Heritage Reports Third Quarter 2024 Results
Heritage Insurance Holdings (NYSE: HRTG) reported strong Q3 2024 results with net income of $8.2 million ($0.27 per share), improving from a net loss of $7.4 million in Q3 2023. The company achieved gross premiums earned of $354.2 million (up 5.1%) and net premiums earned of $198.8 million (up 12.6%). The net combined ratio improved to 100.6%, down 10.2 points year-over-year. Despite retaining $48.0 million in hurricane losses, Heritage maintained profitability and demonstrated successful execution of strategic initiatives focused on rate adequacy and portfolio improvement. The company's book value per share increased to $9.10, up 61.1% from Q3 2023.
Heritage Insurance Holdings (NYSE: HRTG) ha riportato risultati solidi per il terzo trimestre del 2024, con un utile netto di 8,2 milioni di dollari (0,27 dollari per azione), in miglioramento rispetto a una perdita netta di 7,4 milioni di dollari nel terzo trimestre del 2023. L’azienda ha raggiunto premi lordi guadagnati di 354,2 milioni di dollari (un aumento del 5,1%) e premi netti guadagnati di 198,8 milioni di dollari (un aumento del 12,6%). Il rapporto combinato netto è migliorato al 100,6%, con un calo di 10,2 punti rispetto all'anno precedente. Nonostante il mantenimento di 48,0 milioni di dollari in perdite causate dagli uragani, Heritage ha mantenuto la redditività e ha dimostrato un’implementazione efficace delle iniziative strategiche focalizzate sull'adeguatezza delle tariffe e sul miglioramento del portafoglio. Il valore contabile per azione è aumentato a 9,10 dollari, con un incremento del 61,1% rispetto al terzo trimestre del 2023.
Heritage Insurance Holdings (NYSE: HRTG) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos netos de 8,2 millones de dólares (0,27 dólares por acción), mejorando de una pérdida neta de 7,4 millones de dólares en el tercer trimestre de 2023. La compañía logró primas brutas devengadas de 354,2 millones de dólares (un aumento del 5,1%) y primas netas devengadas de 198,8 millones de dólares (un aumento del 12,6%). La razón de combinación neta mejoró al 100,6%, bajando 10,2 puntos en comparación con el año anterior. A pesar de retener 48,0 millones de dólares en pérdidas por huracanes, Heritage mantuvo la rentabilidad y demostró una ejecución exitosa de iniciativas estratégicas centradas en la adecuación de tarifas y la mejora del portafolio. El valor contable por acción aumentó a 9,10 dólares, un incremento del 61,1% respecto al tercer trimestre de 2023.
헤리티지 보험 홀딩스 (NYSE: HRTG)는 2024년 3분기에서 820만 달러의 순이익 (주당 0.27달러)를 기록하여 2023년 3분기의 740만 달러 순손실에서 개선되었다고 보고했다. 이 회사는 총 수익이 3억 5420만 달러 (5.1% 증가)와 순수익이 1억 9880만 달러 (12.6% 증가)를 달성했다. 순종합 비율은 100.6%로 개선되어 전년 대비 10.2 포인트 감소했다. 허리케인 손실 4800만 달러를 보유했음에도 불구하고 헤리티지는 수익성을 유지하며 요율 적정성 및 포트폴리오 개선에 중점을 둔 전략적 이니셔티브의 성공적인 실행을 입증했다. 회사의 주당 순자산가치는 9.10달러로 증가하여 2023년 3분기 대비 61.1% 상승했다.
Heritage Insurance Holdings (NYSE: HRTG) a annoncé de solides résultats pour le troisième trimestre 2024, avec un revenu net de 8,2 millions de dollars (0,27 dollar par action), en amélioration par rapport à une perte nette de 7,4 millions de dollars au troisième trimestre 2023. L'entreprise a réalisé des primes brutes gagnées de 354,2 millions de dollars (en hausse de 5,1%) et des primes nettes gagnées de 198,8 millions de dollars (en hausse de 12,6%). Le ratio combiné net s'est amélioré à 100,6%, en baisse de 10,2 points par rapport à l'année précédente. Malgré des pertes de 48,0 millions de dollars dues aux ouragans, Heritage a maintenu sa rentabilité et a démontré une exécution réussie d'initiatives stratégiques axées sur l'adéquation des tarifs et l'amélioration du portefeuille. La valeur comptable par action a augmenté à 9,10 dollars, en hausse de 61,1% par rapport au troisième trimestre 2023.
