HRTG - Earnings call transcript Q4 2023 | Heritage Insurance Holdings, Inc.

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Operator

Good morning and welcome to the Heritage Insurance Holdings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kirk Lusk, Heritage Chief Financial Officer. Please go ahead.

Kirk Lusk

Good morning, and thank you for joining us today. visit earnings section call release archived. to investors.heritagepci.com, our will you the where and invite the of Investors website, be We our earnings materials at or These for convenience. review available are your replay

material forward-looking call expectations. Reform release circumstances. management's that In changes to Litigation XXXX. risks current statements Today's and of we our contain within meaning SEC to Private from Act based of are differ statements our press in subject cause our and future the filings, These expectations earnings Securities the upon detail may and may uncertainty results our

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

statements to release and a on in those that the earnings described risks our our Form forward-looking XX-K, filings. materially SEC For forward-looking could please statements, annual from of the description report refer and results the other cause to differ

measures. information found Our press non-GAAP include of, financial comments be can reconciliation measures, other will today in these The and release. also our regarding

With to the will call Executive the Chief now turn Ernie Officer. over is me Garateix, call I on Ernie. our today

Ernesto Garateix

Thank you, to morning Kirk, good and everyone.

review period for we achievement on I'm reflect pleased strategic our a XXXX and fourth to year As full advancement our results, company. and of quarter

past deliberate financial execution, culminating outcomes Our X in years efforts actions over improved position. market and the include and focused a strengthened

the adequacy, of our impact underwriting, rate quarter efforts positive reinsurance towards portfolio diversifying our Our demonstrate financial and fourth for results tightening working managing the costs. towards our

in a improvement QX income from for marking $XX.X net million year. same last XXXX the substantial was million, $XX.X quarter Our

exposure in rate period. strategy cornerstone earned now the implemented years, over the as to our premium our management. X from have last increases are the statements being of been approach reflected realized and financial we disciplined our has policy A Over actions

significantly the reduce to personal obtain of Florida and improve business. book strategy adequate business book the lines of rates Our

personal This our lines We reinsurance manage also XX% by our policies business quality XX-state to by to and states costs, a We within our lines X.X%, our slight value strategic deem move in reduction of with expansion. total from only decline of rate multistate to but strategy geographic overall we book reduced more in-force vision in a have of extended not personal intentionally our premium insured long-term and in-force overall adequacy align our only but platform. business. all this to X.X% of the improve selected led effectively, necessary

opportunity against a XX.X% increase The of backdrop commercial market and force ability improved for residential to regions allocate to in capital a has premiums segment underscores in growth This remarkable the seen margins. our set by year-over-year. potential with products

$X.X particularly force, in has deliberate Our risk. efficiently moves and at year-over-year. of exposure hit reflective premium while we decrease These effective, adequately an strategy billion again all-time management in in and high in-force manage X.X% ensure been up portfolio the a the where made is were our costs to once reinsurance maintain premiums our resulting policies our that

to reinsurance with our critical strategy. provide to our continue that We support relationships core our partners foster

focused. and clear remains strategy our ahead, Looking

successful especially recently equity growth raise where selective we in pursue to are opportunities, the criteria. adequacy With rate completed, positioned stringent our our meets geographies well

creation with for clarity, solid and provides operational growth sustained shareholders. strategic coupled to commitment a value Our excellence, foundation our for

insight In operational and XXXX our dedication, conclusion, achievements of strategic the team's reflect discipline.

by unyielding in XX-state the platform. foundation our ability move our momentum, and dedication maintain across we As forward, confident driven of our our team solid to this I am

the the of Let for Kirk a things in and me financial results performance quarter key to turn metrics. review over

Kirk Lusk

advised demonstrated the Thank were results our produce the We years business that Heritage strategic anticipating. the quarter you, Good we XXXX, Ernie. over of fourth decisions to are everyone. morning, of In X had Holdings past the starting of execution Insurance rate on these process, a with forward. focus we the improving to multiyear book the continue progress strategic was of our going and have and overall will we that adequacy made, are initiatives and pleased we quality

We our insurance diligent rate through remain a products selective to the claims an providing for demonstrated objectives and market underwriting, is quarter progress the and favorable profit have adapt our committed by geographies with appropriate underwriting adequacy, in handling. generating we landscape. all results to The those fourth ability in made reflects dynamic

per achieved pace of income same increase of in the share, $X.XX the increases primarily reinsurance premium solid we attributable loss year. income million million to or income net in With from ratio. XXX.X% The a an diluted previous investment new quarter improved costs, improved keeping nearly with or is the our $X.XX per $XX.X diluted improvement increase net $XX.X and share in

premiums Our X% underwriting by net of million, premiums X.X% our the million, rose and $XXX.X increased $XXX.X to earned while strategy gross standards. earned underscoring effectiveness to pricing

increase In premium quarter. the the an of addition, these over in average to actions year prior led per XX.X% policy

prior was the an from losses favorable weather which and $XX.X XX.X $XX to an to quarter to ratio we the is quarter, in this to XX%, XX.X% compared The year and point ratio net prior focused discipline of the weather remained and combined improved relatively The $XX.X These metrics The the million. effective were weather believe attributable cost loss is portfolio is is ratio XX.X%. events. what some statement year net year a an underwriting million million improvement management. from for also improvement able our improved our stable are mitigate which of to expense improvement at

with portfolio the positioned had while market our income million, risk. managing XX.X% and net diversification to quarter opportunities reflecting $X.X alignment Our increased our to well capitalize investment curve on and us for proactive yield management of by The the investment investment decisions.

