Heritage Insurance (HRTG) 2026 年第三季法說會：隨再保險成本下降，EPS 上升

重點摘要

• Heritage Insurance Holdings 公布 2026 年第三季淨利為 5,110 萬美元，高於去年同期的 5,040 萬美元。受惠於稀釋後流通在外股數減少 4%，稀釋後每股盈餘（EPS）成長 5.5% 至 1.72 美元。
• 由於分出保費下降 11.8%，淨已賺保費成長 5.4% 至 2.056 億美元。分出保費比率下降 4.4 個百分點至 41.7%，反映出 6 月再保險計畫帶來節約效果的第一個完整季度。
• 稅前巨災損失總計 1,580 萬美元，而當季氣候與巨災損失總額達 3,360 萬美元。儘管氣候損失較高，淨綜合比率仍大致維持在 73.0% 的穩定水準。
• 由於激進的定價策略，佛羅里達州的商業住宅有效保費年減約 16%，不過保單數量與保險價值均有所增加。管理層表示將繼續優先考慮承保報酬而非業務量。
• 每股淨值達 20.22 美元，年增 42.9%。股東權益為 5.991 億美元，長期債務對資本比率改善至 10.5%。
• 在重新開放的營運區域以及擴展至德州等市場的支撐下，管理層持續預期個人險保單數量將在 2027 年恢復成長。

核心財務數據

2026 年前九個月，淨利成長將近 16% 至 1.493 億美元。稀釋後每股盈餘成長 18.5% 至 4.94 美元，年化平均股東權益報酬率則為 36.1%。

業務與營運表現

本季包含 3,360 萬美元的當期意外季氣候與巨災損失，高於去年同期的 1,380 萬美元。其中包括來自颶風拉拉（Lala）和洛威爾（Lowell）的 910 萬美元、9 月東北風暴的 670 萬美元，以及 1,780 萬美元的非巨災氣候損失。Heritage 還認列了 1,400 萬美元的前幾年準備金有利發展，而 2025 年第三季為 500 萬美元。

6 月安排的再保險提供了超過 22 億美元的保額上限，並帶來約 6,300 萬美元的年化節約額。較低的分出保費有助於抵銷已賺毛保費的下滑，並推動淨已賺保費的成長。

佛羅里達州商業住宅業務仍是營收的主要壓力來源。隨著新產能與激進的定價影響費率，有效保費年減約 16%。該下滑反映的是定價因素而非基礎業務活動減少，因為保單數量與保險價值均有所成長。

在佛羅里達州以外地區，紐澤西州的商業有效保費在 2026 年成長約 12%。Heritage 亦報告了紐約州與夏威夷州的商業業務成長，最近並已進軍南卡羅來納州。該公司跨越 17 個州的營運版圖中，有超過一半的簽單保費來自佛羅里達州以外地區。

個人住宅險趨勢有所改善。Heritage 本季減少約 2,900 份個人險保單，不到去年同期減幅的一半。有效保費微幅增加，且每張保單的平均保費上升將近 5%。

Heritage 於 7 月簽發了首張德州的超額與剩餘險種（E&S）保單，並在當季簽發了 86 張保單。管理層預期短期貢獻仍將溫和，但在現有代理人關係的支援下，將德州視為長期成長機會。

管理層展望

隨著重新開放的營運區域與新市場擴大規模，管理層持續預期個人險保單數量將在 2027 年恢復成長。

針對佛羅里達州的商業住宅續保，管理層表示根據當前狀況，定價到 2027 年可能會再下降 10% 至 18%。儘管如此，該公司仍稱該業務處於獲利狀態，並指出儘管價格下降，損失率近期已趨於平穩。

管理層認為目前位於 41% 中段的分出保費比率是合適的年化預測率（run rate）。公司認為在下次再保險續保後有進一步下降的可能性，這可能有利於 2027 年下半年。

根據早期市場討論，管理層表示明年再保險定價可能會下降約 5% 至 7%，並可能穩定在 5% 至 8% 的降幅區間。管理層提醒，在 1 月 1 日續保後能見度應會提升。

