were approximately $186,848,000 and $115,556,000, respectively, and reflect the gross premiums earned less reinsurance costs as described above.

Previous wording

The following is a reconciliation of our total Net Premiums Written to Net Premiums Earned for the three months ended March 31, 2024 and 2023 (dollar amounts in thousands):

Current wording

The following is a reconciliation of our total Net Premiums Written to Net Premiums Earned for the three months ended June 30, 2024 and 2023 (amounts in thousands):

Previous wording

Our consolidated Losses and Loss Adjustment Expenses amounted to approximately $79,922,000 and $60,565,000 for the three months ended March 31, 2024 and 2023, respectively. The losses and loss adjustment expenses of HCPCI Insurance Operations were $39,014,000 and $28,782,000 for the three months ended March 31, 2024 and 2023, respectively. The increase was primarily attributable to Citizens policies assumed in the fourth quarter of 2023. Losses and loss adjustment expenses for TypTap were $40,553,000 compared with $33,056,000 for the same comparative period. The increase was primarily attributable to the policies assumed from Citizens in December 2023 and January 2024. Losses and loss adjustment expenses for CORE were $1,268,000 for the three months ended March 31, 2024, resulting from the policies assumed from Citizens in February 2024. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”

Current wording

Our consolidated Losses and Loss Adjustment Expenses amounted to approximately $78,324,000 and $61,890,000 for the three months ended June 30, 2024 and 2023, respectively. The losses and loss adjustment expenses of HCPCI Insurance Operations were $37,856,000 and $27,653,000 for the three months ended June 30, 2024 and 2023, respectively. The increase was attributable to a higher number of policies in force, offset by lower claims and litigation frequency related to Florida policies. Losses and loss adjustment expenses for TypTap Group were $38,790,000 compared with $34,937,000 for the same comparative period. The increase was attributable to higher number of policies in force, offset by lower claims and litigation frequency related to Florida policies. Losses and loss adjustment expenses for reciprocal exchange operations were $1,605,000 for the three months ended June 30, 2024, resulting from the policies assumed from Citizens during 2024. See “Reserves for Losses and Loss Adjustment Expenses” under “Critical Accounting Policies and Estimates.”

Previous wording

Policy Acquisition and Other Underwriting Expenses for the three months ended March 31, 2024 and 2023 were approximately $22,139,000 and $22,720,000 on a consolidated basis, respectively, and primarily reflect the amortization of deferred acquisition costs such as commissions payable to agents for production and renewal of policies and premium taxes. Amortized policy acquisition expenses for HCPCI Insurance Operations were $10,136,000 for the three months ended March 31, 2024 compared with $9,621,000 for the three months ended March 31, 2023. The increase was primarily due to the effect of premium rate increases. TypTap's amortized policy acquisition expenses were $10,795,000 compared with $11,863,000 for the same comparative period. The decrease was driven by lower policy acquisition costs in Florida related to lower commission rates.

Current wording

Policy Acquisition and Other Underwriting Expenses for the three months ended June 30, 2024 and 2023 were approximately $23,452,000 and $22,618,000 on a consolidated basis, respectively, and primarily reflect the amortization of deferred acquisition costs such as commissions payable to agents for production and renewal of policies and premium taxes. Policy acquisition and other underwriting expenses for HCPCI Insurance Operations were $11,626,000 for the three months ended June 30, 2024 compared with $10,617,000 for the three months ended June 30, 2023. The increase in amortized costs was primarily due to an increase in premiums in force. TypTap Group’s policy acquisition and other underwriting expenses were $11,360,000 compared with $12,019,000 for the same comparative period, with the decrease due to higher amortized costs attributable to the accelerated transition of United policies during 2023, and lower policy acquisition costs in Florida resulting from lower commissions. Policy acquisition and other underwriting expenses, net of intercompany transactions, for reciprocal exchange operations were $484,000 for the three months ended June 30, 2024, primarily resulting from the policies assumed from Citizens during 2024

Previous wording

General and Administrative Personnel Expenses for the three months ended March 31, 2024 and 2023 were approximately $16,274,000 and $13,502,000, respectively. Our general and administrative personnel expenses include salaries, wages, payroll taxes, stock-based compensation expenses, and employee benefit costs. Factors such as merit increases, changes in headcount, and periodic restricted stock grants, among others, cause fluctuations in this expense. In addition, our personnel expenses are decreased by the capitalization of payroll costs related to projects to develop software for internal use and the payroll costs associated with the processing and settlement of certain catastrophe claims which are recoverable from reinsurers under reinsurance contracts. The period-over-period increase of $2,772,000 was primarily attributable to an increase in employee incentive bonus and merit increases for employees effective in late February 2024, offset by a decrease in stock-based compensation expense.

