Heritage Insurance Holdings has reported a net income of $14.2 million for the first quarter of 2024, a slight improvement compared to $14 million for Q1’23.
This increase can be attributed primarily to a rise in net premiums earned and higher net investment income, partially offset by increased operating expenses.
The company disclosed that gross premiums written saw a significant uptick of 14.9%, reaching $357 million compared to $310 million the previous year. Additionally, gross premiums earned increased by 7.7% in Q1 2024 compared to the preceding year, climbing from $317 million to $341 million, with net premiums earned also showing an 8.1% increase, totaling $179 million.
At the same time, Heritage experienced a decrease in its net loss ratio to 56.9%, a 1.8 point decline from 58.7% in the same quarter last year. Meanwhile, the net expense ratio in Q1 2024 was 37.1%, marking a 1.3 point increase, primarily due to reduced ceding commission income leading to higher policy acquisition costs.
Heritage’s net combined ratio in Q1 stood at 94.0%, showing a slight improvement of 0.5 points from 94.5% in the prior year quarter, driven by a lower net loss ratio, partially offset by a higher net expense ratio as described earlier.
Net investment income, inclusive of realised investment losses and unrealised losses on equity securities, increased by $1.1 million in the first quarter, rising from $7.5 million to $8.6 million. This improvement reflects efforts to align investments with the yield curve and capitalise on higher short-term yields.
Ernie Garateix, CEO at Heritage, comments, “I’m pleased to see the momentum of our efforts to respond to market conditions continues to produce our intended results.”
“Our average premium has increased across the book of business, and we believe the quality of our book of business continues to improve.”
He adds, “We are successfully managing exposure, our cost of catastrophe reinsurance, and continue to build strong relationships with our valued reinsurance partners.”
“Weather losses are higher than last year but attritional losses are down. We are managing expenses while implementing upgraded systems to better manage our business and service our customers. The management team is resolute in our focus to generate underwriting profits across our footprint, maintain adequate rates, ensure selective underwriting, and employ meticulous but fair claims handling,” Garateix concludes.
