Heritage Insurance Reports Third Straight Quarter of Profit After Shedding Policies

Tampa-based Heritage Insurance Holdings reported a $7.8 million profit for the second quarter of this year, along with an improved combined ratio, thanks in part to higher premiums and reduced exposure in Florida.

The black ink is a marked improvement from the second quarter of 2022, in which the insurer reported an $88 million loss.

“This quarter marks the third consecutive quarter of profitability and a net combined ratio below 100%,” Heritage CEO Ernie Garateix said in a statement this week when earnings were announced.

He noted that the publicly traded company has seen “selective organic growth” in its commercial residential business and an average premium increase of 24.3% over Q2 in 2022. Premiums for commercial residential properties increased by almost 76%.

“I’m also pleased with the terms of our catastrophe excess-of-loss reinsurance placement, which included many long-term partners as well as new trading partners,” Garateix said.

Heritage, founded in 2012, had about 165,761 policies in force in Florida in the second quarter of this year – a 15% drop from this time a year ago. That ranked it the 11th-largest property and casualty insurer in Florida, according to the Florida Office of Insurance Regulation. In other states, Heritage held 323,629 policies, a decline of about 9% from the previous year’s period.

“Reduction of policy count for the Florida personal lines product remains a key focus and will continue until the positive impact of recent legislation to reduce abusive claims practices is realized,” the company said in a statement.

The combined ratio stood at 95.1%, down from 99.4% in Q2 2022. Gross premiums written climbed 8.6%, to $396 million compared to last year’s second quarter.

Losses and loss adjustment expenses were higher this quarter but were significantly less for the first half of 2023 compared to the first half of 2022: $204 million in 2023 versus $242 million in the first half of last year.

The Heritage Board of Directors has decided to continue its temporary suspension of quarterly dividends to shareholders, the company said.