Heritage Reports Third Quarter 2025 Results

Core Insights - Heritage Insurance Holdings, Inc. reported strong financial results for the third quarter of 2025, highlighting a significant increase in net income and improvements in underwriting performance [2][7][13]. Financial Performance - Net income for Q3 2025 was $50.4 million, or $1.63 per diluted share, compared to $8.2 million, or $0.27 per diluted share, in Q3 2024, marking a 518.5% increase [7][13]. - Total revenues reached $212.5 million, a slight increase of 0.3% from $211.8 million in the prior year quarter [6][7]. - Gross premiums earned were $362.0 million, up 2.2% from $354.2 million in the same quarter last year [7][15]. - The net loss ratio improved to 38.3%, down 27.1 percentage points from 65.4% in the prior year quarter, reflecting lower net losses and favorable loss development [7][17]. - The net combined ratio improved to 72.9%, down 27.7 percentage points from 100.6% in the prior year quarter, indicating better underwriting performance [7][19]. Strategic Initiatives - The company has focused on disciplined underwriting and rate adequacy, which has led to a significant increase in new business premiums written, totaling $36.3 million, up 166% from $13.7 million in Q3 2024 [3][4]. - Heritage's Board of Directors has suspended the quarterly shareholder dividend to prioritize strategic growth, while also initiating a new share repurchase plan for up to $25.0 million through December 31, 2026 [5][6]. - The company aims to return to growth, with nearly all of its capacity now open for new business, compared to only about 30% last year [3][4]. Operational Metrics - Policies in force decreased by 9.4% year-over-year, with a total of 363,309 policies as of Q3 2025 [22]. - Premiums in force reached an all-time high of $1.44 billion, reflecting a 1.0% increase compared to $1.43 billion in Q3 2024 [22][14]. - Book value per share increased to $14.15, up 48.9% from December 31, 2024, and up 55.5% from September 30, 2024 [23][7]. Market Conditions - The company noted favorable market conditions, with a majority of its markets achieving rate adequacy, which supports its growth strategy [3][4]. - The effective tax rate for Q3 2025 was 26.2%, compared to 9.4% in the prior year quarter, influenced by updated estimates and previous tax benefits [21].