Super-regional property and casualty insurance holding company, Heritage Insurance Holdings, Inc., has reported net income of $2.8 million for the fourth quarter of 2020.
This was despite confirming $41.5 million of catastrophe and weather losses for the quarter, which it warned of back in January.
Of the $41.5 million total, approximately $28.6 million, or 68.9%, relates to net current accident year catastrophe losses; with the remaining $12.9 million, or 31.1%, relating to net current accident year weather losses.
Heritage’s Q4 income was down 78.1% when compared with the $12.8 million it reported for the same period in 2019. But its revenue increased by 15.2% from $138.5 million to $159.5 million.
Looking at the full year period the trend was similar, with net income decreasing by 67.4% to $9.3 million and revenue increasing by 16.1% to $593.4 million.
Gross premiums written in Q4 were $282.3 million, up 19.9% year-over-year, including growth in all states and product lines. Growth was partly attributable to rate increases, particularly in Florida
For the quarter, the combined ratio deteriorated by 19.4 points to 108.7%, and for the year it worsened by 10.5 points to 107.0%.
In both cases this was due to a corresponding increase in the loss ratio, which increased by 19.4 points to 70.4% for Q4 and by 11.4 points to 68.5% for the year.
Turning to the COVID-19 pandemic, Heritage continues to see “virtually no impact to its business” and does not expect a material impact to its business going forward.
“As a residential property insurer, we view our business as relatively insulated from a short-term economic slowdown, as property owners and renters generally view our products as a necessity,” the company noted.
Heritage CEO Ernie Garateix commented on the results: “We were able to generate positive net income in the fourth quarter and full year and grow book value per share year-over-year despite experiencing unprecedented weather losses.”
“I believe our solid organic growth platform and heightened focus on underwriting profitability position us well for 2021 and beyond,” he added.