priority. the remains management Capital

focus exploring actions such commercial reinvesting continued of portfolio quarterly as in taken our operations on strategic the the opportunities the suspension XXXX. have dividend we regarding We growth and as the in core strategic

allocation capital to long-term maximizing returns shareholder approach towards and geared Our is value.

the company opportunities long-term for and position manage to shareholder continue to our actively and of will business returns. We underperforming areas profitability seek

selective move standards growth we centered underwriting adequacy aligns As our geographies rate where our remains product with design. into in XXXX, and on strategy

Our navigate dynamics combined the opportunities. to in improvements, investments exposure market position and with management, growth us approach disciplined capitalizing our on evolving technology to process strategic and

In past closing, have the few strategic the results reflect quarter years. discipline we the executed fourth over

We the insights highly talented to well throughout our of and a that provides and in trajectory the growth. dedicated that analysis, position respective their roles execution and us have organization team the driven results has continue profitable

look your updating you support. progress We on you to Thank for quarters. coming in continued our forward

take to ready now are We questions.

Operator

come our of Sandler. Instructions] first And question [Operator Paul Piper from Newsome will

Jon Paul Newsome

Congratulations quarter. on the

Ernesto Garateix

Paul. you, Thank

Kirk Lusk

Paul. you, Thank

Jon Paul Newsome

I management on a dividend also recent maybe you're into offerings year, want little The suggest capital but coming you the more the on the to bit question. light off. kept ask a capital bit little

So phase, in right. if guessing a still I'm you're capital accumulation that's

the question. that's So

the And I well? potential M&A then even in takeouts does as that for mean, growth, I'll terms include or maybe start with So of select there.

Kirk Lusk

looked being Well, space there's Yes. think opportunistic. thing other And that our advantage of. lot just for to yes, a that as take other I we the is of mean, raise, at the market opportunities capital first, we within opportunities

So of do opposed that raise was to really, shortage the capital as capital to position. a

us, at. sometimes, product a that of we look of we kind continually that. we at be think we And don't I the citizens, versus mean do of incrementally so pricing things we're it's but And looking the our of look because, would number continue opportunities. Takeouts, one think just are takeouts. way there to beneficial at the to it of that's

Jon Paul Newsome

cat question wanted quarterly basis, sort on a look at it as other there've could not ask sense we you this a about moving And as load? do look Great. you I the changed What basis. but My go maybe time the much right of so is Obviously, over is maybe number we an has annual cat how on your forward? think of And to of forward. load been parts.

Kirk Lusk

we've mean exposure that the pace. as changed and also process been that. think to I of up cat definitely mean, taking from we with we perspective, rates I cost that's think Yes. I diligent And our in keep the then that the that need has management reinsurance with has reflecting load why

Jon Paul Newsome

that the down we'll I Has load with up? gone start basis. cat or annual guess

Kirk Lusk

sure understand make you're load, me cat referring what by to I cat as And let load. just

Jon Paul Newsome

relative load is losses of the a be that amount premium. normal year to for Cat catastrophe would

Kirk Lusk

to Yes. that. our expected however, And that pace keeping has been what we with do, increase, premium we've

we've net-net, that from perspective. positive therefore, been So

last ability those the to the other The the that undertaken the of underwriting over has improve we've some is tendency to years of our think weather that, several though, therefore, of withstand mitigate events aspect has some losses. weather we which so the portfolio, underlying and to

that gone but that up, loads I premiums actions the underwriting taken that. with we think think we've So and we've taken, we're the general outpacing in have cat

Jon Paul Newsome

far? somebody Okay. reform And else question, in guess any I'll and my ask, tort on thoughts so let I Florida last

Ernesto Garateix

Yes.

that data We So do we positive litigated some we're regarding trends the continue losses. monitor see receiving that. in to

XX the Florida do months that we've take is that's As the going losses. optimistic to we to to with grow but system, always comes believe said, it we're XX very to when litigated improving market

Operator

The question comes of Maxwell Truist. from next Fritscher

Maxwell Fritscher

Hughes. calling how portfolio way very of versus better better wondering this question, I much quarter? ratio to was durable in weather -- quarter in set was I a guess regulatory loss versus guess and put off to that? that environment the going the up Mark mild how reform the was for more due it I'm of tort Florida just I better is, good. is

Kirk Lusk

compare and at actually been is because occurred trying understand Well, the large analyze not of also convective very I losses year, And the it's number with of have that something when I severe I exact some throughout season. had lower to same convective throughout have that those lower, they've been would the people severe associated is what that. we did the and but mean particularly think we Yes. we've losses type us for that look weather of and been driver loss. say, difficult storms, storms a the fairly just of to

do standpoint, us impacts, Ernie better tort some so our positive I that does it definitely portfolio is mentioned, lower is to weather. that the that but I as having that some reform, from So bit hard quantify. but it's to an a just the performing think probably And -- of have little indication think, think with I gives

Maxwell Fritscher

we expense steady Yes, that's down. in How pretty on the be much you then this to a the looking year? do the little ratio, this that XXXX? And expect helpful. for see full Can for year, same

Kirk Lusk

Yes.

ratio expense flat. forward, -- I probably looking overall, think be the fairly

investments continuing think future. in We investments have But some continuing we I us to are some think is do IT and . I productivity, allow in going to doing 'XX. grow in the which

Maxwell Fritscher

good a quarter. on Congrats

Operator

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

Ernesto Garateix

day. We for call a everybody want hope great today has to everyone the joining and thank

Operator

you has and today's now concluded. disconnect. The presentation may conference now for Thank attending you

Heritage Insurance (HRTG) 12 Mar 242023 Q4 Earnings call transcript