Heritage Insurance Holdings, a super-regional property and casualty insurance holding company has released its results for the second quarter of 2023, which includes a net combined ratio of 95.1%, an improvement of 4.3 points from 99.4% in the prior year quarter.
According to Heritage, the combined ratio figure was driven by lower net loss and net expense ratios.
At the same time, net loss ratio for Q2 was 60.3%, down 3.8 points from 64.1% in the prior year quarter, which was mostly driven by higher net premiums earned, partly offset by higher net losses and LAE driven by higher attritional losses, net of lower weather losses.
Net income for Q2 came in at $7.8 million, a big improvement from last year’s net loss of $87.9 million. Adjusted net income was $8.3 million for the period, up from adjusted net income of $2.9 million in the prior year quarter.
Gross premiums written (GPW) for the quarter were $396.6 million, an increase of 8.6% from $365.3 million in the prior year quarter, reflecting a strategic and substantial increase in Florida commercial lines business and a higher average premium per policy throughout the book of business, partly offset by intentional exposure management resulting in premium reductions on business outside of Florida.
Heritage also noted that GPW for Florida personal lines business increased 3.0% due to rate increases, despite a 16.6% reduction in policy count from the prior year quarter.
In addition, Heritage posted $176.8 million net premiums earned for Q2, up 11.7% from $158.3 million in the prior year quarter, reflecting higher gross premium earned outpacing the increase in ceded premiums for the quarter.
Heritage CEO Ernie Garateix, commented: “This quarter marks the third consecutive quarter of profitability and a net combined ratio below 100%. The continued successful implementation of our strategic profitability initiatives across the organization, which includes significant rating actions, improved underwriting, and selective organic growth of our commercial residential business has improved the quality of our book of business and increased our average premium by 24.3% over the prior year quarter.
“Investment income continues to climb from higher interest rates and our investment strategy. I’m also pleased with the terms of our catastrophe excess-of-loss reinsurance placement, which included many long-term partners as well as new trading partners. Our continued focus on underwriting profits, adequate pricing and thorough underwriting has yielded these positive results while also positioning us for long-term sustainable profitability.”
