Heritage Insurance (HRTG) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 rose to $18.9 million ($0.61 per diluted share), up from $7.8 million ($0.30 per share) in Q2 2023, driven by higher net premiums earned, increased investment income, and improved underwriting margins.

• Gross premiums written increased 7.1% year-over-year to $424.5 million, with commercial residential and E&S portfolios as key growth drivers.

• Strategic focus on rate adequacy, disciplined underwriting, and capital allocation led to improved profitability and margin expansion.

• Policy count declined 14.1% year-over-year, but premiums-in-force grew 6.1% to $1.4 billion, driven by commercial residential growth and rate actions.

• Significantly curtailed new personal business in most Northeast and Southeast states since 2022, focusing on profitable geographies and products.

Financial highlights

• Net income rose to $18.9 million ($0.61 per diluted share), up from $7.8 million ($0.30 per share) in Q2 2023.

• Total revenues increased 9.9% to $203.6 million; gross premiums earned up 6.1% to $350.1 million.

• Net premiums earned grew 7.6% to $190.3 million; commercial residential in-force premium up 29.4%.

• Net investment income increased 48% to $9.8 million, benefiting from higher yields.

• Book value per share increased 32.7% to $8.32; return on equity improved to 30.8%.

Outlook and guidance

• Management expects further rate increases to earn through the portfolio in 2025, providing a tailwind to results.

• Controlled growth strategy initiated, resuming selective new business in Florida and the Northeast.

• Net investment income projected to remain in the $9–$10 million per quarter range.

• Expectation of a meaningful reduction in ceded premium ratio due to improved reinsurance program and premium growth.

• Inflation and reinsurance costs remain key factors, but legislative changes in Florida are stabilizing the market and supporting future growth.