Heritage Insurance Q3 2026 net income rises to $51.1 mn

Heritage Insurance Holdings (NYSE: HRTG), a US super-regional property and casualty insurer, reported third-quarter 2026 net income of $51.1 mn, compared with $50.4 mn a year earlier, maintaining underwriting profitability despite higher catastrophe and weather-related losses.

Diluted earnings per share increased 5.5% to $1.72 from $1.63, supported by a 4.0% reduction in diluted shares outstanding, primarily through stock repurchases.

• Heritage Insurance’s Q3 2026 net income increased 1.4% to $51.1 mn, while diluted earnings per share rose 5.5% to $1.72 despite $15.8 mn in catastrophe losses.
• Revenue increased 3.2% to $219.2 mn, supported by 5.4% growth in net premiums earned and a 17.3% increase in net investment income. The combined ratio remained stable at 73%.
• Nine-month net income rose 15.8% to $149.3 mn. Book value per share increased 42.9% year over year to $20.22, and Heritage announced a new $50 mn share repurchase program for 2027.

Total revenue rose 3.2% to $219.2 mn from $212.5 mn in the third quarter of 2025. Net premiums earned increased 5.4%, while net investment income grew 17.3%, offsetting lower fee income and realized investment gains.

The insurer recorded $15.8 mn in pre-tax catastrophe losses during the quarter, compared with no catastrophe losses in the corresponding period of 2025. Despite the additional claims burden, its net combined ratio remained largely unchanged at 73.0%, against 72.9% a year earlier.

For the nine months ended September 30, 2026, Heritage generated net income of $149.3 mn, an increase of 15.8% from $128.9 mn in the prior-year period. Diluted earnings per share rose 18.5% to $4.94 from $4.17.

Year-to-date revenue reached $646.1 mn, up 2.2% from $632 mn.

Heritage Insurance Q3 2026 earnings and underwriting performance

Heritage’s third-quarter net loss ratio increased 1.3 percentage points to 39.6% from 38.3%, reflecting higher catastrophe and weather-related claims. The increase was substantially offset by $14.0 mn of favorable prior-year reserve development, compared with $5.0 mn in the third quarter of 2025.

The net expense ratio improved to 33.4% from 34.6%, a reduction of 1.2 percentage points. Lower underwriting expenses relative to net earned premiums largely offset the deterioration in the loss ratio, keeping the combined ratio at 73.0%.

For the first nine months of 2026, the combined ratio improved by 3.9 percentage points to 72.9%, compared with 76.8% in the same period of 2025. The year-to-date loss ratio declined to 38.6% from 42.2%, while the expense ratio improved to 34.3% from 34.6%.

Heritage reported an annualized return on equity of 35.1% for the third quarter, compared with 49.2% a year earlier. For the nine-month period, annualized return on equity was 36.1%, down from 47.2%.

Stockholders’ equity at September 30, 2026, was 37.0% higher than a year earlier. Book value per share reached $20.22, representing growth of 23.4% from year-end 2025 and 42.9% from $14.15 at September 30, 2025.

The insurer also reduced its debt-to-capital ratio to 10.5%, compared with 15.3% in the prior-year quarter.

Heritage Insurance financial results for Q3 and nine months of 2026

The company’s reported results for the three and nine months ended September 30 were as follows.

Financial metric	Q3 2026	Q3 2025	9M 2026	9M 2025
Total revenue	$219.2 mn	$212.5 mn	$646.1 mn	$632.0 mn
Net income	$51.1 mn	$50.4 mn	$149.3 mn	$128.9 mn
Diluted EPS	$1.72	$1.63	$4.94	$4.17
Gross premiums written	$322.8 mn	$333.2 mn	$1.058 bn	$1.100 bn
Gross premiums earned	$352.8 mn	$362.0 mn	$1.057 bn	$1.069 bn
Ceded premiums	$147.2 mn	$166.8 mn	$451.1 mn	$477.9 mn
Net premiums earned	$205.6 mn	$195.1 mn	$606.4 mn	$591.5 mn
Ceded premium ratio	41.7%	46.1%	42.7%	44.7%
Net loss ratio	39.6%	38.3%	38.6%	42.2%
Net expense ratio	33.4%	34.6%	34.3%	34.6%
Net combined ratio	73.0%	72.9%	72.9%	76.8%
Annualized return on equity	35.1%	49.2%	36.1%	47.2%
Book value per share	$20.22	$14.15	$20.22	$14.15

The ceded premium ratio measures premiums transferred to reinsurers as a percentage of gross premiums earned. The net loss ratio represents net losses and loss adjustment expenses relative to net premiums earned.

