000159866512-31false2024Q2P1YP2YP3YP1Yxbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:purehrtg:securityutr:acrehrtg:Buildingutr:sqfthrtg:reinstatementhrtg:reinsurerhrtg:vote00015986652024-01-012024-06-3000015986652024-08-0100015986652024-06-3000015986652023-12-3100015986652024-04-012024-06-3000015986652023-04-012023-06-3000015986652023-01-012023-06-300001598665hrtg:PolicyAcquisitionCostsMember2024-04-012024-06-300001598665hrtg:PolicyAcquisitionCostsMember2024-01-012024-06-300001598665hrtg:PolicyAcquisitionCostsMember2023-04-012023-06-300001598665hrtg:PolicyAcquisitionCostsMember2023-01-012023-06-300001598665us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-06-300001598665us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-06-300001598665us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001598665us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001598665us-gaap:CommonStockMember2023-12-310001598665us-gaap:AdditionalPaidInCapitalMember2023-12-310001598665us-gaap:RetainedEarningsMember2023-12-310001598665us-gaap:TreasuryStockCommonMember2023-12-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-3100015986652024-01-012024-03-310001598665us-gaap:CommonStockMember2024-01-012024-03-310001598665us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001598665us-gaap:RetainedEarningsMember2024-01-012024-03-310001598665us-gaap:CommonStockMember2024-03-310001598665us-gaap:AdditionalPaidInCapitalMember2024-03-310001598665us-gaap:RetainedEarningsMember2024-03-310001598665us-gaap:TreasuryStockCommonMember2024-03-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-3100015986652024-03-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001598665us-gaap:CommonStockMember2024-04-012024-06-300001598665us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001598665us-gaap:RetainedEarningsMember2024-04-012024-06-300001598665us-gaap:CommonStockMember2024-06-300001598665us-gaap:AdditionalPaidInCapitalMember2024-06-300001598665us-gaap:RetainedEarningsMember2024-06-300001598665us-gaap:TreasuryStockCommonMember2024-06-300001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001598665us-gaap:CommonStockMember2022-12-310001598665us-gaap:AdditionalPaidInCapitalMember2022-12-310001598665us-gaap:RetainedEarningsMember2022-12-310001598665us-gaap:TreasuryStockCommonMember2022-12-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100015986652022-12-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-3100015986652023-01-012023-03-310001598665us-gaap:CommonStockMember2023-01-012023-03-310001598665us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001598665us-gaap:RetainedEarningsMember2023-01-012023-03-310001598665us-gaap:CommonStockMember2023-03-310001598665us-gaap:AdditionalPaidInCapitalMember2023-03-310001598665us-gaap:RetainedEarningsMember2023-03-310001598665us-gaap:TreasuryStockCommonMember2023-03-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100015986652023-03-310001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001598665us-gaap:CommonStockMember2023-04-012023-06-300001598665us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001598665us-gaap:RetainedEarningsMember2023-04-012023-06-300001598665us-gaap:CommonStockMember2023-06-300001598665us-gaap:AdditionalPaidInCapitalMember2023-06-300001598665us-gaap:RetainedEarningsMember2023-06-300001598665us-gaap:TreasuryStockCommonMember2023-06-300001598665us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000015986652023-06-300001598665hrtg:USGovernmentAgencySecuritiesMember2024-06-300001598665us-gaap:USStatesAndPoliticalSubdivisionsMember2024-06-300001598665hrtg:SpecialRevenueFundMember2024-06-300001598665us-gaap:MortgageBackedSecuritiesMember2024-06-300001598665us-gaap:AssetBackedSecuritiesMember2024-06-300001598665us-gaap:OtherAggregatedInvestmentsMember2024-06-300001598665hrtg:A2018InvestmentAgreementMember2024-06-300001598665hrtg:A2024InvestmentAgreementMember2024-06-300001598665hrtg:USGovernmentAgencySecuritiesMember2023-12-310001598665us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310001598665hrtg:SpecialRevenueFundMember2023-12-310001598665us-gaap:MortgageBackedSecuritiesMember2023-12-310001598665us-gaap:AssetBackedSecuritiesMember2023-12-310001598665us-gaap:OtherAggregatedInvestmentsMember2023-12-310001598665us-gaap:DebtSecuritiesMember2024-04-012024-06-300001598665us-gaap:DebtSecuritiesMember2023-04-012023-06-300001598665us-gaap:DebtSecuritiesMember2024-01-012024-06-300001598665us-gaap:DebtSecuritiesMember2023-01-012023-06-300001598665us-gaap:EquitySecuritiesMember2024-04-012024-06-300001598665us-gaap:EquitySecuritiesMember2023-04-012023-06-300001598665us-gaap:EquitySecuritiesMember2024-01-012024-06-300001598665us-gaap:EquitySecuritiesMember2023-01-012023-06-300001598665us-gaap:CashAndCashEquivalentsMember2024-04-012024-06-300001598665us-gaap:CashAndCashEquivalentsMember2023-04-012023-06-300001598665us-gaap:CashAndCashEquivalentsMember2024-01-012024-06-300001598665us-gaap:CashAndCashEquivalentsMember2023-01-012023-06-300001598665us-gaap:OtherThanSecuritiesInvestmentMember2024-04-012024-06-300001598665us-gaap:OtherThanSecuritiesInvestmentMember2023-04-012023-06-300001598665us-gaap:OtherThanSecuritiesInvestmentMember2024-01-012024-06-300001598665us-gaap:OtherThanSecuritiesInvestmentMember2023-01-012023-06-300001598665us-gaap:FinancialInstrumentOtherMember2024-06-300001598665us-gaap:FinancialInstrumentOtherMember2023-12-310001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:EquityMethodInvestmentsMember2024-06-300001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:EquityMethodInvestmentsMember2023-12-310001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberhrtg:MeasurementAlternativeMember2024-06-300001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberhrtg:MeasurementAlternativeMember2023-12-310001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2024-06-300001598665us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2023-12-310001598665us-gaap:CashAndCashEquivalentsMember2024-06-300001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Member2024-06-300001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel2Member2024-06-300001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel3Member2024-06-300001598665hrtg:RestrictedCashMember2024-06-300001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel1Member2024-06-300001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel2Member2024-06-300001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel3Member2024-06-300001598665us-gaap:FairValueInputsLevel1Memberhrtg:USGovernmentAgencySecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberhrtg:USGovernmentAgencySecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberhrtg:USGovernmentAgencySecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberhrtg:SpecialRevenueFundMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberhrtg:SpecialRevenueFundMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberhrtg:SpecialRevenueFundMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberus-gaap:MortgageBackedSecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberus-gaap:MortgageBackedSecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberus-gaap:MortgageBackedSecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberus-gaap:AssetBackedSecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2024-06-300001598665hrtg:IndustrialAndMiscellaneousMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberhrtg:IndustrialAndMiscellaneousMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberhrtg:IndustrialAndMiscellaneousMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberhrtg:IndustrialAndMiscellaneousMember2024-06-300001598665us-gaap:FairValueInputsLevel1Member2024-06-300001598665us-gaap:FairValueInputsLevel2Member2024-06-300001598665us-gaap:FairValueInputsLevel3Member2024-06-300001598665us-gaap:CommonStockMember2024-06-300001598665us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMember2024-06-300001598665us-gaap:FairValueInputsLevel2Memberus-gaap:CommonStockMember2024-06-300001598665us-gaap:FairValueInputsLevel3Memberus-gaap:CommonStockMember2024-06-300001598665us-gaap:CashAndCashEquivalentsMember2023-12-310001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Member2023-12-310001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001598665us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel3Member2023-12-310001598665hrtg:RestrictedCashMember2023-12-310001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel1Member2023-12-310001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel2Member2023-12-310001598665hrtg:RestrictedCashMemberus-gaap:FairValueInputsLevel3Member2023-12-310001598665us-gaap:FairValueInputsLevel1Memberhrtg:USGovernmentAgencySecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberhrtg:USGovernmentAgencySecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberhrtg:USGovernmentAgencySecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberhrtg:SpecialRevenueFundMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberhrtg:SpecialRevenueFundMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberhrtg:SpecialRevenueFundMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberus-gaap:MortgageBackedSecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberus-gaap:MortgageBackedSecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberus-gaap:MortgageBackedSecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberus-gaap:AssetBackedSecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2023-12-310001598665hrtg:IndustrialAndMiscellaneousMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberhrtg:IndustrialAndMiscellaneousMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberhrtg:IndustrialAndMiscellaneousMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberhrtg:IndustrialAndMiscellaneousMember2023-12-310001598665us-gaap:FairValueInputsLevel1Member2023-12-310001598665us-gaap:FairValueInputsLevel2Member2023-12-310001598665us-gaap:FairValueInputsLevel3Member2023-12-310001598665us-gaap:CommonStockMember2023-12-310001598665us-gaap:FairValueInputsLevel1Memberus-gaap:CommonStockMember2023-12-310001598665us-gaap:FairValueInputsLevel2Memberus-gaap:CommonStockMember2023-12-310001598665us-gaap:FairValueInputsLevel3Memberus-gaap:CommonStockMember2023-12-310001598665srt:MinimumMember2024-06-300001598665srt:MaximumMember2024-06-300001598665us-gaap:InterestExpenseMember2024-01-012024-06-300001598665us-gaap:InterestExpenseMember2023-01-012023-06-300001598665us-gaap:LandMember2024-06-300001598665us-gaap:LandMember2023-12-310001598665us-gaap:BuildingMember2024-06-300001598665us-gaap:BuildingMember2023-12-310001598665us-gaap:SoftwareDevelopmentMember2024-06-300001598665us-gaap:SoftwareDevelopmentMember2023-12-310001598665hrtg:ComputerHardwareAndSoftwareMember2024-06-300001598665hrtg:ComputerHardwareAndSoftwareMember2023-12-310001598665hrtg:OfficeFurnitureAndEquipmentMember2024-06-300001598665hrtg:OfficeFurnitureAndEquipmentMember2023-12-310001598665us-gaap:LeaseholdsAndLeaseholdImprovementsMember2024-06-300001598665us-gaap:LeaseholdsAndLeaseholdImprovementsMember2023-12-310001598665hrtg:VehiclesFleetMember2024-06-300001598665hrtg:VehiclesFleetMember2023-12-310001598665hrtg:FloridaHurricaneCatastropheFundMember2024-01-012024-06-300001598665hrtg:FirstCatastropheMemberhrtg:HeritageMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-01-012024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMemberhrtg:FirstCatastropheMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-01-012024-06-300001598665hrtg:FirstCatastropheMemberhrtg:ZephyrMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-01-012024-06-300001598665hrtg:FirstCatastropheMemberhrtg:HeritageMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-06-300001598665hrtg:OspreyMemberhrtg:FirstCatastropheMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMemberhrtg:FirstCatastropheMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-06-300001598665hrtg:FirstCatastropheMemberhrtg:OspreyAndZephyrMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-06-300001598665hrtg:FirstCatastropheMemberhrtg:ZephyrMemberhrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMembersrt:MaximumMember2024-06-300001598665hrtg:TwoThousandTwentyThreeAndTwoThousandTwentyFourCatastropheExcessOfLossReinsuranceProgramMember2024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMemberhrtg:ReinsuranceContractSeventyPercentLimitMember2023-01-012023-12-310001598665hrtg:NarragansettBayInsuranceCompanyMemberhrtg:ReinsuranceContractThirtyPercentLimitMember2023-01-012023-12-310001598665hrtg:NarragansettBayInsuranceCompanyMember2023-01-012023-12-310001598665hrtg:TwoThousandTwentyThreeToTwoThousandTwentyFourNetQuotaShareReinsuranceMemberhrtg:NarragansettBayInsuranceCompanyMember2024-01-012024-06-300001598665hrtg:TwoThousandTwentyThreeToTwoThousandTwentyFourNetQuotaShareReinsuranceMemberhrtg:NarragansettBayInsuranceCompanyMember2023-12-310001598665us-gaap:InsuranceClaimsMember2024-06-300001598665us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember2024-01-012024-06-300001598665us-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMember2024-06-300001598665us-gaap:InsuranceClaimsMemberhrtg:NarragansettBayInsuranceCompanyMemberhrtg:CommercialResidentialLossesMember2024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMemberus-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMemberhrtg:CommercialResidentialLossesMember2024-01-012024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMemberus-gaap:PropertyLiabilityAndCasualtyInsuranceSegmentMemberhrtg:CommercialResidentialLossesMember2024-06-300001598665hrtg:FacultativeReinsuranceMembersrt:MaximumMember2024-06-300001598665hrtg:FacultativeReinsuranceMembersrt:MinimumMember2024-01-012024-06-300001598665hrtg:FacultativeReinsuranceMember2024-01-012024-06-300001598665hrtg:FacultativeReinsuranceMemberhrtg:NarragansettBayInsuranceCompanyMembersrt:MaximumMember2024-06-300001598665hrtg:PropertyLossesMember2023-07-012024-06-300001598665hrtg:CausalityLossesMember2023-07-012024-06-3000015986652023-07-012024-06-300001598665hrtg:ConvertibleSeniorNotesMember2017-09-300001598665hrtg:ConvertibleSeniorNotesMember2017-08-310001598665us-gaap:ConvertibleDebtMembersrt:ParentCompanyMember2022-01-3100015986652022-01-310001598665hrtg:ConvertibleSeniorNotesMember2024-06-300001598665hrtg:ConvertibleSeniorNotesMembersrt:SubsidiariesMember2024-06-300001598665hrtg:ConvertibleSeniorNotesMember2024-01-012024-06-300001598665hrtg:ConvertibleSeniorNotesMember2023-01-012023-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMemberhrtg:CreditAgreementSeventhAmendmentMember2024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberus-gaap:RevolvingCreditFacilityMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberus-gaap:RevolvingCreditFacilityMemberhrtg:CreditAgreementSeventhAmendmentMember2024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:SwinglineLoanMemberhrtg:CreditAgreementSeventhAmendmentMember2024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMemberus-gaap:DebtInstrumentRedemptionPeriodOneMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMember2023-01-012023-06-300001598665us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-06-300001598665hrtg:SwinglineLoanMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-06-300001598665us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2023-01-012023-06-300001598665us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMemberhrtg:CreditAgreementSeventhAmendmentMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-01-012024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberhrtg:TermLoanMember2024-06-300001598665hrtg:SeniorSecuredCreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2024-06-300001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberus-gaap:FirstMortgageMember2017-10-310001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberhrtg:FiveYearTreasurySecurityMemberus-gaap:FirstMortgageMember2017-10-012017-10-310001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberus-gaap:FirstMortgageMembersrt:MinimumMember2017-10-310001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberus-gaap:FirstMortgageMembersrt:MaximumMember2017-10-310001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberus-gaap:FirstMortgageMember2024-01-012024-06-300001598665hrtg:CollateralFinancialArrangementMemberhrtg:SkyeLanePropertiesLLCMemberus-gaap:FirstMortgageMember2023-01-012023-06-300001598665srt:FederalHomeLoanBankOfAtlantaMember2018-12-310001598665srt:FederalHomeLoanBankOfAtlantaMember2023-09-290001598665srt:FederalHomeLoanBankOfAtlantaMember2024-06-300001598665srt:FederalHomeLoanBankOfAtlantaMember2024-01-012024-06-300001598665srt:FederalHomeLoanBankOfAtlantaMember2023-01-012023-06-300001598665hrtg:FederalHomeLoanBankBostonMember2023-01-012023-12-310001598665hrtg:FederalHomeLoanBankBostonMember2024-01-012024-06-300001598665hrtg:FederalHomeLoanBankDesMoinesMember2018-12-310001598665hrtg:FederalHomeLoanBankDesMoinesMember2024-06-300001598665hrtg:FederalHomeLoanBankDesMoinesMember2024-04-012024-06-300001598665hrtg:FederalHomeLoanBankDesMoinesMember2024-01-012024-06-300001598665us-gaap:ConvertibleDebtMember2024-06-300001598665us-gaap:ConvertibleDebtMember2023-12-310001598665us-gaap:FirstMortgageMember2024-06-300001598665us-gaap:FirstMortgageMember2023-12-310001598665hrtg:TermLoanMember2024-06-300001598665hrtg:TermLoanMember2023-12-310001598665us-gaap:RevolvingCreditFacilityMember2024-06-300001598665us-gaap:RevolvingCreditFacilityMember2023-12-310001598665hrtg:FederalHomeLoanBankLoanAgreementMember2024-06-300001598665hrtg:FederalHomeLoanBankLoanAgreementMember2023-12-310001598665hrtg:HeritagePropertyAndCasualtyInsuranceCompanyMember2024-06-300001598665hrtg:HeritagePropertyAndCasualtyInsuranceCompanyMember2024-01-012024-06-300001598665hrtg:ZephyrMember2024-06-300001598665hrtg:NarragansettBayInsuranceCompanyMember2024-06-300001598665hrtg:HeritagePropertyAndCasualtyInsuranceCompanyAndNarragansettBayInsuranceCompanyAndZephyrMember2024-06-300001598665hrtg:HeritagePropertyAndCasualtyInsuranceCompanyAndNarragansettBayInsuranceCompanyAndZephyrMember2023-12-310001598665us-gaap:RelatedPartyMemberhrtg:ComegysInsuranceAgencyIncorporationMember2024-04-012024-06-300001598665us-gaap:RelatedPartyMemberhrtg:ComegysInsuranceAgencyIncorporationMember2023-04-012023-06-300001598665us-gaap:RelatedPartyMemberhrtg:ComegysInsuranceAgencyIncorporationMember2024-01-012024-06-300001598665us-gaap:RelatedPartyMemberhrtg:ComegysInsuranceAgencyIncorporationMember2023-01-012023-06-300001598665hrtg:DefinedContributionPlanTrancheOneMember2024-01-012024-06-300001598665hrtg:DefinedContributionPlanTrancheTwoMember2024-01-012024-06-300001598665srt:MaximumMember2024-01-012024-06-300001598665hrtg:NewShareRepurchasePlanMember2022-12-150001598665hrtg:NewShareRepurchasePlanMember2023-01-012023-12-310001598665hrtg:NewShareRepurchasePlanMember2024-03-110001598665hrtg:NewShareRepurchasePlanMember2024-01-012024-06-300001598665hrtg:OmnibusIncentivePlanMember2023-06-070001598665hrtg:TwoThousandAndTwentyThreePlanMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:OmnibusIncentivePlanMember2024-02-262024-02-260001598665hrtg:TimeBasedRestrictedStockMemberhrtg:OmnibusIncentivePlanMember2024-02-262024-02-260001598665hrtg:PerformanceBasedRestrictedStockMemberhrtg:OmnibusIncentivePlanMember2024-02-262024-02-260001598665hrtg:OmnibusIncentivePlanMemberhrtg:TimeBasedRestrictedStockMembersrt:MaximumMember2024-02-262024-02-260001598665hrtg:TimeBasedRestrictedStockMemberhrtg:OmnibusIncentivePlanMember2023-07-112023-07-110001598665hrtg:PerformanceBasedRestrictedStockMemberhrtg:OmnibusIncentivePlanMember2023-07-112023-07-110001598665hrtg:OmnibusIncentivePlanMemberhrtg:TimeBasedRestrictedStockMembersrt:MaximumMember2023-07-112023-07-110001598665us-gaap:RestrictedStockMemberhrtg:OmnibusIncentivePlanMember2023-06-012023-06-300001598665us-gaap:RestrictedStockMemberhrtg:OmnibusIncentivePlanMember2023-07-012023-07-310001598665us-gaap:RestrictedStockMemberhrtg:OmnibusIncentivePlanMember2023-08-012023-08-310001598665us-gaap:RestrictedStockMemberhrtg:OmnibusIncentivePlanMember2024-06-052024-06-050001598665us-gaap:RestrictedStockMember2023-12-310001598665us-gaap:RestrictedStockMemberhrtg:PerformanceBasedRestrictedStockMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:TimeBasedRestrictedStockMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMember2024-06-300001598665us-gaap:RestrictedStockMembersrt:MinimumMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMembersrt:MaximumMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:EmployeeAndNonEmployeeDirectorMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMember2023-04-012023-06-300001598665us-gaap:RestrictedStockMember2023-01-012023-06-300001598665hrtg:TimeBasedUnvestedRestrictedStockMember2024-06-300001598665hrtg:PerformanceBasedRestrictedStockMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:JanuaryFourTwoThousandTwentyOneGrantDateMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:JanuaryFourTwoThousandTwentyOneGrantDateMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:AprilThirteenTwoThousandTwentyOneGrantDateMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:AprilThirteenTwoThousandTwentyOneGrantDateMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:OctoberEighteenTwoThousandTwentyOneGrantDateMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:OctoberEighteenTwoThousandTwentyOneGrantDateMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:MarchSixteenTwoThousandTwentyTwoGrantDateMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:MarchSixteenTwoThousandTwentyTwoGrantDateMember2024-01-012024-06-300001598665us-gaap:RestrictedStockMemberhrtg:JuneNineteenTwoThousandTwentyThreeGrantDateMember2024-06-300001598665us-gaap:RestrictedStockMemberhrtg:JuneNineteenTwoThousandTwentyThreeGrantDateMember2024-01-012024-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
________________________________________________________
Form 10-Q
________________________________________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number
001-36462
________________________________________________________
Heritage Insurance Holdings, Inc.
(Exact name of Registrant as specified in its charter)
________________________________________________________
Delaware45-5338504
(State of Incorporation)
(IRS Employer
Identification No.)
1401 N. Westshore Blvd
Tampa, FL 33607
(Address, including zip code, of principal executive offices)
(727) 362-7200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareHRTGNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerxEmerging growth company o
Non-accelerated fileroSmaller reporting companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The aggregate number of shares of the Registrant’s Common Stock outstanding on August 1, 2024 was 30,684,198.



HERITAGE INSURANCE HOLDINGS, INC.
Table of Contents
Page
 



FORWARD-LOOKING STATEMENTS
Statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) or in documents incorporated by reference that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, expectations or beliefs regarding: (i) our core strategy and ability to fully execute our business plan; (ii) our strategic initiatives, including our controlled growth strategy and focus on rate adequacy and selective underwriting, and their impact on shareholder value; (iii) projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; (iv) management’s goals and objectives, including intentions to pursue certain business and the handling of certain claims; (v) projections of financial items; (vi) the supply of catastrophe reinsurance and its costs; (vii) assumptions underlying statements regarding us and our business; (viii) claims and related expenses, and our reinsurers’ obligations; (ix) pending legal proceedings and their effect on our financial position; (x) future impact of prior strategic policy count reductions; and (xi) 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" set forth in our 2023 Annual Report on Form 10-K and Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in this quarterly report on Form 10-Q. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking statement, except as may otherwise be required by law.
These statements are based on current expectations, estimates and projections about the industry and market in which we operate, and management’s beliefs and assumptions. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” or “continue” or the negative variations thereof or comparable terminology are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. The risks and uncertainties include, without limitation:
the possibility that actual losses may exceed reserves, which are based on estimates;
the concentration of our business in coastal states, which could be impacted by hurricane losses or other significant weather-related events such as northeastern winter storms;
our exposure to catastrophic weather events;
our failure to adequately assess and price the risks we underwrite;
the fluctuation in our results of operations, including as a result of factors outside of our control;
increased costs of reinsurance, non-availability of reinsurance, non-collectability of reinsurance and our ability to obtain reinsurance on terms and at a cost acceptable to us;
inherent uncertainty of our models and our reliance on such models as a tool to evaluate risk;
increased competition, competitive pressures, industry developments and market conditions;
continued and increased impact of abusive and unwarranted claims;
our inability to effectively manage our growth and integrate acquired companies;
our failure to execute our diversification strategy;
our reliance on independent agents to write insurance policies for us on a voluntary basis and our ability to attract and retain agents;
the failure of our claims department to effectively manage or remediate claims;
the failure of policy renewals to meet our expectations;
our inability to maintain our financial stability rating;
our ability to access sufficient liquidity or obtain additional financing to fund our operations and expand our business;
our inability to generate investment income;
effects of emerging claim and coverage issues relating to legal, judicial, environmental and social conditions;
the failure of our risk mitigation strategies or loss limitation methods;
lack of effectiveness of exclusions and loss limitation methods in the insurance policies we assume or write;
the regulation of our insurance operations;
changes in regulations and our failure to meet increased regulatory requirements, including minimum capital and surplus requirements;
climate change, health crisis, severe weather conditions and other catastrophe events;
litigation or regulatory actions;
regulation limiting rate increases or that require us to participate in loss sharing or assessments;
the terms of our indebtedness, including restrictions that limit our flexibility in operating our business, and our inability to comply with the financial and other covenants of our debt facilities;
our ability to maintain effective internal controls over financial reporting;
certain characteristics of our common stock;



failure of our information technology systems or those of our key service providers and unsuccessful development and implementation of new technologies;
a lack of redundancy in our operations; and
our failure to attract and retain qualified employees and independent agents or our loss of key personnel.
Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrences of anticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in the forward-looking statements. Consequently, you should not place undue reliance on forward-looking statements.



PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share and share amounts)
June 30, 2024December 31, 2023
ASSETS
(unaudited)
Fixed maturities, available-for-sale, at fair value (amortized cost of $744,173 and $606,646)
$698,853 $560,682 
Equity securities, at fair value, (cost $1,936 and $1,666)
1,936 1,666 
Other investments, net6,790 7,067 
Total investments707,579 569,415 
Cash and cash equivalents480,930 463,640 
Restricted cash10,956 9,699 
Accrued investment income5,148 4,068 
Premiums receivable, net100,832 89,490 
Reinsurance recoverable on paid and unpaid claims, net of allowance for credit losses of $197
536,888 482,429 
Prepaid reinsurance premiums505,180 294,222 
Income tax receivable12,066 13,354 
Deferred income tax asset, net12,694 11,111 
Deferred policy acquisition costs, net114,818 102,884 
Property and equipment, net34,510 33,218 
Right-of-use lease asset, finance16,337 17,606 
Right-of-use lease asset, operating6,357 6,835 
Intangibles, net39,464 42,555 
Other assets15,590 12,674 
Total Assets$2,599,349 $2,153,200 
LIABILITIES AND STOCKHOLDERS' EQUITY
Unpaid losses and loss adjustment expenses$822,271 $845,955 
Unearned premiums765,632 675,921 
Reinsurance payable504,291 159,823 
Long-term debt, net120,780 119,732 
Advance premiums26,262 23,900 
Accrued compensation6,278 9,461 
Lease liability, finance19,250 20,386 
Lease liability, operating7,528 8,076 
Accounts payable and other liabilities71,724 69,666 
Total Liabilities$2,344,016 $1,932,920 
Commitments and contingencies (Note 17)
Stockholders’ Equity:
Common stock, $0.0001 par value, 50,000,000 shares authorized, 42,915,872 shares issued and 30,684,198 outstanding at June 30, 2024 and 42,450,612 shares issued and 30,218,938 outstanding at December 31, 2023
3 3 
Additional paid-in capital361,789 360,310 
Accumulated other comprehensive loss, net of taxes(34,770)(35,250)
Treasury stock, at cost, 12,231,674 shares at each June 30, 2024 and December 31, 2023
(130,900)(130,900)
Retained earnings59,211 26,117 
Total Stockholders' Equity255,333 220,280 
Total Liabilities and Stockholders' Equity$2,599,349 $2,153,200 
See accompanying notes to unaudited condensed consolidated financial statements.
2


HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Other Comprehensive Income
(Unaudited)
(Amounts in thousands, except per share and share amounts)
For the Three Months Ended
June 30,
 For the Six Months Ended
June 30,
2024202320242023
REVENUES:
Gross premiums written$424,530 $396,559 $781,214 $706,868 
Change in gross unearned premiums(74,457)(66,544)(89,752)(59,831)
Gross premiums earned350,073 330,015 691,462 647,037 
Ceded premiums(159,757)(153,211)(321,720)(304,204)
Net premiums earned190,316 176,804 369,742 342,833 
Net investment income9,769 6,599 18,320 12,181 
Net realized gains (losses) and impairment12 (1,568)11 330 
Other revenue3,474 3,478 6,800 6,890 
Total revenues203,571 185,313 394,873 362,234 
EXPENSES:
Losses and loss adjustment expenses105,928 106,646 207,963 204,098 
Policy acquisition costs, net of ceding commission income(1)
47,224 41,451 94,153 81,776 
General and administrative expenses, net of ceding commission income(2)
22,780 20,058 42,414 39,111 
Intangible asset impairment 767  767 
Total expenses175,932 168,922 344,530 325,752 
Operating income27,639 16,391 50,343 36,482 
Interest expense, net2,780 2,740 5,610 5,621 
Income before income taxes24,859 13,651 44,733 30,861 
Provision for income taxes5,990 5,872 11,639 9,074 
Net income$18,869 $7,779 $33,094 $21,787 
OTHER COMPREHENSIVE INCOME
Change in net unrealized gains (losses) on investments924 (2,986)641 9,158 
Reclassification adjustment for net realized investment (gains) losses(12)9 (11)11 
Income tax (expense) benefit related to items of other comprehensive income(216)698 (150)(2,158)
Total comprehensive income$19,565 $5,500 $33,574 $28,798 
Weighted average shares outstanding
Basic30,649,73225,567,15730,513,20725,562,731
Diluted30,708,99525,626,42030,572,47025,621,994
Earnings per share
Basic$0.62 $0.30 $1.08 $0.85 
Diluted$0.61 $0.30 $1.08 $0.85 
(1)Policy acquisition costs includes $9.4 million and $18.7 million of ceding commission income for the three and six months ended June 30, 2024 and $12.8 million and $25.3 million of ceding commission income for the three and six months ended June 30, 2023, respectively.
(2)General and administration includes $3.1 million and $6.1 million of ceding commission income for the three and six months ended June 30, 2024 and $4.1 million and $8.3 million of ceding commission income for the three and six months ended June 30, 2023, respectively.
See accompanying notes to unaudited condensed consolidated financial statements.
3


HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(Amounts in thousands, except share amounts)
Common Shares
Par Value
Additional Paid-In Capital
Retained Earnings
Treasury Shares
Accumulated Other
Comprehensive Loss
Total
Stockholders'
Equity
Balance at December 31, 202330,218,938$3 $360,310 $26,117 $(130,900)$(35,250)$220,280 
Net unrealized change in investments, net of tax— — — — (216)(216)
Issuance of restricted stock417,558— — — — — — 
Additional costs associated to public offering— (3)— — — (3)
Unallocated dividends on restricted stock forfeitures— 54 — — — 54 
Stock-based compensation on restricted stock— 595 — — — 595 
Net income— — 14,225 — — 14,225 
Balance at March 31, 202430,636,496$3 $360,956 $40,342 $(130,900)$(35,466)$234,935 
Net unrealized change in investments, net of tax— — — — 696 696 
Issued restricted stock47,702— — — — — — 
Stock-based compensation on restricted stock— 833 — — — 833 
Net income— — 18,869 — — 18,869 
Balance at June 30, 202430,684,198$3 $361,789 $59,211 $(130,900)$(34,770)$255,333 

Common Shares
Par Value
Additional Paid-In Capital
Retained
Earnings (Deficit)
Treasury Shares
Accumulated Other
Comprehensive Loss
Total
Stockholders'
Equity
Balance at December 31, 202225,539,433$3 $334,711 $(19,190)$(130,900)$(53,585)$131,039 
Net unrealized change in investments, net of tax— — — — 9,290 9,290 
Shares tendered for income taxes withholding(4,200)— (8)— — — (8)
Restricted stock vested25,000— — — — — — 
Forfeiture on restricted stock(1,482)— — — — — — 
Stock-based compensation on restricted stock— 395 — — — 395 
Net income— — 14,008 — — 14,008 
Balance at March 31, 202325,558,751$3 $335,098 $(5,182)$(130,900)$(44,295)$154,724 
Net unrealized change in investments, net of tax— — — — (2,279)(2,279)
Issued restricted stock63,744— — — — — — 
Stock-based compensation on restricted stock— 403 — — — 403 
Net income— — 7,779 — — 7,779 
Balance at June 30, 202325,622,495$3 $335,501 $2,597 $(130,900)$(46,574)$160,627 


See accompanying notes to unaudited condensed consolidated financial statements.
4


HERITAGE INSURANCE HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
For the Six Months Ended June 30,
20242023
OPERATING ACTIVITIES
Net income$33,094 $21,787 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation1,428 798 
Bond amortization and accretion(1,552)(1,261)
Amortization of original issuance discount on debt428 235 
Goodwill or intangible asset impairment 767 
Depreciation and amortization4,491 4,266 
Allowance for (recovery) bad debt(703)87 
Expected credit allowance on reinsurance 152 
Net realized gains(11)(330)
Deferred income taxes, net(1,733)3,771 
Changes in operating assets and liabilities:
Accrued investment income(1,080)245 
Premiums receivable, net(10,639)6,061 
Prepaid reinsurance premiums(210,958)(202,229)
Reinsurance recoverable on paid and unpaid claims(54,459)260,911 
Income taxes receivable1,288 (1,143)
Deferred policy acquisition costs, net(11,934)(7,119)
Right of use leased asset1,747 1,228 
Other assets(2,916)(3,513)
Unpaid losses and loss adjustment expenses(23,684)(313,948)
Unearned premiums89,711 59,737 
Reinsurance payable344,468 187,795 
Accrued interest(474)(122)
Accrued compensation(3,183)1,535 
Advance premiums2,362 12,423 
Operating lease liabilities(1,684)(1,100)
Other liabilities2,531 (6,914)
Net cash provided by operating activities156,538 24,119 
INVESTING ACTIVITIES
Fixed maturity securities sales, maturities and pay downs70,287 479,396 
Fixed maturity securities purchases(206,264)(528,466)
Equity securities reinvestment of dividends
(270) 
Return on other investments277 5,062 
Cost of property and equipment acquired(2,692)(6,092)
Net cash used in investing activities(138,662)(50,100)
FINANCING ACTIVITIES
Repayment of term note(4,750)(4,750)
Mortgage loan payments(130)(52)
Proceeds from loan agreement5,500  
Additional costs associated with public offering(3) 
Tax withholding on share-based compensation awards (8)
Dividends forfeited (paid)54 (11)
Net cash provided by (used in) financing activities671 (4,821)
Increase (decrease) in cash, cash equivalents, and restricted cash18,547 (30,802)
Cash, cash equivalents and restricted cash, beginning of period473,339 287,572 
Cash, cash equivalents and restricted cash, end of period$491,886 $256,770 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid$12,181 $6,446 
Interest paid$4,552 $4,757 
5


Reconciliation of cash, cash equivalents, and restricted cash to condensed consolidated balance sheets.
June 30, 2024December 31, 2023
(In thousands)
Cash and cash equivalents$480,930 $463,640 
Restricted cash10,956 9,699 
Total$491,886 $473,339 
Restricted cash primarily represents funds held to meet regulatory requirements in certain states in which the Company operates.
See accompanying notes to unaudited condensed consolidated financial statements.
6


HERITAGE INSURANCE HOLDINGS, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. (together with its subsidiaries, the “Company”). These statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain financial information that is normally included in annual consolidated financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. In the opinion of the Company’s management, all material intercompany transactions and balances have been eliminated and all adjustments consisting of normal recurring accruals which are necessary for a fair statement of the financial condition and results of operations for the interim periods have been reflected. The accompanying interim condensed consolidated financial statements and related footnotes should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 13, 2024 (the “2023 Form 10-K”).
Significant accounting policies
The accounting policies of the Company are set forth in Note 1 to the consolidated financial statements contained in the Company’s 2023 Form 10-K.
Accounting Pronouncements not yet adopted
The Company has documented the summary of its significant accounting policies in its Notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Form 10-K. There have been no material changes to the Company’s accounting policies since the filing of that report.
On March 6, 2024, the SEC adopted new rules designed to enhance public company disclosures related to the risks and impacts of climate-related matters. The rules amend the provisions of both Regulation S-K and Regulation S-X to require disclosure of climate-related risks, transition plans, targets and goals, risk management and governance as well as require disclosure of the financial effects of severe weather events and other natural conditions as well as the use of carbon offsets or renewable energy credits. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements. The Company will continue to assess the impact of these new rules on its financial statements while the stay is in place.
NOTE 2. INVESTMENTS
Securities Available-for-Sale
The amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities available-for-sale are as follows for the periods presented:
June 30, 2024
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$168,760 $68 $1,178 $167,650 
States, municipalities and political subdivisions322,003 93 30,256 291,840 
Corporate bonds227,867 379 11,402 216,844 
Mortgage-backed securities (1)
18,646  2,881 15,765 
Asset-backed securities
2,892  143 2,749 
Other
4,005   4,005 
Total$744,173 $540 $45,860 $698,853 
(1)Includes securities at June 30, 2024 with a carrying amount of $23.6 million and $8.0 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018 and 2024. The Company is
7


permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
December 31, 2023
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
 Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$81,540 $417 $1,295 $80,662 
States, municipalities and political subdivisions319,896 104 31,018 288,982 
Corporate bonds178,213 475 11,858 166,830 
Mortgage-backed securities22,695  2,769 19,926 
Asset-backed securities
247  20 227 
Other
4,055   4,055 
Total$606,646 $996 $46,960 $560,682 
(1)Includes securities at December 31, 2023 with a carrying amount of $24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
Net Realized Gains (Losses) and Impairment
The following tables present net realized gains (losses) on the Company’s debt securities available-for-sale for the three and six months ended June 30, 2024 and 2023, respectively:
20242023
Three Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $907 $ $ 
Total realized losses(1)117 (9)308 
Net realized gains (losses)$12 $1,024 $(9)$308 
20242023
Six Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $2,644 $ $ 
Total realized losses(2)308 (11)598 
Net realized gains (losses)$11 $2,952 $(11)$598 
8


The following table presents the reconciliation of net realized (losses) gains and impairment of the Company’s investments reported for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Gross realized gains on sales of available-for-sale securities
$13 $ $13 $ 
Impairments on other investments
 (1,559) (1,559)
Realized losses on sales of available-for-sale securities
(1)(9)(2)(11)
Gross realized gains on sale of other investments
   1,900 
Net realized (losses) gains and impairments
$12 $(1,568)$11 $330 
The table below summarizes the Company’s debt securities at June 30, 2024 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.
At June 30, 2024
Cost or Amortized Cost
Percent of Total
Fair Value
Percent of Total
Maturity dates:(In thousands)(In thousands)
Due in one year or less$169,107 22.7 %$167,795 24.0 %
Due after one year through five years383,997 51.6 %362,032 51.8 %
Due after five years through ten years163,398 22.0 %144,765 20.7 %
Due after ten years27,671 3.7 %24,261 3.5 %
Total$744,173 100.0 %$698,853 100.0 %
Net Investment Income
The following table summarizes the Company’s net investment income by major investment category for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Debt securities$6,502 $5,015 $11,057 $8,038 
Equity securities361 57 657 90 
Cash and cash equivalents3,595 2,246 7,814 4,449 
Other investments173 108 324 839 
Net investment income10,631 7,426 19,852 13,416 
Less: Investment expenses862 827 1,532 1,235 
Net investment income, less investment expenses$9,769 $6,599 $18,320 $12,181 
The following tables present, for all debt securities available-for-sale in an unrealized loss position (including securities pledged) and for which no credit loss allowance has been established to date, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position at June 30, 2024 and December 31, 2023, respectively (in thousands):
9


Less Than Twelve Months
Twelve Months or More
June 30, 2024
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities21$128 $101,610 26$1,050 $27,065 
States, municipalities and political subdivisions1139 9,368 37230,217 265,588 
Corporate bonds3464 26,901 18511,338 124,847 
Mortgage-backed securities6 3 1212,881 15,763 
Asset-backed securities   35143 525 
Other      
Total fixed maturity securities72$231 $137,882 739$45,629 $433,788 
Less Than Twelve MonthsTwelve Months or More
December 31, 2023
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities3$14 $2,962 32$1,281 $42,305 
States, municipalities and political subdivisions
521 3,875 38230,997 274,876 
Corporate bonds1024 6,398 18811,834 128,771 
Mortgage-backed securities
10 7 1382,769 19,810 
Asset-backed securities
0  2420 373 
Other
0  0  
Total fixed maturity securities28$59 $13,242 764$46,901 $466,135 
The Company’s unrealized losses on debt securities have not been recognized because the securities are of a high credit quality with investment grade ratings. After reviewing the Company's portfolio, if (i) the Company does not have the intent to sell, or (ii) it is more likely than not it will not be required to sell the security before its anticipated recovery, then the Company's intent is to hold the investment securities to recovery, or maturity if necessary to recover the decline in valuation as prices accrete to par. However, the Company's intent may change prior to maturity due to certain types of events, which include, but are not limited to, changes in the financial markets, the Company's analysis of an issuer’s credit metrics and prospects, changes in tax laws or the regulatory environment, or as a result of significant unforeseen changes in liquidity needs. As such, the Company may, from time to time, sell invested assets subsequent to the balance sheet date that it did not intend to sell at the balance sheet date. Conversely, the Company may not sell invested assets that the Company asserted it intended to sell at the balance sheet date. Such changes in intent are due to unforeseen events occurring subsequent to the balance sheet date.
No credit loss allowance was recorded as of June 30, 2024 or for the year ended December 31, 2023.
Other Investments
Non-Consolidating Variable Interest Entities (“VIEs”)
The Company makes passive investments in limited partnerships (“LPs”), which are accounted for using the equity method, with income reported in earnings through net realized and unrealized gains and losses. The Company also holds a passive investment in a Real Estate Investment Trust (“REIT”), which is accounted for using the measurement alternative method, and reported at cost less impairment (if any), plus or minus changes from observable price changes.
10


The following table summarizes the carrying value and maximum loss exposure of the Company’s non-consolidated VIEs at June 30, 2024 and December 31, 2023, respectively (in thousands):
As of June 30, 2024As of December 31, 2023
Carrying ValueMaximum Loss ExposureCarrying ValueMaximum Loss Exposure
Investments in non-consolidated VIEs - Equity method$1,682 $1,682 $1,819 $1,819 
Investments in non-consolidated VIEs - Measurement alternative$5,108 $5,108 $5,248 $5,248 
Total non-consolidated VIEs$6,790 $6,790 $7,067 $7,067 
No agreements exist requiring the Company to provide additional funding to any of the non-consolidated VIEs in excess of the Company’s initial investment.
NOTE 3. FAIR VALUE OF FINANCIAL MEASUREMENTS
Fair value is determined based on the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.
The Company is required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:
Level 1 – Unadjusted quoted prices are available in active markets for identical assets/liabilities as of the reporting date.
Level 2 – Valuations based on observable inputs, such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in the markets that are not active; or other inputs that are observable, either directly or indirectly.
Level 3 – Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation.
The highest priority is assigned to Level 1 inputs and the lowest priority to Level 3 inputs. At June 30, 2024 and December 31, 2023, there were no transfers in or out of Level 1, 2, and 3.
The following table presents information about the Company’s assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy.
11


The tables below present the balances of the Company’s invested assets measured at fair value on a recurring basis:
June 30, 2024TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$480,930 $480,930 $ $ 
Restricted cash$10,956 $10,956 $ $ 
Debt Securities Available-for-sale
U.S. government and agency securities$167,650 $ $167,650 $ 
States, municipalities and political subdivisions291,840  291,840  
Corporate bonds
216,844  216,844  
Mortgage-backed securities
15,765  15,765  
Asset-backed securities
2,749  2,749  
Other
4,005  4,005  
Total debt securities
$698,853 $ $698,853 $ 
Equity Securities
Common stock
$1,936 $1,936 $ $ 
Total debt securities and equity securities
$700,789 $1,936 $698,853 $ 

December 31, 2023TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$463,640 $463,640 $ 
Restricted cash$9,699 $9,699 $ 
Debt Securities Available-for-sale
U.S. government and agency securities$80,662 $ $80,662 $ 
States, municipalities and political subdivisions288,982  288,982  
Corporate bonds
166,830  166,830  
Mortgage-backed securities
19,926  19,926  
Asset-backed securities
227  227  
Other
4,055  4,055  
Total debt securities
$560,682 $ $560,682 $ 
Equity Securities
Common stock
$1,666 $1,666 $ $ 
Total debt securities and equity securities
$562,348 $1,666 $560,682 $ 
Financial Instruments excluded from the fair value hierarchy
The carrying value of premium receivables, accounts payable, accrued expense, revolving loans and borrowings under the Company’s senior secured credit facility approximate their fair value. The rate at which revolving loans and borrowings under the Company’s senior secured credit facility bear interest resets periodically at market interest rates.
12


Non-recurring fair value measurements
Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. For the six months ended June 30, 2024, there were no assets or liabilities that were measured at fair value on a non-recurring basis.
Certain of the Company’s investments are measured in accordance with GAAP for the type of investment, using methodologies other than fair value.
NOTE 4. OTHER COMPREHENSIVE INCOME
The following tables summarize other comprehensive income and disclose the tax impact of each component of other comprehensive income for the three and six months ended June 30, 2024 and 2023, respectively:
For the Three Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$924 $(219)$705 $(2,986)$700 $(2,286)
Reclassification adjustment of realized (gains) losses included in net income(12)3 (9)9 (2)7 
Effect on other comprehensive income$912 $(216)$696 $(2,977)$698 $(2,279)
For the Six Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$641 $(152)$489 $9,158 $(2,155)$7,003 
Reclassification adjustment of realized losses included in net income(11)2 (9)11 (3)8 
Effect on other comprehensive income $630 $(150)$480 $9,169 $(2,158)$7,011 
NOTE 5. LEASES
The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years, and often include one or more options to renew. These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing the Company’s right-of-use assets and lease obligations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases.
13


Components of the Company’s lease costs were as follows (in thousands):
For The Six Months Ended June 30,
20242023
Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$810 $787 
Finance lease cost:
Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations1,269 1,285 
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations407 451 
Total finance lease cost$1,676 $1,736 
Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$744 $796 
Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$42 $80 
Supplemental balance sheet information related to the Company’s operating and financing leases were as follows (in thousands):
Operating LeasesJune 30, 2024December 31, 2023
Right of use assets$6,357 $6,835 
Lease liability$7,528 $8,076 
Finance Leases 
Right of use assets$16,337 $17,606 
Lease liability$19,250 $20,386 
Weighted-average remaining lease term and discount rate for the Company’s operating and financing leases for the periods presented below were as follows:
Weighted-average remaining lease termJune 30, 2024December 31, 2023
Operating lease5.09yrs.5.57yrs.
Finance lease6.67yrs.7.16yrs.
Weighted-average discount rate
Operating lease5.44 %5.17 %
Finance lease4.14 %4.15 %
Maturities of lease liabilities by fiscal year for the Company’s operating and financing leases were as follows (in thousands):
Financing Lease
Operating Lease
2024 remaining$1,565 $876 
20253,173 1,655 
20263,216 1,636 
20273,190 1,599 
20283,270 1,633 
2029 and thereafter7,651 1,213 
Total lease payments22,065 8,612 
Less: imputed interest(2,815)(1,084)
Present value of lease liabilities$19,250 $7,528 
Supplemental cash flow information related to the Company's operating and financing leases were as follows (in thousands):
14


Operating Leases June 30, 2024June 30, 2023
Lease liability payments$1,139 $1,141 
Finance Leases
Lease liability payments$414 $443 
Total lease liability payments$1,553 $1,584 
NOTE 6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following at June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Land$2,582 $2,582 
Building9,599 9,599 
Software in progress17,530 14,450 
Computer hardware and software10,312 10,717 
Office furniture and equipment1,484 1,484 
Tenant and leasehold improvements10,893 10,876 
Vehicle fleet515 515 
Total, at cost52,915 50,223 
Less: accumulated depreciation and amortization(18,405)(17,005)
Property and equipment, net$34,510 $33,218 
The Company has capitalized certain costs related to a new policy, billing and claims system which is anticipated to be placed into service later in 2025.
Depreciation and amortization expense for property and equipment was approximately $718,800 and $566,000 for the three months ended June 30, 2024 and 2023, respectively. Depreciation and amortization expense for property and equipment was approximately $1.4 million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively. The Company owns real estate consisting of 13 acres of land, two buildings with a gross area of 88,378 square feet and a parking garage. The carrying value of the property is approximately $9.6 million with accumulated depreciation of approximately $2.6 million at June 30, 2024.
NOTE 7. INTANGIBLE ASSETS
At June 30, 2024 and December 31, 2023, intangible assets, net were $39.5 million and $42.6 million, respectively. The Company has determined the useful life of its intangible assets to range between 2.5-15 years. Intangible assets include $1.3 million relating to insurance licenses which is classified as an indefinite lived intangible. Impairment testing is required when events occur that indicate an asset may not be recoverable, such as a triggering event. Management reviews other intangible assets for impairment annually during the fourth quarter, or more frequently should events or changes in circumstances indicate that the Company's other intangible assets might be impaired.
The Company’s intangible assets consist of brand, agent relationships, renewal rights, customer relations, trade names and insurance licenses. During the three months ended June 30, 2023, certain brand and customer relations within the Company's restoration provider with a net value of $766,600 were impaired due to the discontinuation of providing restoration services to the Company’s policyholders. The impairment loss of $766,600 was included in intangible asset impairment in the Company's consolidated statements of operations for the three and six months ended June 30, 2023.
There was no impairment of the intangible assets with definite lives for the three and six months ended June 30, 2024.
Amortization expense of the Company’s intangible assets for the three and six months ended June 30, 2024 was $1.6 million and $3.1 million, respectively and for the three and six months ended June 30, 2023 was $1.6 million and $3.2 million, respectively.
Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands):
15


YearAmount
2024 - remaining$3,092 
20256,183 
20266,033 
20275,836 
20283,914 
Thereafter13,091 
Total$38,149 
NOTE 8. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the periods indicated (amounts in thousands, except share and per share amounts).
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Basic and Diluted
Net income available to common shareholders — basic and diluted
$18,869 $7,779 $33,094 $21,787 
Common Shares
Basic
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
Diluted
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
5.875% Convertible Notes59,26359,26359,26359,263
Total30,708,99525,626,42030,572,47025,621,994
Net income per common share
Basic$0.62 $0.30 $1.08 $0.85 
Diluted$0.61 $0.30 $1.08 $0.85 
NOTE 9. DEFERRED REINSURANCE CEDING COMMISSION
The Company defers reinsurance ceding commission income, which is amortized over the effective period of the related insurance policies. For the three months ended June 30, 2024 and 2023, the Company allocated ceding commission income of $9.4 million and $12.8 million, respectively, to policy acquisition costs and $3.1 million and $4.1 million, respectively, to general and administrative expense. For the six months ended June 30, 2024 and 2023, the Company allocated ceding commission income of $18.7 million and $25.3 million, respectively, to policy acquisition costs and $6.1 million and $8.3 million, respectively, to general and administrative expense.
The table below depicts the activity regarding deferred reinsurance ceding commission, included in accounts payable and other liabilities during the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning balance of deferred ceding commission income$31,549 $40,688 $33,627 $42,757 
Ceding commission deferred14,537 13,888 24,839 28,909 
Less: ceding commission earned(12,484)(16,586)(24,864)(33,676)
Ending balance of deferred ceding commission income$33,602 $37,990 $33,602 $37,990 
NOTE 10. DEFERRED POLICY ACQUISITION COSTS
The Company defers certain costs in connection with written policies, called deferred policy acquisition costs (“DPAC”), which are amortized over the effective period of the related insurance policies.
16


The Company anticipates that its DPAC will be fully recoverable in the near term. The table below depicts the activity regarding DPAC for the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning Balance$104,217 $98,035 $102,884 $99,617 
Policy acquisition costs deferred56,628 53,929 112,885 107,109 
Amortization(46,027)(45,228)(100,951)(99,990)
Ending Balance$114,818 $106,736 $114,818 $106,736 
NOTE 11. INCOME TAXES
For the three months ended June 30, 2024 and 2023, the Company recorded income tax provisions of $6.0 million and $5.9 million, respectively, which corresponds to effective tax rates of 24.1% and 43.0%, respectively. For the six months ended June 30, 2024 and 2023, the Company recorded income tax provisions of $11.6 million and $9.1 million, respectively, which corresponds to effective tax rates of 26.0% and 29.4%, respectively. The effective tax rate for the three months ended June 30, 2023 was impacted by an increase of $2.5 million in the deferred tax valuation allowance related to Osprey Re related to certain tax elections made by Osprey Re, the Company’s captive reinsurer domiciled in Bermuda. The impact of permanent tax differences on projected results of operations for the calendar year impacts the effective tax rate, which can also fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information. The effective tax rate for the six months ended June 30, 2023 was also impacted by a $863,300 increase in the valuation allowance related to certain tax elections made by Osprey Re.
The table below summarizes the significant components of the Company’s net deferred tax assets:
June 30, 2024December 31, 2023
Deferred tax assets:
(In thousands)
Unearned premiums$23,519 $18,507 
Unearned commission7,958 7,964 
Net operating loss1 436 
Tax-related discount on loss reserve4,365 5,162 
Stock-based compensation684 331 
Accrued expenses905 1,677 
Leases937 940 
Unrealized losses11,506 11,655 
Property and equipment314  
Other277 473 
Total deferred tax assets50,466 47,145 
Deferred tax liabilities:
Deferred acquisition costs$27,192 $24,366 
Prepaid expenses189 189 
Property and equipment 359 
Note discount73 152 
Basis in purchased investments7 8 
Basis in purchased intangibles8,658 9,327 
Other1,653 1,633 
Total deferred tax liabilities37,772 36,034 
Net deferred tax asset:$12,694 $11,111 
The statute of limitations related to the Company’s federal and state income tax returns remains open from the Company’s filings for 2020 through 2023. There are currently no tax years under examination.
At June 30, 2024 and December 31, 2023, the Company had no significant uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate.
17


NOTE 12. REINSURANCE
Overview
In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company purchases significant reinsurance from third party reinsurers. Purchasing reinsurance is an important part of the Company’s risk strategy, and premiums ceded to reinsurers is one of the Company’s largest costs. The Company has strong relationships with reinsurers, which it attributes to its management’s industry experience, disciplined underwriting, and claims management capabilities. For each of the twelve months beginning June 1, 2024 and 2023, the Company purchased reinsurance from the following sources: (i) the Florida Hurricane Catastrophe Fund, a state-mandated catastrophe fund (“FHCF”) which provides reinsurance for Florida admitted policies only, (ii) private reinsurers, all of which were rated “A-” or higher by A.M. Best Company, Inc. (“A.M. Best”) or Standard & Poor’s Financial Services LLC (“S&P”) or were fully collateralized, and (iii) the Company’s wholly-owned reinsurance subsidiary, Osprey Re Ltd. (“Osprey”). The Company also sponsored catastrophe bonds in 2024 and 2023 through Citrus Re Ltd., a Bermuda special purpose insurer, which provided an alternative to traditional reinsurance through the issuance of catastrophe bonds. For the 2023 hurricane season only, the Company also obtained reinsurance from the Florida State Board of Administration’s Reinsurance to assist Policyholders (“RAP”) program which provided reinsurance for Florida admitted policies only. The RAP component of the Company's reinsurance program was provided at no cost to the Company and is a non-recurring reinsurance program. In addition to purchasing excess of loss catastrophe reinsurance, the Company also purchased quota share, property per risk and facultative reinsurance. The Company’s quota share program limits its exposure on catastrophe and non-catastrophe losses and provides ceding commission income. The Company’s per risk programs limit its net exposure in the event of severe non-catastrophe losses impacting a single location or risk. The Company also utilizes facultative reinsurance to supplement its per risk reinsurance program where the Company capacity needs dictate.
Purchasing a sufficient amount of reinsurance to cover catastrophic losses from single or multiple events or significant non-catastrophe losses is an important part of the Company’s risk strategy. Reinsurance involves transferring, or “ceding”, a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company’s reinsurers are unable to meet the obligations they assume under the Company’s reinsurance agreements, the Company remains liable for the entire insured loss.
The Company’s insurance regulators require all insurance companies, like us, to have a certain amount of capital and reinsurance coverage in order to cover losses and loss adjustment expenses upon the occurrence of a catastrophic event. The Company’s reinsurance program provides reinsurance in excess of its state regulator requirements, which are generally based on the probable maximum loss that it would incur from an individual catastrophic event estimated to occur once in every 100 years based on its portfolio of insured risks. The nature, severity and location of the event giving rise to such a probable maximum loss differs for each insurer depending on the insurer’s portfolio of insured risks, including, among other things, the geographic concentration of insured value within such portfolio. As a result, a particular catastrophic event could be a one-in-100-year loss event for one insurance company while having a greater or lesser probability of occurrence for another insurance company. The Company also purchases reinsurance coverage to protect against the potential for multiple catastrophic events occurring in the same year. The Company shares portions of its reinsurance program coverage among its insurance company affiliates.
2024 - 2025 Reinsurance Program
Catastrophe Excess of Loss Reinsurance
Effective June 1, 2024, the Company entered into catastrophe excess of loss reinsurance agreements covering Heritage Property & Casualty Insurance Company (“Heritage P&C”), Zephyr Insurance Company (“Zephyr”) and Narragansett Bay Insurance Company (“NBIC”). The catastrophe reinsurance programs are allocated among traditional reinsurers, the Florida Hurricane Catastrophe Fund (“FHCF”), Citrus Re and Osprey Re. The FHCF covers Florida admitted market risks only and the Company elected to participate at 90% for the 2024 hurricane season. Osprey Re will provide reinsurance for a portion of the Heritage P&C, NBIC and Zephyr programs. The Company’s third-party reinsurers are either rated “A-” or higher by A.M. Best or S&P or are fully collateralized, to reduce credit risk. Osprey Re and Citrus Re are fully collateralized programs.
The reinsurance program, which is segmented into layers of coverage, protects the Company for excess property catastrophe losses and loss adjustment expenses. The 2024-2025 reinsurance program provides first event coverage up to $1.3 billion for Heritage P&C, first event coverage up to $1.1 billion for NBIC, and first event coverage up to $750.0 million for Zephyr. The Company’s first event retention in a 1 in 100-year event would include retention for the respective insurance company as well as any retention by Osprey. The first event maximum retention up to a 1 in 100-year event for each insurance company subsidiary is as follows: Heritage P&C – $40.0 million, of which $34.0 million would be ceded to Osprey; NBIC – $31.8 million of which the entire amount would be ceded to Osprey in a shared contract with Zephyr; and Zephyr — $40 million, of which $32 million would be ceded to Osprey in a shared contract with NBIC as well as $8.0 million ceded to Osprey in a separate reinsurance contract.
18


