An unprecedented level of weather losses in the third-quarter of 2020 has pushed super-regional P&C insurer, Heritage Insurance Holdings, Inc., to a net loss of $5.2 million for the period.
The reported net loss for Q3 2020 compares with net income of $8.1 million a year earlier, as net current accident quarter weather losses increased from $18.7 million in Q3 2019 to $47.3 million in Q3 2020.
Heritage notes that current accident quarter weather losses include $24.5 million of catastrophe losses and $22.8 million of other weather losses.
Additionally, through September 30th, 2020, Heritage notes that it saw “virtually no impact” to its business from the ongoing COVID-19 pandemic, adding that as a residential property insurer, it views its business as relatively insulated from a short-term economic slowdown.
As a result of the higher level of weather losses, Heritage has reported a loss ratio of 86.6% for Q3 2020 compared with 56.6% a year earlier. This, combined with a lower expense ratio of 36.1%, saw Heritage produce a combined ratio of 122.7% for the third-quarter of 2020, compared with a combined ratio of 95.5% for the same period in 2019.
The firm’s Chairman and Chief Executive Officer (CEO), Bruce Lucas, commented: “While we had an unprecedented level of weather losses in the third quarter, we grew book value per share year-over year and saw strong organic growth throughout our footprint. Our top priority is bottom line profitability and we’re continuing to pursue rate increases following recent years’ elevated weather trends.”
In Q3 2020, Gross premiums written increased by more than 17% year-on-year to $278 million, while gross premiums earned increased by over 10% to $255 million. Net earned premiums increased by 11.6% year-on-year to $138 million in Q3 2020, as ceded premiums jumped by more than 8% to $117 million.
Overall, Heritage has reported total revenues of $165 million for the third-quarter of 2020, which represents growth of 25.4% from the $132 million reported for the same period in 2019.