在佛羅里達州商業定價壓力下，整體保費成長預計將維持相對溫和，處於個位數水準。管理層表示，由於代理人通路網路已就緒，德州的成長速度可能快於 Heritage 先前的加州擴展，但預期短期內不會有重大貢獻。

風險與關注事項

• 佛羅里達州商業住宅定價持續面臨新產能與激進競爭的壓力。
• 隨著較新進的承保公司從轉移承保活動（takeout activity）擴展至自願性業務，佛羅里達州個人險的競爭可能會在 2027 年加劇。
• 如單季氣候與巨災損失增加所示，氣候波動性依然相當顯著。
• 利率上升增加了固定收益投資組合的累積其他綜合損失，不過管理層將未實現損失歸因於利率而非信用品質。
• 未來的再保險節約額仍取決於市場產能、風暴活動與續保定價。

分析師問答重點

管理層表示，非巨災氣候損失主要反映了較小的冰雹與風暴事件，其中包括東北部略低於 600 萬美元的損失，以及東南部（主要是佛羅里達州）略多於 1,200 萬美元的損失。

關於東北部的擴展，該公司強調了紐約州、紐澤西州和夏威夷州的商業業務成長，以及南卡羅來納州的推出。佛羅里達州以外的個人住宅業務成長主要由東北部帶動，夏威夷州也有所貢獻。

關於 NBIC 年底的成數再保險（quota-share）續保，管理層表示近年來分出比例已降低約 5% 至 7%，並可能根據定價情況出現相近幅度的降低。

管理層預期颶風以賽亞斯（Isaias）帶來的損失有限，因為 Heritage 在彭薩科拉（Pensacola）和德斯廷（Destin）地區的風險曝露相對較低。

Heritage 在本季結束時擁有 5,800 萬美元的非管制現金、4.749 億美元的法定盈餘合計，以及 9,000 萬美元的可調度借款額度。今年以來股票回購總計約 110 萬股，金額為 2,790 萬美元，截至 2026 年 12 月 31 日授權額度尚剩餘 3,410 萬美元。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good morning, and welcome to the Heritage Insurance Holdings Third Quarter 2026 Earnings Conference Call. Please note, today's event is being recorded. I would now like to turn the conference over to Kirk Lusk, Chief Financial Officer. Please go ahead.

Kirk Lusk

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

Today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations and subject to uncertainty and changes in circumstances. In our earnings press release and our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, and we have no obligation to update any forward-looking statements we may make.

For a description of the forward-looking statements and the risks that could cause our results to differ materially from those described in the forward-looking statements, please refer to our annual report on Form 10-K earnings release and other SEC filings. Our comments today will also include non-GAAP financial measures. The reconciliations of, and other information regarding these measures can be found in our press release.

With me on the call today is Ernie Garateix, our Chief Executive Officer.

I'll now turn the call over to Ernie.

Ernesto Garateix

Thanks, Kirk, and good morning, everyone. Over the last several years, we have taken deliberate steps to improve our profitability, reduce volatility and build a more diversified and resilient company. After a quiet storm season last year, the third quarter brought catastrophe activity, including 2 hurricanes in Hawaii and the Northeastern.

As a result, we absorbed $15.8 million of pretax catastrophe losses compared with none in the third quarter of last year and still grew diluted earnings per share to $1.72, up from $1.63 in the year ago quarter. Net income was $51.1 million, up slightly from last year's $50.4 million. Through the first 9 months of the year, we have generated net income of $149.3 million, up nearly 16%, while diluted earnings per share increased 18.5% to $4.94.

Our annualized return on average equity was 36.1% year-to-date and book value per share reached $20.22, up almost 43% from a year ago. Three elements of our strategy contributed to the quarter's results, underwriting discipline, diversification and our reinsurance program. First, our underwriting discipline. Excluding catastrophes, weather and prior year development, our loss ratio improved by nearly 4 points in the quarter. This improvement came despite significant pricing pressure in Florida's commercial residential market, which I'll discuss shortly. It reflects years of disciplined rate setting, risk selection and claims management as well as Florida's improved legal environment. Second, diversification.

