HRTG Stock Forecast & Price Target

Heritage Insurance Holdings Inc reported a statutory surplus of $352 million, reflecting an increase of $66 million over the year. The company achieved new business of $36 million in the quarter, representing a significant 166% year-over-year growth, largely driven by the Florida market. With premiums-in-force totaling $1.4 billion, up 1% year over year, and the achievement of rate adequacy across its markets, Heritage Insurance is positioned for steady growth in policy count in the low-to-mid-single-digits.

Heritage Insurance Holdings Inc. has demonstrated a concerning decline in its financial metrics, with net premiums earned decreasing by 2% year-over-year, a shift from previous growth, largely attributed to higher ceded premiums. Additionally, while the company's net combined ratio improved significantly from 100.6% to 72.9%, the net expense ratio remains elevated at 34.6%, exceeding internal expectations and reflecting potential inefficiencies. Furthermore, the substantial reduction in the legal department's staffing, which has halved from its peak, suggests challenges in managing operational backlogs, and there are indications that residential rates in Florida may be poised to decline, negatively impacting future revenue streams.