Heritage Insurance (HRTG) investor relations material

Executive summary

• Achieved record Q1 net income of $36.5 million ($1.19 per share), up 19.7% year-over-year, driven by improved underwriting, higher investment income, and disciplined expense management, despite $24 million in Northeast winter storm losses.

• Net loss ratio reached its lowest Q1 level since 2015, improving by 3.8 points to 45.9%, and net combined ratio improved by 3.5 points to 81.0% year-over-year.

• Book value per share rose to $17.15, up 61.5% year-over-year and 4.6% sequentially; return on average equity was 28.5%.

• New business written increased 62.7% year-over-year and over 30% sequentially, with policy count trends improving and retention at 88%.

• Strategic expansion into new states, including Hawaii and planned entry into Texas, with four new products launched in Q1 and six more planned for the second half of 2026.

Financial highlights

• Net income of $36.5 million, up 19.7% year-over-year; EPS of $1.19, up 20.2%; ROE reached 28.5%.

• Premiums in force totaled $1.43 billion, down 0.4% year-over-year; gross premiums written declined 2.6% to $346.7 million, mainly due to lower commercial residential business.

• Net premiums earned were $199.7 million, nearly flat year-over-year; gross premiums earned were $353.6 million.

• Net investment income rose 15.1% to $9.9 million.

• Cash and invested assets totaled $1.27 billion; shareholders' equity at $520.4 million.

Outlook and guidance

• Premium growth expected to turn positive in Q2 or Q3, with full-year growth anticipated as rate increases earn through.

• On track to begin writing business in Texas on a surplus lines basis and expand product offerings.

• Reinsurance costs expected to decline, benefiting policyholders through premium reductions while maintaining margins.

• Continued focus on underwriting discipline, rate adequacy (achieved in over 90% of territories), and prudent growth supported by data analytics and AI.

• Inflationary pressures are moderating, and legislative reforms in Florida are expected to support improved margins.