The Company is responsible for all losses and loss adjustment expenses in excess of the Company's reinsurance program. For second or subsequent catastrophic events, the Company’s total available coverage depends on the magnitude of the first event, as the Company may have coverage remaining from layers that were not previously fully exhausted. An aggregate of $3.3 billion of limit is available in 2024, which includes reinstatement through the purchase of reinstatement premium protection. The amount of coverage, however, will be subject to the severity and frequency of such events.
Additionally, the Company placed occurrence contracts for business underwritten by NBIC which covers all catastrophe losses excluding named storms, on December 31, 2023, expiring December 31, 2024. One contract which is 60% placed has a $15.0 million limit in excess of a retention of $25.0 million. Another contract provides the remaining 40% with a $20.0 million limit in excess of a retention of $20.0 million. Each contract has one reinstatement available.
Net Quota Share Reinsurance
The Company’s Net Quota Share coverage is proportional reinsurance, which applies to business underwritten by NBIC, for which certain of the Company’s other reinsurance (property catastrophe excess of loss and the second layer of the general excess of loss) inures to the quota share program. An occurrence limit of $20.0 million for catastrophe losses is in effect on the quota share program, subject to certain aggregate loss limits that vary by reinsurer. The amount and rate of ceding commissions slide, within a prescribed minimum and maximum, depending on loss performance. The Net Quota Share program was renewed on December 31, 2023 ceding 41.0% of the net premiums.
Per Risk Coverage
For losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by NBIC, excluding losses from named storms, the Company purchased property per risk coverage for losses and loss adjustment expenses in excess of $1.5 million per claim. The limit recoverable for an individual loss is $8.5 million and total limit for all losses is $25.5 million. There are two reinstatements available with additional premium due based on the amount of the layer exhausted. This coverage for the contract period from June 15, 2024 through June 14, 2025 is 100% placed. For losses arising from commercial residential business underwritten by NBIC, the Company also purchased property per risk coverage for losses and loss adjustments expenses in excess of $1 million per claim. The limit recovered for an individual loss is $500,000 and total limit for all losses is $1.5 million.
In addition, the Company purchased facultative reinsurance for losses in excess of $10.0 million for any properties it insured where the total insured value exceeded $10.0 million. The maximum limit for this coverage is $80.0 million. This coverage applies to losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by NBIC, excluding losses from named storms. The Company also purchased facultative reinsurance for losses underwritten by NBIC in excess of $3.5 million.
General Excess of Loss
The Company’s general excess of loss reinsurance protects business underwritten by NBIC and Zephyr multi-peril policies from single risk losses. For the contract period of July 1, 2023 through June 30, 2024, the coverage is $2.5 million excess $1.0 million for property losses and $1.0 million excess $1.0 million for casualty losses, and is 67.5% placed.
For a detailed discussion of the Company’s 2023-2024 Reinsurance Program refer to Part I, “Business”, Part II, Item 8, “Financial Statements and Supplementary Data” and “Note 12. Reinsurance” in the Company’s 2023 Form 10-K.
19


Effect of Reinsurance
The Company’s reinsurance arrangements had the following effect on certain items in the condensed consolidated statement of income for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
(In thousands)
Premium written:
Direct$424,530 $396,559 $781,214 $706,868 
Ceded(488,210)(473,657)(532,678)(506,433)
Net$(63,680)$(77,098)$248,536 $200,435 
Premiums earned:
Direct$350,073 $330,015 $691,462 $647,037 
Ceded(159,757)(153,211)(321,720)(304,204)
Net$190,316 $176,804 $369,742 $342,833 
Loss and Loss Adjustment Expenses
Direct$210,962 $144,219 $502,324 $307,036 
Ceded(105,034)(37,573)(294,361)(102,939)
Net$105,928 $106,646 $207,963 $204,098 
NOTE 13. RESERVE FOR UNPAID LOSSES
The Company determines the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts which are commonly referred to as incurred but not reported, or “IBNR”, claims as of the balance sheet date. The Company estimates its IBNR reserves by projecting its ultimate losses using industry accepted actuarial methods and then deducting actual loss payments and case reserves from the projected ultimate losses.
The table below summarizes the activity related to the Company’s reserve for unpaid losses:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Balance, beginning of period$843,687 $980,992 $845,955 $1,131,807 
Less: reinsurance recoverable on unpaid losses477,876 620,218 421,798 759,681 
Net balance, beginning of period365,811 360,774 424,157 372,126 
Incurred related to:
Current year97,240 109,371 192,612 208,285 
Prior years8,688 (2,725)15,351 (4,187)
Total incurred105,928 106,646 207,963 204,098 
Paid related to:
Current year51,201 53,569 81,383 83,944 
Prior years66,404 38,281 196,603 116,710 
Total paid117,605 91,850 277,986 200,654 
Net balance, end of period354,134 375,570 354,134 375,570 
Plus: reinsurance recoverable on unpaid losses468,137 442,289 468,137 442,289 
Balance, end of period$822,271 $817,859 $822,271 $817,859 
The Company believes that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.
As of June 30, 2024, the Company reported $354.1 million in unpaid losses and loss adjustment expenses, net of reinsurance which included $240.6 million attributable to IBNR net of reinsurance recoverable, or 67.9% of net reserves for unpaid losses and loss adjustment expenses. For the three months ended June 30, 2024, the Company experienced $8.7 million of net unfavorable prior year loss development compared to $2.7 million of net favorable prior year loss
20


development for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company experienced $15.4 million of net unfavorable prior year loss development compared to $4.2 million of net favorable prior year loss development for the six months ended June 30, 2023. The unfavorable development is largely associated with adverse development on Hurricane Irma claims, for which the losses are fully retained.
Reinsurance recoverable on unpaid losses includes expected reinsurance recoveries associated with reinsurance contracts the Company has in place. The amount may include recoveries from catastrophe excess of loss reinsurance, net quota share reinsurance, per risk reinsurance, and facultative reinsurance contracts.
NOTE 14. LONG-TERM DEBT
Convertible Senior Notes
In August 2017 and September 2017, the Company issued in aggregate $136.8 million of 5.875% Convertible Senior Notes (“Convertible Notes”) maturing on August 1, 2037, unless earlier repurchased, redeemed or converted. Interest is payable semi-annually in arrears, on February 1, and August 1 of each year. In January 2022, the Company reacquired and retired $11.7 million of its outstanding Convertible Senior Notes. Payment was made in cash and the Convertible Notes were retired at the time of repurchase. In addition, the Company expensed $242,700 which was the proportionate amount of the unamortized issuance and debt discount costs associated with this repurchase.
As of December 31, 2023 and at June 30, 2024, the Company had approximately $885,000 of the Convertible Notes outstanding, net of $21.1 million of Convertible Notes held by an insurance company subsidiary. For the six-months ended June 30, 2024 and 2023, the Company made interest payments, net of affiliated Convertible Notes, of approximately $25,115 and $26,000, on the outstanding Convertible Notes, respectively.
Senior Secured Credit Facility
The Company is party to a credit agreement dated as of December 14, 2018 (as amended from time to time, the “Credit Agreement”) with a syndicate of lenders.
The Credit Agreement, as amended, provides for (1) a five-year senior secured term loan facility in an aggregate principal amount of $100 million (the “Term Loan Facility”) and (2) a five-year senior secured revolving credit facility in an aggregate principal amount of $50 million (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).
Term Loan Facility. The principal amount of the Term Loan Facility amortizes in quarterly installments, which began with the close of the fiscal quarter ending March 31, 2019, in an amount equal to $1.9 million per quarter, payable quarterly, decreasing to $875,000 per quarter commencing with the quarter ending December 31, 2021, and increasing to $2.4 million per quarter commencing with the quarter ending December 31, 2022, with the remaining balance payable at maturity. The Term Loan Facility matures on July 28, 2026. As of December 31, 2023 and June 30, 2024, there was $79.6 million and $74.9 million, respectively in aggregate principal outstanding under the Term Loan Facility and after giving effect to the additional term loan advance that was used to refinance amounts outstanding under the Revolving Credit Facility and to pay fees, costs and expenses related thereto, there was $10 million in aggregate principal outstanding under the Revolving Credit Facility.
For the six months ended June 30, 2024, the Company made principal and interest payments of approximately $4.8 million and $3.3 million, respectively, on the Term Loan Facility and for the comparable period of 2023, the Company made principal and interest payments of $4.8 million and $3.4 million, respectively, on the Term Loan Facility.
Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the Revolving Credit Facility. At June 30, 2024 and December 31, 2023, the Company had $10.0 million in borrowings under the Revolving Credit Facility. At June 30, 2024 and 2023, there were no outstanding letters of credit issued under the Revolving Credit Facility. For the six months ended June 30, 2023, the Company made interest payments in aggregate of approximately $332,106 on the Revolving Credit Facility. For the six months ended June 30, 2024, the Company made interest payments in aggregate of approximately $413,668 on the Revolving Credit Facility and $66,535 relating to unused availability commitment fees.
At the Company's option, borrowings under the Credit Facilities bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin and a credit adjustment spread equal to 0.10% or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin.
21


At June 30, 2024, the effective interest rate for the Term Loan Facility and Revolving Credit Facility was 8.171% and 8.179%, respectively. The Company monitors the rates prior to the reset date which allows it to establish if the payment is monthly or quarterly payment based on the most beneficial rate used to calculate the interest payment.
Mortgage Loan
In October 2017, the Company and its subsidiary, Skye Lane Properties LLC, jointly obtained a commercial real estate mortgage loan in the amount of $12.7 million, bearing interest of 4.95% per annum and maturing on October 30, 2027. Pursuant to the terms of the mortgage loan, on October 30, 2022, the interest rate adjusted to an interest rate equal to the annualized interest rate of the United States 5-year Treasury Notes as reported by the Federal Reserve on a weekly average basis plus 3.10%, which resulted in an increase of the rate from 4.95% to 7.42% per annum. The Company makes monthly principal and interest payments against the loan. For the six months ended June 30, 2024 and 2023, the Company made principal and interest payments $548,131 of $518,746 on the mortgage loan, respectively.
FHLB Loan Agreements
In December 2018, a subsidiary of the Company received a 3.094% fixed interest rate cash loan of $19.2 million from the Federal Home Loan Bank (“FHLB”) Atlanta. On September 29, 2023, the Company restructured the December 2018 agreement to extend the maturity date to March 28, 2025, with a 5.109% fixed interest rate payable quarterly commencing on December 28, 2023. The subsidiary continues to be a member in the FHLB. Membership in the FHLB required an investment in FHLB’s common stock which was purchased in December 2018 and valued at $1.4 million. Additionally, the transaction required the acquired FHLB common stock and certain other investments to be pledged as collateral. As of June 30, 2024, the fair value of the collateralized securities was $23.6 million and the equity investment in FHLB common stock was $1.5 million. For the six months ended June 30, 2024, and 2023, the Company made quarterly interest payments as per the terms of the loan agreement of approximately $498,828 and $300,325, respectively.
As of June 30, 2024 and at December 31, 2023, the Company also holds other common stock from FHLB Boston for a value of $177,197, classified as equity securities and reported at fair value on the condensed consolidated financial statements.
In December 2018, an insurance subsidiary became a member of the FHLB-DM. Membership in the FHLB-DM required an investment in FHLB-DM’s common stock which was purchased in December 2018 and valued at $133,200. In January 2024, the insurance subsidiary of the Company received a 4.23% fixed interest rate cash loan of $5.5 million from the Federal Home Loan Bank (“FHLB-DM”) Des Moines. Additionally, the transaction required the acquired FHLB-DM common stock and certain other investments to be pledged as collateral. As of June 30, 2024, the fair value of the collateralized securities was $8.0 million and the equity investment in FHLB common stock was $295,500.
For the three and six months ended June 30, 2024, the Company made monthly interest payments as per the terms of the loan agreement of approximately $58,809, and $117,103, respectively.
The following table summarizes the Company’s long-term debt and credit facilities as of June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Convertible debt$885 $885 
Mortgage loan10,889 11,019 
Term loan facility74,875 79,625 
Revolving credit facility10,000 10,000 
FHLB loan agreements24,700 19,200 
Total principal amount$121,349 $120,729 
Deferred finance costs$569 $997 
Total long-term debt$120,780 $119,732 
As of the date of this report, the Company was in compliance with the applicable terms of all its covenants and other requirements under the Credit Agreement, Convertible Notes, cash borrowings and other loans. The Company’s ability to secure future debt financing depends, in part, on its ability to remain in such compliance. The covenants in the Credit Agreement may limit the Company’s flexibility in connection with future financing transactions and in the allocation of capital in the future, including the Company’s ability to pay dividends and make stock repurchases, and contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement.
22


The schedule of principal payments on long-term debt as of June 30, 2024 is as follows:
YearAmount
(In thousands)
2024 remaining$4,975 
202529,074 
202671,018 
20279,897 
2028 
Thereafter6,385 
Total$121,349 
NOTE 15. ACCOUNTS PAYABLE AND OTHER LIABILITIES
Accounts payable and other liabilities consist of the following:
DescriptionJune 30, 2024December 31, 2023
(In thousands)
Deferred ceding commission$33,602 $33,627 
Accounts payable and other payables15,058 16,185 
Taxes, licenses and fees4,908  
Accrued interest and issuance costs261 325 
Other liabilities213 329 
Premium tax 1,486 
Commission payables17,682 17,714 
Total other liabilities$71,724 $69,666 
NOTE 16. STATUTORY ACCOUNTING AND REGULATIONS
State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers such as the Company’s insurance subsidiaries. The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-based capital, restrict insurers’ ability to pay dividends, restrict the allowable investment types and investment mixes, and subject the Company’s insurers to assessments.
The Company’s insurance subsidiaries Heritage Property & Casualty Insurance Company (“Heritage P&C)”, Narragansett Bay Insurance Company (“NBIC”), Zephyr Insurance Company (“Zephyr”), and Pawtucket Insurance Company (“PIC”) must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. Heritage P&C is required to maintain capital and surplus equal to the greater of $15.0 million or 10% of its respective liabilities. Zephyr is required to maintain a deposit of $750,000 in a federally insured financial institution. NBIC is required to maintain capital and surplus of $3.0 million. The combined statutory surplus for Heritage P&C, Zephyr, and NBIC was $253.0 million at June 30, 2024 and $259.6 million at December 31, 2023. State law also requires the Company’s insurance subsidiaries to adhere to prescribed premium-to-capital surplus ratios, and risk-based capital requirements with which the Company's insurance subsidiaries are in compliance. At June 30, 2024, the Company’s insurance subsidiaries met the financial and regulatory requirements of each of the states in which they conduct business.
NOTE 17. COMMITMENTS AND CONTINGENCIES
The Company is involved in claims-related legal actions arising in the ordinary course of business. The Company accrues amounts resulting from claims-related legal actions in unpaid losses and loss adjustment expenses during the period that it determines an unfavorable outcome becomes probable and it can estimate the amounts. Management makes revisions to its estimates based on its analysis of subsequent information that the Company receives regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages; and (iv) trends in general economic conditions, including the effects of inflation.
23


NOTE 18. RELATED PARTY TRANSACTIONS
From time to time the Company has been party to various related party transactions involving certain of its officers, directors and significant stockholders, including as set forth below. The Company has entered into each of these arrangements without obligation to continue its effect in the future and the associated expense was immaterial to its results of operations or financial position as of June 30, 2024 and 2023.
In July 2019, the Board of Directors appointed Mark Berset to the Board of Directors of the Company. Mr. Berset is also the Chief Executive Officer of Comegys Insurance Agency, Inc. (“Comegys”), an independent insurance agency that writes policies for the Company. The Company pays commission to Comegys based upon standard industry rates consistent with those provided to the Company’s other insurance agencies. There are no arrangements or understandings between Mr. Berset and any other persons with respect to his appointment as a director. For the three months ended June 30, 2024 and 2023, the Company paid agency commission to Comegys of approximately $39,280 and $33,160, respectively. For the six months ended June 30, 2024 and 2023, the Company paid agency commission to Comegys of approximately $80,088 and $69,901, respectively.
NOTE 19. EMPLOYEE BENEFIT PLANS
The Company provides a 401(k) plan for all qualifying employees. The Company provides a matching contribution of 100% on the first 3% of employees’ contribution and 50% on the next 2% of the employees’ contribution to the plan. The maximum match is 4%. For the three months ended June 30, 2024 and 2023, the contributions made to the plan on behalf of the participating employees were approximately $368,500 and $330,470, respectively. For the six months ended June 30, 2024 and 2023, the contributions made to the plan on behalf of the participating employees were approximately $821,700 and $729,670, respectively.
The Company offers employees a flex healthcare plan which allows employees the choice of three medical plans with a range of coverage levels and costs. For the three months ended June 30, 2024 and 2023, the Company incurred medical premium costs including healthcare premiums of $1.5 million and $1.5 million, respectively. For the six months ended June 30, 2024 and 2023, the Company incurred medical premium costs including healthcare premiums of $2.7 million and $3.0 million, respectively.
NOTE 20. EQUITY
The total amount of authorized capital stock consists of 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of June 30, 2024, the Company had 30,684,198 shares of common stock outstanding, 12,231,674 treasury shares of common stock and 1,549,775 unvested restricted common stock with accrued dividends reflecting additional paid-in capital of $361.8 million as of such date.
As more fully disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2023, as of December 31, 2023, there were 30,218,938 shares of common stock outstanding, 12,231,674 treasury shares of common stock and 1,161,811 unvested shares of restricted common stock with accrued dividends, representing $360.3 million of additional paid-in capital.
Common Stock
Holders of common stock are entitled to one vote for each share held on all matters subject to a vote of stockholders, subject to the rights of holders of any outstanding preferred stock. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election, subject to the rights of holders of any outstanding preferred stock. Holders of common stock will be entitled to receive ratably any dividends that the board of directors may declare out of funds legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. Upon the Company’s liquidation, dissolution or winding up, the holders of common stock will be entitled to receive ratably the Company's net assets available after the payment of all debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. There is no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of the Company’s capital stock (excluding restricted stock) are fully paid and non-assessable.
Stock Repurchase Program
On December 15, 2022, the Board of Directors established a new share repurchase program plan to commence on December 31, 2022, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and
24


regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2023 (the "Prior Share Repurchase Plan"). There were no shares repurchased for the year ended December 31, 2023.
On March 11, 2024, the Board of Directors established a new share repurchase program plan which commenced upon the expiration of the Prior Share Repurchase Plan on December 31, 2023, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2024 (the "New Share Repurchase Plan"). There were no shares repurchased for the six months ended June 30, 2024. At June 30, 2024, the Company has the capacity under the New Share Repurchase Plan to repurchase $10.0 million of its common stock until December 31, 2024.
Dividends
The declaration and payment of any future dividends will be subject to the discretion of the Board of Directors and will depend on a variety of factors including the Company’s financial condition and results of operations.
The Board of Directors elected not to declare any dividends during the six months ended June 30, 2024 or for the six months ended June 30, 2023.
NOTE 21. STOCK-BASED COMPENSATION
Restricted Stock
The Company has adopted the Heritage Insurance Holdings, Inc. 2023 Omnibus Incentive Plan (the “2023 Plan”), which became effective on June 7, 2023. The 2023 Plan authorized 2,125,000 shares of common stock for issuance under the Plan for future grants. Upon effectiveness of the 2023 Plan, no new awards may be granted under the prior Omnibus Incentive Plan, which will continue to govern the terms of awards previously made under such plan.
At June 30, 2024, there were in aggregate 854,857 shares available for grant under the 2023 Plan. The Company recognizes compensation expense under ASC 718 for its stock-based payments based on the fair value of the awards.
In June 2024, the Company awarded to non-employee directors in aggregate 39,312 shares of restricted stock with a fair value at the time of grant of $8.14 per share. The awards shall vest on the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date.
On February 26, 2024, the Company awarded 163,640 shares of time-based restricted stock and 253,918 shares of performance-based restricted stock, with a fair value at the time of grant of $7.02 per share under the 2023 Plan to certain employees. The time-based restricted stock shall vest annually in three equal installments commencing on December 15, 2024. The performance based restricted stock has a three-year performance period beginning on January 1, 2024 and ending on December 31, 2026 and will vest following the end of the performance period but no later than March 30, 2027. The number of shares that will be earned at the end of the performance period is subject to increase or decrease based on the results of the performance condition.
On July 11, 2023, the Company awarded 351,716 shares of time-based restricted stock and 857,843 shares of performance-based restricted stock, with a fair value at the time of grant of $4.08 per share under the 2023 Plan to certain employees. The time-based restricted stock shall vest annually in three equal installments commencing on December 15, 2023. The performance based restricted stock has a three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 and will vest following the end of the performance period but no later than March 30, 2026. The number of shares that will be earned at the end of the performance period is subject to decrease based on the results of the performance condition.
In June 2023, the Company awarded to non-employee directors in aggregate 63,744 shares of restricted stock with a fair value at the time of grant of $5.02 per share. The awards shall vest on the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date. In August 2023, the awards were amended to reflect the correct grant date fair market value that resulted in an adjustment to the number of shares of restricted stock awarded from 63,744 to 77,296 shares of restricted stock. The Company's annual shareholders meeting was held on June 5, 2024, at which time 77,296 shares of restricted stock were effectively vested.
For the performance-based shares issued in 2023, the number of shares that will be earned at the end of the performance period is subject to decrease based on the result of the performance condition, as these shares were issued at the maximum amount. For the performance-based shares issued in 2024, the number of shares that will be earned at the end of the performance period is subject to increase or decrease based on the result of the performance condition, as these shares were issued at the target amount.
25


The Plan authorizes the Company to grant stock options at exercise prices equal to the fair market value of the Company’s stock on the dates the options are granted.
Restricted stock activity for the six months ended June 30, 2024 is as follows:
Number of shares
Weighted-Average Grant-Date Fair
Value per Share
Non-vested, at December 31, 20231,161,811$4.25 
Granted - Performance-based restricted stock253,9187.12 
Granted - Time-based restricted stock211,3427.02 
Vested(77,296)4.14 
Canceled and surrendered  
Non-vested, at June 30, 20241,549,775$6.07 
Awards are being amortized to expense over the one to three-year vesting periods. For the three months ended June 30, 2024 and 2023 the Company recognized $833,000 and $403,000 of stock compensation expense, respectively. The Company recognized $1.4 million and $797,980 of stock compensation expense for the six months ended June 30, 2024 and 2023, respectively. For the three and six month periods ending June 30, 2024, 77,296 shares of restricted stock previously granted to non-employee directors were vested and released. For the three months ended June 30, 2023, 86,954 shares of restricted stock were vested and released, all of which had been granted to employees. For the six months ended June 30, 2023, 111,954 shares of restricted stock previously granted to employees and non-employee directors were vested and released. Of the shares released to employees, 4,200 shares were withheld by the Company to cover withholding taxes of $7,560, and there were also 1,482 shares forfeited upon employment terminations.
At June 30, 2024, there was approximately $2.0 million unrecognized expense related to time-based non-vested restricted stock and an additional $3.2 million for performance-based restricted stock, net of expected forfeitures which is expected to be recognized over the remaining restriction periods as described in the table below. At June 30, 2023, there was approximately $1.5 million of unrecognized expense.
Additional information regarding the Company’s outstanding non-vested time-based restricted stock and performance-based restricted stock at June 30, 2024 is as follows:
Grant dateRestricted shares unvestedShare Value at Grant Date Per ShareRemaining Restriction Period (Years)
March 16, 202237,9476.720.6
July 11, 20231,046,5684.081.3
February 26, 2024417,5587.022.5
March 11, 20248,3907.150.6
June 6, 202439,3128.141
Total1,549,775
NOTE 22. SUBSEQUENT EVENTS
The Company performed an evaluation of subsequent events through the date the condensed consolidated financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the condensed consolidated financial statements as of June 30, 2024.
26


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with our condensed consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). Unless the context requires otherwise, as used in this Form 10-Q, the terms “we”, “us”, “our”, “the Company”, “our Company”, and similar references refer to Heritage Insurance Holdings, Inc., a Delaware corporation, and its subsidiaries.
Overview
We are a super-regional property and casualty insurance holding company that primarily provides personal and commercial residential insurance products across our multi-state footprint. We provide personal residential insurance in Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia and commercial residential insurance in Florida, New Jersey, and New York. We provide personal residential insurance in Florida and South Carolina on both an admitted and non-admitted basis and in California on a non-admitted basis. As a vertically integrated insurer, we control or manage substantially all aspects of risk management, underwriting, claims processing and adjusting, actuarial rate making and reserving, customer service, and distribution. Our financial strength ratings are important to us in establishing our competitive position and can impact our ability to write policies.
Recent Developments
Economic and Market Factors
We continue to monitor the effects of general changes in economic and market conditions on our business. As a result of general inflationary pressures, we have experienced, and may continue to experience, increased cost of materials and labor needed for repairs and to otherwise remediate claims throughout all states in which we conduct business. We mitigate the impact of inflation by implementation of rate increases and the use of inflation guard, which ensures appropriate replacement cost values for our business to reflect the inflationary impact on costs to repair properties. Use of inflation guard impacts both premium and TIV, causing both to rise. Rising reinsurance costs may be mitigated through exposure management as well as recouping the cost of reinsurance in future rate filings.

Supplemental Information
The Supplemental Information table below demonstrates progress on our initiatives by providing policy count, premiums-in-force, and TIV for Florida and all other states as of June 30, 2024 and comparing those metrics to June 30, 2023. One of our strategies has been to reduce personal lines exposure in Florida, given historical abusive claims practices which drove up loss costs. As a consequence, our policy count for Florida personal lines policies has intentionally declined over the last several years. The actions of the Florida legislature aimed at curtailing assignment of benefits and litigated claims abuse is having a positive impact on loss cost trends. Coupled with more adequate rates, we expect to pursue a strategy of controlled growth as described below.
Policies-in-force:Q2 2024Q2 2023
% Change
Florida142,591 165,761 (14.0)%
Other States277,653 323,629 (14.2)%
Total420,244 489,390 (14.1)%
Premiums-in-force:
Florida$734,698,077 $665,169,364 10.5 %
Other States687,638,190 675,983,599 1.7 %
Total$1,422,336,267 $1,341,152,963 6.1 %
Total Insured Value:
Florida$104,426,161,222 $105,826,117,271 (1.3 %)
Other States278,666,369,312 297,901,382,470 (6.5)%
Total$383,092,530,534 $403,727,499,741 (5.1)%
Florida policies-in-force declined from the prior year quarter by 14.0% while premiums-in-force increased 10.5%, and TIV was down by 1.3%. The increase in Florida premiums-in-force was driven by organic growth of our commercial residential business which generates higher average premium, rate increases and use of inflation guard, partly offset by a
27


premium reduction associated with fewer Florida personal lines policies. The Florida TIV declined modestly as the reduction in personal lines policies was offset by the strategic growth of our commercial residential portfolio, as well as use of inflation guard across the book of business. Compared to the quarter ended June 30, 2023, the policy count for markets outside of Florida decreased 14.2% due to underwriting actions and intentional targeted exposure management, resulting in a TIV decrease of 6.5% while premiums-in-force increased by 1.7% due to rating actions.
Strategic Profitability Initiatives
The following provides an update to our strategic initiatives aimed at achieving consistent long-term quarterly earnings and driving shareholder value.
Generate underwriting profit through rate adequacy and more selective underwriting.
Significant and consistent rating actions across the book of business have had a favorable impact, resulting in higher average premium per policy.
Maintaining rate adequacy is a core principle for our business and we expect our net income to grow and build off our first quarter results, having a positive impact on future earnings.
Gross premiums earned increased 6.1% over the prior year quarter, driven by rate actions as well as organic growth in commercial residential business, while net income grew by 143%.
Premiums-in-force of $1.4 billion are up 6.1% from the prior year quarter, driven primarily by growth in commercial residential business and rate increases throughout the book of business.
Continued focus on enhancing underwriting criteria, including assessment of agent and agency performance has benefited the attritional loss ratio.
Allocate capital to products and geographies that maximize long-term returns.
We selectively increased the commercial residential premium in force by 29.4% compared to the second quarter of 2023, while the total insured value (“TIV”) only increased by 9.9%. The commercial residential business, which tends to have a significantly lower attritional loss ratio, generates materially higher premiums. Commercial residential business accounts for 21.3% of the in-force premium, compared to 17.5% in the prior year period.
As part of our targeted 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.
Premiums-in-force grew nearly $30.0 million or 177.0% year over year for our Excess & Surplus (“E&S”) business where we can more nimbly adjust rates and coverage. This business was written in California, Florida, and South Carolina. We will continue to evaluate other states for E&S and other products as we focus on our controlled growth strategy.
This disciplined underwriting approach resulted in a policy count reduction of just over 69,000 or 14.1% throughout our footprint from second quarter 2023, while premium in force increased by $81.2 million or 6.1%. We expect the headwind from declining policies to moderate.
Given improved rate adequacy across our regions, we expect to begin underwriting new policies in Florida and the Northeast as we pursue a controlled growth strategy designed to accelerate revenue growth.
Competitor dislocation in many markets has opened new business opportunities to Heritage, specifically in New York as several competitors have exited the market.
Expect to leverage our existing sales and marketing teams that are in place in both Florida and the Northeast.
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 27.3% of the Company’s TIV.
Trends
Inflation, Underwriting and Pricing
We continue to address rising reinsurance and loss costs in the property insurance sector throughout much of the United States by ensuring rate adequacy, maintaining strong underwriting criteria, and continuous monitoring of exposure
28


on a granular level. Our rates reflect the use of inflation guard factors to ensure that rising costs to repair properties are reflected in our rates. These factors resulted in an increase in the average premium per policy of 23.5% for the quarter ended June 30, 2024 as compared to the prior year quarter. The higher average premium is driven by rate changes, inclusion of inflation in premiums as described above, and by the mix of business written. We experienced intentional growth of our commercial residential business during 2023 and during the first two quarters of 2024. This line of business generates a significantly higher average premium per policy. New rates, which are subject to approval by our regulators, become effective when a policy is written or renewed, and the premium is earned pro rata over the policy period of one year. As a result of this timing, it can take up to twenty-four months for the complete impact of a rate change to be fully earned in our financial statements. For that reason, we account for inflation in our rate indications and filings with our regulators.
We invest in data analytics, using software and experienced personnel, to continuously evaluate our underwriting criteria and manage exposure to catastrophe and other losses. Our retention has remained steady in the range of 90% despite the rate increases we have implemented, in large part due to a challenging property insurance market in many of the regions in which we operate. While we believe our rates are generally competitive with private market insurers operating in our space, we are focused on meticulous underwriting, managing exposure and achieving rate adequacy throughout our book of business.
We continue to experience rising inflation in the form of increased labor and material costs, which drive up claim costs throughout all states in which we conduct business and the cost of reinsurance continues to rise. Our Florida personal lines market had experienced claim costs driven up by litigated claims, which substantially increased loss costs and drove up rates for the insurance buying public. In addition, catastrophe excess of loss reinsurance markets tightened with higher pricing and less supply. Our response to this phenomenon was to raise rates and reduce exposure for personal lines business in Florida and other states in the southeast as well as the northeast. Recent legislative changes have been made in Florida in each of the last three years, which we believe is making progress toward reducing losses from abusive claim reporting practices and stabilizing the Florida property insurance market. The legislation appears to be having the intended impact. Given improved rate adequacy throughout our book of business and more stabilized reinsurance pricing and availability, we expect to pursue a strategy of controlled growth anchored by continued risk management and stringent underwriting. In force premium for our E&S business, where we can more nimbly adjust rates and coverage to meet market conditions, continues to grow.
Our industry experienced significantly higher reinsurance costs and more constrained availability for catastrophe excess of loss reinsurance in recent years. For the 2024 hurricane season, the supply of catastrophe excess of loss reinsurance for the Company was ample and pricing and terms have begun to moderate. We are managing exposure by writing new business only in geographies for which rates are adequate, non-renewing unprofitable business in compliance with regulatory requirements, and maintaining our strict underwriting requirements. We have improved the geographic distribution of our business, which is becoming more rate adequate.
Overview of Financial Results
In the following section, we discuss our financial condition and results of operations for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
The discussion of our financial condition and results of operations that follows provides information that will assist the reader in understanding our consolidated financial statements, the changes in certain key items in those financial statements from quarter to quarter, including certain key performance indicators such as net combined ratio, ceded premium ratio, net expense ratio and net loss ratio, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect our consolidated financial statements. This discussion should be read in conjunction with our consolidated financial statements and the related notes included under Item 1 of this Quarterly Report on Form 10-Q.
Second quarter 2024 net income was $18.9 million or $0.61 per diluted share, compared to net income of $7.8 million or $0.30 per diluted share in the prior year quarter, primarily driven by an increase in net premiums earned, higher net investment income, and a reduction in realized losses, which is partly offset by higher operating expenses. The improvement in net income is attributable to the positive impact of rate actions, underwriting actions, and targeted exposure management taken over the last several years, which favorably impacted results during the second quarter of 2024.
Gross premiums written of $424.5 million were up 7.1% from $396.6 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, partly offset by targeted exposure management.
29


