# Heritage Insurance Holdings, Inc. (HRTG)

Informational only - not investment advice.

CIK: 0001598665
SIC: 6331 Fire, Marine & Casualty Insurance
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Insurance Carriers](/major-group/63/) > [SIC 6331 Fire, Marine & Casualty Insurance](/industry/6331/)
Latest 10-K filed: 2026-03-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=1598665
Filing source: https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-19 · accession 0001193125-26-115451 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001598665.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 847,330,000 USD | 2025 | verified |
| Net income | 195,594,000 USD | 2025 | verified |
| Assets | 2,195,822,000 USD | 2025 | verified |
| Free cash flow | 174,164,000 USD | 2025 | computed |
| Net margin | 23.08% | 2025 | computed |
| Operating margin | 31.53% | 2025 | computed |
| Revenue YoY | +3.71% | 2025 | computed |
| ROE | 38.71% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | HRTG | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 23.1% | 12.9% | 85 | 53 |
| Operating margin | 31.5% | 13.6% | 86 | 8 |
| Revenue growth | 3.7% | 9.4% | 23 | 53 |
| FCF margin | 20.6% | 19.9% | 54 | 36 |
| ROE | 38.7% | 15.9% | 98 | 53 |
| ROA | 8.9% | 3.9% | 88 | 53 |
| Liabilities / equity | 3.35 | 3.04 | 60 | 53 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6331 Fire, Marine & Casualty Insurance, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 847330000 | USD | 2025 | 2026-03-19 |
| Net income | 195594000 | USD | 2025 | 2026-03-19 |
| Assets | 2195822000 | USD | 2025 | 2026-03-19 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001598665.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 438,958,000 | 406,623,000 | 480,171,000 | 511,305,000 | 593,385,000 | 631,561,000 | 662,460,000 | 735,498,000 | 816,985,000 | 847,330,000 |
| Net income | 33,865,000 | -1,119,000 | 27,155,000 | 28,636,000 | 9,326,000 | -74,727,000 | -154,363,000 | 45,307,000 | 61,539,000 | 195,594,000 |
| Operating income | 56,765,000 | 49,535,000 | 69,536,000 | 49,567,000 | 10,185,000 | -68,064,000 | -157,361,000 | 63,215,000 | 93,610,000 | 267,151,000 |
| Diluted EPS | 1.14 | -0.04 | 1.04 | 0.98 | 0.33 | -2.69 | -5.86 | 1.73 | 2.01 | 6.32 |
| Operating cash flow | 82,955,000 | 7,489,000 | 96,338,000 | 119,657,000 | 170,211,000 | 60,130,000 | -34,260,000 | 70,415,000 | 87,095,000 | 182,238,000 |
| Capital expenditures | 1,621,000 | 385,000 | 2,281,000 | 4,984,000 | 755,000 | 1,007,000 | 8,557,000 | 9,890,000 | 8,230,000 | 8,074,000 |
| Share buybacks | 25,562,000 | 61,623,000 | 2,000,000 | 16,183,000 | 9,997,000 | 8,192,000 | 7,343,000 | 0.00 | 0.00 |  |
| Assets | 1,033,244,000 | 1,771,210,000 | 1,768,713,000 | 1,939,670,000 | 2,089,379,000 | 1,980,762,000 | 2,392,600,000 | 2,119,572,000 | 2,468,924,000 | 2,195,822,000 |
| Liabilities | 675,285,000 | 1,391,394,000 | 1,343,380,000 | 1,490,871,000 | 1,647,035,000 | 1,637,711,000 | 2,261,561,000 | 1,899,292,000 | 2,178,125,000 | 1,690,571,000 |
| Stockholders' equity | 357,959,000 | 379,816,000 | 425,333,000 | 448,799,000 | 442,344,000 | 343,051,000 | 131,039,000 | 220,280,000 | 290,799,000 | 505,251,000 |
| Cash and cash equivalents | 105,817,000 | 153,697,000 | 250,117,000 | 268,351,000 | 440,956,000 | 359,337,000 | 280,881,000 | 463,640,000 | 452,666,000 | 559,274,000 |
| Free cash flow | 81,334,000 | 7,104,000 | 94,057,000 | 114,673,000 | 169,456,000 | 59,123,000 | -42,817,000 | 60,525,000 | 78,865,000 | 174,164,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 7.71% | -0.28% | 5.66% | 5.60% | 1.57% | -11.83% | -23.30% | 6.16% | 7.53% | 23.08% |
| Operating margin | 12.93% | 12.18% | 14.48% | 9.69% | 1.72% | -10.78% | -23.75% | 8.59% | 11.46% | 31.53% |
| Return on equity | 9.46% | -0.29% | 6.38% | 6.38% | 2.11% | -21.78% | -117.80% | 20.57% | 21.16% | 38.71% |
| Return on assets | 3.28% | -0.06% | 1.54% | 1.48% | 0.45% | -3.77% | -6.45% | 2.14% | 2.49% | 8.91% |
| Liabilities / equity | 1.89 | 3.66 | 3.16 | 3.32 | 3.72 | 4.77 | 17.26 | 8.62 | 7.49 | 3.35 |

