HRTG - Earnings call transcript Q1 2021 | Heritage Insurance Holdings, Inc.

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Operator

Good morning, and welcome to Heritage Insurance Holdings First Quarter 2021 Financial Results Conference Call. My name is Karen, and I'll be the operator today. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Please note, this event is being recorded. to President conference at like Soleimani, to now Vice Executive Heritage. would turn over the Arash I Please go ahead.

Arash Soleimani

statements of Litigation where Good and call convenience. we Reform morning, and earnings on Act available our In of to are the cause These within section for are uncertainty based you SEC statements today. call detail may We website, and current XXXX. to thanks These our meaning Private may review from that the changes for expectations. our contain visit joining and expectations filings, will Securities risks in be replay our the release forward-looking management's materials results and or earnings Today's of future release differ circumstances. the us archived. material earnings invite our our subject investors.heritagepci.com, are press in Investors your at to

and statements to as obligation we of no statements may Our we today, are have forward-looking make. any update

For call to release Financial differ forward-looking a now earnings Executive results forward-looking With those and filings. on are Form call over our us the Chief turn in other Garateix, Ernie Officer. described our Officer; our the Lusk, report SEC Kirk cause will from statements, on statements that the and could today Chief annual description XX-K, and I refer Ernie. materially our to to risks of please the

Ernie Garateix

for Thank morning, you Good today. Arash. you, Thank us everyone. joining

our reinsurance to and which like gross losses their losses expect I with we weather small remains high, and would the had employees to in our results, Productivity do of a net we us as recoveries stemmed high to weather no losses organization. quarter's We uptick were The disappointed with any to taking continue have the million. profitability large that from quarter come with us number at ROE the very from $XX see our have included impact of weather aggressively to over million to on COVID-XX the the were service and We of for that precluded been and and $XX.X which receiving events, up much actions in year-over-year. they the to long-term provide our identical distribution underwriting dedication part raising are light were Heritage. profile thank in said, business, that that virtually rates fortunate policyholders from improve a has employees. underwriting partners With our and get end a tunnel over cycle. at double-digit and has

to expect the see XXXX. of our the financials. one see While turn I provide over now it's two rate given to or year difficult meaningful more details our to increases, of lag improvement we by emerge the over improvement call will to measured the more some Kirk progress in end with inherent quarters, on

Kirk Lusk

Ernie. Overall, XX%. our on you, same grew the XX.X%, morning. while by in-force Year-over-year, frame time for Good our margin in-force Thank grew expansion. by premiums policies focus is

being premium throughout made underwriting will that and reduced and XXXX. a have implemented, rating XXXX XX.X% increases Florida up future believe The first as we first growth from in position very more have improvement market. X.X% future. to we bottom company impact the the in expect is on through XXXX the X/XX/XX. ceded driven the increase the the believe We actions was ratio X/X/XX that and and the costs that purchase XXXX XXXX program quarter, think from taking and also actions of on ROEs effective impact we market to The a and of of cover of convective reinsurance will slow to but and quarter volatility are loss is line. claims difficult, severe an return in the storm Florida pronounced This litigated beyond, could to As rate cat are the We in underwriting the produce has XX.X%. XOL year implemented by double-digit meaningful the would increase impact that in environment the are our this changes underwriting the rate growth an will

we which first the year. weather $XX.X losses mentioned, have million, last As higher approximately the $XX.X first of than were quarter quarter is million

loss significantly the ratio were loss – than impacted prior Additionally, quarter is just than higher higher and XXXX. loss The weather also losses QX the our first net losses by ratio XX.X% the attritional events and year of attritional was of quarter the XX.X% net of mentioned.

on We XX% portfolio impacting and Rhode over increases HOX and rate California the our continue during as as well Florida increase adequacy rate X/X/XX, voluntary quarter. Massachusetts, have first rate a focus in to effective Island

the During states. licensed remainder we rate in expect the of increases our all year,

net ratio net ratio combined X.X%, expense was ratio, management XXXX year higher offset of by first by of prior net loss is a from reflecting quarter decreased fourth up completed XXX.X%, lower the Our a for XX.X% reflecting the ratio. in senior partially restructuring which period, The in quarter XXXX. the expense

fairly improved Over footprint structure, refine rapid expanded continued have Florida, years, exposures our two our growth other and in the our states to capital saw into in XXXX. past we a

our now margins. focused on We are increasing

to available now questions. take are your We

Operator

comes Please [Operator and Instructions] for questions. gentlemen, question our floor Backer the Marla ahead. Excellent. go Thank actually now first from Ladies open from you. And is Sidoti.

