Super-regional property and casualty insurance holding company Heritage has fallen to a Q2 loss of $4.0 million, after taking $35.5 million of weather losses in the quarter.
Up from $26.8 million in the prior year quarter, the current accident quarter weather losses include $24.5 million of net catastrophe losses, up from $17.6 million last year, and $11.0 million of other weather losses, up from $9.2 million.
Heritage posted net income of $4.1 million in Q2 2020, and attributed its latest Q2 performance to higher weather losses, a $9.4 million reinstatement premium and lower investment income, partly offset by higher net premiums earned and a lower net expense ratio.
Gross premiums written were $337.7 million, up 16.3% year-over-year, including 20.3% growth outside Florida and 12.8% growth in Florida, with rate increases benefiting topline results, particularly in Florida.
Premiums-in-force were $1.2 billion as of second quarter 2021, representing a 17.2% annualized growth rate from first quarter 2021.
Heritage’s ceded premium ratio was 48.7% in second quarter 2021, up 2.1 points from 46.6% in the prior year quarter.
The increase was attributed to higher costs associated with its catastrophe excess-of-loss reinsurance program and a $9.4 million reinstatement premium associated our severe convective storm reinsurance coverage, partly offset by higher gross premiums earned.
The net combined ratio was 105.2% in Q2 2021, up 5.2 points from 100.0% in the prior year quarter, with the increase stemming from a higher net loss ratio, partly offset by a lower net expense ratio.
“I’m encouraged that despite a $9.4 million reinstatement premium in the quarter and a $4.1 million uptick in weather losses relative to the first quarter of this year, net income improved sequentially, suggesting the benefits of our underwriting and pricing actions are starting to show,” said Heritage CEO Ernie Garateix.