## As-reported value updates

3 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/HRTG/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001598665.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | -1.83 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.55 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.30 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 186,300,000 | -7,424,000 | -0.28 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 186,966,000 | 30,944,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 191,302,000 | 14,225,000 | 0.47 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 203,571,000 | 18,869,000 | 0.61 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 211,849,000 | 8,152,000 | 0.27 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 210,264,000 | 20,293,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 211,520,000 | 30,474,000 | 0.99 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 208,035,000 | 48,024,000 | 1.55 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 212,459,000 | 50,421,000 | 1.63 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 215,317,000 | 66,675,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 212,658,000 | 36,483,000 | 1.19 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 214,195,000 | 61,710,000 | 2.05 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from HRTG's latest 10-K: [/company/HRTG/business/](/company/HRTG/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from HRTG's latest 10-K: [/company/HRTG/risk-factors/](/company/HRTG/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1598665/000119312526339815/hrtg-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-07
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with our condensed consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 (as amended“2025 Form 10-K”). Unless the context requires otherwise, as used in this Form 10-Q, the terms “we”, “us”, “our”, “the Company”, “our Company”, and similar references refer to Heritage Insurance Holdings, Inc., a Delaware corporation, and its subsidiaries.

Overview

We are a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance products across our multi-state footprint. We provide personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas, and Virginia and commercial residential insurance in Florida, Hawaii, New Jersey, and New York. We provide personal residential insurance in Florida, Hawaii, and South Carolina on both an admitted and non-admitted basis and in California on a non-admitted basis only. We also provide commercial insurance in the State of Texas on an excess and surplus lines basis. As a vertically integrated insurer, we control or manage substantially all aspects of risk management, underwriting, claims processing and adjusting, actuarial rate making and reserving, customer service, and distribution. Our financial strength ratings are important to us in establishing our competitive position and can impact our ability to write policies.

Recent Developments

Economic and Market Factors

We continue to monitor the effects of general changes in economic and market conditions on our business. As a result of general inflationary pressures, we have experienced, and may continue to experience, increased cost of materials and labor needed for repairs and to otherwise remediate claims throughout all states in which we conduct business. We mitigate the impact of inflation by implementation of rate increases and through the use of inflation guard, which ensures appropriate replacement cost values for our business to reflect the inflationary impact on costs to repair properties. Use of inflation guard impacts both premium and total insured value ("TIV"). Rising reinsurance costs may be mitigated through exposure management as well as recouping the cost of reinsurance in future rate filings.

Supplemental Information

The Supplemental Information table below provides insight on our personal lines, commercial lines, and other business by providing policy count, premiums-in-force and total insured value for those product lines.

