TAMPA, Fla., May 1, 2024 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE:HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, today reported first quarter of 2024 financial results. First Quarter 2024 Result Highlights First quarter net income of $14.2 million or $0.47 per diluted share improved from net income of $14.0 million or $0.55 per diluted share in the prior year quarter, primarily driven by an increase in net premiums earned, and higher net investment income, which is partly offset by higher operating expenses. Gross premiums earned of $341.4 million, up 7.7% from $317.0 million in the prior year quarter. Net premiums earned of $179.4 million, up 8.1% from $166.0 million in the prior year quarter. Net loss ratio of 56.9%, an improvement of 1.8 points from 58.7% in the prior year quarter. Net expense ratio of 37.1%, up 1.3 points from 35.8% in the prior year quarter. Net combined ratio of 94.0%, an improvement of 0.5 points from 94.5% in the prior year quarter. "I'm pleased to see the momentum of our efforts to respond to market conditions continues to produce our intended results," remarked Ernie Garateix, CEO at Heritage. "Our average premium has increased across the book of business, and we believe the quality of our book of business continues to improve. We are successfully managing exposure, our cost of catastrophe reinsurance, and continue to build strong relationships with our valued reinsurance partners. Weather losses are higher than last year but attritional losses are down. We are managing expenses while implementing upgraded systems to better manage our business and service our customers. The management team is resolute in our focus to generate underwriting profits across our footprint, maintain adequate rates, ensure selective underwriting, and employ meticulous but fair claims handling." Strategic Profitability Initiatives The following provides an update to the Company's strategic initiatives that are expected to enable Heritage to achieve consistent long-term quarterly earnings and drive shareholder value. The Supplemental Information table included in this earnings release demonstrates progress made compared to first quarter 2023. Generate underwriting profit though rate adequacy and more selective underwriting. Significant rating actions across the book of business have had a favorable impact, resulting in an increase in average premium per policy. Gross premiums earned increased 7.7% over the prior year quarter, driven by rate actions taken in 2022 and 2023 across the book of business, as well as growth in commercial residential business, which helps drive the higher average premium. Premiums-in-force of $1.4 billion are up 6.2% from the prior year quarter, driven primarily by growth in commercial residential business and rate increases throughout the book of business. Continued focus on timely rate actions, maintaining underwriting criteria, and managing new business written in over-concentrated markets or products. Allocate capital to products and geographies that maximize long-term returns. We selectively increased the commercial residential premium in force by 44.4% compared to the first quarter of 2023, while the TIV only increased by 11.8%. The commercial residential business, which tends to have a significantly lower attritional loss ratio, generates materially higher premiums. Commercial residential business accounts for 19.9% of the in-force premium, compared to 14.7% in the prior year period. As part of our exposure management strategy, we continue to grow our policy count in products and geographies which are profitable and reduce our policy count in unprofitable and over concentrated areas. This disciplined underwriting approach resulted in a policy count reduction of just over 72,000 or 14.2% from first quarter 2023, while premium in force increased by $80.7 million or 6.2%. Maintain a balanced and diversified portfolio. Selective diversification of the portfolio by product and state, which can change based on market conditions, serves to reduce performance volatility. No state represents over 26.7% of the Company's TIV. Provide coverage suitable to the market and return targets. Continuing to offer Excess & Surplus lines ("E&S") policies in California, Florida, and South Carolina. This product allows greater flexibility in product terms as well as speed to market. In-force premium for E&S business increased 182.5% quarter over quarter. Continuing to evaluate other states for E&S and other products. Capital Management Heritage's Board of Directors has decided to continue its suspension of the quarterly dividend to shareholders. The Board of Directors will continue to evaluate dividend distribution and stock repurchases on a quarterly basis. No shares of common stock were repurchased during the quarter. Results of Operations The following table summarizes results of operations for the three months ended March 31, 2024 and 2023 (amounts in thousands, except percentages and per share amounts): Three Months Ended March 31, 2024 2023 Change Total revenues $ 191,302 $ 176,921 8.1 % Net income $ 14,225 $ 14,008 1.5 % Earnings per share $ 0.47 $ 0.55 (14.5) % Book value per share $ 7.67 $ 6.05 26.8 % Return on equity * 25.0 % 39.2 % (14.2)  pts Underwriting summary Gross premiums written $ 356,684 $ 310,309 14.9 % Gross premiums earned $ 341,389 $ 317,022 7.7 % Ceded premiums $ (161,963) $ (150,993) 7.3 % Net premiums earned $ 179,426 $ 166,029 8.1 % Ceded premium ratio 47.4 % 47.6 % (0.2)  pts Ratios to Net Premiums Earned: Loss ratio 56.9 % 58.7 % (1.8)  pts Expense ratio 37.1 % 35.8 % 1.3  pts Combined ratio 94.0 % 94.5 % (0.5)  pts *Return on equity represents annualized net income for the period divided by average stockholders' equity during the period. Note: Percentages and sums in the table may not recalculate precisely due to rounding. Ratios Ceded premium ratio represents ceded premiums as a percentage of gross premiums earned. Net loss ratio represents net losses and loss adjustment expenses ("LAE") as a percentage of net premiums earned. Net expense ratio represents policy acquisition costs ("PAC") and general and administrative ("G&A") expenses as a percentage of net premiums earned. Ceding commission income is reported as a reduction of PAC and G&A expenses. Net combined ratio represents the sum of net losses and LAE, PAC and G&A expenses as a percentage of net premiums earned. The net combined ratio is a key measure of underwriting performance traditionally used in the property and casualty industry. A combined ratio under 100% generally reflects profitable underwriting results. First Quarter 2024 Results: First quarter 2024 net income of $14.2 million or $0.47 per diluted share, compared to net income of $14.0 million or $0.55 per diluted share in the prior year quarter, primarily driven by an increase in net premiums earned, and higher net investment income, which is partly offset by higher operating expenses. This improvement is attributable to the positive impact of rate actions, underwriting actions, and exposure management taken during 2023 and 2022, which favorably impacted results during first quarter 2024. These actions resulted in growth of 8.1% in net premiums earned; however, we experienced growth of 4.7% in net losses and LAE as described below. A 53.2% increase in net investment income resulted from taking advantage of higher short-term interest rates. Policy acquisition costs increased 16.4%, which is attributable to costs that vary with gross premiums written as well as a reduction in ceding commission income on the net quota share reinsurance contract. General and administrative costs increased 3.0% driven primarily by costs associated with software, including a new claims system. Additionally, the decrease in earnings per share was influenced by a higher weighted average number of shares outstanding than the prior year quarter due to equity issuance and stock grants, net of forfeitures. Premiums-in-force were $1.4 billion as of first quarter 2024, an increase of 6.2% compared to $1.3 billion as of first quarter 2023. First quarter 2024 represents our ninth consecutive quarter of driving higher in-force premium. Gross premiums written of $356.7 million were up 14.9% from $310.3 million in the prior year quarter, reflecting a strategic and substantial organic increase in Florida commercial residential lines business and a higher average premium per policy throughout the book of business from rating actions and use of inflation guard, which ensures appropriate property values, mostly offset by targeted exposure management. Gross premiums earned of $341.4 million, up 7.7% from $317.0 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months as described above. Net premiums earned of $179.4 million, up 8.1% from $166.0 million in the prior year quarter, ...