Heritage Insurance (HRTG) investor relations material

Executive summary

• Q3 net income was $51.1M, up 1.4% YoY, and diluted EPS rose 5.5% to $1.72 despite $15.8M of pretax catastrophe losses.

• 9M net income increased 15.8% to $149.3M and diluted EPS rose 18.5% to $4.94; book value per share reached $20.22, up 42.9% YoY.

• Underwriting discipline, lower reinsurance costs and geographic diversification supported results amid Florida commercial pricing pressure.

Financial highlights

• Q3 revenue rose 3.2% to $219.2M; net premiums earned increased 5.4% to $205.6M, and net investment income rose 17.3% to $11.4M.

• 9M revenue increased 2.2% to $646.1M; net premiums earned rose 2.5% to $606.4M, and net investment income was $31.8M, up from $27.3M.

• Q3 gross premiums written fell 3.1% to $322.8M; 9M gross premiums written declined 3.8% to $1.06B, primarily due to lower Florida commercial residential premiums.

• 9M operating income rose 14.9% to $203.9M from $177.5M; Q3 operating income was $69.2M versus $70.2M.

• Q3 net income included $14.0M of favorable prior-year loss development; 9M favorable development totaled $45.5M.

Outlook and guidance

• Personal lines policy count growth is expected to resume in 2027; nearly all territories are open for new business, with rate adequacy reported across nearly all territories.

• Florida commercial renewal price decreases could reach 10%–18% next year; premium growth is expected to remain in the single digits amid pricing pressure.

• Reinsurance pricing is expected to decline 5%–7% next year, potentially 5%–8%; the 41.7% ceded premium ratio was described as a good run rate, with potential to decline further in 2027.

• Strategy emphasizes underwriting profit, selective growth in attractive products and geographies, technology and claims capabilities, and a balanced portfolio; liquidity is expected to meet cash requirements for at least 12 months.