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Jun 30, 2024
Heritage Insurance Q2 2024 Earnings Report
Net income increased due to higher net premiums earned and net investment income.
Key Takeaways
Heritage Insurance Holdings reported a strong second quarter with net income increasing to $18.9 million, driven by growth in net premiums earned and higher net investment income. The company's strategic initiatives, including rate adequacy and selective underwriting, contributed to improved financial results. They are now positioned to selectively resume writing new business in Florida and the Northeast.
Net income reached $18.9 million or $0.61 per diluted share, up from $7.8 million or $0.30 per diluted share year-over-year.
Gross premiums earned increased by 6.1% to $350.1 million compared to the prior year quarter.
Net premiums earned grew by 7.6% to $190.3 million from $176.8 million in the prior year quarter.
The net combined ratio improved to 92.5%, a 2.6 point improvement from 95.1% in the prior year quarter.
Forward Guidance
Heritage plans to pursue a strategy of controlled growth anchored by continued risk management and stringent underwriting. Given improved rate adequacy across our regions, they will begin underwriting new policies in Florida and the Northeast as we pursue a controlled growth strategy designed to accelerate revenue growth.
Positive Outlook
- Improved rate adequacy across regions
- Underwriting new policies in Florida and the Northeast
- Controlled growth strategy to accelerate revenue growth
- Leveraging existing sales and marketing teams in Florida and the Northeast
- Expect a meaningful reduction in ceded premium ratio going forward
Challenges Ahead
- Inflation and other changes in economic conditions
- Impact of macroeconomic and geopolitical conditions
- Impact of new federal and state regulations
- Continued and increased impact of abusive and unwarranted claims
Historical Earnings Impact
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Avg. Return Before/After Earnings
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