Heritage Insurance Holdings (NYSE: HRTG) berichtete über starke Ergebnisse im dritten Quartal 2024 mit einem Nettoeinkommen von 8,2 Millionen Dollar (0,27 Dollar pro Aktie), was eine Verbesserung gegenüber einem Nettoverlust von 7,4 Millionen Dollar im dritten Quartal 2023 bedeutet. Das Unternehmen erzielte bruttoeingenommene Prämien von 354,2 Millionen Dollar (ein Anstieg von 5,1%) und nettoeingenommene Prämien von 198,8 Millionen Dollar (ein Anstieg von 12,6%). Der Netto-Kombinationssatz verbesserte sich auf 100,6%, was einen Rückgang von 10,2 Punkten im Vergleich zum Vorjahr darstellt. Trotz der Beibehaltung von 48,0 Millionen Dollar an Hurrikanverlusten konnte Heritage die Rentabilität aufrechterhalten und zeigte eine erfolgreiche Umsetzung strategischer Initiativen, die sich auf die Angemessenheit der Tarife und die Verbesserung des Portfolios konzentrierten. Der Buchwert pro Aktie erhöhte sich auf 9,10 Dollar, was einen Anstieg von 61,1% im Vergleich zum dritten Quartal 2023 bedeutet.
- Net income improved to $8.2 million from a $7.4 million loss year-over-year
- Net premiums earned increased 12.6% to $198.8 million
- Net combined ratio improved by 10.2 points to 100.6%
- Book value per share grew 61.1% to $9.10
- Net investment income increased 42.7%
- Achieved rate adequacy in over 80% of territories
- Retained hurricane losses of $48.0 million in Q3
- Policy count decreased 14.2% year-over-year
- Net unfavorable loss development of $6.3 million
- Continued suspension of quarterly shareholder dividend
Insights
Heritage Insurance's Q3 2024 results demonstrate a remarkable turnaround with
- Net premiums earned up
12.6% to$198.8 million - Combined ratio improved by
10.2% points to100.6% - Book value per share increased
61.1% to$9.10
Despite facing
Third Quarter 2024 Result Highlights
- Net income of
$8.2 million $0.27 ( or ($7.4) million $0.28 - Gross premiums earned of
$354.2 million 5.1% from$337.0 million - Net premiums earned of
$198.8 million 12.6% from$176.6 million - Net loss ratio of
65.4% , an improvement of 9.0 points from74.4% in the prior year quarter - Net expense ratio of
35.2% , down 1.2 points from36.4% in the prior year quarter - Net combined ratio of
100.6% , an improvement of 10.2 points from110.8% in the prior year quarter
"Our thoughts go out to the many people that were impacted by the devastating hurricanes that affected so many communities across the
Mr. Garateix continued, "While I am proud of the support that we have provided to our policyholders, I am also very proud of our third quarter financial results which clearly demonstrate the successful execution of our strategic initiatives focused on attaining rate adequacy and improving our underlying portfolio. A core objective of our strategy has been to position Heritage to sustain a hurricane loss while maintaining our profitability. I am pleased to note that even with
Strategic Profitability Initiatives
Over the past three years the Company has focused on three main strategic initiatives, including:
- Generating underwriting profit through rate adequacy and more selective underwriting
- Allocating capital to products and geographies that maximize long-term returns
- Maintaining a balanced and diversified portfolio
Mr. Garateix added, "Although we will continue to strive for continuous improvement in meeting each of our strategic initiatives, considerable progress has been made as evidenced by our results this quarter. Looking forward, we will continue to focus on these three areas while pivoting our strategy to one of controlled growth with the opening of many geographies that have been closed for the past two years."