Heritage is a super regional carrier with a diverse portfolio of policies across 17 states. We write business on a surplus lines basis in 5 states. More than half of our premium is written outside of Florida, including other states in the Southeast, the Northeast, the Mid-Atlantic, Hawaii and our excess and surplus line platforms. That diversification has made our earnings more durable while also providing more flexibility to allocate capital towards markets and products where we see the most attractive risk-adjusted returns.

Third, our reinsurance program. The program we placed in June with more than $2.2 billion of limit and approximately $63 million of annualized savings is working as intended. It lowered our cost of protection while keeping our net retention at a manageable level. The third quarter was the first full quarter of those savings, and our ceded premium ratio fell to 41.7% from 46.1% a year ago.

Now let me turn to market conditions, starting with the Florida commercial residential market because it is the biggest moving part of our top line this quarter. The market has become very competitive with new capacity and aggressive pricing. This has pressured our commercial premium in force, down about 16% from a year ago, even though our policy count and insured values are up. That tells you the decline in premium is being driven by price, not a reduction in the underlying business we are writing. We have been very clear on these earnings calls. We will not chase underpriced business, and that will not change. We have walked away from accounts where the price no longer supports an adequate return, and we will continue to do so.

I believe our geographic reach, which provides us with numerous opportunities to grow our commercial and personal residential business in markets where pricing and returns remain attractive is undervalued. We are selectively adding new territories outside of Florida to expand our commercial product offering. This includes product offerings on an admitted as well as surplus lines basis. In New Jersey, for example, our commercial premium in-force has grown about 12% this year. Turning to the personal residential market. Trends continue to move in the right direction as the pace of policy count decline has slowed substantially.

In the third quarter, we lost roughly 2,900 personal lines policies, less than half the decline of a year ago. Premium in-force is up slightly and average premium per policy is up almost 5%. Nearly all of our territories are open for new business and agents in reopened markets continue to tell us they want to place more business with Heritage. Based on those trends, we continue to expect a return to personal lines policy count growth in 2027. We are also beginning to leverage our platform and capabilities in new markets. In Texas, we wrote our first excess and surplus lines policy in July and 86 policies written during the quarter.

While it is still early and the contribution will be modest this year, the reception from agents has been strong. We believe Texas represents another attractive long-term growth opportunity where we can leverage our underwriting expertise and existing agent relationships while continuing to expand our geographic reach. Turning to capital. Our position has never been stronger. We ended the third quarter with shareholders' equity of $599 million and a debt-to-capital ratio of 10.5% Year-to-date, we have repurchased about 1.1 million shares for $27.9 million, representing roughly 3.6% of shares outstanding at the start of the year, and we have $34.1 million remaining under our current authorization.

Looking forward, our priorities are unchanged. First, we will continue to invest in profitable organic growth as our reopened territories and new markets scale. Second, we will continue to repurchase shares when we believe our stock trades below intrinsic value. Third, we will maintain a strong balance sheet that allows us to absorb weather events without changing course. In closing, we delivered solid earnings and continued book value growth in the third quarter with weather activity returning to a level higher than last year. We are confident in the path ahead and remain focused on disciplined underwriting, smart capital allocation and building long-term value for our shareholders. I want to thank our employees, especially our claims team, who supported policyholders through this storm season, along with our agents, reinsurance partners and shareholders.

Kirk, back to you.

Kirk Lusk

Thank you, Ernie, and good morning, everyone. For the third quarter, Heritage reported net income of $51.1 million or $1.72 per diluted share compared with $50.4 million or $1.63 per diluted share in the prior year quarter. Despite the higher level of weather activity, as Ernie discussed, diluted earnings per share increased 5.5%, aided by a 4% reduction in diluted shares outstanding from our share repurchase program.