Gross premiums earned was $350.1 million, up 6.1% from $330.0 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months as described above.
Net premiums earned was $190.3 million, up 7.6% from $176.8 million in the prior year quarter, reflecting higher gross premium earned outpacing the increase in ceded premiums for the current year quarter.
Losses and loss adjustment expenses ("LAE") incurred was $105.9 million, down 0.7% from $106.6 million in the prior year quarter. The decrease primarily stems from lower weather losses mostly offset by adverse loss development and by higher attritional losses. Net weather losses for the current accident quarter were $19.7 million, a decrease of $14.1 million from $33.8 million in the prior year quarter. There were no catastrophe losses in the current or prior year quarter. Additionally, the net loss ratio was impacted by net unfavorable loss development of $8.7 million during the second quarter of 2024, compared to net favorable development of $2.7 million in the second quarter of 2023.
Ceded premium ratio was 45.6%, down 0.8 points from 46.4% in the prior year quarter driven by growth in gross premiums earned which offset higher catastrophe excess of loss reinsurance costs.
Net loss and LAE ratio was 55.7%, down 4.6 points from 60.3% in the prior year quarter, driven by growth in net premiums earned coupled with a small decline in net losses and LAE incurred as described above.
Net expense ratio was 36.8%, up 2.0 points from 34.8% in the prior year quarter, primarily due to higher underwriting costs associated with the increase in gross premiums written and a reduction in ceding commission income as well as higher general and administrative costs which were partly offset by the increase in net premiums earned.
Net combined ratio was 92.5% improved 2.6 points from 95.1% in the prior year quarter, driven by a lower net loss ratio which was partly offset by a higher net expense ratio as described above.
The effective tax rate was 24.1% compared to 43.0% in the prior year quarter. The effective tax rate in second quarter 2023 was impacted by an increase of $2.5 million in the deferred tax valuation allowance related to certain tax elections made by Osprey Re, the Company’s captive reinsurer domiciled in Bermuda. There was no benefit nor detriment associated with a valuation allowance in the current year quarter. The effective tax rate can fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information.
Results of Operations
Comparison of the Three Months Ended June 30, 2024 and 2023
For the Three Months Ended June 30,
20242023$ Change % Change
(Unaudited)(In thousands)
REVENUE:
Gross premiums written$424,530 $396,559 $27,971 7.1 %
Change in gross unearned premiums(74,457)(66,544)(7,913)11.9 %
Gross premiums earned350,073 330,015 20,058 6.1 %
Ceded premiums(159,757)(153,211)(6,546)4.3 %
Net premiums earned 190,316 176,804 13,512 7.6 %
Net investment income9,769 6,599 3,170 48.0 %
Net realized gains (losses) and impairment12 (1,568)1,580 (100.8)%
Other revenue3,474 3,478 (4)(0.1)%
Total revenue$203,571 $185,313 $18,258 9.9 %
Total revenue
Total revenue was $203.6 million for the second quarter of 2024, up 9.9% from $185.3 million in the prior year quarter. The increase primarily stems from higher net premiums earned and net investment income as described below.
30


Gross premiums written
Gross premiums written were $424.5 million for the second quarter of 2024, up 7.1% from $396.6 million in the prior year quarter, reflecting a strategic and substantial 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, partly offset by intentional targeted exposure management resulting in strategic premium reductions of personal lines business in most of our larger states.
Premiums-in-force were $1.4 billion at June 30, 2024, representing a 6.1% increase from the prior year quarter, primarily due to continued proactive underwriting actions and rate increases across the entire portfolio, despite an intentional policy count reduction of approximately 69,000 policies. Premiums-in-force were also favorably impacted by strategic growth of the Company’s commercial residential product and use of inflation guard across all products. Concurrently, TIV was down by 5.1% from the prior year quarter.
Gross premiums earned
Gross premiums earned were $350.1 million for the second quarter of 2024 up 6.1% from $330.0 million in the prior year quarter, reflecting higher gross premiums written over the last twelve months driven by a higher average premium per policy, use of inflation guard, and organic growth of the commercial residential business.
Ceded premiums
Ceded premiums were $159.8 million for the second quarter of 2024, up 4.3% from $153.2 million in the prior year quarter. The increase is attributable to an increase in the cost of our catastrophe excess of loss reinsurance program, which commences June 1 each year, partly offset by a lower cost for our net quota share reinsurance associated with cession and associated premium volume changes. Additionally, the second quarter of 2024 included a $10.0 million reinstatement premium related to Hurricane Ian which did not occur in the prior year quarter. To the extent the ultimate losses for Hurricane Ian grow, additional reinstatement premiums may be incurred depending upon the amount of additional reinsurance limit utilized.
Net premiums earned
Net premiums earned were $190.3 million for the second quarter of 2024, up 7.6% from $176.8 million in the prior year quarter. The increase primarily stems from growth in gross premiums earned outpacing the increase in ceded premiums, as described above.
Net investment income
Net investment income, inclusive of realized investment gains (losses) and unrealized losses on equity securities, was $9.8 million for the second quarter of 2024, up from $5.0 million in the prior year quarter. The increase is primarily due to higher yields on cash and invested assets associated with higher interest rates. Additionally net investment income for the prior year quarter includes a $1.6 million impairment on other investments that did not recur in the current year quarter.
Other revenue
Other revenue was $3.5 million for the second quarter of 2024, relatively flat compared to the prior year quarter.
For the Three Months Ended June 30,
(Unaudited)20242023$ Change % Change
OPERATING EXPENSES:(In thousands)
Losses and loss adjustment expenses105,928 106,646 (718)(0.7)%
Policy acquisition costs47,224 41,451 5,773 13.9 %
General and administrative expenses22,780 20,058 2,722 13.6 %
Intangible asset impairment— 767 (767)(100.0)%
Total operating expenses175,932 168,922 7,010 4.1 %
Losses and loss adjustment expenses
Losses and loss adjustment expenses ("LAE") incurred were $105.9 million for the second quarter of 2024, down 0.7% from $106.6 million in the prior year quarter. The decrease primarily stems from lower weather losses compared to the prior year quarter, mostly offset by higher attritional losses and adverse development. Net current accident year weather losses were $19.7 million, down from $33.8 million in the prior year quarter. There were no catastrophe losses in the current or prior year quarter. Additionally, we experienced $8.7 million of net unfavorable prior year development compared to $2.7 million of net favorable prior year development in the prior year quarter.
31


Policy acquisition costs
Policy acquisition costs were $47.2 million for the second quarter of 2024, up 13.9% from $41.5 million in the prior year quarter. The increase is primarily attributable to growth in gross premiums written and lower ceding commission earned on the net quota share reinsurance contract, the income of which offsets, or reduces, other policy acquisition costs. The reduction in ceding commission income is due to less written premium associated with the net quota share reinsurance program coupled with higher ceding commission associated with contracts in runoff in the prior year period which did not recur in the current year quarter.
General and administrative expenses
General and administrative expenses were $22.8 million for the second quarter of 2024, up 13.6% from $20.1 million in the prior year quarter. The increase was driven primarily by investments in technology, higher costs for liability insurance, and less ceding commission income as described above, for which a portion is allocated to general and administrative expenses.
For the Three Months Ended June 30,
20242023$ Change% Change
(Unaudited)(In thousands, except per share amounts)
Operating income27,639 16,391 11,248 68.6 %
Interest expense, net2,780 2,740 40 1.5 %
Income before income taxes24,859 13,651 11,208 82.1 %
Provision for income taxes5,990 5,872 118 2.0 %
Net income$18,869 $7,779 $11,090 142.6 %
Basic earnings per share$0.62 $0.30 $0.32 106.7 %
Diluted earnings per share$0.61 $0.30 $0.31 103.3 %
Net income
Net income for the second quarter of 2024 was $18.9 million or $0.61 per diluted share, an improvement from net income of $7.8 million or $0.30 per diluted share in the prior year quarter. The improvement in net income is attributable to the positive impact of rate actions, underwriting actions, and targeted exposure management taken over the last several years, which favorably impacted results for the second quarter of 2024. These and other actions resulted in growth of 7.6% in net premiums earned and a 48.0% increase in investment income, and a 0.7% decrease in net losses and LAE, as described above. An increase of 13.9% in policy acquisition costs as well as a 13.6% increase in general and administrative costs partly offset higher total revenue compared to the prior year quarter. The current year quarter also benefited from a lower effective tax rate, as described below.
Provision for income taxes
The provision for income taxes was $6.0 million for the second quarter of 2024 compared to $5.9 million in the prior year quarter. The effective tax rate for second quarter 2024 was 24.1% compared to 43.0% in the prior year quarter. The effective tax rate in second quarter 2023 was impacted by an increase of $2.5 million in the deferred tax valuation allowance related to Osprey Re related to certain tax elections made by Osprey Re, the Company’s captive reinsurer domiciled in Bermuda. The impact of permanent tax differences on projected results of operations for the calendar year impacts the effective tax rate, which can also fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information.
Ratios
For the Three Months Ended June 30,
(Unaudited)20242023
Ceded premium ratio
45.6 %46.4 %
Net loss and LAE ratio55.7 %60.3 %
Net expense ratio36.8 %34.8 %
Net combined ratio92.5 %95.1 %
32


Net combined ratio
The net combined ratio was 92.5% for the second quarter of 2024, down 2.6 points from 95.1% in the prior year quarter. The decrease primarily stems from a lower net loss and LAE ratio as described below, which was partly offset by a higher net expense ratio as described below.
Ceded premium ratio
The ceded premium ratio was 45.6% for the second quarter of 2024, down 0.8 points from 46.4% in the prior year quarter, primarily driven by higher net premiums earned which outpaced the increase in ceded premiums as described above.
Net loss and LAE ratio
The net loss and LAE ratio was 55.7% for the second quarter of 2024, 4.6 points lower than the prior year quarter of 60.3%, primarily driven by higher net premiums earned, and lower net losses and LAE as described above.
Net expense ratio
The net expense ratio was 36.8% for the second quarter of 2024, up 2.0 points from the prior year quarter amount of 34.8%. The increase was primarily driven by higher underwriting costs associated with the increase in gross premiums written and higher general and administrative costs as described above which were partly offset by the increase in net premiums earned.
Comparison of the Six Months Ended June 30, 2024 and 2023
For the Six Months Ended June 30,
20242023$ Change % Change
(Unaudited)(In thousands)
REVENUE:
Gross premiums written$781,214 $706,868 $74,346 10.5 %
Change in gross unearned premiums(89,752)(59,831)(29,921)50.0 %
Gross premiums earned691,462 647,037 44,425 6.9 %
Ceded premiums(321,720)(304,204)(17,516)5.8 %
Net premiums earned 369,742 342,833 26,909 7.8 %
Net investment income18,320 12,181 6,139 50.4 %
Net realized gains11 330 (319)(96.7)%
Other revenue6,800 6,890 (90)(1.3)%
Total revenue$394,873 $362,234 $32,639 9.0 %
Total revenue
Total revenue was $394.9 million for the six months ended June 30, 2024, up 9.0% compared to $362.2 million in the prior year period. The increase primarily stems from higher net premiums earned and net investment income as described below.
Gross premiums written
Gross premiums written were $781.2 million for the six months ended June 30, 2024, up 10.5% from $706.9 million in the prior year period, reflecting a strategic and substantial increase in Florida commercial residential lines business and a higher average premium per policy throughout all lines of business, partly offset by intentional targeted exposure management described above.
Premiums-in-force were $1.4 billion at June 30, 2024, representing a 6.1% increase from the prior year period, primarily due to continued proactive underwriting actions and rate increases across the entire portfolio, despite an intentional policy count reduction of approximately 69,000 policies. Premiums-in-force were also favorably impacted by strategic growth of the Company’s commercial residential product and use of inflation guard across all products. Concurrently, TIV was down by 5.1% from the prior year period.
33


Gross premiums earned
Gross premiums earned were $691.5 million for the six months ended June 30, 2024, up 6.9% from $647.0 million in the prior year period. The increase reflects higher gross premiums written over the preceding twelve months driven by a higher average premium per policy, reflecting rate increases and the use of inflation guard, and organic growth of the commercial residential business.
Ceded premiums
Ceded premiums were $321.7 million for the six months ended June 30, 2024, up 5.8% from $304.2 million in the prior year period. The increase is attributable to an increase in the cost of our catastrophe excess of loss reinsurance program, which commences June 1 each year, driven by an increase in TIV and higher reinsurance costs, partly offset by a lower cost for our net quota share reinsurance associated with cession and associated premium volume changes. Additionally, the six months ended June 30, 2024 includes a $18.7 million reinstatement premium related to Hurricane Ian which did not occur in the prior year period. To the extent the ultimate losses for Hurricane Ian grow, additional reinstatement premiums may be incurred depending upon the amount of additional reinsurance limit utilized.
Net premiums earned
Net premiums earned were $369.7 million for the six months ended June 30, 2024, up 7.8% from $342.8 million in the prior year period. The increase primarily stems from growth in gross premiums earned, which outpaced the increase in ceded premiums earned, as described above.
Net investment income
Net investment income, inclusive of net realized and unrealized gains (losses) and impairments on equity securities, was $18.3 million for the six months ended June 30, 2024, up from $12.5 million in the prior year period. The increase is primarily due to higher yields on cash and invested assets associated with higher interest rates. Additionally, net investment income for the prior year period includes a $1.6 million impairment on other investments that did not recur in the current year period.
For the Six Months Ended June 30,
(Unaudited)20242023$ Change% Change
OPERATING EXPENSES:(In thousands)
Losses and loss adjustment expenses207,963 204,098 3,865 1.9 %
Policy acquisition costs94,153 81,776 12,377 15.1 %
General and administrative expenses42,414 39,111 3,303 8.4 %
Intangible asset impairment— 767 (767)(100.0)%
Total operating expenses344,530 325,752 18,778 5.8 %
Total operating expenses
Total operating expenses were $344.5 million for the six months ended June 30, 2024, up 5.8% from $325.8 million in the prior year period. As described below, we experienced higher losses and LAE, higher policy acquisition costs mostly driven by business volume, and higher general and administrative expenses mostly related to software and systems related costs.
Losses and loss adjustment expenses
Losses and LAE incurred were $208.0 million for the six months ended June 30, 2024, up 1.9% from $204.1 million in the prior year period. The increase primarily stems from adverse development, which was mostly offset by lower weather and attritional losses. Net current accident year weather losses were $38.1 million, down from $46.6 million in the prior year period. Catastrophe losses were $15.9 million, up from $5.0 million in the prior year period. Other weather losses totaled $22.2 million, a reduction from the prior year period amount of $41.6 million. We experienced $15.4 million of net unfavorable prior year development compared to $4.2 million of net favorable prior year development in the prior year period.
Policy acquisition costs
Policy acquisition costs were $94.2 million for the six months ended June 30, 2024, up 15.1% from $81.2 million in the prior year period. The increase is primarily attributable to growth in gross premiums written and lower ceding commission earned on the net quota share reinsurance contract, the income of which offsets, or reduces, other policy acquisition costs. The reduction in ceding commission income is due to less written premium associated with the net quota share reinsurance program, coupled with higher ceding commission associated with contracts in runoff in the prior year period which did not recur.
34


General and administrative expenses
General and administrative expenses were $42.4 million for the six months ended June 30, 2024, up 8.4% from $39.1 million in the prior year period. The increase was driven largely by higher general and administrative costs related to investments in technology, higher costs for liability insurance, and less ceding commission income as described above for which a portion is allocated to general and administrative expenses.
Impairment of Named Intangibles
For the six months ended June 30, 2024, there were no impairments recorded. For the six months ended June 30, 2023, certain brand and customer relations with a net value of $0.8 million within the Company's restoration provider were impaired due to the discontinuation of providing restoration services to our policyholders.
For the Six Months Ended June 30,
20242023$ Change% Change
(Unaudited)(In thousands, except per share amounts)
Operating income50,343 36,482 13,861 38.0 %
Interest expense, net5,610 5,621 (11)(0.2)%
Income before income taxes44,733 30,861 13,872 44.9 %
Provision for income taxes11,639 9,074 2,565 28.3 %
Net income$33,094 $21,787 $11,307 51.9 %
Basic earnings per share$1.08 $0.85 $0.23 27.1 %
Diluted earnings per share$1.08 $0.85 $0.23 27.1 %
Net income
Net income for the six months ended June 30, 2024 was $33.1 million or $1.08 per diluted share, compared to net income of $21.8 million or $0.85 per diluted share in the prior year period. The improvement in net income is attributable to the positive impact of rate actions, underwriting actions, and exposure management taken over the last several years, which favorably impacted results for the six months ended June 30, 2024. These and other actions resulted in growth of 7.8% in net premiums earned and a 50.4% increase in net investment income, as described above. An increase of 1.9% in net losses and LAE, a 15.1% increase in policy acquisition costs as well as an 8.4% increase in general and administrative costs partly offset higher total revenue compared to the prior year period. The current year period also benefited from a lower effective tax rate, as described below.
Provision for income taxes
The provision from income taxes was $11.6 million for the six months ended June 30, 2024 compared to $9.1 million in the prior year period. The effective tax rate was 26.0% for the six months ended June 30, 2024 compared to 29.4% for the prior year period. The effective tax rate for the six months ended June 30, 2023 was impacted by a $863,300 increase in the valuation allowance related to certain tax elections made by Osprey Re, the Company’s captive reinsurer domiciled in Bermuda. The impact of permanent tax differences on projected results of operations for the calendar year affects the effective tax rate, which can also fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information.
Ratios
For the Six Months Ended June 30,
(Unaudited)20242023
Ceded premium ratio
46.5 %47.0 %
Net loss and LAE ratio56.2 %59.5 %
Net expense ratio36.9 %35.3 %
Net combined ratio93.1 %94.8 %
35


Net combined ratio
The net combined ratio was 93.1% for the six months ended June 30, 2024, down 1.7 points from 94.8% in the prior year period. The decrease primarily stems from a lower net loss and LAE ratio, primarily driven by higher net premiums earned despite slightly higher losses incurred as described above, which was partly offset by a higher net expense ratio.
Ceded premium ratio
The ceded premium ratio was 46.5% for the six months ended June 30, 2024, down 0.5 points from 47.0% in the prior year period, reflecting the growth in gross premiums earned outpacing the growth in ceded premiums earned as described above.
Net loss and LAE ratio
The net loss and LAE ratio was 56.2% for the six months ended June 30, 2024, down 3.3 points from 59.5% in the prior year period, primarily driven by higher net premiums earned which outpaced higher losses and LAE compared to the prior year period as described above.
Net expense ratio
The net expense ratio was 36.9% for the six months ended June 30, 2024, up 1.6 points from 35.3% in the prior year period, primarily driven by higher acquisition costs which includes lower ceding commission income.
Financial Condition – June 30, 2024 compared to December 31, 2023
Cash and Cash Equivalents
At June 30, 2024, cash and cash equivalents inclusive of restricted cash, increased by $18.6 million to $491.9 million from $473.3 million at December 31, 2023. The increase was primarily a result of net cash provided by operations.
Fixed Maturity Securities
At June 30, 2024, fixed income securities increased by $138.2 million to $698.9 million from $560.7 million at December 31, 2023. The increase was a result of investing in longer duration fixed income securities to lock in interest rates which includes investing in U.S. government securities which mature in less than one year for additional liquidity during hurricane season.
Reinsurance Recoverable on Paid and Unpaid Claims
At June 30, 2024, reinsurance recoverable on paid and unpaid claims increased by $54.5 million to $536.9 million from $482.4 million at December 31, 2023. The increase is primarily due to increasing our ultimate losses related to Hurricane Ian claims during 2024 which resulted in additional reinsurance recoverable on unpaid claims, which was partly offset by significant reinsurance recoveries received during 2024.
Prepaid Reinsurance Premiums
At June 30, 2024, prepaid reinsurance premiums increased by $211.0 million to $505.2 million from $294.2 million at December 31, 2023. The increase is driven by the June 1, 2024 inception of our catastrophe excess of loss reinsurance program which represents prospective contracts. We record an asset, prepaid reinsurance premiums, and a liability, reinsurance payable, for the entire contract amount upon commencement of these reinsurance agreements, which drove up prepaid reinsurance premiums at June 30, 2024.
Deferred Policy Acquisition Costs, net
At June 30, 2024, deferred policy acquisition costs increased by $11.9 million to $114.8 million from $102.8 million at December 31, 2023. The increase is driven by higher acquisition costs, which are deferred and amortized over the effective period of the related insurance policies, related to higher gross written premium. As gross written premiums and related acquisition costs rise, the deferred component of these costs also rises.
Unpaid Losses and Loss Adjustment Expenses
At June 30, 2024, unpaid losses and loss adjustment expenses decreased by $23.7 million to $822.3 million from $846.0 million at December 31, 2023. The decrease is primarily due to payment of claims, most significantly for Hurricanes Irma and Ian during the six months ended June 30, 2024, which was partly offset by losses and loss adjustment expenses incurred during the period. As described above, the ultimate loss for Hurricane Ian increased from the prior year end; however, these losses are subject to recovery from our catastrophe excess of loss reinsurance program.
Unearned Premiums
At June 30, 2024, unearned premiums increased by $89.7 million to $765.7 million from $675.9 million at December 31, 2023, driven by higher gross premiums written during the six months ended June 30, 2024. Premiums written are recorded as revenue on a daily pro rata basis over the contract period of the related in force policies. For any portion of
36


premiums not earned at the end of the reporting period, the Company records an unearned premium liability; accordingly, growth in gross written premium drove the increase in unearned premiums.
Reinsurance Payable
At June 30, 2024, reinsurance payable increased by $344.5 million to $504.2 million from $159.8 million at December 31, 2023. The increase is driven by the June 1, 2024 inception of our catastrophe excess of loss reinsurance program as described above.
Total Shareholders’ Equity
At June 30, 2024, total shareholders’ equity increased by $35.0 million to $255.3 million from $220.3 million at December 31, 2023. The increase is primarily due to net income for the six months ended June 30, 2024.
Liquidity and Capital Resources
Our principal sources of liquidity include cash flows generated from operations, existing cash and cash equivalents, our marketable securities balances and borrowings available under our Credit Facilities. At June 30, 2024, we had $491.9 million of cash and cash equivalents and $707.6 million in investments, compared to $473.3 million and $569.4 million, respectively, as of December 31, 2023. The increase in cash and cash equivalents relates primarily to timing of receipts of premiums and reinsurance recoveries, partly offset by timing of reinsurance premium and claim payments.
We generally hold substantial cash balances to meet seasonal liquidity needs including amounts to pay quarterly reinsurance installments as well as meet the collateral requirements of Osprey Re, our captive reinsurance company, which is required to maintain a collateral trust account equal to the risk that it assumes from our insurance company affiliates.
We believe that our sources of liquidity are adequate to meet our cash requirements for at least the next twelve months.
We may increase capital expenditures consistent with our investment plans and anticipated business strategies. Cash and cash equivalents may not be sufficient to fund such expenditures. As such, in addition to the use of our existing Credit Facilities, we may need to utilize additional debt to secure funds for such purposes.
Cash Flows
For the Six Months Ended June 30,
20242023Change
(In thousands)
Net cash provided by (used in):
Operating activities$156,538 $24,119 $132,419 
Investing activities(138,662)(50,100)(88,562)
Financing activities671 (4,821)5,492 
Net increase (decrease) in cash and cash equivalents$18,547 $(30,802)$49,350 
Operating Activities
Net cash provided by operating activities was $156.5 million for the six months ended June 30, 2024 compared to net cash provided by operating activities of $24.1 million for the comparable period in 2023. The increase in net cash from operating activities relates primarily to timing of cash flows associated with premium collection, claim and reinsurance payments as well as reinsurance reimbursements during the first six months of 2024 compared to the first six months of 2023. Premium collection for the first six months of 2024 exceeded premium collection for the first six months of 2023, driven largely by growth in gross premiums written.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2024 was $138.7 million as compared to net cash used in investing activities of $50.1 million for the comparable period in 2023. The change in net cash used in investing activities relates primarily to the timing of investment maturities and use of proceeds and availability of cash to invest in longer duration fixed income securities during the first six months of 2024 to lock in current interest rates as well as investing in U.S. government securities which mature in less than one year, for additional liquidity during hurricane season.
37


Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2024 was $671,000, as compared to net cash used in financing activities of $4.8 million for the comparable period in 2023. The change in net cash provided by financing activities relates primarily to the proceeds from a January 2024 loan in the amount of $5.5 million to an insurance company subsidiary from the FHLB-DM.
Credit Facilities
The Company is party to a Credit Agreement by and among the Company, as borrower, certain subsidiaries of the Company from time to time party thereto as guarantors, the lenders from time to time party thereto (the “Lenders”),and the administrative and collateral agents and other parties thereto (as amended from time to time, the “Credit Agreement”).
The Credit Agreement, as amended, provides for (1) a five-year senior secured term loan facility in an aggregate principal amount of $100 million (the “Term Loan Facility”) and (2) a five-year senior secured revolving credit facility in an aggregate principal amount of $50 million (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).
Term Loan Facility. The principal amount of the Term Loan Facility amortizes in quarterly installments, which began with the close of the fiscal quarter ending March 31, 2019, in an amount equal to $1.9 million per quarter, payable quarterly, decreasing to $875,000 per quarter commencing with the quarter ending December 31, 2021, and increasing to $2.4 million per quarter commencing with the quarter ending December 31, 2022, with the remaining balance payable at maturity. The Term Loan Facility matures on July 28, 2026. As of June 30, 2024 and December 31, 2023, there was $74.9 million and $79.6 million, respectively, in aggregate principal outstanding under the Term Loan Facility.
Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the Revolving Credit Facility. At June 30, 2024 and December 31, 2023, the outstanding balance under the Revolving Credit facility was $10.0 million. At June 30, 2024, the Company had no outstanding letters of credit issued from the Revolving Credit Facility.
At our option, borrowings under the Credit Facilities bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin (described below) and a credit adjustment spread equal to 0.10% or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin (described below).
The applicable margin for loans under the Credit Facilities varies from 2.75% per annum to 3.25% per annum (for SOFR loans) and 1.75% to 2.25% per annum (for base rate loans) based on our consolidated leverage ratio ranging from 1.25-to-1 to greater than 2.25-to-1. Interest payments with respect to the Credit Facilities are required either on a quarterly basis (for base rate loans) or at the end of each interest period (for SOFR loans) or, if the duration of the applicable interest period exceeds three months, then every three months. As of June 30, 2024, the borrowings under the Term Loan Facility and Revolving Credit Facility accruing interest at a rate of 8.171% and 8.179% per annum, respectively.
In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by our consolidated leverage ratio.
We may prepay the loans under the Credit Facilities, in whole or in part, at any time without premium or penalty, subject to certain conditions including minimum amounts and reimbursement of certain costs in the case of prepayments of SOFR loans. In addition, we are required to prepay the loan under the Term Loan Facility with the proceeds from certain financing transactions, involuntary dispositions or asset sales (subject, in the case of asset sales, to reinvestment rights).
All obligations under the Credit Facilities are or will be guaranteed by each existing and future direct and indirect wholly owned domestic subsidiary of the Company, other than all of the Company’s current and future regulated insurance subsidiaries (collectively, the “Guarantors”).
The Company and the Guarantors are party to a Pledge and Security Agreement, (as amended from time to time the “Security Agreement”), in favor of a collateral agent. Pursuant to the Security Agreement, amounts borrowed under the Credit Facilities are secured on a first priority basis by a perfected security interest in substantially all of the present and future assets of the Company and each Guarantor (subject to certain exceptions), including all of the capital stock of the Company’s domestic subsidiaries, other than its regulated insurance subsidiaries.
38