Notable Achievements of Our Strategic Profitability Initiatives Since Launch in 2022
- 11 consecutive quarters of achieving in-force premium growth.
- Launched E&S in several states that has now grown to over
$45 million - Grew the commercial portfolio by over
$150 million - Achieved rate adequacy in over
80% of total territories and expect to be at90% in early 2025. - Reduced exposures in over concentrated areas and in geographies where adequate rates were not achieved.
- Achieved profitability in a quarter marked by two hurricanes with combined losses exceeding one full retention.
- No state makes up over
30% of our total exposures.
Mr. Garateix, concluded, "Given the improved rate adequacy across our footprint, we organically wrote more new admitted policies in the Southeast and the Northeast compared to the second quarter of 2024 as well as the prior year period as we pursue a controlled growth strategy designed to accelerate our revenue and earnings growth. Importantly, we believe we have the infrastructure in place today to support this expansion which should provide scale benefits over time. We have also seen a reduction in abusive claims practices, which had been driving up insurance premiums in
Capital Management
Heritage's Board of Directors has decided to continue its suspension of the quarterly shareholder dividend to prioritize strategic growth and achieve robust return on equity with the business generated. The Board of Directors will continue to evaluate dividend distribution and stock repurchases on a quarterly basis. No shares of common stock were repurchased during the quarter.
Results of Operations
The following table summarizes results of operations for the three and nine months ended September 30, 2024 and 2023 (amounts in thousands, except percentages and per share amounts):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||
Total revenues | $ 211,849 | $ 186,300 | 13.7 % | $ 606,721 | $ 548,532 | 10.6 % | |||||||
Net income (loss) | $ 8,152 | $ (7,424) | 209.8 % | $ 41,246 | $ 14,363 | 187.2 % | |||||||
Earnings (loss) per share | $ 0.27 | $ (0.28) | 196.4 % | $ 1.35 | $ 0.55 | 145.5 % | |||||||
Book value per share | $ 9.10 | $ 5.65 | 61.1 % | $ 9.10 | $ 5.65 | 61.1 % | |||||||
Return on equity * | 12.2 % | (19.0) % | 31.2 | pts | 22.0 % | 13.6 % | 8.4 | pts | |||||
Underwriting summary | |||||||||||||
Gross premiums written | 312,986 | 309,510 | 1.1 % | 1,094,200 | 1,016,378 | 7.7 % | |||||||
Gross premiums earned | 354,197 | 336,976 | 5.1 % | 1,045,658 | 984,012 | 6.3 % | |||||||
Ceded premiums | (155,356) | (160,335) | (3.1) % | (477,076) | (464,539) | 2.7 % | |||||||
Net premiums earned | 198,841 | 176,641 | 12.6 % | 568,582 | 519,473 | 9.5 % | |||||||
Ceded premium ratio | 43.9 % | 47.6 % | (3.7) | pts | 45.6 % | 47.2 % | (1.6) | pts | |||||
Ratios to Net Premiums Earned: | |||||||||||||
Loss ratio | 65.4 % | 74.4 % | (9.0) | pts | 59.4 % | 64.6 % | (5.2) | pts | |||||
Expense ratio | 35.2 % | 36.4 % | (1.2) | pts | 36.3 % | 35.7 % | 0.6 | pts | |||||
Combined ratio | 100.6 % | 110.8 % | (10.2) | pts | 95.7 % | 100.3 % | (4.6) | pts | |||||
* Return on equity represents annualized net income for the period divided by average stockholders' equity during the period.
Note: Percentages and sums in the table may not recalculate precisely due to rounding.
Ratios
Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned.
Net loss ratio represents net losses and loss adjustment expenses ("LAE") as a percentage of net premiums earned.
Net expense ratio represents policy acquisition costs ("PAC") and general and administrative ("G&A") expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses.
Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned. The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under
Third Quarter 2024 Results:
Third quarter 2024 net income was
Premiums-in-force were
Gross premiums written of
Gross premiums earned were
Net premiums earned were
Ceded premium ratio was
Net loss ratio decreased to
The net expense ratio was
Net combined ratio of
Net investment income was
The effective tax rate was
Supplemental Information:
Policies-in-force: | Q3 2024 | Q3 2023 | % Change | |||
135,867 | 158,914 | (14.5) % | ||||
Other States | 265,224 | 308,683 | (14.1) % | |||
Total | 401,091 | 467,597 | (14.2) % | |||
Premiums-in-force: | ||||||
722,201,723 | 681,067,580 | 6.0 % | ||||
Other States | 704,779,216 | 665,351,760 | 5.9 % | |||
Total | 1,426,980,939 | 1,346,419,340 | 6.0 % | |||
Total Insured Value: | ||||||
103,248,922,251 | 104,654,005,306 | (1.3) % | ||||
Other States | 270,322,492,468 | 290,916,611,744 | (7.1) % | |||
Total | 373,571,414,719 | 395,570,617,050 | (5.6) % | |||
Book Value Analysis:
Book Value Per Share | As Of | |||||
September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||
Numerator: | ||||||
Common stockholders' equity | $ 279,344 | $ 220,280 | $ 151,386 | |||
Denominator: | ||||||
Total Shares Outstanding | 30,684,198 | 30,218,938 | 26,796,586 | |||
Book Value Per Common Share | $ 9.10 | $ 7.29 | $ 5.65 | |||
Book value per share of
Conference Call Details:
Thursday, November 7, 2024 – 12:00 p.m. ET
Participant Dial-in Numbers Toll Free: 1-888-346-3095
Participant International Dial In: 1-412-902-4258
Canada Toll Free: 1-855-669-9657
Webcast:
To listen to the live webcast, please go to http://investors.heritagepci.com. This webcast will be archived and accessible on the Company's website.
HERITAGE INSURANCE HOLDINGS, INC.
| |||
September 30, 2024 | December 31, 2023 | ||
ASSETS | (unaudited) | ||
Fixed maturities, available-for-sale, at fair value | $ 671,761 | $ 560,682 | |
Equity securities, at fair value | 1,936 | 1,666 | |
Other investments, net | 6,747 | 7,067 | |
Total investments | 680,444 | 569,415 | |
Cash and cash equivalents | 509,918 | 463,640 | |
Restricted cash | 10,980 | 9,699 | |
Accrued investment income | 5,230 | 4,068 | |
Premiums receivable, net | 86,570 | 89,490 | |
Reinsurance recoverable on paid and unpaid claims, net | 441,579 | 482,429 | |
Prepaid reinsurance premiums | 401,022 | 294,222 | |
Income tax receivable | 8,743 | 13,354 | |
Deferred income tax asset, net | 11,028 | 11,111 | |
Deferred policy acquisition costs, net | 109,441 | 102,884 | |
Property and equipment, net | 36,789 | 33,218 | |
Right-of-use lease asset, finance | 15,708 | 17,606 | |
Right-of-use lease asset, operating | 6,057 | 6,835 | |
Intangibles, net | 37,918 | 42,555 | |
Other assets | 12,961 | 12,674 | |
Total Assets | $ 2,374,388 | $ 2,153,200 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Unpaid losses and loss adjustment expenses | $ 775,468 | $ 845,955 | |
Unearned premiums | 724,426 | 675,921 | |
Reinsurance payable | 344,486 | 159,823 | |
Long-term debt, net | 118,551 | 119,732 | |
Advance premiums | 27,936 | 23,900 | |
Accrued compensation | 7,312 | 9,461 | |
Lease liability, finance | 18,669 | 20,386 | |
Lease liability, operating | 7,192 | 8,076 | |
Accounts payable and other liabilities | 71,004 | 69,666 | |
Total Liabilities | $ 2,095,044 | $ 1,932,920 | |
Stockholders' Equity: | |||
Common stock, | $ 3 | $ 3 | |
Additional paid-in capital | 362,609 | 360,310 | |
Accumulated other comprehensive loss, net of taxes | (19,731) | (35,250) | |
Treasury stock, at cost | (130,900) | (130,900) | |
Retained earnings | 67,363 | 26,117 | |
Total Stockholders' Equity | 279,344 | 220,280 | |
Total Liabilities and Stockholders' Equity | $ 2,374,388 | $ 2,153,200 | |
HERITAGE INSURANCE HOLDINGS, INC.