Current wording

General and Administrative Personnel Expenses for the three months ended June 30, 2024 and 2023 were approximately $17,471,000 and $14,272,000, respectively. Our general and administrative personnel expenses include salaries, wages, payroll taxes, stock-based compensation expenses, and employee benefit costs. Factors such as merit increases, changes in headcount, and periodic restricted stock grants, among others, cause fluctuations in this expense. In addition, our personnel expenses are decreased by the capitalization of payroll costs related to projects to develop software for internal use and the payroll costs associated with the processing and settlement of certain catastrophe claims which are recoverable from reinsurers under reinsurance contracts. The quarter-over-quarter increase of $3,199,000 was primarily attributable to lower payroll costs recoverable from reinsurers, decreased capitalized payroll costs for software development, and an increase in stock-based compensation expense related to the restricted stock awarded in April 2024.

Previous wording

The loss ratio applicable to the three months ended March 31, 2024 (losses and loss adjustment expenses incurred related to net premiums earned) was 42.4% compared with 55.3% for the three months ended March 31, 2023. The decrease was primarily attributable to the increase in net premiums earned, offset in part by the increase in losses and loss adjustment expenses as compared to the first quarter of 2023.

Current wording

The loss ratio applicable to the three months ended June 30, 2024 (losses and loss adjustment expenses incurred related to net premiums earned) was 41.9% compared with 53.5% for the three months ended June 30, 2023. The decrease was primarily attributable to the increase in net premiums earned, offset in part by the increase in losses and loss adjustment expenses.

Previous wording

The expense ratio applicable to the three months ended March 31, 2024 (defined as total expenses excluding losses and loss adjustment expenses and interest expense related to net premiums earned) was 24.5% compared with 38.8% for the three months ended March 31, 2023. The decrease in our expense ratio was primarily attributable to the increase in net premiums earned, offset by the increase in general and administrative personnel expenses and the increase in other operating expenses.

Current wording

The expense ratio applicable to the three months ended June 30, 2024 (defined as total expenses excluding losses and loss adjustment expenses and interest expense related to net premiums earned) was 25.9% compared with 36.8% for the three months ended June 30, 2023. The decrease in our expense ratio was primarily attributable to the increase in net premiums earned, offset in part by the increase in general and administrative personnel expenses and the increase in other operating expenses.

Previous wording

The combined ratio (total of all expenses excluding interest expense in relation to net premiums earned) is the measure of overall underwriting profitability before other income. Our combined ratio for the three months ended March 31, 2024 was 66.9% compared with 94.1% for the three months ended March 31, 2023. The decrease in 2024 was attributable to the factors described above.

Current wording

The combined ratio (total of all expenses excluding interest expense in relation to net premiums earned) is the measure of overall underwriting profitability before other income. Our combined ratio for the three months ended June 30, 2024 was 67.8% compared with 90.3% for the three months ended June 30, 2023. The decrease in 2024 was attributable to the factors described above.

Previous wording

Net Unrealized Investment Gains for the three months ended March 31, 2024 and 2023 were $2,635,000 and $529,000, respectively. The increase was primarily attributable to an overall improvement in the equity market.

Current wording

Net Unrealized Investment Gainsfor the six months ended June 30, 2024 and 2023 were approximately $3,168,000 and $1,426,000, respectively. The increase was primarily attributable to an overall improvement in the equity market compared with the six months ended June 30, 2023.

Previous wording

Income Tax Expensefor the three months ended March 31, 2024 and 2023 was approximately $20,474,000 and $5,343,000, respectively, for state, federal, and foreign income taxes resulting in effective tax rates of 26.4% and 23.1%, respectively. The increase in the effective tax rate was primarily attributable to a lower prior year effective tax rate resulting from the release of valuation allowance during 2023.

Current wording

Income Tax Expensefor the six months ended June 30, 2024 and 2023 was approximately $39,401,000 and $10,727,000, respectively, for state, federal, and foreign income taxes, resulting in effective tax rates of 25.7% and 24.7%, respectively. The increase in the effective tax rate was primarily attributable to a lower prior year effective tax rate resulting from the release of valuation allowance during 2023.

