Heritage Insurance (HRTG) Small-Cap Virtual Conference summary

Business overview and financial performance

• Reported $2.5 billion in assets, $567 million equity, and $19.09 book value per share at Q2 end.

• Premium in force is $1.4 billion across 351,000 policies, with 70% of insured value outside Florida.

• Q2 net income was $16.7 million, with a net combined ratio of 64.8%, improved by 8.1 points year-over-year.

• Net premiums earned rose 2.4% to $201 million, despite a 5.5% drop in gross premiums written.

• Commercial residential premiums declined 12.7% due to competitive pricing, while personal residential remained stable.

Strategic initiatives and growth plans

• Strategic reset in 2022 included rate increases, portfolio review, and investment in analytics.

• Profitability improved annually: $45 million net income in 2023, $61.5 million in 2024, $195 million in 2025, and $98.2 million in H1 2026.

• Maintained profitability despite catastrophe losses, demonstrating resilience.

• Pivoting to controlled growth, reopening most markets for new business and planning entry into Texas on an E&S basis.

• Growth will be disciplined, with no loosening of underwriting standards.

Portfolio management and capital allocation

• Focus on underwriting profit, portfolio diversity, and capital allocation to highest-return segments.

• Florida insured value up 3.3% year-over-year, with diversification achieved by growing elsewhere.

• $439 million in statutory surplus funds organic growth; $50 million share repurchase authorization through 2026, with $24.6 million repurchased by June.

• Capital allocation prioritizes growth, then buybacks, then dividends, with dividend policy reviewed quarterly.