| |||||||
For the Three Months Ended | For the Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
REVENUES: | |||||||
Gross premiums written | $ 312,986 | $ 309,510 | $ 1,094,200 | $ 1,016,378 | |||
Change in gross unearned premiums | 41,211 | 27,466 | (48,542) | (32,366) | |||
Gross premiums earned | 354,197 | 336,976 | 1,045,658 | 984,012 | |||
Ceded premiums | (155,356) | (160,335) | (477,076) | (464,539) | |||
Net premiums earned | 198,841 | 176,641 | 568,582 | 519,473 | |||
Net investment income | 9,801 | 6,867 | 28,121 | 19,048 | |||
Net realized gains (losses) and impairment | 6 | (379) | 17 | (49) | |||
Other revenue | 3,201 | 3,171 | 10,001 | 10,060 | |||
Total revenues | 211,849 | 186,300 | 606,721 | 548,532 | |||
EXPENSES: | |||||||
Losses and loss adjustment expenses | 130,020 | 131,397 | 337,983 | 335,495 | |||
Policy acquisition costs, net | 48,508 | 42,427 | 142,661 | 124,202 | |||
General and administrative expenses, net | 21,572 | 21,911 | 63,985 | 61,022 | |||
Intangible asset impairment | — | — | — | 767 | |||
Total expenses | 200,100 | 195,735 | 544,629 | 521,486 | |||
Operating income (loss) | 11,749 | (9,435) | 62,092 | 27,046 | |||
Interest expense, net | 2,755 | 2,591 | 8,365 | 8,211 | |||
Income (loss) before income taxes | $ 8,994 | $ (12,026) | $ 53,727 | $ 18,835 | |||
Provision (benefit) for income taxes | 842 | (4,602) | 12,481 | 4,472 | |||
Net income (loss) | $ 8,152 | $ (7,424) | $ 41,246 | $ 14,363 | |||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||
Change in net unrealized gains (losses) on investments | 19,711 | (4,494) | 20,353 | 4,664 | |||
Reclassification adjustment for net realized investment (gains) losses | (6) | 379 | (17) | 390 | |||
Income tax (expense) benefit related to items of other comprehensive income | (4,666) | 970 | (4,816) | (1,188) | |||
Total comprehensive income (loss) | $ 23,191 | $ (10,569) | $ 56,766 | $ 18,229 | |||
Weighted average shares outstanding | |||||||
Basic | 30,684,198 | 26,698,806 | 30,570,204 | 25,941,422 | |||
Diluted | 30,743,461 | 26,698,806 | 30,629,467 | 25,980,931 | |||
Earnings (loss) per share | |||||||
Basic | $ 0.27 | $ (0.28) | $ 1.35 | $ 0.55 | |||
Diluted | $ 0.27 | $ (0.28) | $ 1.35 | $ 0.55 | |||
About Heritage
Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately
Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release includes forward-looking statements relating to the expected positive impact of our strategic initiatives on our future financial results, including our strategy of controlled, disciplined growth anchored by continued risk management, stringent and selective underwriting, rating action, including the impact of rate adequacy on future financial results, capital allocation, targeted exposure management and increase of personal lines policies, where appropriate, in certain geographies; the impact of our reinsurance program and earned premium growth on our future ceded premium ratio; our expectation that the headwind from declining policies will moderate; our expectation regarding selective underwriting in
Investor Contact:
Kirk Lusk
Chief Financial Officer
klusk@heritagepci.com investors@heritagepci.com
jlillis@soleburystrat.com
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SOURCE Heritage Insurance Holdings, Inc.
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