Florida domiciled property and casualty (P&C) insurer, Heritage Insurance Holdings, Inc., has grown its Q1 income by 9.4% to $7.6 million, citing “virtually no impact” from the COVID-19 pandemic.
The results reflected higher net premiums earned and a lower combined ratio, partly offset by lower investment gains and other income and a higher effective tax rate.
Heritage also reported a ceded premium ratio of 46.3%, down 5.7 points from 52.0% last year. This was due to a reduction in overall quota share reinsurance coverage and reinsurance synergies, partly offset by additional catastrophe excess-of-loss reinsurance coverage.
Gross premiums written amounted to $229.1 million in Q1 2020, up 8.9% from $210.3 million in the prior year quarter, including 12.0% growth outside Florida and 6.4% growth in Florida. Similarly, gross premiums earned increased 2.7% to $234.7 million.
Heritage also reported a combined ratio of 95.2%, down 2.1 points from 97.3% in the prior year quarter due to a lower net loss ratio, partly offset by a higher net expense ratio.
The net loss ratio dropped 2.5 points to 54.1%, mainly due to lower attritional and weather net loss ratios and higher favourable prior year reserve development.
Catastrophe and weather losses in Q1 mainly stemmed from February hail, tornado and wind events in the southeast.
As a residential property insurer, Heritage considers itself to be relatively insulated from a virus-induced economic slowdown, as its products are generally viewed as a necessity by property owners and renters.
And while new business could be impacted if fewer homes are bought, this could be offset by increased retention in Heritage’s renewal portfolio.
“As a super-regional property insurer that’s prevailed through multiple hurricanes, we’re well equipped to operate in the current environment and continue to provide our policyholders and agency partners with the high levels of service they’re accustomed to,” said Bruce Lucas, the Company’s Chairman and CEO.
“Homeowners insurance, our core focus, is a must-have product for most consumers, positioning us well in uncertain economic times. Given our confidence in the resilience of our business model, in the first quarter we repurchased 766,900 shares, representing over 3% of year-end 2019 float.”
