Heritage Insurance Holdings Inc 2024年度报告

Heritage Insurance Holdings, Inc.1401 N Westshore Blvd,Tampa, Florida 33607 April 25, 2025 Dear Shareholders, Before I provide commentary on our posi∞ve results for 2024, I must acknowledge the numerousdestruc∞ve hurricanes that impacted communi∞es across the Southeastern United States and thedevasta∞ng wildfires affec∞ng residents of California through the first quarter of 2025.Our thoughtscon∞nue to be with those impacted by these devas∞ng catastrophes that have resulted in significantdamage and loss to residents. I would like to thank our employees, many of whom themselves wereimpacted by the hurricanes, for their incredible effort during these challenging∞mes. The commitmentthat our employees provided to our policyholders has been remarkable and is a testament to the customerservice culture at Heritage. I would also like to thank our shareholders for your con∞nued trust and beliefin our long-term vision and strategy. As we reflect on the past year, I am also very proud of our financial results, which clearly demonstrate thesuccessful execu∞on of our strategic ini∞a∞ves that I laid out when I was appointed CEO of Heritage justover four years ago. Our ini∞a∞ves have been focused on achieving rate adequacy, strengthening ourunderwri∞ng discipline, and alloca∞ng capital to drive growth and returns. Importantly, this is the first fullyear that we have seen clear, sustained results from our strategy that was designed to maintainprofitability while absorbing a full reten∞on loss. I am pleased to confirm that we have achieved this goal.During 2024, Heritage incurred $105.0 million of net catastrophe related costs on a pre-tax basis, whiledelivering earnings per diluted share of $2.01 and a return on equity of 24.1%. In fact, we absorbed a fullreten∞on loss in both the third and fourth quarters while maintaining our profitability in each period. Thisis a real valida∞on of the successful execu∞on of our strategic plan and provides op∞mism for the earningspower of the Company looking to the years ahead. While we have achieved both success and robust financial results through 2024, we are not standing s∞ll.In the second quarter of last year, we reached an inflec∞on point in our business having achieved rateadequacy in more than approximately 90% of our geographies, which posi∞oned our team to selec∞velyresume wri∞ng new personal lines business. This is a pivot of our strategy to one of controlled growthanchored by a con∞nued focus on risk management and stringent underwri∞ng. This is an opportune∞meto grow, given the disrup∞on in many of our markets. Addi∞onally, we expect to leverage our exis∞ng salesand marke∞ng teams that have largely been in place and will not require incremental general andadministra∞ve expense. Recent legisla∞ve changes in Florida have also had a posi∞ve impact on the economics of wri∞ng new,profitable business in the state. In fact, we have seen a marked decline in frivolous lawsuits and believethe impact of this necessary legisla∞on will also be favorable to the consumer. Star∞ng in the third quarterof 2024, we started wri∞ng new personal lines business again and I am op∞mis∞c with the growthprospects that lie ahead.We also expect the reinsurance market will see the tangible benefits of thislegisla∞on as Hurricane Milton claims mature through this year and into next year, which may have aposi∞ve impact on reinsurance pricing looking to our renewal in 2026. Taken together, we are in an enviable posi∞on as the rate ac∞ons that we have taken over the last severalyears con∞nue to earn through our book of business in 2025, combined with a gradual return to newpersonal lines business growth that we expect to modestly pick up through the second half of the yearand become more pronounced looking to 2026. While we return to growth, our focus remains steadfaston con∞nuing to execute on our strategic goals of genera∞ng underwri∞ng profit across all opera∞onalgeographies, maintaining rate adequacy, ensuring selec∞ve underwri∞ng, me∞culous but fair andcompliant claims handling, as well as providing products the market needs and fostering deeper long-termreinsurance rela∞onships. Importantly, our reinsurance partners con∞nue to provide support to Heritage and have been encouragedby our improved financial performance over the past year.Their support is cri∞cal to our long-termsuccess, and I would like to thank them for their partnership as we work to profitably grow our business. Looking to the future, I am filled with great op∞mism as we con∞nue to expand Heritage as a leading super-regional insurance company. We have spent the last several years diligently building the founda∞on tosupport our expansion and are now in a posi∞on to execute the next phase of our strategic plan. I couldnot be more excited for the year ahead. Thank you for your support and we look forward to sharing our progress and achievements as we con∞nuethis journey of growth and success. Sincerely yours, Ernie Garateix Chi