HRTG - Earnings call transcript Q2 2018 | Heritage Insurance Holdings, Inc.

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Operator

Good morning, and welcome to Heritage Insurance Holdings' Second Quarter 2018 Financial Results Conference Call. My name is Nicole and I will be the Operator today. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Joe Peiso. Please go ahead.

Joseph Peiso

morning. Good to current section our quarter will archived. you heritagepci.com, our earnings the be the where earnings visit invite of Investor website, call We release and convenience. for review These replay are available at materials your or Today's call may forward-looking statements. contain to These current represent risks, and judgment no to our uncertainties. subject update, statements are undertake which assumptions we obligation and

for XX-K For to statements, those Form on Chairman from and the earnings are CFO forward-looking call release, this other Chief differ over please or to non-GAAP financial our report the in one our Bruce measures of to and described I the risks annual GAAP more Lucas, today's discussing Kirk and call, could the that along with press Also, Financial the description defined our made now measures. materially With most a Officer. cause call Chairman results the our refer the will compatible and our including filings today during be us of SEC our in Lusk, quarter's will reconciliations on CEO with SEC. required Bruce. disclosures, course turn

Bruce Lucas

quarter like you, to second Thank all XXXX of earnings would welcome our call. you Joe. to I

employees dedication like I'd thank we the begin Before call, to all for of to company. our their our

modeled this earnings quarter additional reduced losses These million. weather The primary with marked events of excess on our second $XX of losses severe were by was across in our portfolio quarter. driver the

I We in were derisk area. decided conservative the half to related Two frog of the severe litigated Tri-County claims a national track from developments decisions are to federated first and several region for regarding solid given fee losses ago, ahead we choice Florida reserves a Additionally, of million in take adverse view we water reserves, react one we in claims on the and strengthened loss to and years report. a that and of one-time changes environment. light very weather companies reserves $XX.X a quarter multipliers. of have the growing in to loss well typically by homeowner primarily positive expectations. increased Absent to the crisis attorney

considerably TIV Florida is time represents and has diversified market. of approximately and consolidated line value. X% only Tri-County over insured the personal is total Our TIV well our consolidated of one the the in decreased Heritage only total third

As of lawsuits at inventories declined. the have steadily lawsuits at Tri-County, newly related number and claims and Current lows from moved away the these the three claims of Tri-County lows. to are reported lawsuits and claim percentage the are year we and have all-time

continue reduced, sales reduce our [the that we and ratios policies to claims XXXX that related trend As to reserve early strong litigation had will have claim and another a and are inventory lot that improve. Tri-County our in We volatility. loss We will to claims tail] we began open through Tri-County force in of believe our quarter. worked lower continue believe

During originated new XX% the of business were policies quarter, outside Florida. of

Policy pricing. from million. in expand claims and year-over-year. reinsurance record premiums force, and jumped XX% to grow numbers Florida away in increased to which increase help volatility continued which correlates sales continues year-over-year reduce footprint should and to increase an sales to $XXX.X XX% to Our at The

We meaningfully increase also plan new believe which revenue. to this will implement we strategic relationships two year,

to be reduce CAN our provide on retained zones operational to year. all catastrophe and Hawaii details in the to contractor’s operational and this will now and to our more geographic Finally, alliance now will events three now our over respond be able financials. in I call southeast will turn losses. in northeast network the is Kirk

Kirk Lusk

net quarter ratio The the net the alliance that XX.X% variance of of weather-related to the was significant ratio to and items morning. the reported quarter strengthening during are like impact XXXX. vertically loss The down was of impacted driver XX.X% reserve the integrated and Due address also losses and from $X.X arising mitigated from of for was XX.X the Good compared Bruce. affiliate contractors’ second for utilization partially by quarter The the by points. XXXX, XXXX. the and income from would impact of for the strengthening. deviations for losses these million, weather reserve second first. second them ratio I loss profitability you, the on Thank the due quarter million loss quarter, had quarter Net to our The was expectations $X.X to main network. the

