Heritage Insurance Posts $51.1 Million Third-Quarter Profit Despite Catastrophe Losses

Key Facts

Heritage Insurance reported net income of $51.1 million in the third quarter of 2026, compared with $50.4 million in the same period a year earlier, despite incurring $15.8 million in catastrophe losses before tax, according to the company’s statement published on October 28. Diluted earnings per share rose 5.5% to $1.72 from $1.63 a year earlier. Chief Executive Ernie Garateix said the results showed “earnings resilience” as the company absorbed higher weather losses and delivered modest growth in earnings per share. Revenue increased 3.2% to $219.2 million from $212.5 million. Revenue growth came as net premiums earned and investment income increased, while premiums in force and gross premiums written declined.

Earnings per share grew faster than net income, helped by a 4.0% decline in diluted shares outstanding compared with the same quarter of 2025. For the nine months ended September 30, net income was $149.3 million, up 15.8% from $128.9 million in the corresponding period. Diluted earnings per share for those months reached $4.94, up 18.5% from $4.17. The figures show that improved profitability extended beyond the latest quarter, while weather and catastrophe losses continued to affect quarterly results. The net loss ratio rose 1.3 percentage points in the quarter to 39.6% from 38.3% a year earlier, as catastrophe and weather losses increased.

The company said favorable prior-year reserve development of $14 million offset much of the impact of weather and catastrophe losses on the loss ratio. In underwriting, gross premiums written fell 3.1% to $322.8 million from $333.2 million. The company attributed the decline in part to lower commercial residential premiums. Meanwhile, net premiums earned rose 5.4%, benefiting from a reduction in premiums ceded to reinsurers. Premiums in force totaled $1.40 billion, down 2.8% from $1.44 billion in the third quarter of 2025, which the company attributed mainly to commercial residential rate reductions driven by price competition.

Premiums ceded to reinsurers fell 11.8% to $147.2 million from $166.8 million in the year-earlier quarter. The company linked the decline to improved pricing for its catastrophe excess-of-loss program in June 2026, alongside a reduction in reinsurance share in the Northeast. The filing said the catastrophe reinsurance arrangement generated expense savings of $63.2 million during the agreement year. At the same time, net investment income rose 17.3% to $11.4 million from $9.7 million. Cash and invested assets totaled $1.4 billion on September 30, up 8.8% from December 31, 2025.

Results exceeded analyst estimates reported by Reuters via Investing.com: diluted earnings per share came in at $1.72, versus an estimate of $0.93, and revenue was $219.2 million, compared with forecasts of $217.06 million. The stock rose 7.54% to $37.35 in after-hours trading on October 29, according to the same report. The company’s shares closed at $36.14 that day, according to EL7 data. Garateix said the company would not pursue underpriced business, adding: “We will not chase underpriced business, and that will not change.” This approach places pricing pressure in commercial residential insurance alongside the maintenance of underwriting standards among the key subjects covered in the company’s statement and earnings call.

The board announced a new share repurchase program of up to $50 million on October 28. It will begin after the current program ends on December 31, 2026, and run through December 31, 2027. Reuters via Investing.com also reported that management expects pricing pressure in Florida commercial residential insurance to continue, with renewal rates reduced by between 10% and 18% in 2027. Management, meanwhile, pointed to growth opportunities in the Northeast, Hawaii and Texas. The company had announced that quarterly results would be released after the market close on October 28, followed by an investor call on October 29 at 9:00 a.m. Eastern Time. Price competition in commercial residential insurance remains a factor affecting renewal and pricing decisions described by management to investors.