Super-regional P&C insurance holding company, Heritage Insurance Holdings, Inc., has reported a year-on-year improvement in its second second quarter 2024 combined ratio to 92.5% from 95.1%, as net income more than doubled in the period.
The firm’s strong Q2’24 results includes gross premiums written (GPW) of $424.5 million, an increase of 7.1% from Q2 2023’s $396.6 million, driven primarily by a strategic and substantial organic increase in Florida commercial residential lines business.
Gross premiums earned were $350.1 million, up 6.1% from $330 million in the prior year’s quarter. Net premiums earned for the quarter were $190.3 million, up 7.6% from $176.8 million in the same quarter of the previous year.
The firm’s premiums-in-force reached $1.4 billion in Q2 2024, an increase of 6.1% compared to $1.3 billion in Q2 2023. Heritage stated that Q2 2024 represents the tenth consecutive quarter of driving higher in-force premiums.
Heritage reported net income of $18.9 million for Q2 2024, up from $7.8 million in the previous year. The net loss ratio also improved by 4.6 percentage points to 55.7%, compared to 60.3% in the prior year’s quarter.
This improvement was driven by higher net premiums earned, slightly lower net losses and loss adjustment expenses (LAE), partly offset by higher adverse development.
The firm’s net weather losses for the current quarter were $19.7 million, a decrease of $14.1 million from $33.8 million in the prior year’s quarter. There were no catastrophe losses in either the current or prior year quarters.
Additionally, the net loss ratio was affected by net unfavourable loss development of $8.7 million during Q2 2024, compared to net favourable development of $2.7 million in Q2 2023.
Ernie Garateix, Chief Executive Officer of Heritage, commented: “First, on behalf of the entire Heritage family, we wish a swift and complete recovery to all of those impacted by Hurricane Debby. Our team has been responding to policyholder needs and remains ready to provide outstanding claim service.
“With regard to the second quarter, our strong results demonstrate the continued execution of our underwriting and rate adequacy initiatives over the last three years.”
Garaxteix further added: “Through our proactive actions to improve rates and organically grow our commercial residential business, we are achieving top line growth while expanding our margins and delivering stronger earnings.
A key component of this strategy was our decision in December of 2022 to largely cease writing new personal lines policies in Florida and the Northeast given the wavering profitability of our book of business, coupled with tightening reinsurance markets at that that time. Importantly, we have now reached an inflection point which positions us to selectively resume writing new business in these regions.”
He continued: “Looking forward, we plan to pursue a strategy of controlled growth anchored by continued risk management and stringent underwriting. This is an opportune time to accelerate growth given the disruption in many of our markets that is opening up significant market share, combined with the positive impact of Florida legislative changes and a stabilised reinsurance market where we continue to receive support from our partners.
I’m pleased with the progress that we have made, and even more encouraged with the opportunies ahead, which would not be possible without the experience and dedication of our employees.”
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