[[GREPCENT_TABLE]]
[["Policies-in-force:","Q2 2026","","","Q2 2025","","","% Change"],["Personal Residential","","338,817","","","","357,294","","","","(5.2",")","%"],["Commercial Residential","","3,140","","","","2,992","","","","4.9","","%"],["Other","","8,930","","","","9,823","","","","(9.1",")","%"],["Total","","350,887","","","","370,109","","","","(5.2",")","%"],["Premiums-in-force:"],["Personal Residential","","1,162,853,241","","","","1,148,876,238","","","","1.2","","%"],["Commercial Residential","","236,726,188","","","","271,156,884","","","","(12.7",")","%"],["Other","","10,010,765","","","","9,458,112","","","","5.8","","%"],["Total","","1,409,590,194","","","","1,429,491,234","","","","(1.4",")","%"],["Total Insured Value:"],["Personal Residential","","318,809,611,090","","","","319,578,562,554","","","","(0.2",")","%"],["Commercial Residential","","49,442,769,123","","","","45,455,781,220","","","","8.8","","%"],["Total","","368,252,380,213","","","","365,034,343,774","","","","0.9","","%"]]
[[/GREPCENT_TABLE]]

28

Strategic Profitability Initiatives

The Company has focused on three main strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value, which initiatives will remain in place while the Company also expands its strategy to include its 2026 initiatives:

•
Generating underwriting profit through rate adequacy and more selective underwriting

•
Allocating capital to products and geographies that maximize long-term returns

•
Targeting a balanced and diversified portfolio

To continue its progress, the Company expects to also focus on the following profitability initiatives in 2026:

•
Target geographies open for new business, while closely managing risk and exposure

•
Continue persistent underwriting discipline and focus on rate adequacy while driving prudent top line growth

•
Enhance data driven analytics using AI and other technology tools.

•
Continue the refinement of customer service and claims capabilities.

•
Leverage infrastructure and capabilities to foster further growth, which includes our entry to the State of Texas on an excess and surplus lines basis.

•
Act as opportunities emerge which will continue our diversification and expansion over the next several years.

•
Expand our relationship with reinsurance partners to expand capacity and manage volatility while pursuing growth.

Trends

Inflation, Underwriting and Pricing

We address reinsurance and loss cost trends in the property insurance sector through rates and inflation guard factors. Over the last several years, we have filed and been approved by state regulators for rate increases to achieve rate adequacy. Our rates are now adequate in over 90% of our territories, which are currently open for new business. We experienced intentional growth of our commercial residential business during 2025, with in-force premium in that line of business decreasing in 2026, driven primarily by competitive market conditions. To the extent that reinsurance and loss cost trends decline, our rates may be adjusted downward in the future. New rates, which are subject to approval by our regulators, become effective when a policy is written or renewed, and the premium is earned pro rata over the policy period of one year. As a result of this timing, it can take up to twenty-four months for the complete impact of a rate change to be fully earned and impact our financial statements.

We invest in data analytics, using software and experienced personnel, to continuously evaluate our underwriting criteria and manage exposure to catastrophe and other losses. Our policy retention has remained consistent in the upper 80’s to low 90’s. While we believe our rates are generally competitive with private market insurers operating in our space, we are focused on prudent growth in 2026 while managing exposure and ensuring rate adequacy throughout our book of business as well as providing high levels of customer service to our agents and policyholders.

We may experience rising inflation in the form of increased labor and material costs, which drive up claim costs throughout all states in which we conduct business. However, inflation is increasing at a lower rate than what we have experienced in the last several years. We adjust for changes in inflation by increasing or decreasing the inflation factor used in our pricing. Florida personal lines claim costs associated with litigated claims have decreased over the last several years due to favorable legislation aimed to curtail claims abuse and stabilize the Florida property insurance market. This has had the intended impact and has resulted in better margins for the Company and better rates for Florida policyholders. Accordingly, we have a positive outlook for Florida and the other rate adequate states.

We have a solid, consistent panel of reinsurance partners that provide reinsurance capacity at competitive pricing and sufficient levels to support our growth objectives. Additionally, we may leverage our captive reinsurer to assume risks from our insurance company affiliates.

29

We successfully completed the placement of our catastrophe excess of loss reinsurance program with higher coverage levels than the prior-year while achieving a lower total and risk-adjusted cost. As operating and reinsurance costs improve, we expect policyholders to benefit through more competitive pricing while we continue to maintain appropriate underwriting margins. This should also favorably impact the ceded premium over the next four quarters.

Overview of Financial Results

In the following section, we discuss our financial condition and results of operations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

The discussion of our financial condition and results of operations that follows provides information that will assist the reader in understanding our consolidated financial statements, the changes in certain key items in those financial statements from quarter to quarter, including certain key performance indicators such as net combined ratio, ceded premium ratio, net expense ratio and net loss ratio, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect our consolidated financial statements. This discussion should be read in conjunction with our consolidated financial statements and the related notes included under Item 1 of this Quarterly Report on Form 10-Q.

