Heritage Insurance Holdings, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Heritage Insurance Holdings, Inc. has filed its 2023 10-K annual report, detailing its financial performance and operations in the property and casualty insurance sector.</b>

AI Summary

Heritage Insurance Holdings, Inc. (HRTG) filed a Annual Report (10-K) with the SEC on March 13, 2024. The filing is a 10-K annual report for Heritage Insurance Holdings, Inc. for the period ending December 31, 2023. The company is incorporated in Delaware and operates in the FIRE, MARINE & CASUALTY INSURANCE sector. Key addresses include 1401 N Westshore Blvd, Tampa, FL 33607 for both business and mailing. The filing references various insurance-related terms and financial instruments, including catastrophe reinsurance programs and convertible senior notes. Specific dates mentioned range from 2014 to 2023, indicating a history of operations and financial activities.

Why It Matters

For investors and stakeholders tracking Heritage Insurance Holdings, Inc., this filing contains several important signals. This 10-K provides a comprehensive overview of Heritage Insurance Holdings' financial health, operational strategies, and risk exposures for the fiscal year 2023, crucial for investors and stakeholders to assess the company's performance and future outlook. The detailed financial data and risk factors within the report are essential for understanding the company's position in the volatile property and casualty insurance market, particularly in light of potential catastrophe events and regulatory changes.

Risk Assessment

Risk Level: medium — Heritage Insurance Holdings, Inc. shows moderate risk based on this filing. The company operates in the highly competitive and regulated property and casualty insurance industry, which is subject to significant risks from natural disasters, economic fluctuations, and evolving regulatory landscapes, as evidenced by the numerous insurance-specific terms and financial instruments detailed in the filing.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand Heritage Insurance Holdings' exposure to catastrophe risk and its strategies for managing these exposures.

Key Numbers

• 20231231 — Report Period End Date (Conformed period of report)
• 20240313 — Filing Date (Filed as of date)
• 001-36462 — SEC File Number (SEC file number)
• 455338504 — IRS Number (IRS number)

Key Players & Entities

• Heritage Insurance Holdings, Inc. (company) — Filer name
• FIRE, MARINE & CASUALTY INSURANCE (industry) — Standard Industrial Classification
• 1401 N WESTSHORE BLVD (location) — Business address street
• TAMPA (location) — Business address city
• FL (location) — Business address state
• 33607 (location) — Business address zip
• 7273627202 (phone) — Business phone
• DE (location) — State of incorporation

FAQ

Risk Factors

• Catastrophe Risk Exposure [high — financial]: The company is exposed to significant losses from natural catastrophes, which can adversely affect its financial results and condition.
• Competitive Market Conditions [medium — market]: The property and casualty insurance market is highly competitive, with pricing pressures and the need for continuous innovation impacting profitability.
• Regulatory Environment [medium — regulatory]: The insurance industry is subject to extensive regulation, which can change and impact the company's operations, capital requirements, and profitability.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-13: Filing Date — Date the 10-K was officially submitted to the SEC.

Key Financial Figures

• $0.0001 — ch Registered Common Stock, par value $0.0001 per share HRTG New York Stock Excha
• $1.1 billion — dential policies in force, representing $1.1 billion of annualized premium, 2,838 commercial
• $253.4 million — dential policies in force, representing $253.4 million of annualized premium, and 11,181 comme
• $11.0 million — ability policies in force, representing $11.0 million of annualized premium, for a total of 4
• $1.4 billion — um, for a total of 450,675 policies and $1.4 billion of annualized premium. For the year end
• $1.3 billion — 2023, we had gross premiums written of $1.3 billion and operating income of $63.2 million.
• $63.2 million — of $1.3 billion and operating income of $63.2 million. At December 31, 2023, we had total ass
• $2.2 billion — cember 31, 2023, we had total assets of $2.2 billion and total stockholders' equity of $220.
• $220.3 million — llion and total stockholders' equity of $220.3 million. Our Strategy Our overall strategy
• $1.0 billion — cus on optimizing our portfolio of over $1.0 billion in gross premiums written toward produc
• $143.5 m — by statutory accounting principles, of $143.5 million, $72.3 million and $35.8 million,
• $72.3 million — counting principles, of $143.5 million, $72.3 million and $35.8 million, respectively. The su
• $35.8 m — s, of $143.5 million, $72.3 million and $35.8 million, respectively. The surplus for ea