The Credit Agreement contains, among other things, covenants, representations and warranties and events of default customary for facilities of this type. The Company is required to maintain, as of each fiscal quarter (1) a maximum consolidated leverage ratio of 2.50 to 1.00, stepping down to 2.25 to 1.00 as of the second quarter of 2024 and 2.00 to 1.00 as of the second quarter of 2025, (2) a minimum consolidated fixed charge coverage ratio of 1.20 to 1.00 and (3) a minimum consolidated net worth for the Company and its subsidiaries, which is required to be not less than $100 million plus 50% of positive quarterly net income (including its subsidiaries and regulated subsidiaries) plus the net cash proceeds of any equity transactions. Events of default include, among other events, (i) nonpayment of principal, interest, fees or other amounts; (ii) failure to perform or observe certain covenants set forth in the Credit Agreement; (iii) breach of any representation or warranty; (iv) cross-default to other indebtedness; (v) bankruptcy and insolvency defaults; (vi) monetary judgment defaults and material nonmonetary judgment defaults; (vii) customary ERISA defaults; (viii) a change of control of the Company; and (ix) failure to maintain specified catastrophe retentions in each of the Company’s regulated insurance subsidiaries.
Convertible Notes
On August 10, 2017, the Company and Heritage MGA, LLC (the “Notes Guarantor”) entered into a purchase agreement (the “Purchase Agreement”) with the initial purchaser party thereto (the “Initial Purchaser”), pursuant to which the Company agreed to issue and sell, and the Initial Purchaser agreed to purchase, $136.8 million aggregate principal amount of the Company’s 5.875% Convertible Senior Notes due 2037 (the “Convertible Notes”) in a private placement transaction pursuant to Rule 144A under the Securities Act, as amended (the “Securities Act”). The net proceeds from the offering of the Convertible Notes, after deducting discounts and commissions and estimated offering expenses payable by the Company, were approximately $120.5 million. The offering of the Convertible Notes was completed on August 16, 2017.
The Company issued the Convertible Notes under an Indenture (the “Convertible Note Indenture”), dated August 16, 2017, by and among the Company, as issuer, the Notes Guarantor, as guarantor, and the trustee party thereto (the “Trustee”).
The Convertible Notes bear interest at a rate of 5.875% per year. Interest is payable semi-annually in arrears, on February 1 and August 1 of each year. The Convertible Notes are senior unsecured obligations of the Company that rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to the Company’s unsecured indebtedness that is not so subordinated; effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness or other liabilities incurred by the Company’s subsidiaries other than the Notes Guarantor, which fully and unconditionally guarantee the Convertible Notes on a senior unsecured basis.
The Convertible Notes mature on August 1, 2037, unless earlier repurchased, redeemed or converted.
Holders may convert their Convertible Notes at any time prior to the close of business on the business day immediately preceding February 1, 2037, other than during the period from, and including, February 1, 2022 to the close of business on the second business day immediately preceding August 5, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2017, if the closing sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (2) during the ten consecutive business-day period following any five consecutive trading-day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the closing sale price of the Company’s common stock on such date multiplied by the then-current conversion rate; (3) if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.
During the period from and including February 1, 2022 to the close of business on the second business day immediately preceding August 5, 2022, and on or after February 1, 2037 until the close of business on the second business day immediately preceding August 1, 2037, holders may surrender their Convertible Notes for conversion at any time, regardless of the foregoing circumstances.
Upon the occurrence of a fundamental change (as defined in the Convertible Note Indenture) (but not, at the Company’s election, a public acquirer change of control (as defined in the Convertible Note Indenture), holders of the Convertible Notes may require the Company to repurchase for cash all or a portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
39


At any time prior to February 1, 2037, the Company may redeem for cash all or any portion of the Convertible Notes, at the Company’s option, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes, which means that the Company is not required to redeem or retire the Convertible Notes periodically. Holders of the Convertible Notes are able to cause the Company to repurchase their Convertible Notes for cash on any of August 1, 2022, August 1, 2027 and August 1, 2032, in each case at 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the relevant repurchase date.
The Convertible Note Indenture contains customary terms and covenants and events of default. If an Event of Default (as defined in the Convertible Note Indenture) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the Convertible Notes then outstanding by notice to the Company and the Trustee, may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Convertible Notes to be immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization (as set forth in the Convertible Note Indenture) with respect to the Company, 100% of the principal of, and accrued and unpaid interest, if any, on, the Convertible Notes automatically become immediately due and payable.
As of June 30, 2024 and December 31, 2023, there was $885,000 principal amount of outstanding Convertible Notes, net of $21.1 million of Convertible Notes held by an insurance company subsidiary.
FHLB Loan Agreements
In December 2018, a subsidiary of the Company received a 3.094% fixed interest rate cash loan of $19.2 million from the Federal Home Loan Bank (“FHLB”) Atlanta. On September 29, 2023, the Company restructured the December 2018 agreement to extend the maturity date to March 28, 2025, with a 5.109% fixed interest rate payable quarterly commencing on December 28, 2023. The subsidiary continues to be a member in the FHLB. Membership in the FHLB required an investment in FHLB’s common stock which was purchased in December 2018 and valued at $1.4 million. As of June 30, 2024, the common stock was valued at $1.5 million. The subsidiary is permitted to withdraw any portion of the pledged collateral over the minimum collateral requirement at any time, other than in the event of a default by the subsidiary. The proceeds from the loan were used to prepay the Company’s Senior Secured Notes due 2023.
In December 2018, an insurance subsidiary became a member of the FHLB-DM. Membership in the FHLB-DM required an investment in FHLB-DM’s common stock which was purchased in December 2018 and valued at $133,200. In January 2024, the insurance subsidiary of the Company received a 4.23% fixed interest rate cash loan of $5.5 million from the Federal Home Loan Bank (“FHLB-DM”) Des Moines. Additionally, the transaction required the acquired FHLB-DM common stock and certain other investments to be pledged as collateral. As of June 30, 2024, the fair value of the collateralized securities was $8.0 million and the equity investment in FHLB common stock was $295,500.
Critical Accounting Policies and Estimates
When we prepare our condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (GAAP), we must make estimates and assumptions about future events that affect the amounts we report. Certain of these estimates result from judgments that can be subjective and complex. As a result of that subjectivity and complexity, and because we continuously evaluate these estimates and assumptions based on a variety of factors, actual results could materially differ from our estimates and assumptions if changes in one or more factors require us to make accounting adjustments. We have made no material changes or additions with regard to those policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Recent Accounting Pronouncements
The information set forth under Note 1 to the condensed consolidated financial statements under the caption “Basis of Presentation and Significant Accounting Policies” is incorporated herein by reference. We do not expect any recently issued accounting pronouncements to have a material effect on our condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The duration of the financial instruments held in our portfolio that are subject to interest rate risk was 2.68 years and 2.55 years at June 30, 2024 and 2023, respectively, and 2.67 years at December 31, 2023. As interest rates rise, the fair value of our fixed rate debt securities are subject to decline. Credit risk results from uncertainty in a counterparty’s ability to meet its obligations. Credit risk is managed by maintaining a high credit quality fixed maturity securities portfolio. As of June 30, 2024, the estimated weighted-average credit quality rating of the fixed maturity securities portfolio was A+, at fair value, consistent with the average rating at June 30, 2024.
40


We have not experienced a material impact when compared to the tabular presentations of our interest rate and market risk sensitive instruments in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this Quarterly Report, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2024.
Changes in Internal Control over Financial Reporting
There has been no change in our internal controls over financial reporting during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no significant changes to our internal control over financial reporting for the period ending June 30, 2024.
41


PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are subject to routine legal proceedings in the ordinary course of business. We believe that the ultimate resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations.
Item 1A. Risk Factors
The Company documented its risk factors in Item 1A of Part I of its Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 13, 2024. There have been no material changes to the Company’s risk factors since the filing of that report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not Applicable
Item 5. Other Information
Trading Arrangements
During the six months ended June 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
The information required by this Item 6 is set forth in the Index to Exhibits accompanying this Quarterly Report on Form 10-Q.
Index to Exhibits
3.1
3.2
4
31.1*
31.2*
32.1**
32.2**
101.INSInline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, formatted in Inline XBRL (included in Exhibit 101)
*Filed herewith
**Furnished herewith
Management contract or compensatory plan or arrangement
42


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HERITAGE INSURANCE HOLDINGS, INC.
Date: August 8, 2024
By:/s/ ERNESTO GARATEIX
Ernesto Garateix
Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer)
Date: August 8, 2024
By:/s/ KIRK LUSK
Kirk Lusk
Chief Financial Officer
(Principal Financial Officer)
43

Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT
I, Ernesto Garateix, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Heritage Insurance Holdings, Inc.;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 8, 2024
By:/s/ ERNESTO GARATEIX
Ernesto Garateix
Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer)


Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT
I, Kirk Lusk, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Heritage Insurance Holdings, Inc.;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 8, 2024
By:/s/ KIRK LUSK
Kirk Lusk
Chief Financial Officer
(Principal Financial Officer)


Exhibit 32.1
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Heritage Insurance Holdings, Inc. (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Ernesto Garateix, the Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 8, 2024
By: /s/ ERNESTO GARATEIX
Ernesto Garateix
Chief Executive Officer (Principal Executive Officer and Duly Authorized Officer)


Exhibit 32.2
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Heritage Insurance Holdings, Inc. (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Kirk Lusk, the Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 8, 2024
By: /s/ KIRK LUSK
Kirk Lusk
Chief Financial Officer
(Principal Financial Officer)

v3.24.2.u1
Cover - shares
6 Months Ended
Jun. 30, 2024
Aug. 01, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 001-36462  
Entity Registrant Name Heritage Insurance Holdings, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 45-5338504  
Entity Address, Address Line One 1401 N. Westshore Blvd  
Entity Address, City or Town Tampa  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 33607  
City Area Code 727  
Local Phone Number 362-7200  
Title of each class Common Stock, par value $0.0001 per share  
Trading Symbol(s) HRTG  
Name of each exchange on which registered NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   30,684,198
Entity Central Index Key 0001598665  
Current Fiscal Year End Date --12-31  
Amendment Flag false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
v3.24.2.u1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
ASSETS    
Fixed maturities, available-for-sale, at fair value (amortized cost of $744,173 and $606,646) $ 698,853 $ 560,682
Equity securities, at fair value, (cost $1,936 and $1,666) 1,936 1,666
Other investments, net 6,790 7,067
Total investments 707,579 569,415
Cash and cash equivalents 480,930 463,640
Restricted cash 10,956 9,699
Accrued investment income 5,148 4,068
Premiums receivable, net 100,832 89,490
Reinsurance Recoverable for Paid and Unpaid Claims and Claims Adjustments 536,888 482,429
Prepaid reinsurance premiums 505,180 294,222
Income tax receivable 12,066 13,354
Deferred income tax asset, net 12,694 11,111
Deferred policy acquisition costs, net 114,818 102,884
Property and equipment, net 34,510 33,218
Right of use assets 16,337 17,606
Right of use assets 6,357 6,835
Intangibles, net 39,464 42,555
Other assets 15,590 12,674
Total Assets 2,599,349 2,153,200
LIABILITIES AND STOCKHOLDERS' EQUITY    
Unpaid losses and loss adjustment expenses 822,271 845,955
Unearned premiums 765,632 675,921
Reinsurance payable 504,291 159,823
Long-term debt, net 120,780 119,732
Advance premiums 26,262 23,900
Accrued compensation 6,278 9,461
Lease liability, finance 19,250 20,386
Lease liability, operating 7,528 8,076
Accounts payable and other liabilities 71,724 69,666
Total Liabilities 2,344,016 1,932,920
Commitments and contingencies (Note 17)
Stockholders’ Equity:    
Common stock, $0.0001 par value, 50,000,000 shares authorized, 42,915,872 shares issued and 30,684,198 outstanding at June 30, 2024 and 42,450,612 shares issued and 30,218,938 outstanding at December 31, 2023 3 3
Additional paid-in capital 361,789 360,310
Accumulated other comprehensive loss, net of taxes (34,770) (35,250)
Treasury stock, at cost, 12,231,674 shares at each June 30, 2024 and December 31, 2023 (130,900) (130,900)
Retained earnings 59,211 26,117
Total Stockholders' Equity 255,333 220,280
Total Liabilities and Stockholders' Equity $ 2,599,349 $ 2,153,200
v3.24.2.u1
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Cost or Adjusted / Amortized Cost $ 744,173 $ 606,646
Equity securities, cost 1,936 1,666
Reinsurance recoverable net of allowance for credit losses $ 197 $ 197
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 50,000,000 50,000,000
Common stock, shares issued (in shares) 42,915,872 42,450,612
Common stock, shares outstanding (in shares) 30,684,198 30,218,938
Treasury stock, shares (in shares) 12,231,674 12,231,674
v3.24.2.u1
Condensed Consolidated Statements of Operations and Other Comprehensive (Loss) Income (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
REVENUES:        
Gross premiums written $ 424,530,000 $ 396,559,000 $ 781,214,000 $ 706,868,000
Change in gross unearned premiums (74,457,000) (66,544,000) (89,752,000) (59,831,000)
Gross premiums earned 350,073,000 330,015,000 691,462,000 647,037,000
Ceded premiums (159,757,000) (153,211,000) (321,720,000) (304,204,000)
Net premiums earned 190,316,000 176,804,000 369,742,000 342,833,000
Net investment income 9,769,000 6,599,000 18,320,000 12,181,000
Net realized gains (losses) and impairment 12,000 (1,568,000) 11,000 330,000
Other revenue 3,474,000 3,478,000 6,800,000 6,890,000
Total revenues 203,571,000 185,313,000 394,873,000 362,234,000
EXPENSES:        
Losses and loss adjustment expenses 105,928,000 106,646,000 207,963,000 204,098,000
Policy acquisition costs, net of ceding commission income [1] 47,224,000 41,451,000 94,153,000 81,776,000
General and administrative expenses, net of ceding commission income [2] 22,780,000 20,058,000 42,414,000 39,111,000
Intangible asset impairment 0 766,600 0 766,600
Total expenses 175,932,000 168,922,000 344,530,000 325,752,000
Operating income 27,639,000 16,391,000 50,343,000 36,482,000
Interest expense, net 2,780,000 2,740,000 5,610,000 5,621,000
Income before income taxes 24,859,000 13,651,000 44,733,000 30,861,000
Provision for income taxes 5,990,000 5,872,000 11,639,000 9,074,000
Net income 18,869,000 7,779,000 33,094,000 21,787,000
OTHER COMPREHENSIVE INCOME        
Change in net unrealized gains (losses) on investments 924,000 (2,986,000) 641,000 9,158,000
Reclassification adjustment for net realized investment (gains) losses (12,000) 9,000 (11,000) 11,000
Income tax (expense) benefit related to items of other comprehensive income (216,000) 698,000 (150,000) (2,158,000)
Total comprehensive income $ 19,565,000 $ 5,500,000 $ 33,574,000 $ 28,798,000
Weighted average shares outstanding        
Basic 30,649,732 25,567,157 30,513,207 25,562,731
Diluted 30,708,995 25,626,420 30,572,470 25,621,994
Earnings per share        
Basic $ 0.62 $ 0.30 $ 1.08 $ 0.85
Diluted $ 0.61 $ 0.30 $ 1.08 $ 0.85
[1] Policy acquisition costs includes $9.4 million and $18.7 million of ceding commission income for the three and six months ended June 30, 2024 and $12.8 million and $25.3 million of ceding commission income for the three and six months ended June 30, 2023, respectively.
[2] General and administration includes $3.1 million and $6.1 million of ceding commission income for the three and six months ended June 30, 2024 and $4.1 million and $8.3 million of ceding commission income for the three and six months ended June 30, 2023, respectively.
v3.24.2.u1
Condensed Consolidated Statements of Operations and Other Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Ceding commission income $ 12,484 $ 16,586 $ 24,864 $ 33,676
Policy Acquisition Costs        
Ceding commission income 9,400 12,800 18,700 25,300
General and Administrative Expenses        
Ceding commission income $ 3,100 $ 4,100 $ 6,100 $ 8,300
v3.24.2.u1
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Shares
Additional Paid-In Capital
Retained Earnings
Treasury Shares
Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2022   25,539,433        
Beginning balance at Dec. 31, 2022 $ 131,039 $ 3 $ 334,711 $ (19,190) $ (130,900) $ (53,585)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net unrealized change in investments, net of tax 9,290         9,290
Shares tendered for income taxes withholding (in shares)   (4,200)        
Shares tendered for income taxes withholding (8)   (8)      
Restricted stock vested (in shares)   25,000        
Forfeiture on restricted stock (in shares)   (1,482)        
Stock-based compensation on restricted stock 395   395      
Net income 14,008     14,008    
Ending balance (in shares) at Mar. 31, 2023   25,558,751        
Ending balance at Mar. 31, 2023 154,724 $ 3 335,098 (5,182) (130,900) (44,295)
Beginning balance (in shares) at Dec. 31, 2022   25,539,433        
Beginning balance at Dec. 31, 2022 131,039 $ 3 334,711 (19,190) (130,900) (53,585)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 21,787          
Ending balance (in shares) at Jun. 30, 2023   25,622,495        
Ending balance at Jun. 30, 2023 160,627 $ 3 335,501 2,597 (130,900) (46,574)
Beginning balance (in shares) at Mar. 31, 2023   25,558,751        
Beginning balance at Mar. 31, 2023 154,724 $ 3 335,098 (5,182) (130,900) (44,295)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net unrealized change in investments, net of tax (2,279)         (2,279)
Issued restricted stock (in shares)   63,744        
Stock-based compensation on restricted stock 403   403      
Net income 7,779     7,779    
Ending balance (in shares) at Jun. 30, 2023   25,622,495        
Ending balance at Jun. 30, 2023 160,627 $ 3 335,501 2,597 (130,900) (46,574)
Beginning balance (in shares) at Dec. 31, 2023   30,218,938        
Beginning balance at Dec. 31, 2023 220,280 $ 3 360,310 26,117 (130,900) (35,250)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net unrealized change in investments, net of tax (216)         (216)
Issued restricted stock (in shares)   417,558        
Additional costs associated to public offering (3)   (3)      
Unallocated dividends on restricted stock forfeitures 54   54      
Stock-based compensation on restricted stock 595   595      
Net income 14,225     14,225    
Ending balance (in shares) at Mar. 31, 2024   30,636,496        
Ending balance at Mar. 31, 2024 234,935 $ 3 360,956 40,342 (130,900) (35,466)
Beginning balance (in shares) at Dec. 31, 2023   30,218,938        
Beginning balance at Dec. 31, 2023 220,280 $ 3 360,310 26,117 (130,900) (35,250)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 33,094          
Ending balance (in shares) at Jun. 30, 2024   30,684,198        
Ending balance at Jun. 30, 2024 255,333 $ 3 361,789 59,211 (130,900) (34,770)
Beginning balance (in shares) at Mar. 31, 2024   30,636,496        
Beginning balance at Mar. 31, 2024 234,935 $ 3 360,956 40,342 (130,900) (35,466)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net unrealized change in investments, net of tax 696         696
Issued restricted stock (in shares)   47,702        
Stock-based compensation on restricted stock 833   833      
Net income 18,869     18,869    
Ending balance (in shares) at Jun. 30, 2024   30,684,198        
Ending balance at Jun. 30, 2024 $ 255,333 $ 3 $ 361,789 $ 59,211 $ (130,900) $ (34,770)
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
OPERATING ACTIVITIES    
Net income $ 33,094 $ 21,787
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Stock-based compensation 1,428 798
Bond amortization and accretion (1,552) (1,261)
Amortization of original issuance discount on debt 428 235
Goodwill or intangible asset impairment 0 767
Depreciation and amortization 4,491 4,266
Allowance for (recovery) bad debt (703) 87
Expected credit allowance on reinsurance 0 152
Net realized gains (11) (330)
Deferred income taxes, net (1,733) 3,771
Changes in operating assets and liabilities:    
Accrued investment income (1,080) 245
Premiums receivable, net (10,639) 6,061
Prepaid reinsurance premiums (210,958) (202,229)
Reinsurance recoverable on paid and unpaid claims (54,459) 260,911
Income taxes receivable 1,288 (1,143)
Deferred policy acquisition costs, net (11,934) (7,119)
Right of use leased asset 1,747 1,228
Other assets (2,916) (3,513)
Unpaid losses and loss adjustment expenses (23,684) (313,948)
Unearned premiums 89,711 59,737
Reinsurance payable 344,468 187,795
Accrued interest (474) (122)
Accrued compensation (3,183) 1,535
Advance premiums 2,362 12,423
Operating lease liabilities (1,684) (1,100)
Other liabilities 2,531 (6,914)
Net cash provided by operating activities 156,538 24,119
INVESTING ACTIVITIES    
Fixed maturity securities sales, maturities and pay downs 70,287 479,396
Fixed maturity securities purchases (206,264) (528,466)
Equity securities reinvestment of dividends (270) 0
Return on other investments 277 5,062
Cost of property and equipment acquired (2,692) (6,092)
Net cash used in investing activities (138,662) (50,100)
FINANCING ACTIVITIES    
Repayment of term note (4,750) (4,750)
Mortgage loan payments (130) (52)
Proceeds from loan agreement 5,500 0
Additional costs associated with public offering (3) 0
Tax withholding on share-based compensation awards 0 (8)
Dividends forfeited (paid) 54 (11)
Net cash provided by (used in) financing activities 671 (4,821)
Increase (decrease) in cash, cash equivalents, and restricted cash 18,547 (30,802)
Cash, cash equivalents and restricted cash, beginning of period 473,339 287,572
Cash, cash equivalents and restricted cash, end of period 491,886 256,770
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION    
Income taxes paid 12,181 6,446
Interest paid $ 4,552 $ 4,757
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Jun. 30, 2023
Dec. 31, 2022
Statement of Cash Flows [Abstract]        
Cash and cash equivalents $ 480,930 $ 463,640    
Restricted cash 10,956 9,699    
Total $ 491,886 $ 473,339 $ 256,770 $ 287,572
v3.24.2.u1
Basis of Presentation and Significant Accounting Policies
6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Significant Accounting Policies BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. (together with its subsidiaries, the “Company”). These statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain financial information that is normally included in annual consolidated financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. In the opinion of the Company’s management, all material intercompany transactions and balances have been eliminated and all adjustments consisting of normal recurring accruals which are necessary for a fair statement of the financial condition and results of operations for the interim periods have been reflected. The accompanying interim condensed consolidated financial statements and related footnotes should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 13, 2024 (the “2023 Form 10-K”).
Significant accounting policies
The accounting policies of the Company are set forth in Note 1 to the consolidated financial statements contained in the Company’s 2023 Form 10-K.
Accounting Pronouncements not yet adopted
The Company has documented the summary of its significant accounting policies in its Notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Form 10-K. There have been no material changes to the Company’s accounting policies since the filing of that report.
On March 6, 2024, the SEC adopted new rules designed to enhance public company disclosures related to the risks and impacts of climate-related matters. The rules amend the provisions of both Regulation S-K and Regulation S-X to require disclosure of climate-related risks, transition plans, targets and goals, risk management and governance as well as require disclosure of the financial effects of severe weather events and other natural conditions as well as the use of carbon offsets or renewable energy credits. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements. The Company will continue to assess the impact of these new rules on its financial statements while the stay is in place.
v3.24.2.u1
Investments
6 Months Ended
Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Investments INVESTMENTS
Securities Available-for-Sale
The amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities available-for-sale are as follows for the periods presented:
June 30, 2024
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$168,760 $68 $1,178 $167,650 
States, municipalities and political subdivisions322,003 93 30,256 291,840 
Corporate bonds227,867 379 11,402 216,844 
Mortgage-backed securities (1)
18,646 — 2,881 15,765 
Asset-backed securities
2,892 — 143 2,749 
Other
4,005 — — 4,005 
Total$744,173 $540 $45,860 $698,853 
(1)Includes securities at June 30, 2024 with a carrying amount of $23.6 million and $8.0 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018 and 2024. The Company is
permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
December 31, 2023
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
 Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$81,540 $417 $1,295 $80,662 
States, municipalities and political subdivisions319,896 104 31,018 288,982 
Corporate bonds178,213 475 11,858 166,830 
Mortgage-backed securities22,695 — 2,769 19,926 
Asset-backed securities
247 — 20 227 
Other
4,055 — — 4,055 
Total$606,646 $996 $46,960 $560,682 
(1)Includes securities at December 31, 2023 with a carrying amount of $24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
Net Realized Gains (Losses) and Impairment
The following tables present net realized gains (losses) on the Company’s debt securities available-for-sale for the three and six months ended June 30, 2024 and 2023, respectively:
20242023
Three Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $907 $— $— 
Total realized losses(1)117 (9)308 
Net realized gains (losses)$12 $1,024 $(9)$308 
20242023
Six Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $2,644 $— $— 
Total realized losses(2)308 (11)598 
Net realized gains (losses)$11 $2,952 $(11)$598 
The following table presents the reconciliation of net realized (losses) gains and impairment of the Company’s investments reported for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Gross realized gains on sales of available-for-sale securities
$13 $— $13 $— 
Impairments on other investments
— (1,559)— (1,559)
Realized losses on sales of available-for-sale securities
(1)(9)(2)(11)
Gross realized gains on sale of other investments
— — — 1,900 
Net realized (losses) gains and impairments
$12 $(1,568)$11 $330 
The table below summarizes the Company’s debt securities at June 30, 2024 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.
At June 30, 2024
Cost or Amortized Cost
Percent of Total
Fair Value
Percent of Total
Maturity dates:(In thousands)(In thousands)
Due in one year or less$169,107 22.7 %$167,795 24.0 %
Due after one year through five years383,997 51.6 %362,032 51.8 %
Due after five years through ten years163,398 22.0 %144,765 20.7 %
Due after ten years27,671 3.7 %24,261 3.5 %
Total$744,173 100.0 %$698,853 100.0 %
Net Investment Income
The following table summarizes the Company’s net investment income by major investment category for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Debt securities$6,502 $5,015 $11,057 $8,038 
Equity securities361 57 657 90 
Cash and cash equivalents3,595 2,246 7,814 4,449 
Other investments173 108 324 839 
Net investment income10,631 7,426 19,852 13,416 
Less: Investment expenses862 827 1,532 1,235 
Net investment income, less investment expenses$9,769 $6,599 $18,320 $12,181 
The following tables present, for all debt securities available-for-sale in an unrealized loss position (including securities pledged) and for which no credit loss allowance has been established to date, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position at June 30, 2024 and December 31, 2023, respectively (in thousands):
Less Than Twelve Months
Twelve Months or More
June 30, 2024
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities21$128 $101,610 26$1,050 $27,065 
States, municipalities and political subdivisions1139 9,368 37230,217 265,588 
Corporate bonds3464 26,901 18511,338 124,847 
Mortgage-backed securities6— 1212,881 15,763 
Asset-backed securities— — — 35143 525 
Other— — — — — — 
Total fixed maturity securities72$231 $137,882 739$45,629 $433,788 
Less Than Twelve MonthsTwelve Months or More
December 31, 2023
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities3$14 $2,962 32$1,281 $42,305 
States, municipalities and political subdivisions
521 3,875 38230,997 274,876 
Corporate bonds1024 6,398 18811,834 128,771 
Mortgage-backed securities
10— 1382,769 19,810 
Asset-backed securities
0— — 2420 373 
Other
0— — 0— — 
Total fixed maturity securities28$59 $13,242 764$46,901 $466,135 
The Company’s unrealized losses on debt securities have not been recognized because the securities are of a high credit quality with investment grade ratings. After reviewing the Company's portfolio, if (i) the Company does not have the intent to sell, or (ii) it is more likely than not it will not be required to sell the security before its anticipated recovery, then the Company's intent is to hold the investment securities to recovery, or maturity if necessary to recover the decline in valuation as prices accrete to par. However, the Company's intent may change prior to maturity due to certain types of events, which include, but are not limited to, changes in the financial markets, the Company's analysis of an issuer’s credit metrics and prospects, changes in tax laws or the regulatory environment, or as a result of significant unforeseen changes in liquidity needs. As such, the Company may, from time to time, sell invested assets subsequent to the balance sheet date that it did not intend to sell at the balance sheet date. Conversely, the Company may not sell invested assets that the Company asserted it intended to sell at the balance sheet date. Such changes in intent are due to unforeseen events occurring subsequent to the balance sheet date.
No credit loss allowance was recorded as of June 30, 2024 or for the year ended December 31, 2023.
Other Investments
Non-Consolidating Variable Interest Entities (“VIEs”)
The Company makes passive investments in limited partnerships (“LPs”), which are accounted for using the equity method, with income reported in earnings through net realized and unrealized gains and losses. The Company also holds a passive investment in a Real Estate Investment Trust (“REIT”), which is accounted for using the measurement alternative method, and reported at cost less impairment (if any), plus or minus changes from observable price changes.
The following table summarizes the carrying value and maximum loss exposure of the Company’s non-consolidated VIEs at June 30, 2024 and December 31, 2023, respectively (in thousands):
As of June 30, 2024As of December 31, 2023
Carrying ValueMaximum Loss ExposureCarrying ValueMaximum Loss Exposure
Investments in non-consolidated VIEs - Equity method$1,682 $1,682 $1,819 $1,819 
Investments in non-consolidated VIEs - Measurement alternative$5,108 $5,108 $5,248 $5,248 
Total non-consolidated VIEs$6,790 $6,790 $7,067 $7,067 
No agreements exist requiring the Company to provide additional funding to any of the non-consolidated VIEs in excess of the Company’s initial investment.
v3.24.2.u1
Fair Value of Financial Measurements
6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments FAIR VALUE OF FINANCIAL MEASUREMENTS
Fair value is determined based on the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.
The Company is required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:
Level 1 – Unadjusted quoted prices are available in active markets for identical assets/liabilities as of the reporting date.
Level 2 – Valuations based on observable inputs, such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in the markets that are not active; or other inputs that are observable, either directly or indirectly.
Level 3 – Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation.
The highest priority is assigned to Level 1 inputs and the lowest priority to Level 3 inputs. At June 30, 2024 and December 31, 2023, there were no transfers in or out of Level 1, 2, and 3.
The following table presents information about the Company’s assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy.
The tables below present the balances of the Company’s invested assets measured at fair value on a recurring basis:
June 30, 2024TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$480,930 $480,930 $— $— 
Restricted cash$10,956 $10,956 $— $— 
Debt Securities Available-for-sale
U.S. government and agency securities$167,650 $— $167,650 $— 
States, municipalities and political subdivisions291,840 — 291,840 — 
Corporate bonds
216,844 — 216,844 — 
Mortgage-backed securities
15,765 — 15,765 — 
Asset-backed securities
2,749 — 2,749 — 
Other
4,005 — 4,005 — 
Total debt securities
$698,853 $— $698,853 $— 
Equity Securities
Common stock
$1,936 $1,936 $— $— 
Total debt securities and equity securities
$700,789 $1,936 $698,853 $— 

