Reducing Florida personal lines exposure remains a key focus at Heritage

Heritage Insurance hosted its Q2’23 earnings call on Aug 9, 2023. Select highlights:

• Financial Update:
  • Solid financial results for consecutive quarters.
  • Net income for Q2: $7.8 million.
  • Notable improvement from the previous year due to strategic initiatives and favorable weather.
• Strategic Profitability Initiatives:
  • Focus on rate adequacy, selective underwriting, and capital allocation.
  • Aim to offer appropriate coverage, maintaining a balanced and diversified portfolio.
  • Goal: Achieve consistent long-term earnings and increase shareholder value.
• Performance Metrics:
  • Highest in-force premium achieved.
  • Policy count decreased by 11.1% from Q2 last year.
  • Florida commercial residential in-force premiums grew by 75.5% YoY.
  • Total insured value (TIV) for the same product increased 35.3%, with policies in-force rising 12.7%.
  • Florida personal lines policy count reduced by 15.8% from Q2 2022 and 3.9% from Q1 2023.
• Underwriting and Strategy:
  • Continual adjustments to underwriting criteria.
  • Focus on avoiding over concentrated markets/products.
  • Allocation of capital to high-return products and regions.
  • Reduced policy count by 8.7% in other states, but premiums in-force increased 4.2%.
• Portfolio Balance:
  • No state exceeds 26.2% of the company’s TIV.
  • Top five personal line states represented 71.6% of all TIV in Q2 2023, a decrease from 72.5% in Q2 2022.
• Moving Forward:
  • Focus remains on reducing Florida personal lines exposure until recent legislative changes yield positive effects.
  • Continued efforts in portfolio diversification.
  • Successfully placed 2023 catastrophe excess of loss reinsurance program.