Reinsurance News

Heritage suffers Q3 net loss despite improved underwriting result

5th November 2021 - Author: Luke Gallin

Super-regional property and casualty insurance holding company, Heritage Insurance Holdings, Inc., has fallen to a net loss of $16.4 million for the third quarter of 2021, while gross premiums written (GPW) declined by 1.5% to $274 million.

Heritage Insurance LogoThe firm’s Q3 net loss represents a deterioration from the $5.2 million net loss announced for the same period last year, driven mainly by lower realised capital gains, somewhat offset by a narrower underwriting loss.

While GPW contracted in the period, gross premiums earned increased by 15.5% to $294 million, as ceded premiums rose by 13% to $132 million, and net premiums earned rose by 17.5% to $163 million.

The ceded premium ratio fell by one percentage point to 44.8% during Q3 2021.

Overall, Heritage has reported a combined ratio of 112.5% for the third quarter of 2021, which marks an improvement from the 122.7% reported a year earlier.

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The better underwriting performance was assisted by a lower loss ratio of 79.8% and a reduced expense ratio of 32.7%.

During Q3 2021, Heritage booked net current accident quarter weather losses of $51.4 million, compared with $47.3 million a year earlier.

Current accident quarter weather losses include $16 million of net catastrophe losses and $35.5 million of net other weather losses.

Discussing the COVID-19 pandemic, Heritage notes that for last year, it witnessed negligible impacts from the crisis, a trend which has continued through the third quarter of this year.

Ernie Garateix, Heritage’s Chief Executive Officer (CEO), commented: “While we were disappointed with the loss in the quarter, I’m encouraged by underlying signs of improvement that I expect will continue next quarter and throughout 2022. For example, year-over-year premiums-in-force growth significantly outpaced policies-in-force growth.”

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