December 31, 2023TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$463,640 $463,640 $— 
Restricted cash$9,699 $9,699 $— 
Debt Securities Available-for-sale
U.S. government and agency securities$80,662 $— $80,662 $— 
States, municipalities and political subdivisions288,982 — 288,982 — 
Corporate bonds
166,830 — 166,830 — 
Mortgage-backed securities
19,926 — 19,926 — 
Asset-backed securities
227 — 227 — 
Other
4,055 — 4,055 — 
Total debt securities
$560,682 $— $560,682 $— 
Equity Securities
Common stock
$1,666 $1,666 $— $— 
Total debt securities and equity securities
$562,348 $1,666 $560,682 $— 
Financial Instruments excluded from the fair value hierarchy
The carrying value of premium receivables, accounts payable, accrued expense, revolving loans and borrowings under the Company’s senior secured credit facility approximate their fair value. The rate at which revolving loans and borrowings under the Company’s senior secured credit facility bear interest resets periodically at market interest rates.
Non-recurring fair value measurements
Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. For the six months ended June 30, 2024, there were no assets or liabilities that were measured at fair value on a non-recurring basis.
Certain of the Company’s investments are measured in accordance with GAAP for the type of investment, using methodologies other than fair value.
v3.24.2.u1
Other Comprehensive Income
6 Months Ended
Jun. 30, 2024
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]  
Other Comprehensive Income OTHER COMPREHENSIVE INCOME
The following tables summarize other comprehensive income and disclose the tax impact of each component of other comprehensive income for the three and six months ended June 30, 2024 and 2023, respectively:
For the Three Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$924 $(219)$705 $(2,986)$700 $(2,286)
Reclassification adjustment of realized (gains) losses included in net income(12)(9)(2)
Effect on other comprehensive income$912 $(216)$696 $(2,977)$698 $(2,279)
For the Six Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$641 $(152)$489 $9,158 $(2,155)$7,003 
Reclassification adjustment of realized losses included in net income(11)(9)11 (3)
Effect on other comprehensive income $630 $(150)$480 $9,169 $(2,158)$7,011 
v3.24.2.u1
Leases
6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Leases LEASES
The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years, and often include one or more options to renew. These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing the Company’s right-of-use assets and lease obligations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases.
Components of the Company’s lease costs were as follows (in thousands):
For The Six Months Ended June 30,
20242023
Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$810 $787 
Finance lease cost:
Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations1,269 1,285 
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations407 451 
Total finance lease cost$1,676 $1,736 
Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$744 $796 
Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$42 $80 
Supplemental balance sheet information related to the Company’s operating and financing leases were as follows (in thousands):
Operating LeasesJune 30, 2024December 31, 2023
Right of use assets$6,357 $6,835 
Lease liability$7,528 $8,076 
Finance Leases 
Right of use assets$16,337 $17,606 
Lease liability$19,250 $20,386 
Weighted-average remaining lease term and discount rate for the Company’s operating and financing leases for the periods presented below were as follows:
Weighted-average remaining lease termJune 30, 2024December 31, 2023
Operating lease5.09yrs.5.57yrs.
Finance lease6.67yrs.7.16yrs.
Weighted-average discount rate
Operating lease5.44 %5.17 %
Finance lease4.14 %4.15 %
Maturities of lease liabilities by fiscal year for the Company’s operating and financing leases were as follows (in thousands):
Financing Lease
Operating Lease
2024 remaining$1,565 $876 
20253,173 1,655 
20263,216 1,636 
20273,190 1,599 
20283,270 1,633 
2029 and thereafter7,651 1,213 
Total lease payments22,065 8,612 
Less: imputed interest(2,815)(1,084)
Present value of lease liabilities$19,250 $7,528 
Supplemental cash flow information related to the Company's operating and financing leases were as follows (in thousands):
Operating Leases June 30, 2024June 30, 2023
Lease liability payments$1,139 $1,141 
Finance Leases
Lease liability payments$414 $443 
Total lease liability payments$1,553 $1,584 
Leases LEASES
The Company has entered into operating and financing leases primarily for real estate and vehicles. The Company will determine whether an arrangement is a lease at inception of the agreement. The operating leases have terms of one to ten years, and often include one or more options to renew. These renewal terms can extend the lease term from two to ten years and are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company considers these options in determining the lease term used in establishing the Company’s right-of-use assets and lease obligations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Because the rate implicit in each operating lease is not readily determinable, the Company uses its incremental borrowing rate to determine present value of the lease payments. The Company used the implicit rates within the finance leases.
Components of the Company’s lease costs were as follows (in thousands):
For The Six Months Ended June 30,
20242023
Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$810 $787 
Finance lease cost:
Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations1,269 1,285 
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations407 451 
Total finance lease cost$1,676 $1,736 
Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$744 $796 
Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$42 $80 
Supplemental balance sheet information related to the Company’s operating and financing leases were as follows (in thousands):
Operating LeasesJune 30, 2024December 31, 2023
Right of use assets$6,357 $6,835 
Lease liability$7,528 $8,076 
Finance Leases 
Right of use assets$16,337 $17,606 
Lease liability$19,250 $20,386 
Weighted-average remaining lease term and discount rate for the Company’s operating and financing leases for the periods presented below were as follows:
Weighted-average remaining lease termJune 30, 2024December 31, 2023
Operating lease5.09yrs.5.57yrs.
Finance lease6.67yrs.7.16yrs.
Weighted-average discount rate
Operating lease5.44 %5.17 %
Finance lease4.14 %4.15 %
Maturities of lease liabilities by fiscal year for the Company’s operating and financing leases were as follows (in thousands):
Financing Lease
Operating Lease
2024 remaining$1,565 $876 
20253,173 1,655 
20263,216 1,636 
20273,190 1,599 
20283,270 1,633 
2029 and thereafter7,651 1,213 
Total lease payments22,065 8,612 
Less: imputed interest(2,815)(1,084)
Present value of lease liabilities$19,250 $7,528 
Supplemental cash flow information related to the Company's operating and financing leases were as follows (in thousands):
Operating Leases June 30, 2024June 30, 2023
Lease liability payments$1,139 $1,141 
Finance Leases
Lease liability payments$414 $443 
Total lease liability payments$1,553 $1,584 
v3.24.2.u1
Property and Equipment, Net
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following at June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Land$2,582 $2,582 
Building9,599 9,599 
Software in progress17,530 14,450 
Computer hardware and software10,312 10,717 
Office furniture and equipment1,484 1,484 
Tenant and leasehold improvements10,893 10,876 
Vehicle fleet515 515 
Total, at cost52,915 50,223 
Less: accumulated depreciation and amortization(18,405)(17,005)
Property and equipment, net$34,510 $33,218 
The Company has capitalized certain costs related to a new policy, billing and claims system which is anticipated to be placed into service later in 2025.
Depreciation and amortization expense for property and equipment was approximately $718,800 and $566,000 for the three months ended June 30, 2024 and 2023, respectively. Depreciation and amortization expense for property and equipment was approximately $1.4 million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively. The Company owns real estate consisting of 13 acres of land, two buildings with a gross area of 88,378 square feet and a parking garage. The carrying value of the property is approximately $9.6 million with accumulated depreciation of approximately $2.6 million at June 30, 2024.
v3.24.2.u1
Intangible Assets
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets INTANGIBLE ASSETS
At June 30, 2024 and December 31, 2023, intangible assets, net were $39.5 million and $42.6 million, respectively. The Company has determined the useful life of its intangible assets to range between 2.5-15 years. Intangible assets include $1.3 million relating to insurance licenses which is classified as an indefinite lived intangible. Impairment testing is required when events occur that indicate an asset may not be recoverable, such as a triggering event. Management reviews other intangible assets for impairment annually during the fourth quarter, or more frequently should events or changes in circumstances indicate that the Company's other intangible assets might be impaired.
The Company’s intangible assets consist of brand, agent relationships, renewal rights, customer relations, trade names and insurance licenses. During the three months ended June 30, 2023, certain brand and customer relations within the Company's restoration provider with a net value of $766,600 were impaired due to the discontinuation of providing restoration services to the Company’s policyholders. The impairment loss of $766,600 was included in intangible asset impairment in the Company's consolidated statements of operations for the three and six months ended June 30, 2023.
There was no impairment of the intangible assets with definite lives for the three and six months ended June 30, 2024.
Amortization expense of the Company’s intangible assets for the three and six months ended June 30, 2024 was $1.6 million and $3.1 million, respectively and for the three and six months ended June 30, 2023 was $1.6 million and $3.2 million, respectively.
Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands):
YearAmount
2024 - remaining$3,092 
20256,183 
20266,033 
20275,836 
20283,914 
Thereafter13,091 
Total$38,149 
v3.24.2.u1
Earnings Per Share
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Earnings Per Share EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the periods indicated (amounts in thousands, except share and per share amounts).
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Basic and Diluted
Net income available to common shareholders — basic and diluted
$18,869 $7,779 $33,094 $21,787 
Common Shares
Basic
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
Diluted
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
5.875% Convertible Notes59,26359,26359,26359,263
Total30,708,99525,626,42030,572,47025,621,994
Net income per common share
Basic$0.62 $0.30 $1.08 $0.85 
Diluted$0.61 $0.30 $1.08 $0.85 
v3.24.2.u1
Deferred Reinsurance Ceding Commission
6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Deferred Reinsurance Ceding Commission DEFERRED REINSURANCE CEDING COMMISSION
The Company defers reinsurance ceding commission income, which is amortized over the effective period of the related insurance policies. For the three months ended June 30, 2024 and 2023, the Company allocated ceding commission income of $9.4 million and $12.8 million, respectively, to policy acquisition costs and $3.1 million and $4.1 million, respectively, to general and administrative expense. For the six months ended June 30, 2024 and 2023, the Company allocated ceding commission income of $18.7 million and $25.3 million, respectively, to policy acquisition costs and $6.1 million and $8.3 million, respectively, to general and administrative expense.
The table below depicts the activity regarding deferred reinsurance ceding commission, included in accounts payable and other liabilities during the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning balance of deferred ceding commission income$31,549 $40,688 $33,627 $42,757 
Ceding commission deferred14,537 13,888 24,839 28,909 
Less: ceding commission earned(12,484)(16,586)(24,864)(33,676)
Ending balance of deferred ceding commission income$33,602 $37,990 $33,602 $37,990 
v3.24.2.u1
Deferred Policy Acquisition Costs
6 Months Ended
Jun. 30, 2024
Deferred Policy Acquisition Costs Disclosures [Abstract]  
Deferred Policy Acquisition Costs DEFERRED POLICY ACQUISITION COSTS
The Company defers certain costs in connection with written policies, called deferred policy acquisition costs (“DPAC”), which are amortized over the effective period of the related insurance policies.
The Company anticipates that its DPAC will be fully recoverable in the near term. The table below depicts the activity regarding DPAC for the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning Balance$104,217 $98,035 $102,884 $99,617 
Policy acquisition costs deferred56,628 53,929 112,885 107,109 
Amortization(46,027)(45,228)(100,951)(99,990)
Ending Balance$114,818 $106,736 $114,818 $106,736 
v3.24.2.u1
Income Taxes
6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
For the three months ended June 30, 2024 and 2023, the Company recorded income tax provisions of $6.0 million and $5.9 million, respectively, which corresponds to effective tax rates of 24.1% and 43.0%, respectively. For the six months ended June 30, 2024 and 2023, the Company recorded income tax provisions of $11.6 million and $9.1 million, respectively, which corresponds to effective tax rates of 26.0% and 29.4%, respectively. The effective tax rate for the three months ended June 30, 2023 was impacted by an increase of $2.5 million in the deferred tax valuation allowance related to Osprey Re related to certain tax elections made by Osprey Re, the Company’s captive reinsurer domiciled in Bermuda. The impact of permanent tax differences on projected results of operations for the calendar year impacts the effective tax rate, which can also fluctuate throughout the year as estimates used in the quarterly tax provision are updated with additional information. The effective tax rate for the six months ended June 30, 2023 was also impacted by a $863,300 increase in the valuation allowance related to certain tax elections made by Osprey Re.
The table below summarizes the significant components of the Company’s net deferred tax assets:
June 30, 2024December 31, 2023
Deferred tax assets:
(In thousands)
Unearned premiums$23,519 $18,507 
Unearned commission7,958 7,964 
Net operating loss436 
Tax-related discount on loss reserve4,365 5,162 
Stock-based compensation684 331 
Accrued expenses905 1,677 
Leases937 940 
Unrealized losses11,506 11,655 
Property and equipment314 — 
Other277 473 
Total deferred tax assets50,466 47,145 
Deferred tax liabilities:
Deferred acquisition costs$27,192 $24,366 
Prepaid expenses189 189 
Property and equipment— 359 
Note discount73 152 
Basis in purchased investments
Basis in purchased intangibles8,658 9,327 
Other1,653 1,633 
Total deferred tax liabilities37,772 36,034 
Net deferred tax asset:$12,694 $11,111 
The statute of limitations related to the Company’s federal and state income tax returns remains open from the Company’s filings for 2020 through 2023. There are currently no tax years under examination.
At June 30, 2024 and December 31, 2023, the Company had no significant uncertain tax positions or unrecognized tax benefits that, if recognized, would impact the effective income tax rate.
v3.24.2.u1
Reinsurance
6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Reinsurance REINSURANCE
Overview
In order to limit the Company’s potential exposure to individual risks and catastrophic events, the Company purchases significant reinsurance from third party reinsurers. Purchasing reinsurance is an important part of the Company’s risk strategy, and premiums ceded to reinsurers is one of the Company’s largest costs. The Company has strong relationships with reinsurers, which it attributes to its management’s industry experience, disciplined underwriting, and claims management capabilities. For each of the twelve months beginning June 1, 2024 and 2023, the Company purchased reinsurance from the following sources: (i) the Florida Hurricane Catastrophe Fund, a state-mandated catastrophe fund (“FHCF”) which provides reinsurance for Florida admitted policies only, (ii) private reinsurers, all of which were rated “A-” or higher by A.M. Best Company, Inc. (“A.M. Best”) or Standard & Poor’s Financial Services LLC (“S&P”) or were fully collateralized, and (iii) the Company’s wholly-owned reinsurance subsidiary, Osprey Re Ltd. (“Osprey”). The Company also sponsored catastrophe bonds in 2024 and 2023 through Citrus Re Ltd., a Bermuda special purpose insurer, which provided an alternative to traditional reinsurance through the issuance of catastrophe bonds. For the 2023 hurricane season only, the Company also obtained reinsurance from the Florida State Board of Administration’s Reinsurance to assist Policyholders (“RAP”) program which provided reinsurance for Florida admitted policies only. The RAP component of the Company's reinsurance program was provided at no cost to the Company and is a non-recurring reinsurance program. In addition to purchasing excess of loss catastrophe reinsurance, the Company also purchased quota share, property per risk and facultative reinsurance. The Company’s quota share program limits its exposure on catastrophe and non-catastrophe losses and provides ceding commission income. The Company’s per risk programs limit its net exposure in the event of severe non-catastrophe losses impacting a single location or risk. The Company also utilizes facultative reinsurance to supplement its per risk reinsurance program where the Company capacity needs dictate.
Purchasing a sufficient amount of reinsurance to cover catastrophic losses from single or multiple events or significant non-catastrophe losses is an important part of the Company’s risk strategy. Reinsurance involves transferring, or “ceding”, a portion of the risk exposure on policies the Company writes to another insurer, known as a reinsurer. To the extent that the Company’s reinsurers are unable to meet the obligations they assume under the Company’s reinsurance agreements, the Company remains liable for the entire insured loss.
The Company’s insurance regulators require all insurance companies, like us, to have a certain amount of capital and reinsurance coverage in order to cover losses and loss adjustment expenses upon the occurrence of a catastrophic event. The Company’s reinsurance program provides reinsurance in excess of its state regulator requirements, which are generally based on the probable maximum loss that it would incur from an individual catastrophic event estimated to occur once in every 100 years based on its portfolio of insured risks. The nature, severity and location of the event giving rise to such a probable maximum loss differs for each insurer depending on the insurer’s portfolio of insured risks, including, among other things, the geographic concentration of insured value within such portfolio. As a result, a particular catastrophic event could be a one-in-100-year loss event for one insurance company while having a greater or lesser probability of occurrence for another insurance company. The Company also purchases reinsurance coverage to protect against the potential for multiple catastrophic events occurring in the same year. The Company shares portions of its reinsurance program coverage among its insurance company affiliates.
2024 - 2025 Reinsurance Program
Catastrophe Excess of Loss Reinsurance
Effective June 1, 2024, the Company entered into catastrophe excess of loss reinsurance agreements covering Heritage Property & Casualty Insurance Company (“Heritage P&C”), Zephyr Insurance Company (“Zephyr”) and Narragansett Bay Insurance Company (“NBIC”). The catastrophe reinsurance programs are allocated among traditional reinsurers, the Florida Hurricane Catastrophe Fund (“FHCF”), Citrus Re and Osprey Re. The FHCF covers Florida admitted market risks only and the Company elected to participate at 90% for the 2024 hurricane season. Osprey Re will provide reinsurance for a portion of the Heritage P&C, NBIC and Zephyr programs. The Company’s third-party reinsurers are either rated “A-” or higher by A.M. Best or S&P or are fully collateralized, to reduce credit risk. Osprey Re and Citrus Re are fully collateralized programs.
The reinsurance program, which is segmented into layers of coverage, protects the Company for excess property catastrophe losses and loss adjustment expenses. The 2024-2025 reinsurance program provides first event coverage up to $1.3 billion for Heritage P&C, first event coverage up to $1.1 billion for NBIC, and first event coverage up to $750.0 million for Zephyr. The Company’s first event retention in a 1 in 100-year event would include retention for the respective insurance company as well as any retention by Osprey. The first event maximum retention up to a 1 in 100-year event for each insurance company subsidiary is as follows: Heritage P&C – $40.0 million, of which $34.0 million would be ceded to Osprey; NBIC – $31.8 million of which the entire amount would be ceded to Osprey in a shared contract with Zephyr; and Zephyr — $40 million, of which $32 million would be ceded to Osprey in a shared contract with NBIC as well as $8.0 million ceded to Osprey in a separate reinsurance contract.
The Company is responsible for all losses and loss adjustment expenses in excess of the Company's reinsurance program. For second or subsequent catastrophic events, the Company’s total available coverage depends on the magnitude of the first event, as the Company may have coverage remaining from layers that were not previously fully exhausted. An aggregate of $3.3 billion of limit is available in 2024, which includes reinstatement through the purchase of reinstatement premium protection. The amount of coverage, however, will be subject to the severity and frequency of such events.
Additionally, the Company placed occurrence contracts for business underwritten by NBIC which covers all catastrophe losses excluding named storms, on December 31, 2023, expiring December 31, 2024. One contract which is 60% placed has a $15.0 million limit in excess of a retention of $25.0 million. Another contract provides the remaining 40% with a $20.0 million limit in excess of a retention of $20.0 million. Each contract has one reinstatement available.
Net Quota Share Reinsurance
The Company’s Net Quota Share coverage is proportional reinsurance, which applies to business underwritten by NBIC, for which certain of the Company’s other reinsurance (property catastrophe excess of loss and the second layer of the general excess of loss) inures to the quota share program. An occurrence limit of $20.0 million for catastrophe losses is in effect on the quota share program, subject to certain aggregate loss limits that vary by reinsurer. The amount and rate of ceding commissions slide, within a prescribed minimum and maximum, depending on loss performance. The Net Quota Share program was renewed on December 31, 2023 ceding 41.0% of the net premiums.
Per Risk Coverage
For losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by NBIC, excluding losses from named storms, the Company purchased property per risk coverage for losses and loss adjustment expenses in excess of $1.5 million per claim. The limit recoverable for an individual loss is $8.5 million and total limit for all losses is $25.5 million. There are two reinstatements available with additional premium due based on the amount of the layer exhausted. This coverage for the contract period from June 15, 2024 through June 14, 2025 is 100% placed. For losses arising from commercial residential business underwritten by NBIC, the Company also purchased property per risk coverage for losses and loss adjustments expenses in excess of $1 million per claim. The limit recovered for an individual loss is $500,000 and total limit for all losses is $1.5 million.
In addition, the Company purchased facultative reinsurance for losses in excess of $10.0 million for any properties it insured where the total insured value exceeded $10.0 million. The maximum limit for this coverage is $80.0 million. This coverage applies to losses arising from business underwritten by Heritage P&C and losses arising from commercial residential business underwritten by NBIC, excluding losses from named storms. The Company also purchased facultative reinsurance for losses underwritten by NBIC in excess of $3.5 million.
General Excess of Loss
The Company’s general excess of loss reinsurance protects business underwritten by NBIC and Zephyr multi-peril policies from single risk losses. For the contract period of July 1, 2023 through June 30, 2024, the coverage is $2.5 million excess $1.0 million for property losses and $1.0 million excess $1.0 million for casualty losses, and is 67.5% placed.
For a detailed discussion of the Company’s 2023-2024 Reinsurance Program refer to Part I, “Business”, Part II, Item 8, “Financial Statements and Supplementary Data” and “Note 12. Reinsurance” in the Company’s 2023 Form 10-K.
Effect of Reinsurance
The Company’s reinsurance arrangements had the following effect on certain items in the condensed consolidated statement of income for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
(In thousands)
Premium written:
Direct$424,530 $396,559 $781,214 $706,868 
Ceded(488,210)(473,657)(532,678)(506,433)
Net$(63,680)$(77,098)$248,536 $200,435 
Premiums earned:
Direct$350,073 $330,015 $691,462 $647,037 
Ceded(159,757)(153,211)(321,720)(304,204)
Net$190,316 $176,804 $369,742 $342,833 
Loss and Loss Adjustment Expenses
Direct$210,962 $144,219 $502,324 $307,036 
Ceded(105,034)(37,573)(294,361)(102,939)
Net$105,928 $106,646 $207,963 $204,098 
v3.24.2.u1
Reserve For Unpaid Losses
6 Months Ended
Jun. 30, 2024
Insurance Loss Reserves [Abstract]  
Reserve for Unpaid Losses RESERVE FOR UNPAID LOSSES
The Company determines the reserve for unpaid losses on an individual-case basis for all incidents reported. The liability also includes amounts which are commonly referred to as incurred but not reported, or “IBNR”, claims as of the balance sheet date. The Company estimates its IBNR reserves by projecting its ultimate losses using industry accepted actuarial methods and then deducting actual loss payments and case reserves from the projected ultimate losses.
The table below summarizes the activity related to the Company’s reserve for unpaid losses:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Balance, beginning of period$843,687 $980,992 $845,955 $1,131,807 
Less: reinsurance recoverable on unpaid losses477,876 620,218 421,798 759,681 
Net balance, beginning of period365,811 360,774 424,157 372,126 
Incurred related to:
Current year97,240 109,371 192,612 208,285 
Prior years8,688 (2,725)15,351 (4,187)
Total incurred105,928 106,646 207,963 204,098 
Paid related to:
Current year51,201 53,569 81,383 83,944 
Prior years66,404 38,281 196,603 116,710 
Total paid117,605 91,850 277,986 200,654 
Net balance, end of period354,134 375,570 354,134 375,570 
Plus: reinsurance recoverable on unpaid losses468,137 442,289 468,137 442,289 
Balance, end of period$822,271 $817,859 $822,271 $817,859 
The Company believes that the reserve for unpaid losses reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.
As of June 30, 2024, the Company reported $354.1 million in unpaid losses and loss adjustment expenses, net of reinsurance which included $240.6 million attributable to IBNR net of reinsurance recoverable, or 67.9% of net reserves for unpaid losses and loss adjustment expenses. For the three months ended June 30, 2024, the Company experienced $8.7 million of net unfavorable prior year loss development compared to $2.7 million of net favorable prior year loss
development for the three months ended June 30, 2023. For the six months ended June 30, 2024, the Company experienced $15.4 million of net unfavorable prior year loss development compared to $4.2 million of net favorable prior year loss development for the six months ended June 30, 2023. The unfavorable development is largely associated with adverse development on Hurricane Irma claims, for which the losses are fully retained.
Reinsurance recoverable on unpaid losses includes expected reinsurance recoveries associated with reinsurance contracts the Company has in place. The amount may include recoveries from catastrophe excess of loss reinsurance, net quota share reinsurance, per risk reinsurance, and facultative reinsurance contracts.
v3.24.2.u1
Long-Term Debt
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Long-Term Debt LONG-TERM DEBT
Convertible Senior Notes
In August 2017 and September 2017, the Company issued in aggregate $136.8 million of 5.875% Convertible Senior Notes (“Convertible Notes”) maturing on August 1, 2037, unless earlier repurchased, redeemed or converted. Interest is payable semi-annually in arrears, on February 1, and August 1 of each year. In January 2022, the Company reacquired and retired $11.7 million of its outstanding Convertible Senior Notes. Payment was made in cash and the Convertible Notes were retired at the time of repurchase. In addition, the Company expensed $242,700 which was the proportionate amount of the unamortized issuance and debt discount costs associated with this repurchase.
As of December 31, 2023 and at June 30, 2024, the Company had approximately $885,000 of the Convertible Notes outstanding, net of $21.1 million of Convertible Notes held by an insurance company subsidiary. For the six-months ended June 30, 2024 and 2023, the Company made interest payments, net of affiliated Convertible Notes, of approximately $25,115 and $26,000, on the outstanding Convertible Notes, respectively.
Senior Secured Credit Facility
The Company is party to a credit agreement dated as of December 14, 2018 (as amended from time to time, the “Credit Agreement”) with a syndicate of lenders.
The Credit Agreement, as amended, provides for (1) a five-year senior secured term loan facility in an aggregate principal amount of $100 million (the “Term Loan Facility”) and (2) a five-year senior secured revolving credit facility in an aggregate principal amount of $50 million (inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the revolving credit facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the revolving credit facility) (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”).
Term Loan Facility. The principal amount of the Term Loan Facility amortizes in quarterly installments, which began with the close of the fiscal quarter ending March 31, 2019, in an amount equal to $1.9 million per quarter, payable quarterly, decreasing to $875,000 per quarter commencing with the quarter ending December 31, 2021, and increasing to $2.4 million per quarter commencing with the quarter ending December 31, 2022, with the remaining balance payable at maturity. The Term Loan Facility matures on July 28, 2026. As of December 31, 2023 and June 30, 2024, there was $79.6 million and $74.9 million, respectively in aggregate principal outstanding under the Term Loan Facility and after giving effect to the additional term loan advance that was used to refinance amounts outstanding under the Revolving Credit Facility and to pay fees, costs and expenses related thereto, there was $10 million in aggregate principal outstanding under the Revolving Credit Facility.