Previous wording

Our limited partnership investments consist of six private equity funds managed by their general partners. Two of these funds have unexpired capital commitments which are callable at the discretion of the fund’s general partner for funding new investments or expenses of the fund. Although capital commitments for the four remaining funds have expired, the general partners may request additional funds under certain circumstances. At March 31, 2024, there was an aggregate unfunded capital balance of $3,806,000. See Limited Partnership Investments under Note 4 -- “Investments” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our limited partnership investments consist of six private equity funds managed by their general partners. Two of these funds have unexpired capital commitments which are callable at the discretion of the fund’s general partner for funding new investments or expenses of the fund. Although capital commitments for the four remaining funds have expired, the general partners may request additional funds under certain circumstances. At June 30, 2024, there was an aggregate unfunded capital balance of $3,353,000. See Limited Partnership Investments under Note 4 -- “Investments” to our unaudited consolidated financial statements under Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Cash Flows for the Three Months Ended March 31, 2024

Current wording

Cash Flows for the Six Months Ended June 30, 2024

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2024 was approximately $181,989,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $19,151,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash used in investing activities of $4,872,000 was primarily due to the purchases of fixed-maturity and equity securities of $180,015,000 and purchases of real estate investments of $5,244,000, offset by the proceeds from calls, repayments and maturities of fixed-maturity securities of $172,024,000 and the proceeds from sales of fixed-maturity and equity securities of $9,546,000. Net cash used in financing activities totaled $58,199,000, which was primarily due to the redemption of redeemable noncontrolling interests of $100,000,000, $3,993,000 of cash dividend payments, and cash dividends paid to redeemable noncontrolling interest of $2,923,000, offset by $50,000,000 of net borrowing under the line of credit agreement.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 was approximately $152,985,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $49,334,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash used in investing activities of $179,433,000 was primarily due to the purchases of fixed-maturity and equity securities of $506,438,000, purchases of property and equipment of $2,039,000, and purchases of real estate investments of $9,909,000, offset by the proceeds from calls, repayments and maturities of fixed-maturity securities of $323,568,000, the proceeds from sales of fixed-maturity and equity securities of $14,199,000, and distributions received from limited partnership investments of $2,292,000. Net cash used in financing activities totaled $64,174,000, which was primarily due to the redemption of redeemable noncontrolling interests of $100,000,000, $8,165,000 of cash dividend payments, cash dividends paid to redeemable noncontrolling interests of $2,923,000, $1,037,000 of share repurchases, and redemption of promissory notes of $466,000, offset by the proceeds from borrowing under the line of credit agreement of $48,000,000 and net contribution from noncontrolling interests of $864,000.

Previous wording

Cash Flows for the Three Months Ended March 31, 2023

Current wording

Cash Flows for the Six Months Ended June 30, 2023

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2023 was approximately $99,109,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $94,412,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash used in investing activities of $17,757,000 was primarily due to the purchases of fixed-maturity and equity securities of $166,624,000 and purchases of property and equipment of $1,469,000, offset by the proceeds from calls, repayments and maturities of fixed-maturity securities of $112,497,000, the proceeds from sales of real estate investments of $21,746,000, the proceeds from sales of fixed-maturity and equity securities of $14,814,000, and distributions received from limited partnership investments of $1,602,000. Net cash used in financing activities totaled $14,100,000, which was primarily due to the redemption of long-term debt of $6,895,000, $3,432,000 of cash dividend payments, cash dividends paid to redeemable noncontrolling interest of $3,012,000, $305,000 of share repurchases, and repayments of long-term debt of $258,000.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2023 was approximately $5,944,000, which consisted primarily of cash received from net premiums written, and reinsurance recoveries of approximately $141,630,000 less cash disbursed for operating expenses, losses and loss adjustment expenses and interest payments. Net cash provided by investing activities of $59,675,000 was primarily due to the proceeds from calls, repayments and maturities of fixed-maturity securities of $258,207,000, the proceeds from sales of real estate investments of $21,746,000, the proceeds from sales of fixed-maturity and equity securities of $18,360,000, and distributions received from limited partnership investments of $2,596,000, offset by the purchases of fixed-maturity and equity securities of $237,811,000, purchases of property and equipment of $2,762,000, and purchases of real estate investments of $744,000. Net cash used in financing activities totaled $6,402,000, which was primarily due to the redemption of long-term debt of $6,895,000, $6,869,000 of cash dividend payments, cash dividends paid to redeemable noncontrolling interest of $3,012,000, $784,000 of share repurchases, and repayments of long-term debt of $328,000, offset by the proceeds from issuance of long-term debt of $12,000,000.

Previous wording

At March 31, 2024, we had $522,818,000 of fixed-maturity and equity investments, which are carried at fair value. Changes in the general interest rate environment affect the returns available on new fixed-maturity investments. While a rising interest rate environment enhances the returns available on new investments, it reduces the market value of existing fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new fixed-maturity investments but increases the market value of existing fixed-maturity investments, creating the opportunity for realized investment gains on disposition.

