HRTG · Heritage Insurance Holdings, Inc.

Heritage’s Q1 2026 results reflect strong execution of its multi-year strategic profitability initiatives—rate adequacy, selective underwriting, and capital allocation to high-return geographies and products. The 3.5-point improvement in net combined ratio to 81.0% was primarily driven by a 3.8-point decline in net loss ratio to 45.9%, attributable to lower net attritional losses, favorable prior-year development ($8.2M), and reduced catastrophe losses ($24.4M vs. $31.8M YoY), even with $36.7M in weather-related losses. Investment income rose 15.1% to $9.9M due to higher invested assets, while expense ratio increased modestly to 35.2% amid higher human capital costs. Book value per share grew 4.6% sequentially to $17.15, though ROAE declined to 28.5% (from 39.3% YoY) due to a 65.5% increase in average equity—reflecting retained earnings and capital strength rather than dilution. Management emphasized geographic re-opening (over 90% of territories now open), product expansion (four new Q1 products, Texas entry pending), and disciplined growth: new business written rose 62.7% YoY. The Board’s replacement of the $25M repurchase program with a $50M authorization signals continued confidence in capital generation and strategic flexibility. With no forward guidance disclosed, investors should focus on the sustainability of underwriting discipline amid competitive Florida commercial residential conditions and the execution timeline for Texas market entry and H2 product launches.