•
Second quarter 2026 net income increased to $61.7 million, or $2.05 per diluted share, compared with $48.0 million, or $1.55 per diluted share, in the prior-year quarter. The increase was primarily driven by lower losses and higher revenue. Revenue growth reflected lower ceded premiums, which increased net premiums earned, as well as higher investment income from a larger invested asset base. Losses decreased primarily due to favorable prior-year loss development and lower weather-related losses.

•
Gross premiums written decreased 5.5% to $388.4 million from $411.0 million in the prior-year quarter, primarily reflecting lower commercial residential premiums, partially offset by growth in personal lines. The Florida commercial residential market remains highly competitive and management continues to emphasize underwriting discipline and adequate profitability by writing business that meets our pricing and risk standards. Commercial premiums are expected to level off in the second half of the year as we continue to grow this business outside of Florida where business conditions are more favorable while leveraging our strong Florida agency network.

•
Gross premiums earned were $351.2 million, compared to $353.6 million earned in the prior year quarter, reflecting the decline in commercial residential business driven by the competitive market conditions described above.

•
Net premiums earned increased 2.4% to $201.1 million from $196.3 million in the prior-year quarter, driven by lower ceded premiums. The reduction in ceded premiums reflected the decrease in the northeast net quota share program at year-end 2025 and one month of savings driven by the improved pricing of our June 2026 catastrophe excess of loss ("CAT XOL") program. The CAT XOL placement generated treaty-year expense savings of $63.2 million, of which seven-twelfths will be recognized in 2026.

•
Losses and loss adjustments expenses were $61.1 million, down $14.6 million from $75.6 million in the prior-year quarter. The net loss ratio improved 8.1 points to 30.4% from 38.5% in the same quarter last year. Net weather losses for the current accident quarter were $11.5 million, compared with $12.5 million in the prior-year quarter. Net favorable prior-year loss development was $23.4 million in the second quarter of 2026, compared with $2.3 million in the prior-year quarter. The favorable reserve development recorded in the second quarter of 2026 reflects several positive trends that have become increasingly evident over the past several quarters. K

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1598665/000119312526103715/hrtg-20251231.htm
Complete FY 2025 MD&A: /company/HRTG/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-03-12
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance products across our multi-state footprint. We provide personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia and commercial residential insurance in Florida, Hawaii, New Jersey, and New York. We provide personal residential insurance in Florida, Hawaii and South Carolina on both an admitted and non-admitted basis and in California on a non-admitted basis. As a vertically integrated insurer, we control or manage substantially all aspects of risk management, underwriting, claims processing and adjusting, actuarial rate making and reserving, customer service, and distribution. Our financial strength ratings are important to us in establishing our competitive position and can impact our ability to write policies.

Recent Developments

Economic and Market Factors

We continue to monitor the effects of general changes in economic and market conditions on our business. As a result of general inflationary pressures, we have experienced, and may continue to experience, increased cost of materials and labor needed for repairs and to otherwise remediate claims throughout all states in which we conduct business. We mitigate the impact of inflation by implementation of rate increases and the use of inflation guard, which ensures appropriate replacement cost values for our business to reflect the inflationary impact on costs to repair properties. Use of inflation guard impacts both premium and total insured value ("TIV"). To the extent that reinsurance costs rise, we may seek to recoup the cost of reinsurance in future rate filings as well as mitigate the cost through exposure management.

Supplemental Information

The Supplemental Information table below demonstrates progress on our initiatives by providing policy count, premiums-in-force, and total insured value for Florida and all other states as of December 31, 2025 and comparing those metrics to December 31, 2024. One of our strategies had been to reduce personal lines exposure in Florida, given historical abusive claims practices. Since 2022, several legislative changes have been implemented to positively impact the Florida property insurance market by curtailing assignment of benefits and litigated claims abuses. The positive impact of the legislative changes is reflected in our loss trends, which favorably impact the cost of insurance to our policyholders. Our strategy has been to obtain rate adequacy throughout our portfolio. Through various underwriting, rate making and other actions over the last several years, we believe we have achieved rate adequacy in over 90% of our portfolio, with each of those rate adequate territories being currently open for writing new business. During 2025, we concluded our exposure management initiatives from previous years and began deployment of our managed growth initiative. We anticipate growing our portfolio during 2026 while maintaining our disciplined underwriting standards.