a geographically advantages. that many yields We diversified have portfolio

and However, severe ongoing our are reserves and area. with area the we they evaluate Tri-County have of by in respect to that we to continued With storms. state Florida reserve adequate diversification we to an basis hit that One isolated that particular, appropriate. on continued and on to the will to ensure in litigated have occasionally focus claims evaluate strengthening, be is

that our the believe litigated claims. claims the peer we we state. the second about to quarter, environment development reserves increase group, have was judicial the necessary in the during due taken Of due amongst was XX% it felt period to Although litigated we our fewest to prior

had will mitigate the have strengthening We include in-house. actions litigated detrimental future the that actions as taken claims continue of in attorneys all her Those we and well to the have that as take upon litigated to bring company. hiring reserve XX impact quarter, the claims believe

in approximately the actions comprises took Tri-County our which litigated reduce area, to we claims. exposure typically XXXX of to the XX% addition, In

the $X.X down of was future necessary the quarter second We will our reserve for limit which million $XX.X from income take XXXX. and to position steps of was continue the evaluate on exposures Operating periods. quarter, and to million as impact the to

premiums from top at XXXX line, its XX%. from reinsurance $XX at was to addition the million XXXX. programs of which year-over-year. for quota Net a as $XX NBIC second Ceded to is from Heritage premium of and up premiums from and which XQ, the quarter various $XXX second share $XX million, XX% were on increase million, XXXX, program catastrophe the million measured against consolidated of XX% year-over-year was the their Looking Legacy written the $XX million ceded XX.X% increased the the from quarter premiums from XXXX million gross million the NBIC the million ratio increase reflecting XXXX. are or $XXX increased gross XX.X% increased of portion $XXX was from XQ an business. of to earned, and Gross premiums $XXX earned premiums earned which million of $XX Correspondingly, at is portfolio. million, $XXX from in increase year-end

decreased XQ, was expenses the XX%. This ratio synergies net and ceded reduction from in and portfolio XXXX year the prior Excluding acquisition year-over-year the at of proportion diversification at XX.X% NBIC, exposure commissions premium the the operating the down and ceded to of production quarter expense in were premium reflects XXXX. second to Ceding reinsurance cost The of to of $XX XX%, expenses management. from ratio associated XX.X% against the offset business. million with related

reflects Our as of XX.X% The a from net QX, percentage combined quarter losses discussed. as the as was for ratio increase XXXX. of which XX.X% up premiums the the previously is earned

XXXX. to million and recoverable in repurchase notes. net the share $XXX end tax-effected to the assets at of Book sheet, $XX.XX the balance net reflects to questions. offset is increased investments, year a at shareholders, The of driven from of income year-to-date the value convertible I up Moving per Hurricane June $XXX unrealized dividends end. change to shareholders' related $XX.XX change to of your receipt invested share million from at million predominantly $XX claims. per by equity by portion and per for diluted XXXX reinsurance take XX, Total the Bruce the available Irma share now mostly increased are quarter, the

Operator

from go question ahead. comes first Sandler John Our of Please Instructions] Barnidge [Operator O'Neill.

John Barnidge

caps said and your Thanks I located? if what minute out another. dialed but geographically, in break independent I But development? in were it’s could CATs press CATs one $XX of and then late, a I where And release like know reserve the that development already apologize you million, this. you in at then were so

Bruce Lucas

not about was at and related and in million like ahead litigation to Florida, as looks in the million, [hail] want XX.X we we or additional in about events $XX reserves. looking strengthening were development, primarily up what kind development reserve the be Yes, CAT The to added environment really just the Northeast winter of storms. of portion We development really that.

John Barnidge

points and points? on, ratio with what gross being it then there you be obviously your there bumped Okay, basis. almost was Can talk a around but four to going maybe on right there up added Narragansett basis, on a is time, up seeing scale about you're occurring X sequentially actually that’s more net expense over

Kirk Lusk

charges is is and associated of so there that boosting see written $X.X right claims with with do claims really $X personnel of of and – with other that’s I that and particular then about the like $X the integration it some has Yes, handle expenses these one are there in litigated items the and the time worth you'll related to brining to there is aspects One was were three the with into there. personnel up the million bringing operation premium NBIC personal million volume quarter, address. million about associated that in about

John Barnidge

was haven't Okay we up none that showed in I what XXX,XXX seen a in quarter, expenses, then are and other that while operating the about?

