Heritage Insurance (HRTG) investor relations material

Executive summary

• Achieved record Q2 2026 net income of $61.7 million ($2.05 EPS), up 28.5% year-over-year, with annualized ROE at 45.4%.

• Total revenue rose 3.0% to $214.2 million, driven by higher net premiums earned and investment income.

• Strategic focus on profitability, rate adequacy, diversification, and prudent capital allocation, supported by technology and analytics.

• Geographic and product diversification reduced reliance on Florida and enhanced earnings durability.

• Cash flow from operations surged to $166.5 million; over 1 million shares repurchased for $24.6 million in 2026.

Financial highlights

• Net income for Q2 2026 was $61.7 million, up from $48 million in the prior year; first half net income was $98.2 million, up 25% year-over-year.

• Net premiums earned increased 2.4% to $201.1 million; gross premiums written declined 5.5% due to lower commercial residential business.

• Net combined ratio improved to 64.9% from 72.9%, with net loss ratio at 30.4% and expense ratio stable at 34.5%.

• Net investment income rose 17.3% to $10.6 million.

• Operating income increased 29.3% to $83.9 million.

Outlook and guidance

• Rate reductions expected in Florida due to lower reinsurance costs; modest increases in other states to match claims inflation.

• Ceded premium ratio expected to drop by 1-2 points in Q3 with new reinsurance program.

• Focus on underwriting discipline, prudent growth, and leveraging technology for analytics and customer service.

• Texas entry and expansion into other markets expected to support growth over the next 2-3 years.

• Liquidity considered sufficient for at least the next twelve months.