HRTG Stock Forecast & Price Target

Heritage Insurance Holdings Inc. has demonstrated significant financial growth, with a statutory surplus increasing by $66 million this year to a total of $352 million. The company achieved new business production of $36 million in the quarter, reflecting a remarkable year-over-year increase of 166%, particularly driven by a $17 million contribution from Florida. Moreover, Heritage's $1.4 billion in premiums-in-force indicates stable growth, and the company has reached rate adequacy across its operational regions, positioning it for continued policy count expansion in the low-to-mid-single-digits.

Heritage Insurance Holdings Inc. has reported a net combined ratio of 72.9%, significantly improved from 100.6% in the prior year, yet concerns persist due to a net expense ratio of 34.6%, which exceeds expectations and indicates rising operational costs. Additionally, net premiums earned of $195 million for the third quarter represented a 2% decline year-over-year, with a notable influence from higher ceded premiums, suggesting potential challenges in revenue generation. The company also faces operational challenges, evidenced by a substantial reduction in its legal department, with staffing levels halved as they continue to address a pre-reform backlog, further compounding existing uncertainties surrounding growth and stability in policy count and residential rates in Florida.