For the first 9 months of 2026, net income was $149.3 million or $4.94 per diluted share compared with $128.9 million or $4.17 per diluted share a year ago. The annualized return on average equity was 35.1% for the quarter and 36.1% year-to-date. The quarterly figure is lower than last year's 49.2% at the third quarter of 2025 because average equity is more than 40% higher, not because of a decline in earnings. Total revenue increased 3.2% to $219.2 million from an increase in net earned premiums and investment income.

Net realized gains and losses included a nonrecurring $2.7 million gain in the prior year quarter, which had a negative comparable impact on revenue in the current quarter. Gross premiums written were $322.8 million, down 3.1%, primarily reflecting lower Florida commercial residential premium, partially offset by growth in personal lines and non-Florida commercial markets. Gross premiums earned were $352.8 million compared with $362 million in the year ago quarter.

Ceded premiums declined 11.8% to $147.2 million, reflecting the first full quarter of savings from our June catastrophe excess of loss program and the reduction of our Northeast net quota share at year-end 2025. The ceded premium ratio was 41.7%, down 4.4 points from a year ago. As a result, net premiums earned increased 5.4% to $205.6 million. Net investment income rose 17.3% to $11.4 million, driven by a larger portfolio as average cash and invested assets were about $185 million higher than a year ago. Cash and invested assets totaled $1.4 billion at quarter end, and the fixed income portfolio has an average duration of 3.3 years and remains high quality.

Net losses and loss adjustment expense were $81.4 million compared with $74.8 million in the prior year quarter, and the net loss ratio was 39.6% compared with 38.3% in the prior year quarter. Current accident quarter weather and catastrophe losses totaled $33.6 million compared with $13.8 million a year ago. That included $9.1 million from Hurricanes Lala and Lowell and $6.7 million from the September Nor'easter, along with $17.8 million of non-catastrophe weather. Those losses were largely offset by favorable development. We recognized $14 million of net favorable prior year reserve development compared with $5 million a year ago in the third quarter.

The development is spread across several accident years and continues to reflect stable frequency, manageable severity and claims closing below our expectations. We consider that a strong result, especially given the pricing pressure in the Florida commercial residential market. The net expense ratio improved 1.2 points to 33.4%. Policy acquisition costs were essentially flat at $45.1 million as lower premium volume offset by $1.2 million of lower ceding commissions from the reduced net quota share. General and administrative expenses rose 5.2% to $23.5 million, reflecting higher comp and related expenses and temporary staffing, partially offset by a nonrecurring $1 million refund of corporate reinsurance premium.

The net combined ratio was relatively flat at 73% compared to 72.9% in the prior year quarter despite the higher net loss ratio of 1.3%. The effective tax rate was 24.5% compared to 26.2% in the prior year quarter, reflecting the level of pretax income and permanent items. Shareholders' equity was $599.1 million at September 30, and book value per share was $20.22, up 23.4% from year-end and up 42.9% from a year ago. The increase from year-end reflects strong earnings, partially offset by $27.9 million of share repurchases and $22.7 million increase in accumulated other comprehensive loss, net of tax, representing higher unrealized losses on the fixed income portfolio.

Those unrealized losses are driven by rising interest rates, not credit, and we expect them to reverse as securities mature since we do not anticipate selling investments prior to maturity. During the quarter, we purchased 100,000 shares for $3.3 million, bringing year-to-date repurchases to 1,101,508 shares for $27.9 million. We have $34.1 million remaining under our authorization, which runs through December 31, 2026. Long-term debt was $70.4 million, down $8 million since year-end. Our long-term debt-to-capital ratio improved to 10.5% from 15.3% a year ago. We also continue to have $75 million of undrawn delayed draw term loan capacity as well as $15 million available on our revolving credit facility.

Nonregulated cash at quarter end was $58 million and combined statutory surplus was $474.9 million compared with $439.4 million at June 30. To summarize, we delivered solid earnings in a quarter with more normal weather activity, grew book value per share, returned capital to shareholders and further strengthened the balance sheet. As we head into year-end, we are well capitalized. Our reinsurance program is in place through May of 2027, and we see attractive opportunities to continue our progress.

