HCI Group expects Isaias losses to impact its reinsurance tower and tokenized securities

HCI Group, Inc., the insurance holding company, has confirmed that only one of its three reinsurance towers has been impacted after receiving claims from Hurricane Isaias, while the company also expects one of its tokenized reinsurance securities to be affected by losses from the storm too.

Hurricane Isaias made landfall close to Destin, Florida on October 9th, carrying Category 2 sustained winds of 105 mph and higher gusts.

HCI’s exposure remains significantly Florida focused; however the company continues to expand its underwriting platforms into additional states across the United States, including the Gulf Coast region.

HCI said that the impacted reinsurance tower is Reinsurance Tower 3, which covers the northern region of Florida and has a $15 million retention, including participation by the company’s own captive reinsurers.

The firm explained, “Anything above this number will be subject to the company’s reinsurance agreements.”

In addition, Tower 3 is also shared between Homeowners Choice and two HCI-sponsored reciprocal insurance companies: Tailrow Insurance Exchange and Condo Owners Reciprocal Exchange (known as CORE).

With respect to the company’s tokenized reinsurance securities, HCI stated that it expects only Token B to be impacted by losses from Hurricane Isaias.

HCI Group’s HCI Re 2026 Series B token is a digital reinsurance security issued on the Solana blockchain via Cayman Islands-based reinsurance company Oxbridge Re Holdings’ subsidiary SurancePlus.

Initially, the Series B token targeted an annualised investor return of approximately 133% but later shifted to 122%.

Paresh Patel, HCI’s Chairman and Chief Executive Officer, commented: “Our thoughts are with everyone impacted by Hurricane Isaias. At this time, we are focused on supporting our policyholders by processing their claims as efficiently and effectively as possible.”

Recently, Moody’s RMS Event Response team estimated that insurance industry losses from hurricane Isaias will range between $2.5 billion and $4.5 billion.

Karen Clark & Company (KCC) also estimated the private insurance market loss from wind and storm surge associated with Isaias would be $3 billion.

Additionally, Verisk also recently gave its initial industry insured loss estimate for Isaias, saying that onshore property losses from the storm could reach up to $2 billion.

Euler ILS Partners, the specialist Swiss insurance-linked securities (ILS) investment manager, also put an initial insurance industry loss estimate for hurricane Isaias in the range of $2 billion to $4 billion.