Filing Documents

• hrtg-20231231.htm (10-K) — 4843KB
• hrtg-ex21.htm (EX-21) — 29KB
• hrtg-ex23_1.htm (EX-23.1) — 4KB
• hrtg-ex31_1.htm (EX-31.1) — 14KB
• hrtg-ex31_2.htm (EX-31.2) — 14KB
• hrtg-ex32_1.htm (EX-32.1) — 12KB
• hrtg-ex97_1.htm (EX-97.1) — 89KB
• img15283342_0.jpg (GRAPHIC) — 74KB
• img15283342_1.jpg (GRAPHIC) — 75KB
• img15283342_2.jpg (GRAPHIC) — 144KB
• 0000950170-24-030766.txt (&nbsp;) — 23383KB
• hrtg-20231231.xsd (EX-101.SCH) — 2880KB
• hrtg-20231231_htm.xml (XML) — 5121KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 14 Item 1B. Unresolved Staff Comments 26 Item 1C. Cybersecurity 26 Item 2.

Properties

Properties 28 Item 3.

Legal Proceedings

Legal Proceedings 28 Item 4. Mine Safety Disclosure 28 PART II – Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. Reserved 30 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 48 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 50 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 92 Item 9A.

Controls and Procedures

Controls and Procedures 92 Item 9B. Other Information 92 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 92 PART III – Item 10. Directors, Executive Officers and Corporate Governance 94 Item 11.

Executive Compensation

Executive Compensation 94 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 94 Item 13. Certain Relationships and Related Transactions, and Director Independence 94 Item 14. Principal Accountant Fees and Services 94 PART IV – Item 15. Exhibits, Financial Statement Schedules 95 Item 16. Form 10-K Summary 97

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding: our core strategy and ability to fully execute our business plan; our growth, including by geographic expansion, new lines of business, additional policies and new products and services, competitive strengths, proprietary capabilities, processes and new technology, results of operations and liquidity; strategic initiatives and their impact on shareholder value; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; statements of management's goals and objectives, including intentions to pursue certain business and the handling of certain claims; projections of revenue, earnings, capital structure, reserves and other financial items; assumptions underlying our critical accounting policies and estimates; assumptions underlying statements regarding us and our business; statements regarding the impact of legislation; expectations regarding claims and related expenses, and our reinsurers' obligations; and other similar expressions concerning matters that are not historical facts. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item 1A: "Risk Factors" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in this Annual Report on Form 10-K. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obliga

Business

Item 1. Business Our Business Heritage Insurance Holdings, Inc. ("we", "our", "us", "Heritage" and the "Company") is a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance through our insurance company subsidiaries. We are vertically integrated and control or manage substantially all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. We are led by a highly experienced and diverse management team with significant expertise in the residential property insurance industry and deep industry relationships. Our insurance subsidiaries include: Heritage Property & Casualty Insurance Company ("Heritage P&C"), which provides personal and commercial residential property insurance and commercial general liability insurance; Narragansett Bay Insurance Company ("NBIC"), which provides personal and commercial residential property insurance; and Zephyr Insurance Company ("Zephyr"), which provides personal residential and wind-only property insurance in Hawaii. Our financial strength ratings are important in establishing our competitive position and can significantly impact our ability to write policies. We are rated by both Demotech, Inc. ("Demotech") and Kroll Bond Rating Agency ("KBRA"). Demotech, a rating agency specializing in evaluating the financial stability of insurers, maintains a letter-scale financial stability rating system ("FSR") from A'' (A double prime) to L (licensed by insurance regulatory authorities). KBRA's ratings assigned to insurance companies range from AAA (extremely strong operations to no risk) to R (operating under regulatory supervision). Demotech and KBRA have assigned the following insurance financial strength ratings ("IFSR") to the Company and our key operating subsidiaries. Subsidiary Demotech Rating KBRA Rating KBRA Investment Rating Heritage Insurance Holdings N/A N/A

View Full Filing

View this 10-K filing on SEC EDGAR