Heritage Insurance Holdings Inc (HRTG)

Heritage Insurance Holdings reported record second-quarter 2026 net income of $61.7 million, up 28.5% from $48.0 million a year earlier 2.

The company said the gain came mainly from lower losses and higher revenue 2. Net losses and loss adjustment expenses, the cost of paying claims, were $61.1 million, down from $75.6 million 2.

Premiums written, the value of policies sold, fell 5.5% to $388.4 million, mostly because commercial residential premiums dropped 2. The company blames a highly competitive Florida market for that business 2.

The combined ratio, claims plus costs as a share of premiums earned, was 64.9%, and a figure under 100% generally means an underwriting profit 2.

The open question is growth: the company has started writing business in Texas on a surplus lines basis, a separate licence route, and says it sees room to expand 2.

Heritage describes itself as a super-regional property and casualty insurer that mainly sells home insurance for owners and for apartment and condo buildings in fourteen eastern and gulf states 1.

Its recent story is a swing to strong profit: net income was $61.5 million in 2024 and $195.6 million in 2025 1.

The company credits rate increases, selective underwriting and tighter limits on how much risk it takes in storm-prone areas for the improvement 1.

Claims costs fell 29.9% to $313.2 million, helped by fewer big storm losses: catastrophe losses were $33.2 million, down from $104.6 million 1.

Those choices cut the number of home policies: selective underwriting led to an intentional decline in policy count, while rate actions raised the average premium per policy 1.

Revenue reached $847.3 million in 2025, up 3.7% from $817.0 million a year earlier 1.

The company also rebuilt its systems: a new claims system arrived in 2023, and a new policy system began in the third quarter of 2024 and was fully running for personal lines in 2025 1.

Because its homes sit on the coast, hurricanes are the main threat, and the company says its reinsurance, insurance that insurers buy for themselves, protects its balance sheet 1.

Home and building insurance

At the end of 2025 Heritage had 345,121 personal residential policies, carrying $1.2 billion of yearly premium 1. It also had 3,059 commercial residential policies, for apartment and condo buildings, with $265.0 million of premium, and 9,095 liability policies with $9.3 million 1.

In the second quarter of 2026 premiums in force were $1.41 billion, down 1.4% from $1.43 billion a year earlier 2. The company reports one segment, so the filings give no revenue split by product 1.

Where and how it sells

Heritage P&C sells home policies through more than 2,500 independent agents, and the three largest agency relationships bring about 15% of yearly premium 1. The company says it competes against single state or regional carriers, large national carriers and state-sponsored home insurers 1.

People and problems

Ernesto Garateix is chief executive and Kirk Lusk is chief financial officer, while Richard Widdicombe, a former president, is chairman 1. The company had 542 employees at the end of 2025, and over 250 of them work on claims 1.

The current problem is price competition: the company says Florida commercial residential business is highly competitive and its volume there has shrunk 2.

The umbrella, in words

Three insurance companies carry the business: Heritage P&C, Narragansett Bay Insurance Company (NBIC) and Zephyr, which covers Hawaii 1. Their regulatory surplus, the cushion above required minimums, was $251.2 million, $88.5 million and $52.8 million 1.

Other subsidiaries include Osprey Re, a captive reinsurer, Heritage MGA, NBIC Service Company and Contractors' Alliance Network, which manages claims vendors 1. Citrus Re, a Bermuda special purpose insurer, is the vehicle through which the insurance companies sponsored catastrophe bonds 1.

The company expects commercial premiums to level off in the second half of the year as it grows business outside Florida 2. It lists Texas, data analytics using AI and closer reinsurance partnerships among its 2026 initiatives 2.

The board has kept its quarterly dividend suspended and says it will reassess it each quarter 2. On May 7, 2026 it authorized a new $50.0 million share repurchase program, with $37.4 million remaining 2.

The annual report says work to bring commercial products into the new policy system is expected to be completed during 2026 1.

No clue on file points to a new direction yet.