For the six months ended June 30, 2024, the Company made principal and interest payments of approximately $4.8 million and $3.3 million, respectively, on the Term Loan Facility and for the comparable period of 2023, the Company made principal and interest payments of $4.8 million and $3.4 million, respectively, on the Term Loan Facility.
Revolving Credit Facility. The Revolving Credit Facility allows for borrowings of up to $50 million inclusive of a sublimit for the issuance of letters of credit equal to the unused amount of the Revolving Credit Facility and a sublimit for swingline loans equal to the lesser of $25 million and the unused amount of the Revolving Credit Facility. At June 30, 2024 and December 31, 2023, the Company had $10.0 million in borrowings under the Revolving Credit Facility. At June 30, 2024 and 2023, there were no outstanding letters of credit issued under the Revolving Credit Facility. For the six months ended June 30, 2023, the Company made interest payments in aggregate of approximately $332,106 on the Revolving Credit Facility. For the six months ended June 30, 2024, the Company made interest payments in aggregate of approximately $413,668 on the Revolving Credit Facility and $66,535 relating to unused availability commitment fees.
At the Company's option, borrowings under the Credit Facilities bear interest at rates equal to either (1) a rate determined by reference to SOFR, plus an applicable margin and a credit adjustment spread equal to 0.10% or (2) a base rate determined by reference to the highest of (a) the “prime rate” of Regions Bank, (b) the federal funds rate plus 0.50%, and (c) the adjusted term SOFR in effect on such day for an interest period of one month plus 1.00%, plus an applicable margin.
At June 30, 2024, the effective interest rate for the Term Loan Facility and Revolving Credit Facility was 8.171% and 8.179%, respectively. The Company monitors the rates prior to the reset date which allows it to establish if the payment is monthly or quarterly payment based on the most beneficial rate used to calculate the interest payment.
Mortgage Loan
In October 2017, the Company and its subsidiary, Skye Lane Properties LLC, jointly obtained a commercial real estate mortgage loan in the amount of $12.7 million, bearing interest of 4.95% per annum and maturing on October 30, 2027. Pursuant to the terms of the mortgage loan, on October 30, 2022, the interest rate adjusted to an interest rate equal to the annualized interest rate of the United States 5-year Treasury Notes as reported by the Federal Reserve on a weekly average basis plus 3.10%, which resulted in an increase of the rate from 4.95% to 7.42% per annum. The Company makes monthly principal and interest payments against the loan. For the six months ended June 30, 2024 and 2023, the Company made principal and interest payments $548,131 of $518,746 on the mortgage loan, respectively.
FHLB Loan Agreements
In December 2018, a subsidiary of the Company received a 3.094% fixed interest rate cash loan of $19.2 million from the Federal Home Loan Bank (“FHLB”) Atlanta. On September 29, 2023, the Company restructured the December 2018 agreement to extend the maturity date to March 28, 2025, with a 5.109% fixed interest rate payable quarterly commencing on December 28, 2023. The subsidiary continues to be a member in the FHLB. Membership in the FHLB required an investment in FHLB’s common stock which was purchased in December 2018 and valued at $1.4 million. Additionally, the transaction required the acquired FHLB common stock and certain other investments to be pledged as collateral. As of June 30, 2024, the fair value of the collateralized securities was $23.6 million and the equity investment in FHLB common stock was $1.5 million. For the six months ended June 30, 2024, and 2023, the Company made quarterly interest payments as per the terms of the loan agreement of approximately $498,828 and $300,325, respectively.
As of June 30, 2024 and at December 31, 2023, the Company also holds other common stock from FHLB Boston for a value of $177,197, classified as equity securities and reported at fair value on the condensed consolidated financial statements.
In December 2018, an insurance subsidiary became a member of the FHLB-DM. Membership in the FHLB-DM required an investment in FHLB-DM’s common stock which was purchased in December 2018 and valued at $133,200. In January 2024, the insurance subsidiary of the Company received a 4.23% fixed interest rate cash loan of $5.5 million from the Federal Home Loan Bank (“FHLB-DM”) Des Moines. Additionally, the transaction required the acquired FHLB-DM common stock and certain other investments to be pledged as collateral. As of June 30, 2024, the fair value of the collateralized securities was $8.0 million and the equity investment in FHLB common stock was $295,500.
For the three and six months ended June 30, 2024, the Company made monthly interest payments as per the terms of the loan agreement of approximately $58,809, and $117,103, respectively.
The following table summarizes the Company’s long-term debt and credit facilities as of June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Convertible debt$885 $885 
Mortgage loan10,889 11,019 
Term loan facility74,875 79,625 
Revolving credit facility10,000 10,000 
FHLB loan agreements24,700 19,200 
Total principal amount$121,349 $120,729 
Deferred finance costs$569 $997 
Total long-term debt$120,780 $119,732 
As of the date of this report, the Company was in compliance with the applicable terms of all its covenants and other requirements under the Credit Agreement, Convertible Notes, cash borrowings and other loans. The Company’s ability to secure future debt financing depends, in part, on its ability to remain in such compliance. The covenants in the Credit Agreement may limit the Company’s flexibility in connection with future financing transactions and in the allocation of capital in the future, including the Company’s ability to pay dividends and make stock repurchases, and contribute capital to its insurance subsidiaries that are not parties to the Credit Agreement.
The schedule of principal payments on long-term debt as of June 30, 2024 is as follows:
YearAmount
(In thousands)
2024 remaining$4,975 
202529,074 
202671,018 
20279,897 
2028— 
Thereafter6,385 
Total$121,349 
v3.24.2.u1
Accounts Payable and Other Liabilities
6 Months Ended
Jun. 30, 2024
Other Liabilities Disclosure [Abstract]  
Accounts Payable and Other Liabilities ACCOUNTS PAYABLE AND OTHER LIABILITIES
Accounts payable and other liabilities consist of the following:
DescriptionJune 30, 2024December 31, 2023
(In thousands)
Deferred ceding commission$33,602 $33,627 
Accounts payable and other payables15,058 16,185 
Taxes, licenses and fees4,908 — 
Accrued interest and issuance costs261 325 
Other liabilities213 329 
Premium tax— 1,486 
Commission payables17,682 17,714 
Total other liabilities$71,724 $69,666 
v3.24.2.u1
Statutory Accounting and Regulations
6 Months Ended
Jun. 30, 2024
Regulated Operations [Abstract]  
Statutory Accounting and Regulations STATUTORY ACCOUNTING AND REGULATIONS
State laws and regulations, as well as national regulatory agency requirements, govern the operations of all insurers such as the Company’s insurance subsidiaries. The various laws and regulations require that insurers maintain minimum amounts of statutory surplus and risk-based capital, restrict insurers’ ability to pay dividends, restrict the allowable investment types and investment mixes, and subject the Company’s insurers to assessments.
The Company’s insurance subsidiaries Heritage Property & Casualty Insurance Company (“Heritage P&C)”, Narragansett Bay Insurance Company (“NBIC”), Zephyr Insurance Company (“Zephyr”), and Pawtucket Insurance Company (“PIC”) must maintain capital and surplus ratios or balances as determined by the regulatory authority of the states in which they are domiciled. Heritage P&C is required to maintain capital and surplus equal to the greater of $15.0 million or 10% of its respective liabilities. Zephyr is required to maintain a deposit of $750,000 in a federally insured financial institution. NBIC is required to maintain capital and surplus of $3.0 million. The combined statutory surplus for Heritage P&C, Zephyr, and NBIC was $253.0 million at June 30, 2024 and $259.6 million at December 31, 2023. State law also requires the Company’s insurance subsidiaries to adhere to prescribed premium-to-capital surplus ratios, and risk-based capital requirements with which the Company's insurance subsidiaries are in compliance. At June 30, 2024, the Company’s insurance subsidiaries met the financial and regulatory requirements of each of the states in which they conduct business.
v3.24.2.u1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIESThe Company is involved in claims-related legal actions arising in the ordinary course of business. The Company accrues amounts resulting from claims-related legal actions in unpaid losses and loss adjustment expenses during the period that it determines an unfavorable outcome becomes probable and it can estimate the amounts. Management makes revisions to its estimates based on its analysis of subsequent information that the Company receives regarding various factors, including: (i) per claim information; (ii) company and industry historical loss experience; (iii) judicial decisions and legal developments in the awarding of damages; and (iv) trends in general economic conditions, including the effects of inflation.
v3.24.2.u1
Related Party Transactions
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions RELATED PARTY TRANSACTIONS
From time to time the Company has been party to various related party transactions involving certain of its officers, directors and significant stockholders, including as set forth below. The Company has entered into each of these arrangements without obligation to continue its effect in the future and the associated expense was immaterial to its results of operations or financial position as of June 30, 2024 and 2023.
In July 2019, the Board of Directors appointed Mark Berset to the Board of Directors of the Company. Mr. Berset is also the Chief Executive Officer of Comegys Insurance Agency, Inc. (“Comegys”), an independent insurance agency that writes policies for the Company. The Company pays commission to Comegys based upon standard industry rates consistent with those provided to the Company’s other insurance agencies. There are no arrangements or understandings between Mr. Berset and any other persons with respect to his appointment as a director. For the three months ended June 30, 2024 and 2023, the Company paid agency commission to Comegys of approximately $39,280 and $33,160, respectively. For the six months ended June 30, 2024 and 2023, the Company paid agency commission to Comegys of approximately $80,088 and $69,901, respectively.
v3.24.2.u1
Employee Benefit Plans
6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
Employee Benefit Plans EMPLOYEE BENEFIT PLANS
The Company provides a 401(k) plan for all qualifying employees. The Company provides a matching contribution of 100% on the first 3% of employees’ contribution and 50% on the next 2% of the employees’ contribution to the plan. The maximum match is 4%. For the three months ended June 30, 2024 and 2023, the contributions made to the plan on behalf of the participating employees were approximately $368,500 and $330,470, respectively. For the six months ended June 30, 2024 and 2023, the contributions made to the plan on behalf of the participating employees were approximately $821,700 and $729,670, respectively.
The Company offers employees a flex healthcare plan which allows employees the choice of three medical plans with a range of coverage levels and costs. For the three months ended June 30, 2024 and 2023, the Company incurred medical premium costs including healthcare premiums of $1.5 million and $1.5 million, respectively. For the six months ended June 30, 2024 and 2023, the Company incurred medical premium costs including healthcare premiums of $2.7 million and $3.0 million, respectively.
v3.24.2.u1
Equity
6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Equity EQUITY
The total amount of authorized capital stock consists of 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of June 30, 2024, the Company had 30,684,198 shares of common stock outstanding, 12,231,674 treasury shares of common stock and 1,549,775 unvested restricted common stock with accrued dividends reflecting additional paid-in capital of $361.8 million as of such date.
As more fully disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2023, as of December 31, 2023, there were 30,218,938 shares of common stock outstanding, 12,231,674 treasury shares of common stock and 1,161,811 unvested shares of restricted common stock with accrued dividends, representing $360.3 million of additional paid-in capital.
Common Stock
Holders of common stock are entitled to one vote for each share held on all matters subject to a vote of stockholders, subject to the rights of holders of any outstanding preferred stock. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election, subject to the rights of holders of any outstanding preferred stock. Holders of common stock will be entitled to receive ratably any dividends that the board of directors may declare out of funds legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. Upon the Company’s liquidation, dissolution or winding up, the holders of common stock will be entitled to receive ratably the Company's net assets available after the payment of all debts and other liabilities and subject to the prior rights of holders of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. There is no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of the Company’s capital stock (excluding restricted stock) are fully paid and non-assessable.
Stock Repurchase Program
On December 15, 2022, the Board of Directors established a new share repurchase program plan to commence on December 31, 2022, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and
regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2023 (the "Prior Share Repurchase Plan"). There were no shares repurchased for the year ended December 31, 2023.
On March 11, 2024, the Board of Directors established a new share repurchase program plan which commenced upon the expiration of the Prior Share Repurchase Plan on December 31, 2023, for the purpose of repurchasing up to an aggregate of $10.0 million of common stock, through the open market or in such other manner as will comply with the terms of applicable federal and state securities laws and regulations, including without limitation, Rule 10b-18 under the Securities Act at any time or from time to time on or prior to December 31, 2024 (the "New Share Repurchase Plan"). There were no shares repurchased for the six months ended June 30, 2024. At June 30, 2024, the Company has the capacity under the New Share Repurchase Plan to repurchase $10.0 million of its common stock until December 31, 2024.
Dividends
The declaration and payment of any future dividends will be subject to the discretion of the Board of Directors and will depend on a variety of factors including the Company’s financial condition and results of operations.
The Board of Directors elected not to declare any dividends during the six months ended June 30, 2024 or for the six months ended June 30, 2023
v3.24.2.u1
Stock-Based Compensation
6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION
Restricted Stock
The Company has adopted the Heritage Insurance Holdings, Inc. 2023 Omnibus Incentive Plan (the “2023 Plan”), which became effective on June 7, 2023. The 2023 Plan authorized 2,125,000 shares of common stock for issuance under the Plan for future grants. Upon effectiveness of the 2023 Plan, no new awards may be granted under the prior Omnibus Incentive Plan, which will continue to govern the terms of awards previously made under such plan.
At June 30, 2024, there were in aggregate 854,857 shares available for grant under the 2023 Plan. The Company recognizes compensation expense under ASC 718 for its stock-based payments based on the fair value of the awards.
In June 2024, the Company awarded to non-employee directors in aggregate 39,312 shares of restricted stock with a fair value at the time of grant of $8.14 per share. The awards shall vest on the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date.
On February 26, 2024, the Company awarded 163,640 shares of time-based restricted stock and 253,918 shares of performance-based restricted stock, with a fair value at the time of grant of $7.02 per share under the 2023 Plan to certain employees. The time-based restricted stock shall vest annually in three equal installments commencing on December 15, 2024. The performance based restricted stock has a three-year performance period beginning on January 1, 2024 and ending on December 31, 2026 and will vest following the end of the performance period but no later than March 30, 2027. The number of shares that will be earned at the end of the performance period is subject to increase or decrease based on the results of the performance condition.
On July 11, 2023, the Company awarded 351,716 shares of time-based restricted stock and 857,843 shares of performance-based restricted stock, with a fair value at the time of grant of $4.08 per share under the 2023 Plan to certain employees. The time-based restricted stock shall vest annually in three equal installments commencing on December 15, 2023. The performance based restricted stock has a three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 and will vest following the end of the performance period but no later than March 30, 2026. The number of shares that will be earned at the end of the performance period is subject to decrease based on the results of the performance condition.
In June 2023, the Company awarded to non-employee directors in aggregate 63,744 shares of restricted stock with a fair value at the time of grant of $5.02 per share. The awards shall vest on the next annual meeting of the Company's stockholders that occurs after the award date, provided the member remains on the Board until such date. In August 2023, the awards were amended to reflect the correct grant date fair market value that resulted in an adjustment to the number of shares of restricted stock awarded from 63,744 to 77,296 shares of restricted stock. The Company's annual shareholders meeting was held on June 5, 2024, at which time 77,296 shares of restricted stock were effectively vested.
For the performance-based shares issued in 2023, the number of shares that will be earned at the end of the performance period is subject to decrease based on the result of the performance condition, as these shares were issued at the maximum amount. For the performance-based shares issued in 2024, the number of shares that will be earned at the end of the performance period is subject to increase or decrease based on the result of the performance condition, as these shares were issued at the target amount.
The Plan authorizes the Company to grant stock options at exercise prices equal to the fair market value of the Company’s stock on the dates the options are granted.
Restricted stock activity for the six months ended June 30, 2024 is as follows:
Number of shares
Weighted-Average Grant-Date Fair
Value per Share
Non-vested, at December 31, 20231,161,811$4.25 
Granted - Performance-based restricted stock253,9187.12 
Granted - Time-based restricted stock211,3427.02 
Vested(77,296)4.14 
Canceled and surrendered— — 
Non-vested, at June 30, 20241,549,775$6.07 
Awards are being amortized to expense over the one to three-year vesting periods. For the three months ended June 30, 2024 and 2023 the Company recognized $833,000 and $403,000 of stock compensation expense, respectively. The Company recognized $1.4 million and $797,980 of stock compensation expense for the six months ended June 30, 2024 and 2023, respectively. For the three and six month periods ending June 30, 2024, 77,296 shares of restricted stock previously granted to non-employee directors were vested and released. For the three months ended June 30, 2023, 86,954 shares of restricted stock were vested and released, all of which had been granted to employees. For the six months ended June 30, 2023, 111,954 shares of restricted stock previously granted to employees and non-employee directors were vested and released. Of the shares released to employees, 4,200 shares were withheld by the Company to cover withholding taxes of $7,560, and there were also 1,482 shares forfeited upon employment terminations.
At June 30, 2024, there was approximately $2.0 million unrecognized expense related to time-based non-vested restricted stock and an additional $3.2 million for performance-based restricted stock, net of expected forfeitures which is expected to be recognized over the remaining restriction periods as described in the table below. At June 30, 2023, there was approximately $1.5 million of unrecognized expense.
Additional information regarding the Company’s outstanding non-vested time-based restricted stock and performance-based restricted stock at June 30, 2024 is as follows:
Grant dateRestricted shares unvestedShare Value at Grant Date Per ShareRemaining Restriction Period (Years)
March 16, 202237,9476.720.6
July 11, 20231,046,5684.081.3
February 26, 2024417,5587.022.5
March 11, 20248,3907.150.6
June 6, 202439,3128.141
Total1,549,775
v3.24.2.u1
Subsequent Events
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events SUBSEQUENT EVENTS
The Company performed an evaluation of subsequent events through the date the condensed consolidated financial statements were issued and determined there were no recognized or unrecognized subsequent events that would require an adjustment or additional disclosure in the condensed consolidated financial statements as of June 30, 2024.
v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure            
Net income $ 18,869 $ 14,225 $ 7,779 $ 14,008 $ 33,094 $ 21,787
v3.24.2.u1
Insider Trading Arrangements
3 Months Ended
Jun. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Basis of Presentation and Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation
The condensed consolidated financial statements include the accounts of Heritage Insurance Holdings, Inc. (together with its subsidiaries, the “Company”). These statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain financial information that is normally included in annual consolidated financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. In the opinion of the Company’s management, all material intercompany transactions and balances have been eliminated and all adjustments consisting of normal recurring accruals which are necessary for a fair statement of the financial condition and results of operations for the interim periods have been reflected. The accompanying interim condensed consolidated financial statements and related footnotes should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 13, 2024 (the “2023 Form 10-K”)
Accounting Pronouncements not yet adopted
Accounting Pronouncements not yet adopted
The Company has documented the summary of its significant accounting policies in its Notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Form 10-K. There have been no material changes to the Company’s accounting policies since the filing of that report.
On March 6, 2024, the SEC adopted new rules designed to enhance public company disclosures related to the risks and impacts of climate-related matters. The rules amend the provisions of both Regulation S-K and Regulation S-X to require disclosure of climate-related risks, transition plans, targets and goals, risk management and governance as well as require disclosure of the financial effects of severe weather events and other natural conditions as well as the use of carbon offsets or renewable energy credits. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements. The Company will continue to assess the impact of these new rules on its financial statements while the stay is in place.
v3.24.2.u1
Investments (Tables)
6 Months Ended
Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]  
Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Debt Securities Available-for-Sale
The amortized cost, gross unrealized gains and losses, and fair value of the Company’s debt securities available-for-sale are as follows for the periods presented:
June 30, 2024
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$168,760 $68 $1,178 $167,650 
States, municipalities and political subdivisions322,003 93 30,256 291,840 
Corporate bonds227,867 379 11,402 216,844 
Mortgage-backed securities (1)
18,646 — 2,881 15,765 
Asset-backed securities
2,892 — 143 2,749 
Other
4,005 — — 4,005 
Total$744,173 $540 $45,860 $698,853 
(1)Includes securities at June 30, 2024 with a carrying amount of $23.6 million and $8.0 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018 and 2024. The Company is
permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
December 31, 2023
Cost or Adjusted /
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
 Fair Value
Debt Securities Available-for-sale(In thousands)
U.S. government and agency securities (1)
$81,540 $417 $1,295 $80,662 
States, municipalities and political subdivisions319,896 104 31,018 288,982 
Corporate bonds178,213 475 11,858 166,830 
Mortgage-backed securities22,695 — 2,769 19,926 
Asset-backed securities
247 — 20 227 
Other
4,055 — — 4,055 
Total$606,646 $996 $46,960 $560,682 
(1)Includes securities at December 31, 2023 with a carrying amount of $24.3 million that were pledged as collateral for the advance agreement entered into with a financial institution in 2018. The Company is permitted to withdraw or exchange any portion of the pledged collateral over the minimum requirement at any time.
Schedule of Net Realized Losses on Debt Securities Available-for-sale
The following tables present net realized gains (losses) on the Company’s debt securities available-for-sale for the three and six months ended June 30, 2024 and 2023, respectively:
20242023
Three Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $907 $— $— 
Total realized losses(1)117 (9)308 
Net realized gains (losses)$12 $1,024 $(9)$308 
20242023
Six Months Ended June 30,
Gains
(Losses)
Fair Value at Sale
Gains
(Losses)
Fair Value at Sale
(In thousands)
Debt Securities Available-for-Sale
Total realized gains$13 $2,644 $— $— 
Total realized losses(2)308 (11)598 
Net realized gains (losses)$11 $2,952 $(11)$598 
Schedule of Reconciliation of Net Realized Losses and Impairments of Investments
The following table presents the reconciliation of net realized (losses) gains and impairment of the Company’s investments reported for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Gross realized gains on sales of available-for-sale securities
$13 $— $13 $— 
Impairments on other investments
— (1,559)— (1,559)
Realized losses on sales of available-for-sale securities
(1)(9)(2)(11)
Gross realized gains on sale of other investments
— — — 1,900 
Net realized (losses) gains and impairments
$12 $(1,568)$11 $330 
Summary of Debt Securities by Contractual Maturity Periods
The table below summarizes the Company’s debt securities at June 30, 2024 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.
At June 30, 2024
Cost or Amortized Cost
Percent of Total
Fair Value
Percent of Total
Maturity dates:(In thousands)(In thousands)
Due in one year or less$169,107 22.7 %$167,795 24.0 %
Due after one year through five years383,997 51.6 %362,032 51.8 %
Due after five years through ten years163,398 22.0 %144,765 20.7 %
Due after ten years27,671 3.7 %24,261 3.5 %
Total$744,173 100.0 %$698,853 100.0 %
Summary of Net Investment Income
The following table summarizes the Company’s net investment income by major investment category for the three and six months ended June 30, 2024 and 2023, respectively:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Debt securities$6,502 $5,015 $11,057 $8,038 
Equity securities361 57 657 90 
Cash and cash equivalents3,595 2,246 7,814 4,449 
Other investments173 108 324 839 
Net investment income10,631 7,426 19,852 13,416 
Less: Investment expenses862 827 1,532 1,235 
Net investment income, less investment expenses$9,769 $6,599 $18,320 $12,181 
Schedule of Debt Securities Available-for-Sale in an Unrealized Loss Position, Aggregate Fair Value
The following tables present, for all debt securities available-for-sale in an unrealized loss position (including securities pledged) and for which no credit loss allowance has been established to date, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position at June 30, 2024 and December 31, 2023, respectively (in thousands):
Less Than Twelve Months
Twelve Months or More
June 30, 2024
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities21$128 $101,610 26$1,050 $27,065 
States, municipalities and political subdivisions1139 9,368 37230,217 265,588 
Corporate bonds3464 26,901 18511,338 124,847 
Mortgage-backed securities6— 1212,881 15,763 
Asset-backed securities— — — 35143 525 
Other— — — — — — 
Total fixed maturity securities72$231 $137,882 739$45,629 $433,788 
Less Than Twelve MonthsTwelve Months or More
December 31, 2023
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Number of
Securities
Gross
Unrealized
Losses
Fair Value
Debt Securities Available-for-sale
U.S. government and agency securities3$14 $2,962 32$1,281 $42,305 
States, municipalities and political subdivisions
521 3,875 38230,997 274,876 
Corporate bonds1024 6,398 18811,834 128,771 
Mortgage-backed securities
10— 1382,769 19,810 
Asset-backed securities
0— — 2420 373 
Other
0— — 0— — 
Total fixed maturity securities28$59 $13,242 764$46,901 $466,135 
Summary of Carrying Value and Maximum Loss Exposure of Company's Non-consolidated VIEs
The following table summarizes the carrying value and maximum loss exposure of the Company’s non-consolidated VIEs at June 30, 2024 and December 31, 2023, respectively (in thousands):
As of June 30, 2024As of December 31, 2023
Carrying ValueMaximum Loss ExposureCarrying ValueMaximum Loss Exposure
Investments in non-consolidated VIEs - Equity method$1,682 $1,682 $1,819 $1,819 
Investments in non-consolidated VIEs - Measurement alternative$5,108 $5,108 $5,248 $5,248 
Total non-consolidated VIEs$6,790 $6,790 $7,067 $7,067 
v3.24.2.u1
Fair Value of Financial Measurements (Tables)
6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Measurements
The following table presents information about the Company’s assets measured at fair value on a recurring basis. The Company assesses the levels for the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Company’s accounting policy regarding the recognitions of transfers between levels of the fair value hierarchy.
The tables below present the balances of the Company’s invested assets measured at fair value on a recurring basis:
June 30, 2024TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$480,930 $480,930 $— $— 
Restricted cash$10,956 $10,956 $— $— 
Debt Securities Available-for-sale
U.S. government and agency securities$167,650 $— $167,650 $— 
States, municipalities and political subdivisions291,840 — 291,840 — 
Corporate bonds
216,844 — 216,844 — 
Mortgage-backed securities
15,765 — 15,765 — 
Asset-backed securities
2,749 — 2,749 — 
Other
4,005 — 4,005 — 
Total debt securities
$698,853 $— $698,853 $— 
Equity Securities
Common stock
$1,936 $1,936 $— $— 
Total debt securities and equity securities
$700,789 $1,936 $698,853 $— 

