Super-regional property & casualty insurance holding company, Heritage Insurance Holdings, Inc., has reported net income of $14.0 million in the first-quarter of 2023, up from a net loss of $30.8 million in the prior year quarter primarily due to higher net earned premium and significantly lower weather losses.
At the same time, Heritage reported that gross written premiums (GWP) were $310.3 million, up 9.6% from $283.2 million in the prior year quarter, mainly due to a rise in average premium per policy across the business. This was partially offset by a deliberate reduction of 10.0% in Florida personal lines business, 1.0% in business outside Florida, and a planned increase in Florida commercial lines business.
Gross premiums earned in the quarter were $317.0 million, up 10.3% from $287.4 million in Q1 2022.
Meanwhile, premiums-in-force for the quarter were $1.3 billion, up 10.9% year-over-year driven by rate increases across the portfolio, while policy count was down 9.0%, resulting in average premium per policy increasing 21.9%.
The company also reported a ceded premium ratio of 47.6% for the quarter, a slight movement from last years 46.8%.
However, net loss ratio was 58.7%, a major shift from 91.6% in the prior year quarter, driven primarily by lower weather losses.
Net current accident year weather losses of $12.8 million, down substantially from $63.8 million in the prior year quarter. Current accident year weather losses include $5.0 million of net current accident quarter catastrophe losses, down from $45.0 million in the prior year quarter, and $7.8 million of other weather losses, down from $18.8 million in the prior year quarter.
Net expense ratio also showed slight movement at 35.8%, compared to 37.9% from last years quarter, while net combined ratio was 94.5%, compared to the prior year’s period of 129.5%.
“I am pleased to report a second consecutive quarter with net income and continued improvement in our financial results this quarter, which were bolstered by the continued implementation of our strategic profitability initiatives across the organization,” said Heritage CEO Ernie Garateix.
“We anticipate the impact of rate increases and underwriting changes made in 2022, and those we will make in 2023, will continue to have a favorable impact on our financial position throughout the year. We remain committed to allocating capital toward products and geographies that maximize long-term returns. An example is the selective growth of our commercial residential business, which increased substantially over the prior year quarter. The impact of higher reinsurance costs is being mitigated by making appropriate rate adjustments and managing exposure,” Garateix added.
“We are focused on generating an underwriting profit through rate adequacy and more selective underwriting. We remain optimistic in achieving consistent long-term quarterly earnings and sustainable shareholder value through our strategic profitability initiatives.”
