Heritage Insurance Reports $48M Net Income in Q2 2025, Driven by Reduced Losses

Heritage Insurance Holdings, Inc. reported a significant increase in financial performance for the second quarter of 2025, with net income reaching $48.0 million, or $1.55 per diluted share, compared to $18.9 million, or $0.61 per diluted share, in the same period last year. This growth was primarily driven by a 28.6% reduction in losses and loss adjustment expenses (LAE), which fell to $75.6 million from $105.9 million, alongside a 3.2% increase in net premiums earned, totaling $196.3 million. The company’s total revenue for the quarter was $208.0 million, reflecting a 2.2% increase from $203.6 million in the prior year.

In terms of operational metrics, gross premiums written decreased by 3.2% to $411.0 million, down from $424.5 million in the previous year. The decline was attributed to strategic exposure management in personal lines, although the company anticipates a reversal of this trend by the end of 2025. The ceded premium ratio improved to 44.5%, down from 45.6%, indicating a favorable shift in reinsurance costs. The net loss ratio also saw a significant improvement, decreasing to 38.5% from 55.7% in the prior year, reflecting lower weather-related losses and favorable reserve development.

Heritage Insurance has been actively managing its portfolio and strategic initiatives, focusing on generating underwriting profit through rate adequacy and selective underwriting. The company has also been expanding its geographic footprint, particularly in Florida, where it plans to grow modestly in 2025. The total insured value across all states decreased by 4.7% to $365.0 billion, driven by a reduction in policies in force, particularly in Florida, which saw a 10.4% decline in policies.

On the balance sheet, total assets increased to $2.54 billion as of June 30, 2025, up from $2.47 billion at the end of 2024. The company reported a decrease in unpaid losses and LAE to $713.2 million, down from $1.04 billion, primarily due to claims payments related to Hurricanes Ian and Milton. Total shareholders' equity rose to $383.3 million, an increase of $92.5 million, largely due to the net income generated during the first half of the year.

Looking ahead, Heritage Insurance remains focused on maintaining its financial strength and operational efficiency while navigating the challenges posed by inflation and competitive market conditions. The company is committed to leveraging data analytics to enhance underwriting practices and improve customer service, positioning itself for sustainable growth in the evolving insurance landscape.