Oct 29, 2026 earnings call — Earnings, reinsurance, and Florida pricing
Heritage reported net income of 51.1 million and diluted EPS of $1.72 in Q3.
Revenue $0.2B (est $0.2B) · EPS $1.72 (est $0.93)
Key quotes
"The program we placed in June with more than 2.2 billion limit and approximately 63 million of annualized savings is working as intended."
"This has pressured our commercial premium in force 16% from a year ago."
"More than half of our premium is written outside of Florida, including other states in the Southeast, the Northeast, the Mid Atlantic, Hawaii, and our access and surplus line platforms."
Analyst Q&A 5
Weather losses and Northeast growth
Q (Karol Krzysztof Chmiel · Citizens): He asked for detail on the non-cat portion of the $33.6 weather loss and how those losses are defined. He also asked about growth in the Northeast and which region offsets Florida pressures.
A: Management said the non-cat losses were many smaller storms across the East Coast. They said about just under $6 million in the Northeast and a little over like $12 million in the Southeast, predominantly in Florida. They also said the commercial book has been growing in New York, New Jersey, Hawaii, and they launched South Carolina; personal residential strength is mostly in the Northeast with some impact from Hawaii.
"We have been growing with the commercial book in other regions such as New York, New Jersey, Hawaii, and just launched South Carolina as well." — Ernesto Jose Garateix CPCU (CEO)
Florida residential rates and quota share cession
Q (Mitch · Raymond James): He asked what rate changes the company is achieving on Florida residential now versus earlier. He also asked about the target cession level ahead of NBIC's quota share renewal.
A: Management said retention is in the mid-80s and slightly above prior levels, and new business has been strong. They said renewal pricing is expected to continue to decrease and that next year you could be looking at another 10% to 18% based on current trends. For the quota share cession they said they have been dropping it by anywhere from 5% to 7% over the last couple years and expect something comparable.
"I think that if we look kind of into next year, I think that you could be looking at another 10% to 18% based upon what we are seeing right now." — Kirk Howard Lusk (CFO)
Isaias losses, Texas growth, reinsurance level
Q (Axel · Truist): He asked if there are any early loss indications from Hurricane Isaias. He also asked whether Florida commercial pricing will boost gross written premiums in Q4 and whether the Texas product will materially contribute in 2027. He asked about the ceded premium ratio run rate mid-41s.
A: They said they have low exposure in the affected areas (Pensacola/Destin) and do not expect many losses. They said Texas is unlikely to be material in the near term but should be positive over time and could grow faster than California did; they expect growth into the single digits. On the ceded premium ratio they said mid-41s is a good run rate and it could be down a little further next year.
"I would expect Texas has the potential to grow a little faster than that." — Ernesto Jose Garateix CPCU (CEO)
Competition and growth outside Florida
Q (Cam · Piper Sandler): He asked whether there is incremental competition in the personal market. He also asked which non-Florida geographies are most attractive and where they see most growth. Finally, he asked what would make them prioritize growth over profitability in commercial residential.
A: They said in Florida over 20 new companies have entered in the last 2 years and most of those companies have been focused on the takeout; they have not done a takeout since 2018 but expect some entrants to write new business in 2027. Outside Florida they said the Northeast (New York, New Jersey, Connecticut) and Hawaii are attractive and growing. They said a change in external market conditions (an event or reinsurance pricing) would be needed to shift to growth over disciplined underwriting.
"Most of those companies have been focused on the takeout." — Ernesto Jose Garateix CPCU (CEO)
Runway for reinsurance savings
Q (Brendan · Sidoti & Company): He asked what runway exists for additional reinsurance savings in 2027 and beyond and which markets drive those savings.
A: They said because of a lack of storms and additional capacity entering the market, reinsurance pricing could be down anywhere from a -5 to -7 next year and many expect stabilization around -5% to -8%. They noted this year's reduction was around 20%, so next year is likely smaller than this year's change. They also said they will have a better idea after the 1/1 renewals and are actively discussing with reinsurers now.
"I mean, I think we are hearing it could be down anywhere from a -5 to -7 next year." — Kirk Howard Lusk (CFO)