The expense ratio includes policy acquisition costs and general and administrative expenses, net of ceding commission income. Adding the loss and expense ratios produces the combined ratio, a principal measure of property and casualty underwriting performance. A ratio below 100% generally indicates an underwriting profit.

Return on equity is calculated using annualized net income divided by average stockholders’ equity for the reporting period.

Gross written premiums decline amid competitive pricing in Florida

Heritage’s premiums-in-force totaled $1.40 bn at September 30, 2026, down 2.8% from $1.44 bn a year earlier.

Management attributed the decline primarily to lower commercial residential premiums resulting from increased pricing competition. In personal lines, a reduction in Florida premiums-in-force was more than offset by growth in other states.

Third-quarter gross premiums written decreased 3.1% to $322.8 mn from $333.2 mn. Commercial residential premium reductions were partially offset by expansion in personal lines.

For the nine-month period, gross premiums written declined 3.8% to $1.058 bn from $1.100 bn.

The Florida commercial residential insurance market remains highly competitive, according to Heritage. The company said it continues to require commercial residential business to meet its pricing and risk standards rather than pursue premium growth at the expense of underwriting returns.

Gross premiums earned decreased 2.5% to $352.8 mn in the third quarter, compared with $362.0 mn a year earlier, largely reflecting the contraction in commercial residential business.

For the first nine months of 2026, gross premiums earned declined 1.1% to $1.057 bn from $1.069 bn.

Despite lower gross earned premiums, Heritage recorded growth in net premiums earned, benefiting from reduced reinsurance costs and changes to its reinsurance arrangements.

Lower reinsurance costs support net premiums earned

Ceded premiums decreased 11.8% to $147.2 mn in the third quarter, compared with $166.8 mn a year earlier.

The reduction reflected a full quarter of savings from improved pricing on Heritage’s June 2026 catastrophe excess-of-loss reinsurance program, together with a reduction in its Northeast net quota share program effective December 31, 2025.

The catastrophe excess-of-loss placement generated treaty-year expense savings of $63.2 mn, with seven-twelfths of those savings scheduled for recognition during calendar 2026.

Lower ceded premiums more than offset the reduction in gross earned premiums. Net premiums earned increased 5.4% to $205.6 mn from $195.1 mn.

The ceded premium ratio declined by 4.4 percentage points to 41.7% from 46.1%.

During the first nine months of 2026, ceded premiums decreased 5.6% to $451.1 mn from $477.9 mn. The year-to-date ceded premium ratio improved to 42.7% from 44.7%.

Net premiums earned increased 2.5% to $606.4 mn for the nine-month period, compared with $591.5 mn in 2025.

Heritage’s reinsurance strategy remains focused on managing catastrophe exposure and earnings volatility while maintaining capacity to support selective underwriting growth.

The company also intends to expand relationships with its reinsurance partners as it pursues further geographic and product diversification.

Catastrophe losses reach $15.8 mn in the third quarter

Heritage recorded $15.8 mn in pre-tax catastrophe losses during the quarter, including $9.1 mn from Hurricanes Lala and Lowell and $6.7 mn from other catastrophe-related weather events, primarily the late-September Nor’easter.

Total net weather and catastrophe losses for the current accident quarter reached $33.6 mn, compared with $13.8 mn a year earlier. Net losses and loss adjustment expenses increased to $81.4 mn from $74.8 mn, a rise of $6.6 mn.

As a result, the quarterly net loss ratio increased to 39.6% from 38.3%. The additional catastrophe losses were partly offset by favorable development on prior-year loss reserves. Heritage recognized $14 mn of favorable prior-year loss development, compared with $5 mn in the prior-year quarter.

The company’s lower expense ratio further reduced the impact of increased claims on overall underwriting profitability.

Policy acquisition costs were relatively unchanged from the third quarter of 2025. General and administrative expenses increased 5.2%, reflecting higher employee compensation and related costs, partially offset by lower corporate insurance expenses, primarily due to a non-recurring premium refund.

