Heritage Insurance expects strong Q4 amid catastrophe challenges

Profits expected to surpass Q2 highs, even with hurricane-related losses

Heritage Insurance expects strong Q4 amid catastrophe challenges

Insurance News

By Kenneth Araullo

Heritage Insurance Holdings has provided an update on its fourth-quarter 2024 financial results, along with an estimate of catastrophe losses from the Southern California wildfires expected in the first quarter of 2025. 

The company anticipates its strongest earnings quarter of the year in the fourth quarter of 2024, exceeding the $18.9 million in after-tax net income reported in the second quarter. This performance includes an estimated $57 million impact from Hurricane Milton, which consists of $40 million in retained catastrophe losses and a $17 million net reinstatement premium.

Lower-than-expected non-catastrophe accident year losses also contributed favorably to the quarter’s results. 

As of Jan. 21, Heritage had settled more than 9,000 claims from 2024 hurricanes, with over $140 million in payments made. Approximately 90% of reported hurricane claims from 2024 have been closed. 

For the first quarter of 2025, Heritage expects to incur between $35 million and $40 million in pre-tax net current accident quarter catastrophe losses related to the Southern California wildfires. The company is actively participating in insurance villages in California, where its personnel are assisting policyholders with claims and recovery efforts. 

Heritage CEO Ernie Garateix (pictured above) acknowledged the impact of the wildfires on affected communities.

"We want to express our deepest sympathies for all those affected by the Southern California wildfires,” Garateix said. “Heritage is deeply committed to supporting our customers and communities as they begin the difficult process of recovering from such a devastating event. We are also proud of the continued work from our teams, who are working tirelessly to process claims quickly and provide resources to those in need."

In its third quarter, the firm reported a net income of $8.2 million, or $0.27 per diluted share, compared to a net loss of $7.4 million, or $0.28 per diluted share, in the same quarter last year.

Gross premiums earned increased by 5.1% to $354.2 million, up from $337 million in the prior-year quarter. The company also reported a 12.6% rise in net premiums earned, reaching $198.8 million, up from $176.6 million.

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