Kirk Lusk

of debt convertible some the extinguishment Oh yes, that debts. on the

John Barnidge

trading talk shares they previous can weren’t at question you of are, own last where Okay, maybe? With but have least stock, I quarter quarters you. your know pretty you the I’ll and been that active I buyers that in saw, about reach this

Bruce Lucas

or the We in because the retired as caps of value so bonds on money active share not of better goes having back that in outstanding. $XX price get the the convertible or term at price the short against look portion long Yes, there’s the covered. a million that interest coupon, that stock when as of we that quarter, the you're rid actually and principal non getting terribly bond were during your the you grows retiring buying the bond convertible the option assured up and we share amount feature you, were

into did form and in allocate a rather than of put we did share a repurchase, so bond the it $XX And we million repurchase.

John Barnidge

re-queue. great. Thank Okay, I’ll you.

Operator

next Our ahead. of SunTrust. from comes go Hughes question Please Mark

Mark Hughes

thank you. Good morning. Yes,

Bruce Lucas

Mark. morning, Good

Mark Hughes

line, million grow items, Of new $X.X top to is around continue related it’s you that if that to the fair? I those the presume the expense premium

Bruce Lucas

Yes.

Mark Hughes

the And $X around as I that that well, the correct? sticks legal new is guess for the million staff then

Bruce Lucas

portion will portion yes. but not, good a it as That portion of the yes. Yes of well of well, that a that

Mark Hughes

to terms could NBIC and come your then together how had it in cost reinsurance the of the did you And do what compared acquisition? Okay. on anticipate you you targeted program, talk what new about program with

Bruce Lucas

were some that in, all our first on sure program. came, There of synergies of and to really and with go our reinsurance. was would in well up We speculation risk synergies tremendously. the diversification in a it million XXXX in XXXX The was at XXXX did in the weren’t of helped for out cost $XX came XX% expectations, lot decrease about into flat. going we actually X.X% the people how the said came adjusted that realized We in a about so XX%, put program reinsurance line pretty cost for cost, that

a sure spend for looking can we you’re you If dollar get I’m that then amount. net

Kirk Lusk

savings XX% again, -- when of the down from look the indicative to seeing. And really reflective at XX% is that of the it’s ratios you ceded dropping we’re

right commission, is to it’s net savings therefore be that in ceding with going NBIC from synergies. distort shares which the and to idea going a that gives tendency to were an the on for the of program range, be have you what out back gross the you XX.X, line XX so to reinsurance that, so it’s that quarter around If

Mark Hughes

quarters, Do your in something annually of couple you quarterly or of a terms last reinsurance spend is basis? go-forward cost kind $XXX have much a the million on changed of dollar that basis, sort are in of on roughly

Kirk Lusk

XXX, Yes, previously. build where up it’s will you that [Indiscernible] was it little bit get on it over a number. Maybe I’ll

Bruce Lucas

second, scrolls that a to Hold he page. while on

Mark Hughes

about Heritage portfolio. think in premiums said was I you in of million voluntary talk the you then trends? production your Could And Legacy written increasing the $XX Okay. gross

Kirk Lusk

Yes.

increased portfolio. Heritage the are across production seeing we So,

board. We South We're and Carolina Florida. the are Southeastern. launched across North in in Georgia, Production the increases Alabama, have and steady been

We an cetera reacted top increase. our record that two and doing outside business we portfolio. saw premium coming thought analysis some at out that's look premium one been dropping key we that Tri-County. lawsuits But has once founded increase been are of line a before TIDs of impact of certainly it years in even we've overall than some volumes were going predict and We be We've an are really But the production AOB, offsetting numbers we in on up and would. the new highest ago, Tri-County hitting a We And and non-renewals. rate is, and outside started there us. business new others the we've That companies shutdown per first been hitting our been the company. significant of AOB there. attrition that us of AOB a issue. policies immediately. problem force growing would by in selective lot the where to the Tri-County, is We more blew et It XXXX Florida that pretty those because record that of we've way your in the despite We've that lot getting. and is where that half with the been the business with is actually book