The net expense ratio improved by 1.2 percentage points to 33.4%, allowing Heritage to report a combined ratio of 73.0%, only 0.1 percentage points above the prior-year quarter.

Investment income rises 17.3% as invested assets expand

Heritage’s net investment income increased 17.3% to $11.4 mn in the third quarter from $9.7 mn in the corresponding period of 2025. The increase was driven by a larger invested asset base.

Cash and invested assets totaled $1.4 bn at September 30, 2026, an increase of 8.8% from December 31, 2025.

Heritage maintained a conservative investment allocation focused on high-quality fixed-income securities, with asset durations closely matched to the company’s insurance liabilities.

Higher net premiums earned and investment income contributed to the 3.2% increase in quarterly revenue.

Those gains were partially offset by a $2.6 mn decline in other revenue, reflecting lower fee income, and a $2.8 mn reduction in net realized investment gains. Both items had been elevated in the prior-year quarter.

The effective income tax rate decreased to 24.5% from 26.2%, a reduction of 1.7 percentage points, primarily attributable to permanent tax items.

Heritage calculates its interim income tax provision using an estimate of the effective tax rate for the full year. The rate may fluctuate as earnings change and quarterly tax estimates are adjusted to reflect additional information.

Heritage expands capital returns with new $50 mn buyback program

Heritage continued repurchasing common stock during 2026, buying 1,101,508 shares at a total cost of approximately $27.9 mn through September 30.

During the third quarter alone, the company repurchased 100,000 shares for approximately $3.3 mn under its existing authorization.

At September 30, Heritage had $34.1 mn remaining under the program.

On October 28, 2026, the board of directors approved a new share repurchase program authorizing the purchase of up to $50 mn of common stock through December 31, 2027.

The new authorization is scheduled to begin after the existing program expires on December 31, 2026.

The repurchases contributed to the reduction in diluted shares outstanding, supporting earnings-per-share growth despite the relatively modest increase in quarterly net income.

Chief Executive Officer Ernie Garateix said the company had concentrated on underwriting profitability, capital strength and reducing volatility over several years.

Several years ago, we implemented a strategy of long-term sustainability which includes a focus on improving profitability, strengthening the balance sheet, and reducing volatility in our financial results. Today, we are generating record earnings, producing substantial capital and are positioned well to continue our momentum into the future.

Ernie Garateix, Heritage Insurance Chief Executive Officer

He added that Heritage’s geographic and product diversification gives the insurer flexibility to allocate capital across markets and distribution channels according to expected risk-adjusted returns.

“We believe Heritage has proven to be a stronger, better diversified and more resilient business, operating as a super-regional insurance carrier,” he said. Garateix also pointed to the company’s ability to sustain earnings despite increased catastrophe losses.

Our third quarter results demonstrate our earnings resilience as we absorbed higher weather losses and still modestly grew earnings per share.

Management believes Heritage’s current valuation does not fully reflect the company’s earnings capacity and progress in strengthening its business, a factor cited in its decision to repurchase more than one million shares during 2026.

Geographic expansion, AI analytics and selective underwriting growth

Heritage continues to pursue a strategy centered on underwriting profitability, capital allocation and diversification across products and geographic markets.

Management’s principal priorities include maintaining adequate insurance rates, applying selective underwriting standards and allocating capital to business offering attractive long-term risk-adjusted returns.

The company plans to expand in selected geographic markets while continuing to monitor risk concentrations and overall exposure.

Heritage has also identified artificial intelligence and other data analytics technologies as areas for further development, alongside improvements in customer service and claims management.

Its existing infrastructure and operating capabilities are expected to support expansion into additional markets, including its entry into Texas through the excess and surplus lines insurance market.

The insurer intends to evaluate further diversification and expansion opportunities over the next several years while maintaining underwriting discipline in markets experiencing greater pricing competition.

Garateix said Heritage’s broader geographic reach gives it greater flexibility to pursue selective growth without relaxing its profitability requirements.

“Additionally, our expanding geographic reach and the capabilities we have built position Heritage to capitalize on selective growth opportunities across our markets while remaining selective in areas where competition has intensified,” he said.

The company’s priorities remain focused on rate adequacy, disciplined risk selection, additional reinsurance capacity and capital deployment across markets where management believes long-term underwriting returns justify further expansion.