Marla Backer

you. Thank

does entering or mean near-term you So new given margin in markets that on might expansion the that XXXX? now, forgo in the focus

Ernie Garateix

Thank the question, Marla. you for

So would in Kirk as we're the we only of Obviously, right looking line bottom line was profitability. be and what markets. those states is now. the at that focus our And to XX new is mentioned, markets bottom would if there add profitability

a diligence we be to won't the to that line. it have So be it consider And would it. them, will bottom do we won't on but hard due accretive

Marla Backer

you've been then some talking that also, Citizens impact – about? the potential selectively picking policies Okay. does this the of for from And some how up

Ernie Garateix

takeout? the Referring program, the to takeout Citizens

Marla Backer

Yes.

Ernie Garateix

Citizens our in So has been takeout program place. always

the going that is there. and what policies increase Citizens monitor number to in of on continue We

So to at would adds our and we look timing at that, continue a we into doing that, look if take to is the the takeout another it, that. profitability, will again, monitor a And future. right take

Kirk Lusk

And Marla, to just now about that, policies. Citizens has add I right XXX,XXX would

If you But figure they estimating have that this website, latest go the year. their that's it's up. to go about to they're XX% another probably up going

be So the just grow, past then made the to opportunity there are comments Citizens there. we've an in if continues could

Ernie Garateix

it to Yes, very and would selective. out take selectively be very policies,

Marla Backer

Thank Okay. you.

Ernie Garateix

Thank you.

Operator

from Please go our JMP. And you. next question Carletti Thank Mark comes from ahead.

Matt Carletti

will or the environment book, you the your goes correct Hey, enough And far in thanks; a Matt specifically, and both the get to recent if just passed and direction? to think in have step hoping particular. it's on your that the I on right if Carletti. Florida smaller thoughts legislation in of situation what was it kind impact

Ernie Garateix

Okay. Thanks, Matt, for question. the

market, that very the So any passes of. legislation appreciative we're that helps

that taken also the the our reporting impact years have book. are to to happy from down we're to optimistic the However, see such cautiously There as are two there period to things the would reinsurance in folks that. some years. on sure three market being glad see we're I'm

market, what impact currently we and go at again, kind how are well. into seeing legislation kind have far of the be Florida to We're of doing but it, book. may legislation yet time, we the at we're the our determine that always, of through we're helps that which this goes We any book. appreciative to But point in look insurance the overall as as

Matt Carletti

how a you question Okay, been speak situates capital and/or And that just Clearly, capital great. capital. Heritage's my Can both and there's what other your peers, disposal? a for might struggles. your be your around of to continued management across little options then centers view lot at position you of capital growth bit

Ernie Garateix

and do a we a group recapitalized the of position Yes. structure. going forward. capital XXXX. maintaining a strong company very We debt We do Well, structure we the syndicate and have flexible on do focus in and have fairly banks, capital

the the profitable margin. some market With dynamics, focusing being on and are again, we focusing, very – on of

that a bit puts could line top us capital impact then which the So position. growth, even little better therefore,

Matt Carletti

you. thank Great, right. All

Ernie Garateix

Thank you, Matt.

Operator

questions time. Instructions] Instructions]. this at no to [Operator there [Operator appear And further be

Ernie Garateix

there on everyone for Heritage, Well, Thank you joining you behalf for at are no your time. the today. if questions, of thank call

Operator

conclude gentlemen, does Thank today's your you. you participation. thank We and for teleconference. Ladies this

your at time, this have and great lines day. a You may disconnect

Heritage Insurance (HRTG) 9 May 212021 Q1 Earnings call transcript