TAMPA,
Fla., May 18, 2023 /PRNewswire/ -- Heritage
Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the
"Company"), a super-regional property and casualty insurance
holding company announced today that it fully placed its 2023-2024
indemnity based, catastrophe excess-of-loss reinsurance program for
its statutory insurance subsidiaries, Heritage Property Casualty
Insurance Company, Narragansett Bay Insurance Company and Zephyr
Insurance Company.
Key points of the 2023-2024 catastrophe reinsurance program
include:
- Total consolidated cost of approximately $420.5 million,
accounting for 32% of March 31, 2023, premiums-in-force, one
point higher than the prior year cost which accounted for 31%
of March 31, 2022, premium-in-force.
- First event reinsurance tower exhaustion points of $1.3 billion for the Northeast, $1.1 billion in the Southeast and $870 million in Hawaii.
- The program includes $120 million
Northeast only limit and $115 million
of combined Northeast/Hawaii limit
from the 2023 catastrophe bonds issued by a Bermuda-domiciled special purpose vehicle,
Citrus Re Ltd., which provides multi-year reinsurance protection.
Both bonds received authorizations above the initial targeted
limits and at the lowest end of the pricing guidance. This is in
addition to the $100 million limit of
the 2022 in-force Northeast only catastrophe bond.
- The first event consolidated loss retention for the Southeast
and Hawaii of approximately
$40 million, and $30 million in the Northeast. Individual
insurance companies will be less given the use of our captive
reinsurance company, Osprey Re.
- Florida Hurricane Catastrophe Fund participation of 90%,
consistent with the prior year program.
- The entire program is indemnity based, with no parametric
covers.
- Includes the use of Reinsurance to Assist Policyholders (RAP)
program created by the Florida
legislature in 2022 and is expected to provide limit of
approximately $71 million at no cost
to the Company. The RAP program was deferred last year because our
2022-2023 placement was completed without this program.
"We are pleased to announce the completion and terms of our
2023-2024 CAT XOL reinsurance program," said Heritage CEO
Ernie Garateix. "We appreciate our
reinsurance partners' continued support and their recognition of
our efforts to provide the appropriate coverage for the market. We
expect rates to continue to increase and will take underwriting
actions within statutory guidelines to ensure long-term
profitability in the markets we serve. We will continue to seek
profitable opportunities while maintaining a balanced
portfolio."
Heritage's premiums-in-force of $1.3
billion as of first quarter 2023 represented a 10.9%
increase from first quarter 2022 due to continued proactive
underwriting and rate actions, despite a policy count reduction of
approximately 50,000 policies. The significant rating actions
resulted in an increase in average premium per policy throughout
the book of business of 5.9% from fourth quarter 2022, and 21.9%
over the first quarter 2022.
About Heritage
Heritage Insurance Holdings,
Inc. is a super-regional property and casualty insurance holding
company. Through its insurance subsidiaries and a large network of
experienced agents, the Company writes approximately $1.3 billion of gross personal and commercial
residential premium across its multi-state footprint.
Forward-Looking Statements
Statements in this
press release that are not historical facts are forward-looking
statements that are subject to certain risks and uncertainties that
could cause actual events and results to differ materially from
those discussed herein. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," "could," "would," "estimate," "or
"continue" or the other negative variations thereof or comparable
terminology are intended to identify forward-looking statements.
This release includes forward-looking statements relating to our
2023-2024 catastrophe reinsurance program, and our strategic
initiatives, including our risk diversification and selective
underwriting strategies, and their impact on our future financial
results and profitability. The risks and uncertainties that could
cause our actual results to differ from those expressed or implied
herein include, without limitation: the success of the Company's
underwriting and profitability initiatives; inflation and other
changes in economic conditions (including changes in interest rates
and financial and real estate markets), including changes that may
impact demand for our products and our operations; the impact of
macroeconomic and geopolitical conditions, including the impact of
supply chain constraints, inflationary pressures, labor
availability and the conflict between Russia and Ukraine; the impact of new federal and state
regulations that affect the property and casualty insurance market;
the cost of reinsurance, the collectability of reinsurance and our
ability to obtain reinsurance coverage on terms and at a cost
acceptable to us; assessments charged by various governmental
agencies; pricing competition and other initiatives by competitors;
our ability to obtain regulatory approval for requested rate
changes, and the timing thereof; legislative and regulatory
developments; the outcome of litigation pending against us,
including the terms of any settlements; risks related to the nature
of our business; dependence on investment income and the
composition of our investment portfolio; the adequacy of our
liability for losses and loss adjustment expense; our ability to
build and maintain relationships with insurance agents; claims
experience; ratings by industry services; catastrophe losses;
reliance on key personnel; weather conditions (including the
severity and frequency of storms, hurricanes, tornadoes and hail);
changes in loss trends; acts of war and terrorist activities; court
decisions and trends in litigation; and other matters described
from time to time by us in our filings with the Securities and
Exchange Commission, including, but not limited to, the Company's
Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and
Exchange Commission on March 13,
2023, and subsequent filings. The Company undertakes no
obligations to update, change or revise any forward-looking
statement, whether as a result of new information, additional or
subsequent developments or otherwise.
Investor Contacts:
Kirk
Lusk
Chief Financial Officer
klusk@heritagepci.com
Mike Houston
Lambert
HRTG@lambert.com
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SOURCE Heritage Insurance Holdings, Inc.