Heritage Insurance (HRTG) investor relations material

Executive summary

• Achieved record Q2 2026 net income of $61.7 million, up 28.5% year-over-year, and diluted EPS of $2.05, with annualized ROE at 45.4%.

• Strategic focus on profitability, diversification, rate adequacy, and prudent capital allocation, supported by technology and analytics investments.

• Book value per share increased 54.5% year-over-year to $19.09; shareholders' equity rose to $567.7 million.

• Cash flow from operations surged to $166.5 million; over 1 million shares repurchased for $24.6 million in 2026.

• Geographic and product diversification, including expansion into Texas and other markets, enhances earnings durability and reduces reliance on Florida.

Financial highlights

• Net income for Q2 2026 was $61.7 million, up from $48 million in the prior year; first half net income was $98.2 million, up 25% year-over-year.

• Net premiums earned rose 2.4% to $201.1 million; gross premiums written declined 5.5% to $388.4 million due to lower commercial residential business.

• Net loss ratio improved to 30.4% from 38.5%, and combined ratio improved to 64.9% from 72.9% year-over-year.

• Net investment income increased 17.3% to $10.6 million.

• Operating cash flow reached $166.5 million for the first six months.

Outlook and guidance

• Expecting rate reductions in Florida due to lower reinsurance costs, with modest rate increases in other states to match claims inflation.

• Ceded premium ratio expected to drop by 1-2 points in Q3 with the new reinsurance program.

• Continued focus on underwriting discipline, prudent growth, and leveraging technology for analytics and customer service.

• Texas entry expected to contribute modestly in 2026, with growth over the next 2-3 years.

• Liquidity is considered sufficient for at least the next twelve months.