the it's a But has hedge We're production claims good top in Tri-County and for and ahead us. book company Tri-County development. well fraud they to adverse not, most it way So from elsewhere, Florida and getting get big tell whether you or to worked this going for importantly, are to of they tail, helped tail us. the Mark, have us they're number related of diversification line every

to the half We this let's said, problem business, and different. any and a looked don't ahead it lot Our approach at now, stop book and that get off write leave years two issue. it of more ago, is

are with at lows year in Tri-County today the here first when problem three claims started. sitting the open we're that of inventory So a

carriers these We through Tri-County closer record the come XX% lows, And open in also that much inventory three-year down and are that resolving tells in of that we are are to year-over-year percentage which lows. of lawsuits at Florida. open claims than at in the in are we are me tail then other at have claims that

we to been reduce company. is the and has the to grow claims for So, the see way line be top think -- I able positive that the it done we've there incredibly

Mark Hughes

you in footprint? And in see do in NBIC potential and terms Florida then a final of what question, both increases rate the

Bruce Lucas

are NBIC stable. rates pretty

Carolina of we about North we place quarters. rate through good with and those and Heritage some able That's of received percent, and I a being are maybe have are sticky I goes coming couple kind XX% legacy single get is in the at Florida, that rates. applied roughly counteract thing think our volatility in market pretty kind Florida arrange, seeing renewed upper rates to and in you portfolio increase retention that of one digit the help, future you're can say does of the for claims

Mark Hughes

Thank you.

Bruce Lucas

Yes, Mark.

Kirk Lusk

can I look being about ceding think the XXX. commissions at you

Mark Hughes

much. very you Thank Okay.

Operator

from next comes ahead. Our question Please go of Matt JMP. Carletti

Matt Carletti

Thanks. Good morning.

Bruce Lucas

morning, Good Matt.

Matt Carletti

remarks. you Good follow-up just comment made morning. I to in opening on your wanted a

us the bit the of increase I located two Or just might you think give I that of Where them? And that's heard will magnitude Can can't up be? a be that you tell revenue. nature right? that too kind relationships you I of associated I some hear significantly you points little right, mentioned well, know those you with of coming color strategic they much. on might not volume did new what

Bruce Lucas

No, you me right. new have We relationships. heard do strategic two

will I that. as we you soon the can buying We tell as policy. announce first them

the in a One writer United say auto two top of or relationships the let's one is States.

Matt Carletti

Okay.

Bruce Lucas

portfolio. partners want else that And to But have is And It's our make comments on want probably than is the Five, approved make I these make and bigger get I the we in ahead. anything are to upside Top I so our them. before other one massive. any we far don't too by potential sure

for to year launching looking in us to partnerships drivers really this here new launch future and third already are kind these and place growth going you've of that like launch dates we're in they're are These for going looks quarter. years. training it forward be of the got and to So set big

Matt Carletti

describe be sort given more…? of would have think these to if national as they Were or you Okay. of those how kind multistate relationships or right will they

Bruce Lucas

for Yes, multistate sure. relationships

been that yet. hasn't Third as one in one close but to well, was

Matt Carletti

right. for you. Got All of and Great. the best luck. color Thank you

Bruce Lucas

you, Thank right. All Matt.

Operator

Arash question Please ahead. comes next of from Soleimani KBW. go Our

Arash Soleimani

Thanks.

so outside Tri-County? wanted to on in you more XX% Tri-County. Florida, increases, the higher coming to the Is assuming rate extent Just getting have continue question the I the XX% rate below increase that increases you're in Mark's but on actually are the know renewals since I'm rate effective in the

