TAMPA, Fla. - Heritage Insurance Holdings, Inc. (NYSE:HRTG), a leading property and casualty insurance provider, today announced a significant beat on fourth quarter earnings, with a reported EPS of $1.15, surpassing the analyst estimate of $0.46 by $0.69.
Revenue also exceeded expectations, coming in at $187 million, higher than the consensus estimate of $185.11 million. The company's stock surged over 18% following the announcement, signaling a strong market response to the earnings and revenue beat.
The company's fourth quarter performance marked a substantial improvement from the same quarter last year, with net income rising from $12.5 million to $30.9 million. This increase was primarily attributed to a 7.0% increase in gross premiums earned, which totaled $339.6 million, up from $317.3 million in the prior year quarter. Net premiums earned also grew by 6.9% to $177.7 million. The net loss ratio saw an 11.4 point improvement, dropping to 51.0% from 62.4% in the prior year quarter, reflecting the company's effective management of reinsurance costs and lower claims related losses.
CEO Ernie Garateix credited the company's strategic focus on achieving rate adequacy and superior underwriting results for the strong quarter. "Our deliberate efforts over the past two years resulted in a better quality and more diversified book of business," Garateix said. He also highlighted the company's commitment to enhanced relationships with reinsurers and a recent capital raise as positioning Heritage for selective growth going forward.
Despite a 15.0% intentional decline in personal lines policies-in-force and a 6.9% decline in personal lines total insured value (TIV) compared to the prior year period, the company's disciplined approach to underwriting and exposure management has paid off. The commercial residential business saw a significant increase, with premiums in force up by 63.9% year-over-year, contributing to the company's underwriting income and return on equity.
Heritage's strong fourth quarter results and positive outlook for the future reflect the company's focus on profitability and strategic growth. With a solid foundation and a clear strategic direction, Heritage Insurance appears well-positioned to maintain its momentum across its multi-state platform.
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