Heritage Reports Second Quarter 2025 Results
TAMPA, Fla., Aug. 5, 2025 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported second quarter of 2025 financial results.
Second Quarter 2025 Result Highlights
Net income of $48.0 million or $1.55 per diluted share, improved from net income of $18.9 million or $0.61 per diluted share in the prior year quarter.
Gross premiums earned of $353.6 million, up 1.0% from $350.1 million in the prior year quarter.
Net premiums earned of $196.3 million, up 3.2% from $190.3 million in the prior year quarter.
Net loss ratio of 38.5%, an improvement of 17.2 points from 55.7% in the prior year quarter.
Net expense ratio of 34.4%, an improvement of 2.4 points from 36.8% in the prior year quarter.
Net combined ratio of 72.9%, an improvement of 19.6 points from 92.5% in the prior year quarter.
Return on average equity of 53.9% up from 30.8% in the prior year quarter.
"Our second quarter results have further demonstrated the successful execution of our strategic initiatives and the corresponding increase in the Company's earnings trajectory which started at the end of 2023. Over the last several years we have focused on disciplined underwriting, driving rate adequacy, and refining customer service. Taken together, these actions have created significant earnings power within our Company," remarked Ernie Garateix, Heritage's CEO. "We have also continued to provide our insureds with quality customer service and an efficient and thorough claims handling experience to ensure they receive the support and service that they expect especially in times of crisis."
Mr. Garateix continued, "As I noted last quarter, we are now positioned to return the Company to growth given favorable market conditions combined with a majority of our markets having achieved rate adequacy. As a result, nearly all of our capacity is now open, compared to only about 30% of our capacity being open last year at this time. This can be seen in our new business premium written for the second quarter, which was 46.3% higher than new business written for the year ago second quarter when we only had 30% of our territories open. Our new business growth this quarter was accomplished while continuing to maintain our disciplined underwriting process which resulted in a lower net loss ratio."
Strategic Profitability Initiatives
The Company has focused on three main strategic initiatives over the past few years aimed at achieving consistent, long-term quarterly earnings and driving shareholder value, which include:
Generating underwriting profit through rate adequacy and more selective underwriting.
Allocating capital to products and geographies that maximize long-term returns.
Maintaining a balanced and diversified portfolio.
These three initiatives will remain in place while we also expand our strategy to include our 2025 initiatives.
Strategic Initiatives for 2025
Re-opening profitable geographies and allocating capital to sustain profits and margins on a measured basis.
Persistent underwriting discipline and focus on rate adequacy.
Continued data driven analytics.
Enhancing customer service and claims capabilities.
Leveraging infrastructure and capabilities to foster future growth.
2025 Update
As of the beginning of the 3rd quarter, nearly all capacity is now open for new business.
No change to existing robust underwriting standards.
Received 14 rate approvals, 9 rate filings are pending approval.
Adjusted inflation guard to 5% which reflects current trend.
Expect more rate to earn through the portfolio in 2025 than in any prior year.
Capital Management
Heritage's Board of Directors has decided to continue its suspension of the quarterly shareholder dividend to prioritize strategic growth. The Board of Directors will continue to evaluate dividend distribution and stock repurchases on a quarterly basis. No shares of common stock were repurchased during the quarter.
Results of Operations
The following table summarizes results of operations for the three and six months ended June 30, 2025, and 2024 (amounts in thousands, except percentages and per share amounts):
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
Change
2025
2024
Change
Total revenues
$ 208,035
$ 203,571
2.2
%
$ 419,554
$ 394,873
6.3
%
Net income
$ 48,024
$ 18,869
154.5
%
$ 78,498
$ 33,094
137.2
%
Earnings per share
$ 1.55
$ 0.61
154.1
%
$ 2.54
$ 1.08
135.2
%
Book value per share
$ 12.36
$ 8.32
48.6
%
$ 12.36
$8.32
48.6
%
Return on equity *
53.9
%
30.8
%
23.1
pts
46.6
%
27.8
%
18.8
pts
Underwriting summary:
Gross premiums written
$ 410,968
$ 424,530
(3.2)
%
$ 766,965
$ 781,214
(1.8)
%
Gross premiums earned
$ 353,594
$ 350,073
1.0
%
$ 707,422
$ 691,462
2.3
%
Ceded premiums
$ (157,278)
$ (159,757)
(1.6)
%
$ (311,072)
$ (321,720)
(3.3)
%
Net premiums earned
$ 196,316
$ 190,316
3.2
%
$ 396,350
$ 369,742
7.2
%
Ceded premium ratio
44.5
%
45.6
%
(1.1)
pts
44.0
%
46.5
%
(2.5)
pts
Ratios to Net Premiums Earned:
Loss ratio
38.5
%
55.7
%
(17.2)
pts
44.2
%
56.2
%
(12.0)
pts
Expense ratio
34.4
%
36.8
%
(2.4)
pts
34.6
%
36.9
%
(2.3)
pts
Combined ratio
72.9
%
92.5
%
(19.6)
pts
78.8
%