Bruce Lucas

were board. spread rate consistent the Tri-County we increases with the rest Actually the No, it of across states. the fairly

because and Tri-County the you would people So policies. and the worsen. they're you been their to that rates that of over AOB if predicted low date it. years can in continued this extremely we kept rates half got doing still proactive Lot two To believe in we to increasing and last problem remember buy

of when I up can of problem better with a doesn't I Those we've that underperform past through but that quarterly to putting the and company risk sign. the the investors best that, I Florida that on lot get the legal That we outperform painful, open but going look sudden that's the to you of no you will means through, of what unfortunately and CAT will lawsuits see to in of should that ahead you down that lawsuits, raised $XXX,XXX came of work just That's things that play. a moving the have thing these recently open like one, well. forward. to And our going or the last the then Tri-County And exist. years. opinion guidance is that is trend. whether of strategy great, wouldn't a portfolio or have much long-term rest environment. with so get And rates down of $XX,XXX at like actuaries our when resolve would of view these decisions this to fact so years the I'm in number. don't roof legal yet those change where up at sucks the quickly. next sort problem be decisions quarter analysis hurt your the losses, some what as if portfolio. number just to end upside in thing you claims counsel, don't I'm the on own get rate one against that a something acting was. for lot, the related in going mean make than get in two can number tell So, some any this only as way that what like try tail to going number you looking be to that's to And reserves there litigation story not is we our it been it incredibly the a do end that's open and three resolve fees Problems to two paying more these over environment XQ. and lawsuits, one well. it. earnings almost line that better my good the the to ahead reserves is claims factor other we think Florida. our It’s stats was to age a filing on you tell $XXX,XXX the in market gap with in internal couple We what lawsuits to couple the you reserve Tri-County. peer court what's and metric with saw The your environment attorney sandbag We Had it ahead just plaintiff of a than five carriers did of in punch It’s primarily and cost below and And and increase like in just claim be you're number go to coming of that in the there adjustments some of

Arash Soleimani

then well? looking rate another taking you and board sizable regulators ahead me if the do can that as you And so anticipate to with into remind went when expect you XX% effect? Thanks. do be And increase on

Bruce Lucas

– Yes. I and They they they my the are the off incredible limitation doing there's can't to mean, an I can hats can They're aware regulators. mean everything companies. what job. to problem. Florida do. to doing of help They're the

not rate criticized I required to approach good think opinion, thing and taken hostile they've solvency. they have are they've overly but one that my little been been insurance the at, company on focusing increases a they to

So actuarial Xst date out and roughly the That yet. place side increase in a because can't year, that on well date future about rate increases rate done And we XX%. I on that's already effective [X/XX] our analysis we take then and of effect rate the was had voluntary business roughly right haven't August now. XX% tell this so the was

Arash Soleimani

Okay. and then original And stands was [Indiscernible] some loss losses, can you questions gross on the what us today? where remind gross it

Bruce Lucas

Yes.

experience. We I put up any in RMS, claim somewhere in million, we today an it's $X average and of number and upper million. and that AIR $X the was think million XXX between took without just and a

Arash Soleimani

unpaid? you do to-date have many how of paid versus And are the of number and those claims Okay.

Bruce Lucas

Yes.

claims. pretty the of as a number count separate lot And maybe probably the thousand Our a neighborhood that's XX,XXX, somewhere XX,XXX of It’s do. claims. reopens on open count much do of where companies not couple of is top a in we claim line and close claim

for as had XX,XXX but reopens you hypothetical even one if on XX,XXX actually we have claim reported it to we'd if related So example Irma, claims only reopens.

closed we of look you apples-to-apples to like it want that. how claims, go other XX% of players kind lot something with market I'd a at in if of do the our So say

Arash Soleimani

you're attorney so, of of seeing those most – coming involvement have in of of first those now did And at lot claims if and most loss? still Okay. are notice

Bruce Lucas

time. some quite They are everywhere. Right They the their mine off seeing new racket. now It's are We're still trying going power everything come claims. door-to-door. in trickles the advertising are Yes. in over to tail claims and attorneys that

So coming in. claims yes, new are

have news to claims in at updated is coming we do but get What tail, don't have a looked reopen reopens. You four an I are for number that a three, few lot you, of so months And talk stat, and that Tri-County. seen the a are I related months percentage by PA County of an were claims by ago and I the attorney by represented state adjuster what was were was or at a looked and or X%. like all reported XX% of reported attorney in like rest all to claims Dade the public Broward XX% and

So it tells is. you problem where are the

You're half Florida continue derisking seeing trickle the been related on tell and as players. fraud lot this, be related as reinsurance water we the means the a same the started problem won't on But on market of that that big seeing down. good in other recoveries Tri-County fact the a thing. a claims. two years to numbers ago That's And