Current wording

At June 30, 2024, we had $694,128,000 of fixed-maturity and equity investments, which are carried at fair value. Changes in the general interest rate environment affect the returns available on new fixed-maturity investments. While a rising interest rate environment enhances the returns available on new investments, it reduces the market value of existing fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new fixed-maturity investments but increases the market value of existing fixed-maturity investments, creating the opportunity for realized investment gains on disposition.

Previous wording

The IBNR represents our estimate of the ultimate cost of all claims that have occurred but have not been reported to us, and in some cases may not yet be known to the insured, and future development of reported claims. Estimating the IBNR component of our Reserves involves considerable judgment on the part of management. At March 31, 2024, $514,553,000 of the total $578,712,000 we have reserved for losses and loss adjustment expenses is attributable to our estimate of IBNR. The remaining $64,159,000 relates to known cases which have been reported but not yet fully settled in which case we have established a reserve based on currently available information and our best estimate of the cost to settle each claim. At March 31, 2024, $57,137,000 of the $64,159,000 in reserves for known cases relates to claims incurred during prior years.

Current wording

The IBNR represents our estimate of the ultimate cost of all claims that have occurred but have not been reported to us, and in some cases may not yet be known to the insured, and future development of reported claims. Estimating the IBNR component of our Reserves involves considerable judgment on the part of management. At June 30, 2024, $505,775,000 of the total $571,646,000 we have reserved for losses and loss adjustment expenses is attributable to our estimate of IBNR. The remaining $65,871,000 relates to known cases which have been reported but not yet fully settled in which case we have established a reserve based on currently available information and our best estimate of the cost to settle each claim. At June 30, 2024, $56,563,000 of the $65,871,000 in reserves for known cases relates to claims incurred during prior years.

Previous wording

Our Reserves decreased from $585,073,000 at December 31, 2023 to $578,712,000 at March 31, 2024. The $6,361,000 decrease is comprised of reductions in our Reserves of $26,404,000 primarily specific to Hurricane Ian and Hurricane Irma, and reductions in our non-catastrophe Reserves of $24,974,000 for 2023 and $17,116,000 for 2022 and prior loss years, offset by $62,133,000 in reserves established for the 2024 loss year. The Reserves established for 2024 claims are primarily driven by an allowance for those claims that have been incurred but not reported to the company as of March 31, 2024. The decrease of $68,494,000 specific to our 2023 and prior loss-years reserves is due to settlement of claims related to those loss years.

Current wording

Our Reserves decreased from $585,073,000 at December 31, 2023 to $571,646,000 at June 30, 2024. The $13,427,000 decrease is comprised of reductions in our catastrophe Reserves of $51,142,000 primarily specific to Hurricane Ian and Hurricane Irma, and reductions in our non-catastrophe Reserves of $35,864,000 for 2023 and $30,288,000 for 2022 and prior loss years, offset by $103,867,000 in reserves established for the 2024 loss year. The Reserves established for 2024 claims are primarily driven by an allowance for those claims that have been incurred but not reported to the company as of June 30, 2024. The decrease of $117,294,000 specific to our 2023 and prior loss-years reserves is due to settlement of claims related to those loss years.

Previous wording

For the three months ended March 31, 2024 and 2023, we accrued benefits of $6,993,000 in each of the respective periods. The accrual of benefits was recognized as a reduction in ceded premiums.

Current wording

For the three months ended June 30, 2024 and 2023, we accrued benefits of $6,993,000 in each of the respective periods. For the six months ended June 30, 2024 and 2023, we accrued benefits totaling $13,986,000 in each respective period. The accrual of benefits was recognized as a reduction in ceded premiums.

Previous wording

As of March 31, 2024, we had $51,282,000 of accrued benefits, the amount that would be charged to earnings in the event we experience a catastrophic loss that exceeds the coverage limit provided under such agreement.

Current wording

As of June 30, 2024, we had $58,275,000 of accrued benefits, the amount that would be charged to earnings in the event we experience a catastrophic loss that exceeds the coverage limit provided under such agreements.

Previous wording

The above and other accounting estimates and their related risks that we consider to be our critical accounting estimates are more fully described in our Annual Report on Form 10-K, which we filed with the SEC on March 8, 2024. For the three months ended March 31, 2024, there have been no other material changes with respect to any of our critical accounting policies.

Current wording

The above and other accounting estimates and their related risks that we consider to be our critical accounting estimates are more fully described in our Annual Report on Form 10-K, which we filed with the SEC on March 8, 2024. For the six months ended June 30, 2024, there have been no other material changes with respect to any of our critical accounting policies.