Heritage Insurance has reported net income of $50.4 million for the third quarter of 2025, an increase from $8.2 million in the prior year quarter, primarily driven by a significant reduction in losses and loss adjustment expenses and a reduction in other operating expenses.
Heritage’s gross premiums earned were $362 million for Q3’25, rising 2.2% from $354.2 million last year, reflecting higher gross premiums written over the last twelve months.
For Q3’25, net premiums earned dipped by 1.9% to $195.1 million from $198.8 million last year, driven by higher ceded premiums in the quarter, which offset higher gross premiums earned.
Heritage explained that the increase in ceded premiums is driven primarily by a $4 million reinstatement premium for Hurricane Ian and an increase in the northeast quota share programme, as the premium subject to that program grew from the prior year quarter. This led to an increase in the ceded premium ratio to 46.1%, up 2.2 points from 43.9% in the prior year quarter.
For the third quarter of 2025, net loss ratio decreased to 38.3%, a 27.1 point improvement from 65.4% last year, reflecting significantly lower net losses and LAE coupled with higher net premiums earned.
Heritage’s net weather losses for Q3’25 were $13.8 million, a decrease of $49.2 million from $63 million in Q3’24. Additionally, there were no catastrophe losses in the current quarter compared to $48.7 million in the prior year quarter.
The firm explained, “The reduction in weather losses was coupled with a reduction in attritional losses and favourable reserve development compared to the prior year quarter. Favourable net loss development was $5 million in the current year quarter compared to adverse development of $6.3 million in the prior year quarter.”
The group’s Q3’25 net combined ratio is 72.9% improved by 27.7 points from 100.6% in Q3’24, driven primarily by a lower net loss ratio and net expense ratio.
Lately, the net investment income for Q3’25 is $9.7 million, relatively flat year over year, due to a lower interest rate environment for our sweep accounts and money market fund, despite higher invested assets.
Ernie Garateix, Chief Executive Officer, Heritage, commented, “Our third quarter results continue to demonstrate the successful execution of our strategic initiatives and the corresponding increase in the Company’s earnings trajectory, which started at the end of 2023. Over the last several years, we have focused on disciplined underwriting, driving rate adequacy, and providing our insureds with quality customer service. These actions have created significant earnings power for the Company, as we delivered record in-force premiums this quarter.”
He continued, “As I noted last quarter, we are now positioned to return the Company to growth given favourable market conditions combined with a majority of our markets having achieved rate adequacy. As a result, nearly all of our capacity is now open, compared to only about 30% of our capacity being open last year at this time.
“This can be seen in our new business premium written for the third quarter of $36.3 million, up 166% from $13.7 million of new business written in the third quarter last year. While we experienced an underwriting-driven decline in policies in force, the reduction has moderated, and we expect our policy count to return to growth over the next six months, which puts us on a firm path to full-year policy growth in 2026.”
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