Heritage Insurance Holdings, Inc., a supra-regional property and casualty insurance holding company, reported its most profitable first quarter on record, with net income of $36.5 million in 1Q26, an increase of 19.7% from $30.5 million in the same period last year.
The company attributed the increase in net income to higher investment income and lower losses, partially offset by higher general and administrative expenses.
Gross premiums decreased 2.6% to $346.7 million in 1Q26 from $356.0 million in 1Q25, primarily due to a decrease in commercial residential business, partially offset by an increase in personal lines gross premiums.
Gross premiums were basically consistent with the same period last year, declining slightly from US$353.8 million to US$353.6 million.
Likewise, net premiums remained relatively stable year over year, declining slightly from $200 million to $199.7 million.
Total revenue was relatively flat at $212.7 million, compared with $211.5 million a year earlier.
Heritage’s net combined ratio improved 3.5 percentage points to 81.0% from 84.5%, driven by a lower net loss ratio, partially offset by a higher net expense ratio.
The net loss ratio fell from 49.7% to 45.9% due to lower net losses and LAE and relatively stable net premium income.
Meanwhile, net expense ratio increased to 35.2% from 34.8%, primarily due to higher human capital-related costs, partially offset by lower policy acquisition costs.
Net investment income increased 15.1%, from $8.6 million to $9.9 million, primarily due to an increase in investment asset balances.
Ernie Garateix, CEO of Heritage, said, “Our first quarter was the company’s most profitable first quarter since going public in 2014. Our net loss margin was also the lowest first quarter since 2015, despite weather-related losses of $37 million in the quarter. These results stem from the consistent application of the strategic profitability plan we developed several years ago, which focuses on rate adequacy and underwriting discipline, allocating capital to products and geographies that maximize long-term returns, and in a balanced and diversified portfolio.”
“With the implementation of our strategic initiatives, we have reopened more than 90% of our regions because their rates are adequate and the quality of business has improved greatly through our rigorous underwriting program. This strategy is bearing fruit, with new underwriting business increasing 62.7% compared with the first quarter of 2025 and 30.0% compared with the fourth quarter of 2025. Above. We have expanded our business scope, added products, enhanced our data analysis, and demonstrated our ability to execute in severe weather. With our capabilities and financial strength, we are also well-positioned to capitalize on any market disruption or emerging opportunities, and we will focus on evaluating and allocating capital to profitable products or geographies, and we have the ability to expand organically or value-added business opportunities.”