Arash Soleimani

And terms any reopens percentage of do of any the in are you reopening? [work-through]? And stats claims have for what

Bruce Lucas

an way for is reason. could that you administrative reopen with reopens tracking that problem The

You to estimate could reopens claim. a drop in into

a to hundreds track them reopen expired. check a why claim technically of that reopen. a just We can had reopen. You as there would is reissue reasons I mean,

a can't So actually but spend right just I'd to guess. couple had probably data the time the thousand a reopen, maybe I the that's have lot cause reopens, the through XXXX of a of good digging don't I we figure out you to now. number -- give

Arash Soleimani

claims severity for average Okay. provide And any can the with do payment? closed you chance – you by

Bruce Lucas

bit. have a and that residential quite have number me. And commercial SKUs the front in don't I of we

Arash Soleimani

That's fair. Okay.

you network – there. get curious they it any that? you positive income obviously help Or generate of know I with them? the extra the when pushback guys at terms the In Just you use have -- CAN look Do do from you is how reinsurers feedback? some to discussions

Bruce Lucas

going Yes. AOB we've be. got money. at mean, what customer get I I mean, if you're claim a lot discount you quickly signed is to positive and feedback. save get And program can doing would CAN repair but to out a nothing repair and into the an up the substantial to going work in

to dollars going attorneys put a PAs I'd reduction see adjustment on I it. AOBs you You're of you, and loss where lot fees save corresponding thousand guarantee and and a of expense. also

lowest the have Florida. in We loss expense adjustment

some costs. Florida XX%. Lloyd I as XX%, to week. CAT saves saying other I so had it's they're of what average and them lot come are We asked LAE money syndicates CAN ratio under on here in the through a like XX% these the

Arash Soleimani

you able impact any that CAN ratio disclose this to what related the of any the benefited Irma that CAN kind are extent work -- in loss the quarter perform it And to quarter? – to

Bruce Lucas

actually of through. that's Irma Where that or of daily we and XX ago months most to Yes. we a it’s related the quite types repair has now, But those repair wash nobody have mode that mean, I just seeing I work that say we on you, benefits because today – at lot are was we're the one claims I it's don't work repair really CAN a can do CAN months, numbers, else this of the point. does. is I guard break because don't side the I so XX XX thing down – we Irma systemically. on mean, something do that tell mean, on in trickle kind

Arash Soleimani

the book, terms to heritage in extent And what Thanks. exposure in of the Narragansett legacy growth versus was outside rate that driven?

Bruce Lucas

You Jacksonville had, of like Tri-County we year-over-year dropped remember everyone rate policy XXX average where had $XXXX down is in revenue a it's rate around there lose bucks. And Tri-County and in continue as probably and tremendous some a in also a writing we're changes driven get XX% the alone. derisk We to did writing policy because we we got But line you premium you top there. the TID XXXX a maybe because to if else. you're not but increases amount

and you the new fact the increase impressive in despite the diversified and how So continues our is footprint it its goes pretty just accelerating becoming to of the Tri-County our show is in hotline in to all derisking that states southeast.

Arash Soleimani

what's And haven't yet. I new into partnerships you're know talking about because effect acceleration the that gone driving

example? driver in the XQ what for So main

Bruce Lucas

in game place, makes in Well, easy a new It in policy, us your market minute. really our enhancements I to buying it that new takes to know with policy the it state been have critical. agents. to the time get ground system buying under to

love five North And And drive so helping its really we're Alabama, a the is would growth. But that of lot out those And rolled inland not Carolina coast, to premiums writing agents terms do mean, that. volume. We've the are I impossible. killing I South the the beauty of like be everyone times inland Carolina ratios said absolutely coastal, North higher Georgia. it. rolled Carolina; on business. things We've out In mean we're to inland in

dialed in. we're So

look a systems our gaining game place, the got of of Florida ground rates in lot are Our in well good. us far working we're away Tri-County. very that for other and just We traction from its areas good, a

Arash Soleimani

years those And terms Thanks. of reserve the accident strengthening in which were from?

