Heritage Insurance Holdings Reports Strong Q1 2025 Results
Heritage Insurance Holdings, a property and casualty insurance company, has reported robust first-quarter results for 2025, demonstrating growth in premiums and improved underwriting performance despite the impact of recent catastrophic events. For the quarter, Heritage reported a net income of $30.5 million, or $0.99 per diluted share, a significant increase from $14.2 million, or $0.47 per diluted share, in the same period last year.
Gross premiums earned during the quarter totaled $353.8 million, representing a 3.6% increase from the previous year’s $341.4 million. Although the company faced substantial losses due to California wildfires, resulting in a net pre-tax impact of $31.8 million in losses and loss adjustment expenses, its overall financial performance was bolstered by premium growth and improvements in underwriting metrics.
CEO Ernie Garateix attributed the company’s results to its disciplined approach to underwriting, rate adequacy, and effective claims handling. “Our results highlight the effectiveness of our strategy, even in the face of significant catastrophe events,” Garateix said. “We’ve focused on enhancing customer service and claims efficiency while maintaining a balanced portfolio that drives profitability.”
The company also emphasized its ongoing efforts to expand its business in a controlled manner. Heritage has gradually increased its capacity for new business, with nearly 75% of its production capacity now open, up from 30% as of mid-2024. The company plans to open the remaining capacity by the end of 2025.
Garateix noted that recent reforms in Florida’s insurance market have positively impacted the company’s outlook in the state. Legislative changes aimed at curbing claims abuse have improved market conditions, and Heritage is gradually opening additional territories in Florida to meet customer demand. “Our outlook for Florida has improved with the recent reforms,” Garateix said. “As we expand into new territories, we expect to see an increase in production growth.”
Looking ahead, Heritage’s strategic focus for 2025 includes continuing to pursue underwriting profitability through disciplined rate setting and selective underwriting. The company is also concentrating on expanding in profitable geographies while maintaining a diversified portfolio to reduce risk. Since launching its strategic initiatives in December 2022, Heritage has achieved consistent growth in in-force premiums, reduced its exposure in areas with insufficient rate adequacy, and grown its commercial portfolio. The company has also expanded into the excess and surplus lines market, which has grown to over $48 million in in-force premiums.
As part of its ongoing focus on growth, Heritage’s board has decided to continue suspending its quarterly dividend to prioritize reinvestment in the business. The board will continue to evaluate dividend distributions and stock repurchases on a quarterly basis.
