What's Behind HRTG's Stronger and More Balanced Insurance Portfolio?

Heritage Insurance Holdings HRTG remains focused on optimizing its portfolio of over $1 billion in gross premiums written toward products and geographies that maximize long-term returns to shareholders, while mitigating risk from a single or series of catastrophic weather events. 

This super-regional U.S. property and casualty insurance holding company thus depends on prudent underwriting execution, business diversification, rate adequacy initiatives implemented over the past three years, a robust reinsurance program and efficient management of losses and loss adjustment expenses (LAE). 

Heritage ceased issuing new personal lines policies in Florida and the Northeast in December 2022. However, favorable legislative reforms in Florida and more stable reinsurance pricing have encouraged a measured resumption of personal lines underwriting. Through selective underwriting, the company intentionally reduced policy count for its admitted personal lines while achieving higher average premiums through rate adjustments. 

Heritage expects its in-force policy count to stabilize and gradually grow through 2025–2026. Given its coastal exposure to hurricanes and severe weather events, a comprehensive reinsurance program offers strong balance sheet protection and reduces earnings volatility. 

Cost-efficient enhancements are also expected to lower the ceded premium ratio as gross premiums rise. The company recently completed its 2025–2026 indemnity-based catastrophe excess-of-loss reinsurance placement. 

Heritage continues to invest strategically in InsurTech and advanced analytics to manage exposures effectively, supporting prudent loss management, earnings consistency and book value growth. 

Additionally, its strong partnerships with independent agencies and auto insurers enhance distribution reach and business diversification through bundled product offerings.

What About HRTG’s Competitors?

Kinsale Capital Group KNSL and Kingstone Companies KINS have enhanced and diversified their insurance portfolios through disciplined underwriting, prudent risk management, and targeted geographic expansion. 

Kinsale continues to excel in the excess and surplus (E&S) market, using advanced analytics to identify profitable segments and sustain strong underwriting performance, supporting favorable combined ratios and steady profitability.

Kingstone has strengthened its portfolio by scaling back exposure to high-risk coastal areas, refining reinsurance programs, and expanding into lower-volatility markets. 

Both insurers focus on data-driven pricing, capital efficiency and portfolio balance, driving stable earnings, greater resilience and sustainable long-term growth across market cycles.

HRTG’s Price Performance

Shares of HRTG have gained 93.4% year to date, outperforming the industry.

HRTG’s Expensive Valuation

HRTG trades at a price-to-book value ratio of 1.87, above the industry average of 1.5. But it carries a Value Score of A.

Estimate Movement for HRTG

The Zacks Consensus Estimate for HRTG’s third-quarter and fourth-quarter 2025 EPS witnessed no movement in the past 30 days. The same holds true for full-year 2025 and 2026 estimates.
 

The consensus estimates for HRTG’s 2025 and 2026 revenues and EPS indicate year-over-year increases. 
 
HRTG stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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