Bruce Lucas

Lot right? of those related to XQ,

Kirk Lusk

throughout, actually XQ. was XXXX, It that Yes, XXXX. predominately but with

Arash Soleimani

Okay. in any you to of again prepared – make And quota terms mentioned if this the but did changes share? terms I already apologize the quota range now of the share in in remarks, you

Kirk Lusk

ceded Yes. commission, on the XX%, also drop the will premium. that so and gross We about on have ceding the from quota share impact an

Arash Soleimani

about an about that you think like curious to you Okay. reduce quarter, or to And you're I does just the thinking want the change Just the reinsurance? I cover that? how volatility implement Would this given guess there? CAT mean way ad anything

Bruce Lucas

through none them retention. the ad these an but pierced have of Heritage, do we at cover Well, were

And yes, mean, going about. so think unusual. we're – is this I to

just and you couple quarter. in portfolio the can in bucks There you. of to second a there, had think you going get couple the hail losses is hit ever Usually and we're CAT we've you a a do seeing nothing about. so million it's most got events I

compare dollar cetera, the for really all weather you're but a to events in losses it just pretty so, Florida, risk, to Tri-County. really, retention savings – in and that That's program. first aggregate in quota quarter that get sliding and I typically being an not there you you coverage shares as quota you gross did the have the then Bay, by more you eggs all not to goes overall versus you they your place losses were And portfolio, thing really worse, very Organza better it net little records, going quarter, mean first one the et losses. but pick last respond get scales you're certainly to that diversified, well with bit events. going get We amount. you dollar when diversified toward events have things these tough is along convective that frequency its less reinsurance have when severe get But isolated share less per get over are to it a going you to be diversified particularly and have all robust in volatility program to have remember escalate It's the robust, and quarter open is time a your in up definitely

Arash Soleimani

Exactly. And you to the what given your extent in retention does made change share quota that Narragansett? change

Kirk Lusk

point. XX

Arash Soleimani

of What NBIC with Okay. about mentioned And fees million. was in the and some Kirk integration that additional said such. think you I X think, had I comments legal of terms

something work be does forward? that cost going or a recurring how few a So expense quarters the for that integration will

Kirk Lusk

also. will portion will it staffing, for good some A of that period continue actually a time of then of so that that again continue Yes. and is

Bruce Lucas

plans growth lines some just We grow have new new in we you're NBIC live up and including recently partnerships, big states for the northeast. it, and that new launched went

to the If that staffing growth, there the bodies lag other and generate a production. lead you is got

your the on face. going production staffing If before you you to try get you're flat to the get fall

Arash Soleimani

Okay.

place the in ready you're just so basically to the growth infrastructure you for go? So putting that future

Bruce Lucas

been et is cetera, return then you but G&A for in get it been up future we growth, expenses along quarters. so – remember there network come there that we And the contractors expanding alliance with Yes.

Arash Soleimani

maybe the going thoughts change in perfect. forward? And M&A comment any M&A on Okay, your and just appetite looking at kind or what you're of your

Bruce Lucas

comfortable We with purchase came where did an part we so comfortable or the M&A We anything can't – like I'm under feel the We just from with price names weren't prices not what purchase just their versus on saw. look transaction; that. I sellers our away NDA, at didn't we an disclose And it. in. walked were

So M&A align done the or the at looked It we've two. on happens different opportunities, that. probably time. two XX I all XX parties just couldn't

stick that I We fits that it a within going pretty to have something we're doesn't, We're discipline. it to of we to be so, comes and it. got The going model box, selective. model. works. so the And And to kind in future be if if along think

Arash Soleimani

know I Perfect. right. All ask lot questions. of

So thanks answers. for all the

Bruce Lucas

course. Arash. Thanks Of

Operator

concludes over This Lucas to turn the our for conference any I to question and closing Bruce answer like session. remarks. back would

Bruce Lucas

for everyone second the call. thank to quarter joining like earnings would I

Operator

you today's Thank conference for attending now is presentation. concluded. The

now You disconnect. may

Heritage Insurance (HRTG) 3 Aug 182018 Q2 Earnings call transcript