Heritage Insurance Holdings, Inc. · NYSE:HRTG
Heritage Insurance — Q1 2025 Earnings Presentation
24 slides from Heritage Insurance's earnings presentation, May 2025
Slide 1: Investor Presentation First Quarter 2025
Investor Presentation FIR ST Q U ART ER 2 0 2 5 M AY 2 0 2 5 Heritage Insurance Holdings, Inc. NYSE: HRTG www.heritagepci.com
Slide 2: Safe Harbor
SAFE HARBOR Statements in this presentation that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing,
Slide 3: Heritage Overview
H E R I TA G E O V E R V I E W NYSE: HRTG Super-regional U.S. property and Total Insured Value at 3/31/2025 casualty insurance holding company Market Cap: ~$609mm Total Assets: $2.2bn $1.43 billion of premiums Total Equity: $329.0mm Northeast 47.7% in force, personal residential Southeast 28.2% insu
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Experienced Returning to a Controlled Management Team Growth Strategy Vertically Integrated A Robust Reinsurance Structure Program to Protect Capital Geographic Diversification Technology Augmented U.S. Super-Regional P&C Insurer Insurance Operations Strategic Profitability Ini
Slide 5: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM Ernie Garateix Kirk Lusk Tim Moura Tim Johns Chief Executive Officer Chief Financial Officer President, NBIC President, Zephyr o CEO since 2020 o CFO since 2018 o NBIC President since 2017 o Zephyr President since 2018 o Previously COO since 2014 and EVP o Joined Heritage
Slide 6: Vertically Integrated Structure
V E R T I C A L LY I N T E G R AT E D S T R U C T U R E o Vertically integrated structure includes a preferred provider network, minimizing third-party reliance, reducing costs, and providing a strategic hedge during catastrophe years o Vertically integrated structure reduces our earnings volatility
Slide 7: Geographic Diversification and Intelligent Growth
G E O G R A P H I C D I V E R S I F I C AT I O N A N D INTELLIGENT GROWTH o Strategically diversified portfolio to achieve better risk distribution, claims trends, and lower reinsurance costs o As of Q1 2025, 71.8% of total insured value (TIV) is positioned outside of Florida. Moreover, 67.1% is out
Slide 8: Strategic Profitability Initiatives
S T R AT E G I C P R O F I TA B I L I T Y I N I T I AT I V E S Generate Underwriting Profit o Focus on rate adequacy and selective underwriting o Profit-oriented underwriting criteria while restricting new business in over-concentrated markets or products o Inflation guard to insure appropriate insu
Slide 9: Heritage Evolution
H E R I TA G E E V O L U T I O N o 2014 -2020: Top-line Focus o Initiate profitability initiatives o Opportunistic growth (Commercial, CA) o 2021- 2024: Bottom-line Focus o Increased analytics o Positions company for managed growth o Re-underwrite the entire portfolio o 2025: Managed Growth $1,600,0
Slide 10: Full Year Net Income Trajectory
FULL YEAR NET INCOME TRAJECTORY 3-Year Trajectory (in thousands) o 2022 includes pre-tax $61,539 $94 million of goodwill write off $50,000 $45,307 and $40 million of retained losses from Hurricane Ian $0 o 2023 includes pre-tax $40 million of retained losses from Hurricane Idilia and the ($50,000) M
Slide 11: Initiating a Controlled Growth Strategy
I N I T I AT I N G A C O N T R O L L E D G R O W T H S T R AT E G Y o As part of our strategic profitability initiatives, we largely ceased underwriting new personal lines in the Northeast and Florida in December 2022, given a tightening reinsurance market combined with an adverse risk-adjusted retu
Slide 12: Cat XOL Reinsurance Program
C AT X O L R E I N S U R A N C E P R O G R A M Fully placed 2025-2026 catastrophe excess-of-loss reinsurance program for statutory insurance subsidiaries in May 2025 Program Overview o 2025 CAT XOL limit placed for each region in the amount of: o $1.1B in the Northeast ○ $1.6B in the Southeast ○ $86
Slide 13: Reinsurance Placements
Top10 Reinsurers REINSURANCE PLACEMENTS D.E. Shaw Re (Bermuda) Ltd., Bermuda (Collateralized) Model change requires additional property cat limit expected to be $300M–$400M with flat exposure Fidelis Insurance Bermuda Ltd projections. (AM Best A, S&P A-) Swiss Reinsurance America Corporation Notewor
Slide 14: Technology Overview
TECHNOLOGY OVERVIEW Heritage focuses on being a data-driven company with solid traditional insurance operations that are augmented with technology Data Warehouse: A Robust, Mature and Rich Policy Admin, Enterprise Analytics Platform Claims, Billing Contains key performance Implementing a new policy
Slide 15: Investment Highlights
INVESTMENT HIGHLIGHTS o Heritage is a super-regional U.S. P&C insurance holding company positioned for long-term growth and profitability. o Our strategic profitability initiatives are delivering positive results as we remained profitable through a challenging Cat season which was an important goal
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS 2025 Investor Presentation 16
Slide 17: In-Force Metrics
IN-FORCE METRICS In-Force Metrics YE2020 YE2021 YE2022 YE2023 YE2024 1Q2025 Total Premiums-in-force: In Q1 2025, premiums-in-force was $1.43 billion, reflecting Premiums In-Force (Millions) a 3.3% increase from Q1 2024’s $1.39 billion. This growth was achieved with a 13.5% Pres $969 $1,052 $1,118 $1
Slide 18: Financial Trajectory
FINANCIAL TRAJECTORY Shareholders Equity (in 000s) Book Value Per Share $350,000 $12.00 $300,000 $290,799 $9.50 $10.00 $250,000 $220,278 $8.00 $7.22 $200,000 $6.00 $5.13 $150,000 $131,038 $4.00 $100,000 $50,000 $2.00 $0 - 2022 2023 2024 2022 2023 2024 Cash and Invested Assets (in 000s) Debt to Capit
Slide 19: Q1 2025 Operating Performance Summary
Q 1 2 0 2 5 O P E R AT I N G P E R F O R M A N C E S U M M A R Y YoY Financial Results: Earnings before taxes of $40.0 million, an In thousands, except per share amounts 1Q25 Change 1Q24 increase of $20.1 million from the previous year. This increase was primarily driven by higher earned premiums an
Slide 20: Capital Management & Operating Leverage
C A P I TA L M A N A G E M E N T & O P E R AT I N G L E V E R A G E Ongoing evaluation of dividend distribution and stock repurchases on a quarterly basis No repurchases of common stock were conducted during the quarter Responsible steward of shareholder capital o New Share Repurchase Plan authorize
Slide 21: Conservative Investment Portfolio
C O N S E R VAT I V E I N V E S T M E N T P O R T F O L I O In Q1 2025, Heritage delivered investment income of $8.5M, in-line with the prior-year quarter. The investment portfolio is comprised of short duration, high credit quality, fixed income securities with an average credit rating of A. Sum of
Slide 22: Corporate Sustainability
CORPORATE SUSTAINABILITY 2025 Investor Presentation 22
Slide 23: Mission, Vision & Values
M I S S I O N , V I S I O N & VA L U E S Mission Mission: To deliver insurance products and services that offer the greatest value in the most challenging markets. Innovation Integrity Claims Mission: Provide We are on constant quest to Doing the right thing even find better ways to do things when n
Slide 24: Additional Information
ADDITIONAL INFORMATION EMAIL: investors@heritagepci.com WEBSITE: investors.heritagepci.com 2025 Investor Presentation 24
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