[[GREPCENT_TABLE]]
[["","","At December 31,"],["Policies in force:","","2025","","","2024","","","% Change"],["Florida","","","123,437","","","","133,775","","","","(7.7",")","%"],["Other States","","","233,838","","","","255,700","","","","(8.5",")","%"],["Total","","","357,275","","","","389,475","","","","(8.3",")","%"],["Premiums in force:","","(In thousands)"],["Florida","$","","679,079","","$","","707,197","","","","(4.0",")","%"],["Other States","","","752,738","","","","726,048","","","","3.7","","%"],["Total","$","","1,431,817","","$","","1,433,245","","","","(0.1",")","%"],["Total Insured Value:","","(In thousands)"],["Florida","$","","105,997,817","","$","","102,661,095","","","","3.3","","%"],["Other States","","","257,533,142","","","","264,950,914","","","","(2.8",")","%"],["Total","$","","363,530,959","","$","","367,612,009","","","","(1.1",")","%"]]
[[/GREPCENT_TABLE]]

38

Table of Contents

Policies-in-force decreased from the prior year, driven primarily by the final stages of our continued strategy to re-underwrite our existing personal lines book of business and gradually open territories for new business written where rates are adequate. At the same time, the policies-in-force specific to our commercial residential business grew during 2025, which drove an increase in our Florida TIV. As rates for our personal lines business became more adequate during 2025, the Company embarked upon a managed growth strategy. New business premium production for the fourth quarter of 2025 increased over 60% compared to new business production for the fourth quarter of 2024. Premiums in force for our personal lines business grew year over year but was offset by a larger decline in premiums in force for our commercial residential business. The decline in premium in force for commercial residential business was driven mostly by the current competitive market in Florida for this product. We have a substantial book of commercial business at December 31, 2025 with $265.0 million of in-force premium and will maintain our established pricing and underwriting discipline.

Florida policies-in-force declined from the prior year by 7.7% and Florida premiums-in-force decreased by 4.0%, while Florida TIV increased over the prior year. The decrease in Florida premiums-in-force was driven mostly by a reduction in premium for commercial residential business related to the current competitive market in the state. However the in-force policies for the commercial residential product grew resulting in higher Florida TIV. Compared to the year ended December 31, 2024, the policy count for markets outside of Florida decreased 8.5% due to underwriting actions and intentional exposure management, resulting in a TIV decrease of 2.8% while premiums-in-force increased by 3.7% due to rating actions.

Strategic Profitability Initiatives

The Company has focused on three main strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value including:

•
Generating underwriting profit through rate adequacy and more selective underwriting.

•
Allocating capital to products and geographies that maximize long-term returns.

•
Targeting a balanced and diversified portfolio

Fulfilled Strategic Profitability Initiatives in 2025

•
Re-opened profitable geographies and allocated capital to sustain profits and margin on a measured basis

•
Persistent underwriting discipline and focus on rate adequacy

•
Continued data driven analytics

•
Enhanced customer service and claims capabilities

•
Leveraged infrastructure and capabilities to foster future growth

Strategic Profitability Initiatives for 2026

•
Target geographies open for new business, while closely managing risk and exposure

•
Continue persistent underwriting discipline and focus on rate adequacy while driving prudent growth of the top line

•
Enhance data driven analytics using AI and other technology tools

•
Continue the refinement of customer service and claims capabilities

•
Leverage infrastructure and capabilities to foster future growth, which includes our plan to enter the State of Texas to offer products on an excess and surplus lines basis

39

Table of Contents

Trends

Inflation, Underwriting and Pricing

We address reinsurance and loss costs trends in the property insurance sector through rates and inflation guard factors which resulted in an increase in the average premium per policy of 8.9% at December 31, 2025, as compared to the prior year . The higher average premium is driven by rate changes, inclusion of inflation guard, and by the mix of business written. We experienced intentional growth of our commercial residential business during 2024, with in-force premium in that line of business decreasing during 2025, driven primarily by competitive market conditions as described above. New rates, which are subject to approval by our regulators, become effective when a policy is written or renewed, and the premium is earned pro rata over the policy period of one year. As a result of this timing, it can take up to twenty-four months for the complete impact of a rate change to be fully earned in our financial statements. For that reason, we account for inflation in our rate indications and filings with our regulators.

