Heritage Insurance Holdings reported its third-quarter 2024 financial results, highlighting 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 $337.0 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.
The net loss ratio for the quarter improved to 65.4%, down 9 points from 74.4% in the previous year. The net expense ratio also saw a decline, dropping 1.2 points to 35.2%. Overall, the net combined ratio stood at 100.6%, an improvement of 10.2 points from 110.8% in the third quarter of 2023.
In recent years, Heritage has centered its strategy on three key areas: enhancing underwriting profit through rate adequacy and selective underwriting, allocating capital to high-return products and regions, and maintaining a diversified portfolio.
Since launching these initiatives in 2022, the company has posted in-force premium growth for 11 consecutive quarters, expanded its excess and surplus lines across multiple states to exceed $45 million in in-force premium, and added over $150 million in in-force premium within its commercial portfolio.
Heritage achieved rate adequacy across more than 80% of its territories, with expectations to reach 90% by early 2025.
The company also reduced exposures in high-concentration areas and states where rate adequacy could not be achieved, and no state currently exceeds 30% of total exposures. These adjustments helped Heritage achieve profitability in a quarter impacted by two hurricanes that resulted in combined losses exceeding one retention.
Heritage CEO Ernie Garateix (pictured above) expressed concern for those affected by recent hurricanes in the Southeastern United States.
"Our focus has been on providing our policyholders with the support and response that they expect and need as we assist them with their recovery. To accomplish this, we have deployed our resources as well as those of our outsourced providers throughout the affected areas and have participated in numerous insurance hurricane villages, where we meet personally with policyholders to assist with their claims. While the recovery will take time, I am very proud of our employees and their commitment to our policyholders to help them through this challenging time,” Garateix said.
Commenting on the financial results, Garateix stated that the third quarter demonstrated the effectiveness of Heritage’s strategic focus on rate adequacy and portfolio improvements.
“We have much more to accomplish as we now pivot our strategy to one of controlled growth. I remain very optimistic about the opportunities that lie ahead for our company, employees and shareholders,” he said.
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