U.S. markets open in 1 hour 35 minutes
  • S&P Futures

    4,126.50
    -15.25 (-0.37%)
     
  • Dow Futures

    32,736.00
    -56.00 (-0.17%)
     
  • Nasdaq Futures

    13,093.00
    -90.25 (-0.68%)
     
  • Russell 2000 Futures

    1,934.20
    -6.90 (-0.36%)
     
  • Crude Oil

    91.72
    +0.96 (+1.06%)
     
  • Gold

    1,789.00
    +2.20 (+0.12%)
     
  • Silver

    20.64
    +0.02 (+0.10%)
     
  • EUR/USD

    1.0219
    +0.0024 (+0.24%)
     
  • 10-Yr Bond

    2.7650
    0.0000 (0.00%)
     
  • Vix

    21.88
    +0.73 (+3.45%)
     
  • GBP/USD

    1.2096
    +0.0015 (+0.12%)
     
  • USD/JPY

    135.0800
    +0.1070 (+0.08%)
     
  • BTC-USD

    23,257.07
    -879.03 (-3.64%)
     
  • CMC Crypto 200

    539.87
    -3.01 (-0.55%)
     
  • FTSE 100

    7,483.95
    +1.58 (+0.02%)
     
  • Nikkei 225

    27,999.96
    -249.28 (-0.88%)
     

/C O R R E C T I O N -- Heritage Insurance Holdings, Inc./

  • Oops!
    Something went wrong.
    Please try again later.
·6 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

In the news release, Heritage Reports Second Quarter 2022 Results, issued 04-Aug-2022 by Heritage Insurance Holdings, Inc. over PR Newswire, in the table titled "Book Value Per Common Share", the value for Common stockholder's equity for Jun 30, 2021 should read "424,873" rather than "42,873" as incorrectly transmitted by PR Newswire. The complete, corrected release follows:

Heritage Reports Second Quarter 2022 Results

TAMPA, Fla., Aug. 4, 2022 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported second quarter of 2022 financial results.

Heritage Insurance (PRNewsFoto/Heritage Insurance Holdings, Inc) (PRNewsfoto/Heritage Insurance Holdings, In)
Heritage Insurance (PRNewsFoto/Heritage Insurance Holdings, Inc) (PRNewsfoto/Heritage Insurance Holdings, In)

Second Quarter 2022 Results

  • Second quarter net loss of $87.9 million or $3.32 per diluted share, down from a net loss of $4.0 million or $0.14 per diluted share in the prior year quarter, with the reduction stemming from a net $90.8 million or $3.48 per diluted share non-cash goodwill impairment charge.

  • Goodwill impairment charge driven by: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, largely due to recent weather-related catastrophe events; (ii) elevated loss ratios for property insurers in our markets; and (iii) trading of our stock below book value.

  • Second quarter adjusted net income1 of $2.9 million or $0.11 per diluted share, up from an adjusted net loss1 of $4.0 million, or $0.14 per diluted share in the prior year quarter driven by an improvement in the net combined ratio of 5.8 points, to 99.4%.

  • Net loss ratio of 64.1%, 4.7 points lower from the prior year quarter of 68.8%, driven by higher net earned premium, which outpaced the 0.7% increase in losses.

  • Net current accident year weather losses of $38.1 million, up 7.3% from $35.5 million in the prior year quarter. Current accident year weather losses include $32.1 million of net current accident quarter catastrophe losses, up from $24.5 million in the prior year quarter, and $6.0 million of other weather losses, down from $11.0 million in the prior year quarter.

  • Net expense ratio of 35.3%, down 1.1 point from the prior year quarter amount of 36.4%.

  • Exposure management highlights:

  • Gross premiums earned of $296.2 million, up 3.7% from $285.6 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months driven by higher average premium per policy.

  • Gross premiums written of $365.3 million, up 8.2% from $337.7 million in the prior year quarter, driven by higher rates, with intentional exposure-management and re-underwriting efforts resulting in a 4.6% increase in Florida driven by rate actions and growth of 12.1% in other regions.

  • Total capital returned to shareholders of $1.6 million, reflects $0.06 per share of the regular quarterly dividend.

  • Continued execution of Heritage's diversification strategy, with 74.4% of TIV outside of Florida, up from 69.8% as of second quarter 2021.

"Our underwriting profit for the quarter and nearly 6-point reduction in our combined ratio demonstrate that our focus on profitability, exposure management and rate adequacy are having the desired impact," said Heritage CEO Ernie Garateix. "Our improved metrics are significant in comparison to the prior year quarter and we expect these improvements to continue each successive quarter. Additionally, I'm pleased with the outcome of our catastrophe reinsurance program which incepted June 1st. Heritage secured appropriate levels of reinsurance, we did not use the new Florida Reinsurance to Assist Policyholders program, and our program included deployment of Citrus Re, which brings in additional collateralized reinsurance through the capital markets. We are cautiously optimistic that the actions taken by the Florida legislature will have a positive impact on our results and the challenging claims environment, but also believe that more legislative action needs to be taken to improve the health of the Florida property insurance market."

Capital Management

Given that Heritage's stock is trading below tangible book value, Heritage's Board of Directors has decided for this quarter to allocate the $0.06 per share typically used to pay a quarterly dividend to shareholders to repurchase common stock, which will be accretive to shareholders. The Board of Directors will re-evaluate dividend distribution on a quarterly basis and will make a determination, in part, based on the current stock trading price as compared to book value.

Results of Operations

The following table summarizes results of operations for the three and six months ended June 30, 2022 and 2021 (amounts in thousands, except percentages and per share amounts):



Three Months Ended June 30,




Six Months Ended June 30,





2022



2021



Change




2022



2021



Change
























Revenue

$


163,770


$


150,197




9.0


%

$


322,378


$


297,441




8.4


%

Net loss

$


(87,866)


$


(3,950)



NM


%

$


(118,625)


$


(9,097)



NM


%






















Adjusted net income (loss) [1]

$


2,908


$


(3,950)




(173.6)


%

$


(27,851)


$


(9,097)




206.2


%

Loss per share

$


(3.32)


$


(0.14)



NM


%

$


(4.46)


$


(0.33)



NM


%

Adjusted net income (loss)[1]

$


0.11


$


(0.14)




(178.6)


%

$


(1.05)


$


(0.33)




218.2


%






















Book value per share

$


6.80


$


15.20




(55.3)


%

$


6.80


$


15.20




(55.3)


%

Adjusted book value[1]

$


8.35


$


15.20




(45.1)


%

$


8.35


$


15.20




(45.1)


%






















Return on equity*



(152.0)


%


(3.7)


%


(148.3)


pts



(90.6)


%


(4.2)


%


(86.4)


 pts

Adjusted return on equity[1]*



5.0


%


(3.7)


%


8.7


pts



(21.3)


%


(4.2)


%


(17.1)


 pts






















Underwriting summary





















Gross premiums written

$


365,284


$


337,700




8.2


%

$


648,480


$


611,881




6.0


%

Gross premiums earned

$


296,211


$


285,646




3.7


%

$


583,579


$


556,057




4.9


%

Ceded premiums earned

$


(137,940)


$


(139,147)




(0.9)


%

$


(272,379)


$


(267,359)




1.9


%

Net premiums earned

$


158,271


$


146,499




8.0


%

$


311,200


$


288,698




7.8


%






















Ceded premium ratio



46.6


%


48.7


%


(2.1)


pts



46.7


%


48.1


%


(1.4)


 pts






















Ratios to Net Premiums Earned:



















Loss ratio



64.1


%


68.8


%


(4.7)


pts



77.6


%


68.8


%


8.8


...