Heritage Insurance Chief Executive Kirk Lusk says his company is implementing rating and underwriting actions within the Florida market that will facilitate a to return to double-digit ROEs in the future.
Speaking during a recent earnings call, Lusk identified the Florida’s litigious environment as having creating such a difficult environment to do effective business in.
“Over the past two years, we have improved our capital structure, continued to refine our exposures in Florida, expanded our footprint into other states and saw a fairly rapid growth in 2020. We are now focused on increasing our margins,” he said.
Although it remains domiciled in Florida, since 2016 Heritage has been shutting off business in what it considers to be “troubled regions” of the state.
At year-end 2019, approximately 30% of the company’s total insurable value (TIV) was in Florida with only 6.4% within the border of the Tri-County region.
Last year, Heritage grew its net income by 5% to $28.6 million, with a 6.2% increase in gross written premiums to $235.4 million.
This consisted of 9.4% growth outside Florida and 3.5% growth in Florida, reflecting organic growth across all states and lines of business.
Comemtning further, Lusk said ”,There are some things there we’re glad to see such as the reporting period being taken down from three years to two years.
“I’m sure our folks in the reinsurance market are happy to see that. We are as well. But as we kind of look at the legislation and go through it, which we’re doing currently at this point in time, we’re seeing what the impact may be to the book.
“We’re always, again, appreciative of any legislation that helps the overall Florida insurance market, but we have yet to kind of determine how far that goes into our book.”