Heritage Insurance Holdings, parent company of Florida’s 10th-largest property insurance company, reported a net loss of $7.4 million for the third quarter of 2023, a significant improvement over last year after the carrier shook almost 74,000 policies from its rolls in that time.
“This improvement is attributable to growth of 10.6% in net premiums earned, an increase of 137.8% in net investment income, and a reduction of 15.7% in net losses and LAE (loss adjustment expenses),” the publicly traded holding company said in a press release Friday.
Like other Florida-based carriers that have made major adjustments in recent years to manage heavy litigation costs and weather losses, Heritage has shed policies in Florida and beyond. A year ago, Heritage had 541,372 policies in force in all states in which it writes. By the end of Q3 2023, that was down to 467,597, almost a 14% drop.
In Florida, policies in force have fallen by a similar percentage, from 188,383 last year to 158,914 this year, the company’s financial statement shows.
The Tampa-headquartered company’s combined ratio also improved, from 133% in Q3 2022 to 111% in the third quarter this year. Net premiums earned climbed 11%, from $160 million to $177 million.
Heritage, which also held policies in Hawaii, was affected by the wildfires that devastated part of Maui.
“Our policyholders, agents, and employees were affected by two catastrophic events this quarter. In early August, wildfires on the island of Maui caused devastating losses, followed by Hurricane Idalia in the Florida panhandle at the end of the month,” Heritage CEO Ernie Garateix said in a statement.
Garateix did not mention the Florida Legislature’s property insurance litigation reform measures, approved in late 2022, as a reason for the company’s improvement. He hinted that further Heritage rate increases are on the way.
“Despite challenges in the property insurance space, including social and actual inflation, increased frequency and severity of catastrophic events, and rising reinsurance costs, I’m encouraged to report a substantial improvement in our financial position and strides toward sustained profitability,” he said. “Our management team continues to drive exposure management, strengthen underwriting criteria, and work toward rate adequacy throughout our book of business.”
Average premium per policy increased by 26% from Q3 2022. Total revenue improved almost 13%.
Part of he reason is that the company has focused on commercial residential properties, increasing its commercial residential premiums by 75% in the last year but raising its total insured value in that area by just 31% and increasing policies in force by less than 10%.
The Heritage Board of Directors has decided to continue suspension of quarterly dividends to shareholders.
Heritage shares, traded on the New York Stock Exchange, closed Friday at $7 a share, a steady rise in the last 12 months, according to Yahoo! Finance.
**Article obtained from: Insurance Journal, By: Insurance Journal Staff Reports , Published 11/06/2023
https://www.insurancejournal.com/news/southeast/2023/11/06/747007.htm