Operator, we are now ready to take questions.

Operator

[Operator Instructions] The first question comes from Karol Chmiel with Citizens.

分析師問答

Karol Chmiel

I got 2 questions. First one regarding the weather losses, it was a total of $33.6 million, I believe, total and of which only $15.8 million were the actual cat losses in Hawaii and the Northeast. So I'm just wanting to know, can you give more color on the balance of the weather losses outside of the cats?

And then maybe you can help define those losses and how you define them internally?

Kirk Lusk

Yes. Those are just typically much smaller events. And we had about probably $6 million, just under $6 million in the Northeast and a little over like $12 million in the Southeast, predominantly in Florida. And so those are just smaller storms, either hail, wind, that stuff where we just have some smaller losses.

Karol Chmiel

Okay. So it's a compilation of different losses throughout the East Coast. Okay. And then just my second question would be just the growth comment that Ernie made regarding New Jersey. Is there any more that you want to maybe share about your growth in the Northeast?

Ernesto Garateix

Yes. So that comment was specifically to the commercial lines. We made the comment about where Florida is and the aggressive pricing and the competition there. So we've been growing with the commercial book in other regions such as New York, New Jersey, Hawaii and just launched South Carolina as well.

Karol Chmiel

Okay. And then just lastly, just in general, because I think there was a comment in the press release that personal residential is offsetting the pressures of the Florida commercial residential. Is there any particular region that you want to maybe mention that is contributing to that balance?

Kirk Lusk

I mean it's mostly the Northeast, but the Hawaii did have a little bit of impact there also.

Operator

The next question comes from Mitchell Rubin with Raymond James.

Mitchell Rubin

This is Mitch on for Greg. Congrats on the quarter. What rate changes are you achieving on Florida commercial residential today? And how does that compare with earlier in the year?

Kirk Lusk

The retention rates are in the mid-80s, and they're actually above where they were previously. So it's improved slightly. Although I must admit, when we look going forward, we are expecting it to not climb significantly from where it is just from a retention standpoint. Our new business has been strong, and we actually expect possibly that we can pick up a little bit more on the new business side.

Mitchell Rubin

I'm sorry, I was looking for the renewal rate, not retention.

Kirk Lusk

The renewal rate -- the price rate.

Mitchell Rubin

Yes.

Kirk Lusk

Yes. Okay. I mean we're expecting that to continue to decrease. I think that if we look kind of into next year, I think that you could be looking at another 10% to 18% based upon kind of what we're seeing right now. We're hoping it holds a little bit more.

One of the things that we are seeing, which is very favorable to that book of business is even with the price decreases, we are not seeing much of an increase in the loss ratio. It did creep up a little bit a couple of quarters, but it seems to be leveled off. And so therefore, even with the price decreases, it is a profitable book of business.

Mitchell Rubin

Makes sense. As you approach NBIC's year-end quota share renewal, how are you thinking about your target session level?

Kirk Lusk

We've been dropping that in the last couple of years by anywhere from 5% to 7%. And based upon pricing, I think that we probably look at something comparable.

Operator

The next question comes from Maxwell Fritscher with Truist.

Maxwell Fritscher

I am calling in for Mark Hughes. I'm sorry if I missed this in the prepared remarks, but are there any early indications on losses from Hurricane Isaias earlier this month?

Ernesto Garateix

Yes. So to begin with, we don't have a lot of exposures up there. Just to give you kind of a perspective, we did go up there in the Pensacola Destin area. We had a hurricane cat team there. They had 2 insurance villages. One was closed down. This destin was closed down within 3 days. Pensacola last a little bit longer, but we don't expect a lot of losses from that area just because we don't have a lot of exposures there.

Maxwell Fritscher

Great. And then what are your thoughts more broadly around top line trajectory, puts and takes with the Florida commercial pricing? Are you expecting that to inflect positively in gross premiums written in 4Q? And then should we expect any material contribution from the Texas product in '27?