We invest in data analytics, using software and experienced personnel, to continuously evaluate our underwriting criteria and manage exposure to catastrophe and other losses. Our policy retention has remained steadily in the range of 90.0%. While we believe our rates are generally competitive with private market insurers operating in our space, we are focused on managing exposure and achieving rate adequacy throughout our book of business as well as providing high levels of customer service to our agents and policyholders.

We experience rising inflation in the form of increased labor and material costs, which drive up claim costs throughout all states in which we conduct business. However, inflation is increasing at a lower rate than what we have experienced in the last several years. We adjust for changes in inflation by increasing or decreasing the inflation factor used in our pricing. Florida personal lines claim costs associated with litigated claims have decreased over the last several years due to favorable legislation aimed to curtail claims abuse and stabilizing the Florida property insurance market. This is reflected in our rates and as the legislation appears to have achieved its intended impact, our outlook on conducting business in Florida has improved.

We have experienced a sufficient supply of catastrophe excess of loss reinsurance and believe our cost of reinsurance to be competitive. In contrast, our industry had experienced significantly higher reinsurance costs and more constrained availability for catastrophe excess of loss reinsurance in 2022 and 2023.

Key Components of our Results of Operations

Revenue

Gross premiums written represent, with respect to a period, the sum of direct premiums written (premiums from policies written during the period, net of any midterm cancellations and renewals of voluntary policies) and assumed premiums written (primarily premiums from state fair plan policies), in each case prior to ceding premiums to reinsurers.

Gross premiums earned represent the total premiums earned during a period from policies written. Premiums associated with new and renewal policies are earned ratably over the twelve-month term of the policy and premiums associated with assumed policies are earned ratably over the remaining term of the policy.

Ceded premiums represent the cost of our reinsurance during a period. We recognize the cost of our reinsurance program ratably over term of the arrangement, which is typically twelve months. Our catastrophe excess of loss reinsurance generally commences on June 1 and runs through May 31 of the following year. Our net quota share treaty commences on December 31. Our other reinsurance programs may be purchased on a calendar or fiscal year basis.

Net premiums earned reflect gross premiums earned less ceded premiums during the period.

Net investment income represents interest earned on fixed maturity securities, short term securities and other investments, dividends on equity securities.

Net realized and unrealized gains or losses represent gains or losses on investment sales and unrealized gains or losses on equity securities.

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Table of Contents

Other revenue is primarily comprised of policy and pay-plan fees and also includes rental income due under non-cancelable leases for space at the Company’s commercial property in Clearwater, Flo

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/HRTG/mda/fy2025/
All MD&A years: /company/HRTG/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/HRTG/mda/fy2024/): filed 2025-03-13; accession 0001598665-25-000009 (https://www.sec.gov/Archives/edgar/data/1598665/000159866525000009/hrtg-20241231.htm)
- [FY 2023 MD&A](/company/HRTG/mda/fy2023/): filed 2024-03-13; accession 0000950170-24-030766 (https://www.sec.gov/Archives/edgar/data/1598665/000095017024030766/hrtg-20231231.htm)
- [FY 2022 MD&A](/company/HRTG/mda/fy2022/): filed 2023-03-13; accession 0000950170-23-007569 (https://www.sec.gov/Archives/edgar/data/1598665/000095017023007569/hrtg-20221231.htm)
- [FY 2021 MD&A](/company/HRTG/mda/fy2021/): filed 2022-03-14; accession 0000950170-22-003575 (https://www.sec.gov/Archives/edgar/data/1598665/000095017022003575/hrtg-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6331 Fire, Marine & Casualty Insurance) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index

Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/HRTG.md · JSON record: /company/HRTG.json · verified financials: /company/HRTG/financials.json / /company/HRTG/financials.csv · machine TOC for the whole site: /llms.txt