Summary of HRTG Q3 2025 Earnings Call

1Key Financial Results and Metrics

Net Income: $50.4 million ($1.63 per diluted share), a significant increase from $8.2 million ($0.27 per diluted share) in Q3 2024.

Nine-Month Performance: Net income of $129 million ($4.17 per diluted share), up from $41 million ($1.35 per diluted share) in the same period last year.

Gross Premiums Earned: $362 million, up 2.2% year-over-year.

Net Premiums Earned: $195.1 million, down 1.9% due to increased ceded premiums.

Net Loss Ratio: Improved to 38.3% from 65.4% in Q3 2024.

Net Expense Ratio: 34.6%, a slight improvement from 35.2% in the prior year.

Net Combined Ratio: 72.9%, improved from 100.6% in Q3 2024.

Book Value per Share: Increased to $14.15, up 49% from Q4 2024.

2Strategic Updates and Business Highlights

The company has successfully implemented strategic initiatives focusing on rate adequacy, underwriting discipline, and improved claims and customer service.

Personal lines premium increased to a record $1.44 billion, despite a reduction in policies in-force.

New business production surged to $36 million in Q3, a 166% increase year-over-year, with $17 million generated from Florida.

The company has re-underwritten its personal lines book and opened nearly all geographies to new business.

Strong relationships with agents and brokers have been maintained, contributing to positive growth momentum.

3Forward Guidance and Outlook

HRTG expects to achieve policy count growth in 2026, driven by ramping new business efforts across newly opened regions.

Anticipates continued improvement in reinsurance pricing due to favorable market conditions and tort reform impacts.

The company plans to utilize its strong capital position for growth and has restarted its share repurchase program, buying back 106,000 shares for $2.3 million.

4Bad News, Challenges, or Points of Concern

Ceded Premiums: Increased ceded premiums due to reinstatement premiums from Hurricane Ian and a growing quota share program, raising the ceded premium ratio to 46.1%.

Commercial Residential Business: The company reduced its exposure in this area due to competitive pressures.

Market Conditions: The competitive environment in Florida remains challenging, particularly in commercial property, though the company believes it can still grow in this market.

5Notable Q&A Insights

Management expressed confidence in Florida's growth potential, citing strong agency relationships and new business momentum.

Acknowledged the pressures in commercial property pricing but noted that even with slight increases, the combined ratios remain profitable.

Discussed the potential for further stock buybacks given the strong capital position and undervaluation of shares, with a focus on balancing growth investments and shareholder returns. Overall, HRTG demonstrated strong financial performance in Q3 2025, with a positive outlook for growth while navigating challenges in competitive markets.