Kirk Lusk

I hesitant to say it's going to be material, but I think it is going to be positive over a period of time. I think that when we look at it, it's -- historically speaking, it took us about 4 years to get to $40 million of premium in California. I would expect Texas has the potential to grow a little faster than that because we already had a distribution network there of existing agents.

So I think that, that could accelerate a little further. I think that when we look at some of the price decreases, some of the competitive pressures, that type stuff, I mean I think our growth is going to be relatively minor. So we're talking about into the single digits.

Maxwell Fritscher

And then on the ceded premium ratio, how do you expect that to trend as premiums grows mid-41s? Is that a good run rate? Or would you expect that to go any lower?

Kirk Lusk

I think that's a good run rate. I think that we'll see what the renewal looks like next year. I think that there's a good possibility it could be down a little further next year. So that would have a favorable impact towards the second half of next year.

Operator

The next question comes from Cam Bianchi with Piper Sandler.

Cameron Bianchi

This is Cam on for Paul. Congrats on the quarter. Curious if you could elaborate on any incremental competition in the Florida personal market, if any?

Ernesto Garateix

I'm sorry, it was competition on the personal lines market?

Cameron Bianchi

Yes, yes, in Florida.

Ernesto Garateix

Yes. So again, in Florida, we have seen more competition come in over 20 new companies over the last 2 years. Most of those companies have been focused on the takeout. We have not done a takeout since 2018. But what we do expect into '27 is some of those start to write new voluntary business out there.

So we're starting to see some of these new companies out there, which again is why our focus has been on the diversification launch into Texas and expanding our product lines through our geographic footprint.

Cameron Bianchi

Got it. And then on your footprint outside of Florida, what geographies do you find to be most attractive at this point in time? And where are you seeing the most growth outside of Florida?

Ernesto Garateix

Yes. So it is pretty spread, again, attractive in the Northeast where we are rate adequate. The Northeast, New York, New Jersey and Connecticut has been growing for us. Hawaii is rate adequate as well. They've seen some growth out there as well.

So we're pretty optimistic about the entire footprint and where we're at. The one thing is we will remain underwriters and make sure that, again, that we're getting pricing where it's attractive based on risk return.

Cameron Bianchi

Got it. Just one more for me. It looks like you're prioritizing profitability over growth in commercial residential. What would it take for the tides to change in that market from a growth perspective?

Ernesto Garateix

Yes. It's a great question in the sense that there are new entrants into that market. And again, there's going to be -- my opinion, would be some external market conditions that would change, whether that's an event, whether that's reinsurance pricing. But again, we remain disciplined and become underwriters first and foremost and understand what that risk return is going to be out there.

And I think the agents have valued that. Our PIP count is actually up even given some of the pricing being down.

Operator

The next question comes from Brendan McCarthy with Sidoti & Company.

Brendan Michael McCarthy

I just have a quick question on the reinsurance savings. I think you outlined about $63 million in reinsurance savings secured this year. What kind of runway for additional savings do you see in 2027 and beyond? And maybe kind of touch on what markets are driving those savings?

Kirk Lusk

Okay. I think that right now, what we're hearing is that because of the lack of storms, some additional capacity coming into the marketplace, I mean, I think we're hearing it could be down anywhere from a minus 5% to minus 7% next year. And based upon the trend, I mean, it's possible it could be higher than that. I think that most people are looking for -- hopefully, it's going to stabilize a little bit around that minus 5% to minus 8%, which would then help us again a little bit more next year.

To give you an idea, this year was -- the reduction was up around 20%. So therefore, that's why it was the larger number. So we would expect a decrease next year, but not to the same extent as this year.

Ernesto Garateix

Yes. And we would expect after the 1/1 renewals to get a better idea of that. So we're still a little early in the stages, but having discussions with reinsurers as we speak.

Operator

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

Ernesto Garateix

Yes. We'd like to thank you for joining the call. I hope everyone has a great day.

Operator

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