December 31, 2023TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Financial assets
(In thousands)
Cash and cash equivalents$463,640 $463,640 $— 
Restricted cash$9,699 $9,699 $— 
Debt Securities Available-for-sale
U.S. government and agency securities$80,662 $— $80,662 $— 
States, municipalities and political subdivisions288,982 — 288,982 — 
Corporate bonds
166,830 — 166,830 — 
Mortgage-backed securities
19,926 — 19,926 — 
Asset-backed securities
227 — 227 — 
Other
4,055 — 4,055 — 
Total debt securities
$560,682 $— $560,682 $— 
Equity Securities
Common stock
$1,666 $1,666 $— $— 
Total debt securities and equity securities
$562,348 $1,666 $560,682 $— 
v3.24.2.u1
Other Comprehensive Income (Tables)
6 Months Ended
Jun. 30, 2024
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]  
Summary of Other Comprehensive (loss) income and Tax Impact of Each Component of Other Comprehensive (loss) income
The following tables summarize other comprehensive income and disclose the tax impact of each component of other comprehensive income for the three and six months ended June 30, 2024 and 2023, respectively:
For the Three Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$924 $(219)$705 $(2,986)$700 $(2,286)
Reclassification adjustment of realized (gains) losses included in net income(12)(9)(2)
Effect on other comprehensive income$912 $(216)$696 $(2,977)$698 $(2,279)
For the Six Months Ended June 30,
20242023
Pre-tax
Tax
After-tax
Pre-tax
Tax
After-tax
(In thousands)
Other comprehensive income
Change in unrealized gains (losses) on investments, net$641 $(152)$489 $9,158 $(2,155)$7,003 
Reclassification adjustment of realized losses included in net income(11)(9)11 (3)
Effect on other comprehensive income $630 $(150)$480 $9,169 $(2,158)$7,011 
v3.24.2.u1
Leases (Tables)
6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Components of Lease Costs
Components of the Company’s lease costs were as follows (in thousands):
For The Six Months Ended June 30,
20242023
Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$810 $787 
Finance lease cost:
Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations1,269 1,285 
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations407 451 
Total finance lease cost$1,676 $1,736 
Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$744 $796 
Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations$42 $80 
Supplemental cash flow information related to the Company's operating and financing leases were as follows (in thousands):
Operating Leases June 30, 2024June 30, 2023
Lease liability payments$1,139 $1,141 
Finance Leases
Lease liability payments$414 $443 
Total lease liability payments$1,553 $1,584 
Supplemental Balance Sheet Information Related to Operating and Financing Leases
Supplemental balance sheet information related to the Company’s operating and financing leases were as follows (in thousands):
Operating LeasesJune 30, 2024December 31, 2023
Right of use assets$6,357 $6,835 
Lease liability$7,528 $8,076 
Finance Leases 
Right of use assets$16,337 $17,606 
Lease liability$19,250 $20,386 
Weighted-Average Remaining Lease Term and Discount Rate for Operating and Financing Leases
Weighted-average remaining lease term and discount rate for the Company’s operating and financing leases for the periods presented below were as follows:
Weighted-average remaining lease termJune 30, 2024December 31, 2023
Operating lease5.09yrs.5.57yrs.
Finance lease6.67yrs.7.16yrs.
Weighted-average discount rate
Operating lease5.44 %5.17 %
Finance lease4.14 %4.15 %
Maturities of Lease Liabilities by Fiscal Year for Operating and Financing Leases
Maturities of lease liabilities by fiscal year for the Company’s operating and financing leases were as follows (in thousands):
Financing Lease
Operating Lease
2024 remaining$1,565 $876 
20253,173 1,655 
20263,216 1,636 
20273,190 1,599 
20283,270 1,633 
2029 and thereafter7,651 1,213 
Total lease payments22,065 8,612 
Less: imputed interest(2,815)(1,084)
Present value of lease liabilities$19,250 $7,528 
v3.24.2.u1
Property and Equipment, Net (Tables)
6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment, Net
Property and equipment, net consisted of the following at June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Land$2,582 $2,582 
Building9,599 9,599 
Software in progress17,530 14,450 
Computer hardware and software10,312 10,717 
Office furniture and equipment1,484 1,484 
Tenant and leasehold improvements10,893 10,876 
Vehicle fleet515 515 
Total, at cost52,915 50,223 
Less: accumulated depreciation and amortization(18,405)(17,005)
Property and equipment, net$34,510 $33,218 
v3.24.2.u1
Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Estimated Amortization of Intangible Assets
Estimated annual pretax amortization of intangible assets for each of the next five years and thereafter is as follows (in thousands):
YearAmount
2024 - remaining$3,092 
20256,183 
20266,033 
20275,836 
20283,914 
Thereafter13,091 
Total$38,149 
v3.24.2.u1
Earnings Per Share (Tables)
6 Months Ended
Jun. 30, 2024
Earnings Per Share [Abstract]  
Schedule of Computation of Basic and Diluted Earnings (Loss) Per Share (EPS)
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the periods indicated (amounts in thousands, except share and per share amounts).
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Basic and Diluted
Net income available to common shareholders — basic and diluted
$18,869 $7,779 $33,094 $21,787 
Common Shares
Basic
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
Diluted
Weighted average shares outstanding30,649,73225,567,15730,513,20725,562,731
5.875% Convertible Notes59,26359,26359,26359,263
Total30,708,99525,626,42030,572,47025,621,994
Net income per common share
Basic$0.62 $0.30 $1.08 $0.85 
Diluted$0.61 $0.30 $1.08 $0.85 
v3.24.2.u1
Deferred Reinsurance Ceding Commission (Tables)
6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Schedule of Activity with Regard to Deferred Reinsurance Ceding Commission
The table below depicts the activity regarding deferred reinsurance ceding commission, included in accounts payable and other liabilities during the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning balance of deferred ceding commission income$31,549 $40,688 $33,627 $42,757 
Ceding commission deferred14,537 13,888 24,839 28,909 
Less: ceding commission earned(12,484)(16,586)(24,864)(33,676)
Ending balance of deferred ceding commission income$33,602 $37,990 $33,602 $37,990 
v3.24.2.u1
Deferred Policy Acquisition Costs (Tables)
6 Months Ended
Jun. 30, 2024
Deferred Policy Acquisition Costs Disclosures [Abstract]  
Summary of Activity in Deferred Policy Acquisition Costs (DPAC)
The Company anticipates that its DPAC will be fully recoverable in the near term. The table below depicts the activity regarding DPAC for the three and six months ended June 30, 2024 and 2023.
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Beginning Balance$104,217 $98,035 $102,884 $99,617 
Policy acquisition costs deferred56,628 53,929 112,885 107,109 
Amortization(46,027)(45,228)(100,951)(99,990)
Ending Balance$114,818 $106,736 $114,818 $106,736 
v3.24.2.u1
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Components of Deferred Tax Liability
The table below summarizes the significant components of the Company’s net deferred tax assets:
June 30, 2024December 31, 2023
Deferred tax assets:
(In thousands)
Unearned premiums$23,519 $18,507 
Unearned commission7,958 7,964 
Net operating loss436 
Tax-related discount on loss reserve4,365 5,162 
Stock-based compensation684 331 
Accrued expenses905 1,677 
Leases937 940 
Unrealized losses11,506 11,655 
Property and equipment314 — 
Other277 473 
Total deferred tax assets50,466 47,145 
Deferred tax liabilities:
Deferred acquisition costs$27,192 $24,366 
Prepaid expenses189 189 
Property and equipment— 359 
Note discount73 152 
Basis in purchased investments
Basis in purchased intangibles8,658 9,327 
Other1,653 1,633 
Total deferred tax liabilities37,772 36,034 
Net deferred tax asset:$12,694 $11,111 
v3.24.2.u1
Reinsurance (Tables)
6 Months Ended
Jun. 30, 2024
Insurance [Abstract]  
Schedule of Effect of Reinsurance Arrangements in Consolidated Statement of Income
The Company’s reinsurance arrangements had the following effect on certain items in the condensed consolidated statement of income for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
(In thousands)
Premium written:
Direct$424,530 $396,559 $781,214 $706,868 
Ceded(488,210)(473,657)(532,678)(506,433)
Net$(63,680)$(77,098)$248,536 $200,435 
Premiums earned:
Direct$350,073 $330,015 $691,462 $647,037 
Ceded(159,757)(153,211)(321,720)(304,204)
Net$190,316 $176,804 $369,742 $342,833 
Loss and Loss Adjustment Expenses
Direct$210,962 $144,219 $502,324 $307,036 
Ceded(105,034)(37,573)(294,361)(102,939)
Net$105,928 $106,646 $207,963 $204,098 
v3.24.2.u1
Reserve for Unpaid Losses (Tables)
6 Months Ended
Jun. 30, 2024
Insurance Loss Reserves [Abstract]  
Summary of Reserve for Unpaid Losses
The table below summarizes the activity related to the Company’s reserve for unpaid losses:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Balance, beginning of period$843,687 $980,992 $845,955 $1,131,807 
Less: reinsurance recoverable on unpaid losses477,876 620,218 421,798 759,681 
Net balance, beginning of period365,811 360,774 424,157 372,126 
Incurred related to:
Current year97,240 109,371 192,612 208,285 
Prior years8,688 (2,725)15,351 (4,187)
Total incurred105,928 106,646 207,963 204,098 
Paid related to:
Current year51,201 53,569 81,383 83,944 
Prior years66,404 38,281 196,603 116,710 
Total paid117,605 91,850 277,986 200,654 
Net balance, end of period354,134 375,570 354,134 375,570 
Plus: reinsurance recoverable on unpaid losses468,137 442,289 468,137 442,289 
Balance, end of period$822,271 $817,859 $822,271 $817,859 
v3.24.2.u1
Long-Term Debt (Tables)
6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Company's Long Term Debt and Credit Facilities
The following table summarizes the Company’s long-term debt and credit facilities as of June 30, 2024 and December 31, 2023:
June 30, 2024December 31, 2023
(In thousands)
Convertible debt$885 $885 
Mortgage loan10,889 11,019 
Term loan facility74,875 79,625 
Revolving credit facility10,000 10,000 
FHLB loan agreements24,700 19,200 
Total principal amount$121,349 $120,729 
Deferred finance costs$569 $997 
Total long-term debt$120,780 $119,732 
Schedule of Principal Payments on Long-Term Debt
The schedule of principal payments on long-term debt as of June 30, 2024 is as follows:
YearAmount
(In thousands)
2024 remaining$4,975 
202529,074 
202671,018 
20279,897 
2028— 
Thereafter6,385 
Total$121,349 
v3.24.2.u1
Accounts Payable and Other Liabilities (Tables)
6 Months Ended
Jun. 30, 2024
Other Liabilities Disclosure [Abstract]  
Schedule of Accounts Payable and Other Liabilities
Accounts payable and other liabilities consist of the following:
DescriptionJune 30, 2024December 31, 2023
(In thousands)
Deferred ceding commission$33,602 $33,627 
Accounts payable and other payables15,058 16,185 
Taxes, licenses and fees4,908 — 
Accrued interest and issuance costs261 325 
Other liabilities213 329 
Premium tax— 1,486 
Commission payables17,682 17,714 
Total other liabilities$71,724 $69,666 
v3.24.2.u1
Stock-Based Compensation (Tables)
6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Restricted Stock Activity
Restricted stock activity for the six months ended June 30, 2024 is as follows:
Number of shares
Weighted-Average Grant-Date Fair
Value per Share
Non-vested, at December 31, 20231,161,811$4.25 
Granted - Performance-based restricted stock253,9187.12 
Granted - Time-based restricted stock211,3427.02 
Vested(77,296)4.14 
Canceled and surrendered— — 
Non-vested, at June 30, 20241,549,775$6.07 
Additional Information Regarding Outstanding Non-vested Time-based Restricted Stock and Performance-based Restricted Stock
Additional information regarding the Company’s outstanding non-vested time-based restricted stock and performance-based restricted stock at June 30, 2024 is as follows:
Grant dateRestricted shares unvestedShare Value at Grant Date Per ShareRemaining Restriction Period (Years)
March 16, 202237,9476.720.6
July 11, 20231,046,5684.081.3
February 26, 2024417,5587.022.5
March 11, 20248,3907.150.6
June 6, 202439,3128.141
Total1,549,775
v3.24.2.u1
Investments - Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Debt Securities Available-for-Sale (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Schedule of Available-for-sale Securities [Line Items]    
Total $ 744,173 $ 606,646
Gross Unrealized Gains 540 996
Gross Unrealized Losses 45,860 46,960
Fair Value 698,853 560,682
Carrying amount   24,300
2018 Investment Agreement    
Schedule of Available-for-sale Securities [Line Items]    
Carrying amount 23,600  
2024 Investment Agreement    
Schedule of Available-for-sale Securities [Line Items]    
Carrying amount 8,000  
U.S. government and agency securities    
Schedule of Available-for-sale Securities [Line Items]    
Total 168,760 81,540
Gross Unrealized Gains 68 417
Gross Unrealized Losses 1,178 1,295
Fair Value 167,650 80,662
States, municipalities and political subdivisions    
Schedule of Available-for-sale Securities [Line Items]    
Total 322,003 319,896
Gross Unrealized Gains 93 104
Gross Unrealized Losses 30,256 31,018
Fair Value 291,840 288,982
Corporate bonds    
Schedule of Available-for-sale Securities [Line Items]    
Total 227,867 178,213
Gross Unrealized Gains 379 475
Gross Unrealized Losses 11,402 11,858
Fair Value 216,844 166,830
Mortgage-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Total 18,646 22,695
Gross Unrealized Gains 0 0
Gross Unrealized Losses 2,881 2,769
Fair Value 15,765 19,926
Asset-backed securities    
Schedule of Available-for-sale Securities [Line Items]    
Total 2,892 247
Gross Unrealized Gains 0 0
Gross Unrealized Losses 143 20
Fair Value 2,749 227
Other    
Schedule of Available-for-sale Securities [Line Items]    
Total 4,005 4,055
Gross Unrealized Gains 0 0
Gross Unrealized Losses 0 0
Fair Value $ 4,005 $ 4,055
v3.24.2.u1
Investments - Schedule of Net Realized Losses on Debt Securities Available-for-sale (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Debt Securities Available-for-Sale        
Total realized gains $ 13 $ 0 $ 13 $ 0
Total realized losses (1) (9) (2) (11)
Net realized gains (losses) 12 (9) 11 (11)
Debt Securities Available-for-Sale        
Total realized gains 907 0 2,644 0
Total realized losses 117 308 308 598
Net realized gains (losses) $ 1,024 $ 308 $ 2,952 $ 598
v3.24.2.u1
Investments - Schedule of Reconciliation of Net Realized Losses and Impairments of Investments (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]        
Gross realized gains on sales of available-for-sale securities $ 13 $ 0 $ 13 $ 0
Impairments on other investments 0 (1,559) 0 (1,559)
Realized losses on sales of available-for-sale securities (1) (9) (2) (11)
Gross realized gains on sale of other investments 0 0 0 1,900
Net realized (losses) gains and impairments $ 12 $ (1,568) $ 11 $ 330
v3.24.2.u1
Investments - Summary of Debt Securities by Contractual Maturity Periods (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Cost or Amortized Cost    
Due in one year or less $ 169,107  
Due after one year through five years 383,997  
Due after five years through ten years 163,398  
Due after ten years 27,671  
Total $ 744,173 $ 606,646
Percent of Total    
Due in one year or less 22.70%  
Due after one year through five years 51.60%  
Due after five years through ten years 22.00%  
Due after ten years 3.70%  
Total 100.00%  
Fair Value    
Due in one year or less $ 167,795  
Due after one year through five years 362,032  
Due after five years through ten years 144,765  
Due after ten years 24,261  
Total $ 698,853 $ 560,682
Percent of Total    
Due in one year or less 24.00%  
Due after one year through five years 51.80%  
Due after five years through ten years 20.70%  
Due after ten years 3.50%  
Total 100.00%  
v3.24.2.u1
Investments - Summary of Net Investment Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Available-for-sale Securities [Line Items]        
Net investment income $ 10,631 $ 7,426 $ 19,852 $ 13,416
Less: Investment expenses 862 827 1,532 1,235
Net investment income, less investment expenses 9,769 6,599 18,320 12,181
Debt securities        
Schedule of Available-for-sale Securities [Line Items]        
Net investment income 6,502 5,015 11,057 8,038
Equity securities        
Schedule of Available-for-sale Securities [Line Items]        
Net investment income 361 57 657 90
Cash and cash equivalents        
Schedule of Available-for-sale Securities [Line Items]        
Net investment income 3,595 2,246 7,814 4,449
Other investments        
Schedule of Available-for-sale Securities [Line Items]        
Net investment income $ 173 $ 108 $ 324 $ 839
v3.24.2.u1
Investments - Schedule of Debt Securities Available-for-Sale in an Unrealized Loss Position, Aggregate Fair Value (Detail)
$ in Thousands
Jun. 30, 2024
USD ($)
security
Dec. 31, 2023
USD ($)
security
Less Than Twelve Months    
Number of Securities | security 72 28
Gross Unrealized Losses $ 231 $ 59
Fair Value $ 137,882 $ 13,242
Twelve Months or More    
Number of Securities | security 739 764
Gross Unrealized Losses $ 45,629 $ 46,901
Fair Value $ 433,788 $ 466,135
U.S. government and agency securities    
Less Than Twelve Months    
Number of Securities | security 21 3
Gross Unrealized Losses $ 128 $ 14
Fair Value $ 101,610 $ 2,962
Twelve Months or More    
Number of Securities | security 26 32
Gross Unrealized Losses $ 1,050 $ 1,281
Fair Value $ 27,065 $ 42,305
States, municipalities and political subdivisions    
Less Than Twelve Months    
Number of Securities | security 11 5
Gross Unrealized Losses $ 39 $ 21
Fair Value $ 9,368 $ 3,875
Twelve Months or More    
Number of Securities | security 372 382
Gross Unrealized Losses $ 30,217 $ 30,997
Fair Value $ 265,588 $ 274,876
Corporate bonds    
Less Than Twelve Months    
Number of Securities | security 34 10
Gross Unrealized Losses $ 64 $ 24
Fair Value $ 26,901 $ 6,398
Twelve Months or More    
Number of Securities | security 185 188
Gross Unrealized Losses $ 11,338 $ 11,834
Fair Value $ 124,847 $ 128,771
Mortgage-backed securities    
Less Than Twelve Months    
Number of Securities | security 6 10
Gross Unrealized Losses $ 0 $ 0
Fair Value $ 3 $ 7
Twelve Months or More    
Number of Securities | security 121 138
Gross Unrealized Losses $ 2,881 $ 2,769
Fair Value $ 15,763 $ 19,810
Asset-backed securities    
Less Than Twelve Months    
Number of Securities | security 0 0
Gross Unrealized Losses $ 0 $ 0
Fair Value $ 0 $ 0
Twelve Months or More    
Number of Securities | security 35 24
Gross Unrealized Losses $ 143 $ 20
Fair Value $ 525 $ 373
Other    
Less Than Twelve Months    
Number of Securities | security 0 0
Gross Unrealized Losses $ 0 $ 0
Fair Value $ 0 $ 0
Twelve Months or More    
Number of Securities | security 0 0
Gross Unrealized Losses $ 0 $ 0
Fair Value $ 0 $ 0
v3.24.2.u1
Investments - Additional Information (Detail) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]    
Credit allowance for securities $ 0 $ 0
v3.24.2.u1
Investments - Summary of Carrying Value and Maximum Loss Exposure of Company's Non-consolidated VIEs (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Variable Interest Entity [Line Items]    
Carrying Value $ 6,790 $ 7,067
Non-Consolidating Variable Interest Entities    
Variable Interest Entity [Line Items]    
Carrying Value 6,790 7,067
Maximum Loss Exposure 6,790 7,067
Non-Consolidating Variable Interest Entities | Investments in non-consolidated VIEs - Equity method    
Variable Interest Entity [Line Items]    
Carrying Value 1,682 1,819
Maximum Loss Exposure 1,682 1,819
Non-Consolidating Variable Interest Entities | Investments in non-consolidated VIEs - Measurement alternative    
Variable Interest Entity [Line Items]    
Carrying Value 5,108 5,248
Maximum Loss Exposure $ 5,108 $ 5,248
v3.24.2.u1
Fair Value of Financial Measurements - Schedule of Fair Value of Measurements (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value $ 698,853 $ 560,682
Total debt securities and equity securities 700,789 562,348
Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Total debt securities and equity securities 1,936 1,666
Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 698,853 560,682
Total debt securities and equity securities 698,853 560,682
Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Total debt securities and equity securities 0 0
U.S. government and agency securities    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 167,650 80,662
U.S. government and agency securities | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
U.S. government and agency securities | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 167,650 80,662
U.S. government and agency securities | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
States, municipalities and political subdivisions    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 291,840 288,982
States, municipalities and political subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
States, municipalities and political subdivisions | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 291,840 288,982
States, municipalities and political subdivisions | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Corporate bonds    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 216,844 166,830
Corporate bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Corporate bonds | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 216,844 166,830
Corporate bonds | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Mortgage-backed securities    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 15,765 19,926
Mortgage-backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Mortgage-backed securities | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 15,765 19,926
Mortgage-backed securities | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Asset-backed securities    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 2,749 227
Asset-backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Asset-backed securities | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 2,749 227
Asset-backed securities | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Mortgage-back securities    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 4,005 4,055
Mortgage-back securities | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Mortgage-back securities | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 4,005 4,055
Mortgage-back securities | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Fair Value 0 0
Common Shares    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Equity Securities 1,936 1,666
Common Shares | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Equity Securities 1,936 1,666
Common Shares | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Equity Securities 0 0
Common Shares | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Equity Securities 0 0
Cash and cash equivalents    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 480,930 463,640
Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 480,930 463,640
Cash and cash equivalents | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 0
Cash and cash equivalents | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 0 0
Restricted Cash    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 10,956 9,699
Restricted Cash | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 10,956 9,699
Restricted Cash | Significant Other Observable Inputs (Level 2)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets 0
Restricted Cash | Significant Unobservable Inputs (Level 3)    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Financial assets $ 0 $ 0
v3.24.2.u1
Other Comprehensive Income - Summary of Other Comprehensive (Loss) Income and Tax Impact of Each Component of Other Comprehensive (Loss) Income (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pre-tax        
Change in unrealized gains (losses) on investments, net $ 924 $ (2,986) $ 641 $ 9,158
Reclassification adjustment of realized (gains) losses included in net income (12) 9 (11) 11
Effect on other comprehensive income 912 (2,977) 630 9,169
Tax        
Change in unrealized gains (losses) on investments, net (219) 700 (152) (2,155)
Reclassification adjustment of realized (gains) losses included in net income 3 (2) 2 (3)
Effect on other comprehensive income (216) 698 (150) (2,158)
After-tax        
Change in unrealized gains (losses) on investments, net 705 (2,286) 489 7,003
Reclassification adjustment of realized (gains) losses included in net income (9) 7 (9) 8
Effect on other comprehensive income $ 696 $ (2,279) $ 480 $ 7,011
v3.24.2.u1
Leases - Additional Information (Detail)
Jun. 30, 2024
Minimum  
Lessee Lease Description [Line Items]  
Lease terms 1 year
Renewal terms of lease 2 years
Maximum  
Lessee Lease Description [Line Items]  
Lease terms 10 years
Renewal terms of lease 10 years
v3.24.2.u1
Leases - Components of Lease Costs (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Lessee Lease Description [Line Items]    
Total finance lease cost $ 1,676 $ 1,736
General and Administrative Expenses    
Lessee Lease Description [Line Items]    
Operating lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations 810 787
Amortization of assets, included in General & Administrative expenses on the Consolidated Statements of Operations 1,269 1,285
Variable lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations 744 796
Short-term lease cost, included in General & Administrative expenses on the Consolidated Statements of Operations 42 80
Interest Expense    
Lessee Lease Description [Line Items]    
Interest on lease liabilities, included in Interest expense on the Consolidated Statements of Operations $ 407 $ 451
v3.24.2.u1
Leases - Supplemental Balance Sheet Information Related to Operating and Financing Leases (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Operating Leases    
Right of use assets $ 6,357 $ 6,835
Lease liability, operating 7,528 8,076
Finance Leases    
Right of use assets 16,337 17,606
Lease liability, finance $ 19,250 $ 20,386
v3.24.2.u1
Leases - Weighted-Average Remaining Lease Term and Discount Rate for Operating and Financing Leases (Detail)
Jun. 30, 2024
Dec. 31, 2023
Leases [Abstract]    
Operating lease (in years) 5 years 1 month 2 days 5 years 6 months 25 days
Finance lease (in years) 6 years 8 months 1 day 7 years 1 month 28 days
Operating lease (%) 5.44% 5.17%
Finance lease (%) 4.14% 4.15%
v3.24.2.u1
Leases - Maturities of Lease Liabilities by Fiscal Year for Operating and Financing Leases (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Financing Lease    
2024 remaining $ 1,565  
2025 3,173  
2026 3,216  
2027 3,190  
2028 3,270  
2029 and thereafter 7,651  
Total lease payments 22,065  
Less: imputed interest (2,815)  
Lease liability, finance 19,250 $ 20,386
Operating Lease    
2024 remaining 876  
2025 1,655  
2026 1,636  
2027 1,599  
2028 1,633  
2029 and thereafter 1,213  
Total lease payments 8,612  
Less: imputed interest (1,084)  
Lease liability, operating $ 7,528 $ 8,076
v3.24.2.u1
Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Operating Leases    
Lease liability payments $ 1,139 $ 1,141
Finance Leases    
Lease liability payments 414 443
Total lease liability payments $ 1,553 $ 1,584
v3.24.2.u1
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]    
Total, at cost $ 52,915 $ 50,223
Less: accumulated depreciation and amortization (18,405) (17,005)
Property and equipment, net 34,510 33,218
Land    
Property, Plant and Equipment [Line Items]    
Total, at cost 2,582 2,582
Building    
Property, Plant and Equipment [Line Items]    
Total, at cost 9,599 9,599
Less: accumulated depreciation and amortization (2,600)  
Software in progress    
Property, Plant and Equipment [Line Items]    
Total, at cost 17,530 14,450
Computer hardware and software    
Property, Plant and Equipment [Line Items]    
Total, at cost 10,312 10,717
Office furniture and equipment    
Property, Plant and Equipment [Line Items]    
Total, at cost 1,484 1,484
Tenant and leasehold improvements    
Property, Plant and Equipment [Line Items]    
Total, at cost 10,893 10,876
Vehicle fleet    
Property, Plant and Equipment [Line Items]    
Total, at cost $ 515 $ 515
v3.24.2.u1
Property and Equipment, Net - Additional Information (Detail)
3 Months Ended 6 Months Ended
Jun. 30, 2024
USD ($)
Building
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
a
ft²
Building
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Property, Plant and Equipment [Abstract]          
Depreciation and amortization expense $ 718,800 $ 566,000 $ 1,400,000 $ 1,100,000  
Number of acres of land purchased | a     13    
Number of buildings | Building 2   2    
Gross area of acquired property | ft²     88,378    
Total, at cost $ 52,915,000   $ 52,915,000   $ 50,223,000
Accumulated depreciation $ 18,405,000   $ 18,405,000   $ 17,005,000
v3.24.2.u1
Intangible Assets - Additional Information (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Finite Lived Intangible Assets [Line Items]          
Intangibles, net $ 39,464,000   $ 39,464,000   $ 42,555,000
Indefinite lived intangible, insurance licenses 1,300,000   1,300,000    
Impairment of certain brand and customer relations, net   $ 766,600      
Impairment of intangible assets 0 766,600 0 $ 766,600  
Amortization of intangible assets $ 1,600,000 $ 1,600,000 $ 3,100,000 $ 3,200,000  
Minimum          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible asset 2 years 6 months   2 years 6 months    
Maximum          
Finite Lived Intangible Assets [Line Items]          
Useful life of intangible asset 15 years   15 years    
v3.24.2.u1
Intangible Assets - Schedule of Estimated Amortization of Intangible Assets (Details)
$ in Thousands
Jun. 30, 2024
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2024 - remaining $ 3,092
2025 6,183
2026 6,033
2027 5,836
2028 3,914
Thereafter 13,091
Total $ 38,149
v3.24.2.u1
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings (Loss) Per Share (EPS) (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Basic and Diluted        
Net income available to common shareholders — basic $ 18,869 $ 7,779 $ 33,094 $ 21,787
Net income available to common shareholders — diluted $ 18,869 $ 7,779 $ 33,094 $ 21,787
Basic        
Weighted average shares outstanding 30,649,732 25,567,157 30,513,207 25,562,731
Diluted        
Weighted average shares outstanding 30,649,732 25,567,157 30,513,207 25,562,731
5.875% Convertible Notes (in shares) 59,263 59,263 59,263 59,263
Total (in shares) 30,708,995 25,626,420 30,572,470 25,621,994
Net income per common share (in dollars per share)        
Basic (in dollars per share) $ 0.62 $ 0.30 $ 1.08 $ 0.85
Diluted (in dollars per share) $ 0.61 $ 0.30 $ 1.08 $ 0.85
v3.24.2.u1
Deferred Reinsurance Ceding Commission - Additional Information (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Deferred Reinsurance Ceding Commission [Line Items]        
Ceding commission income $ 12,484 $ 16,586 $ 24,864 $ 33,676
Policy Acquisition Costs        
Deferred Reinsurance Ceding Commission [Line Items]        
Ceding commission income 9,400 12,800 18,700 25,300
General and Administrative Expenses        
Deferred Reinsurance Ceding Commission [Line Items]        
Ceding commission income $ 3,100 $ 4,100 $ 6,100 $ 8,300
v3.24.2.u1
Deferred Reinsurance Ceding Commission - Schedule of Activity with Regard to Deferred Reinsurance Ceding Commission (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Deferred Ceding Commission Income [Roll Forward]        
Beginning balance of deferred ceding commission income $ 31,549 $ 40,688 $ 33,627 $ 42,757
Ceding commission deferred 14,537 13,888 24,839 28,909
Less: ceding commission earned (12,484) (16,586) (24,864) (33,676)
Ending balance of deferred ceding commission income $ 33,602 $ 37,990 $ 33,602 $ 37,990
v3.24.2.u1
Deferred Policy Acquisition Costs - Summary of Activity in Deferred Policy Acquisition Costs (DPAC) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]        
Beginning Balance $ 104,217 $ 98,035 $ 102,884 $ 99,617
Policy acquisition costs deferred 56,628 53,929 112,885 107,109
Amortization (46,027) (45,228) (100,951) (99,990)
Ending Balance $ 114,818 $ 106,736 $ 114,818 $ 106,736
v3.24.2.u1
Income Taxes - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Income Tax Disclosure [Abstract]          
Provision (benefit) for income taxes $ 5,990,000 $ 5,872,000 $ 11,639,000 $ 9,074,000  
Annual effective tax rate 24.10% 43.00% 26.00% 29.40%  
Increase (decrease) deferred tax assets valuation allowance   $ 2,500,000      
Uncertain tax positions $ 0   $ 0   $ 0
Valuation allowance, deferred tax asset, increase (decrease), amount     $ 863,300,000    
v3.24.2.u1
Income Taxes - Components of Deferred Tax Liability (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Deferred tax assets:    
Unearned premiums $ 23,519 $ 18,507
Unearned commission 7,958 7,964
Net operating loss 1 436
Tax-related discount on loss reserve 4,365 5,162
Stock-based compensation 684 331
Accrued expenses 905 1,677
Leases 937 940
Unrealized losses 11,506 11,655
Property and equipment 314 0
Other 277 473
Total deferred tax assets 50,466 47,145
Deferred tax liabilities:    
Deferred acquisition costs 27,192 24,366
Prepaid expenses 189 189
Property and equipment 0 359
Note discount 73 152
Basis in purchased investments 7 8
Basis in purchased intangibles 8,658 9,327
Other 1,653 1,633
Total deferred tax liabilities 37,772 36,034
Net deferred tax asset: $ 12,694 $ 11,111
v3.24.2.u1
Reinsurance - Narrative (Details)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
reinsurer
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
reinstatement
Mar. 31, 2024
USD ($)
Mar. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Number of reinstatements available | reinsurer     2            
Unpaid losses and loss adjustment expenses $ 822,271,000 $ 817,859,000 $ 822,271,000 $ 817,859,000 $ 822,271,000 $ 845,955,000 $ 843,687,000 $ 980,992,000 $ 1,131,807,000
Reinsurance payable 504,291,000   504,291,000   $ 504,291,000 $ 159,823,000      
Reinsurance excess retention percentage         67.50%        
Ceded Premiums Written 488,210,000 $ 473,657,000 532,678,000 $ 506,433,000          
Property Losses                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Retention under program to provide reinsurance coverage         $ 2,500,000        
Excess retention amount reinsured         1,000,000.0        
Causality Losses                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Retention under program to provide reinsurance coverage         1,000,000.0        
Excess retention amount reinsured         1,000,000.0        
Insurance Claims                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Unpaid losses and loss adjustment expenses 1,500,000   1,500,000   1,500,000        
Facultative Reinsurance                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Reinsurance, maximum coverage     80,000,000            
NBIC                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Number of reinstatements available | reinstatement           1      
NBIC | Insurance Claims | Commercial Residential Losses                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Unpaid losses and loss adjustment expenses 1,000,000   1,000,000   1,000,000        
NBIC | 70% Reinsurance Contract                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Aggregate contract coverage limit           $ 15,000,000.0      
Excess retention amount reinsured           25,000,000.0      
NBIC | 30% Reinsurance Contract                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Aggregate contract coverage limit           20,000,000.0      
Excess retention amount reinsured           $ 20,000,000.0      
NBIC | 2023 -2024 Net Quota Share Reinsurance                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Net lines quota share occurrence limit     20,000,000.0            
Percentage of renewed ceded net premium and losses           41.00%      
Maximum | Facultative Reinsurance                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Reinsurance payable 10,000,000.0   10,000,000.0   10,000,000.0        
Maximum | NBIC | Facultative Reinsurance                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Reinsurance payable 3,500,000   3,500,000   3,500,000        
Minimum | Facultative Reinsurance                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Facultative reinsurance purchase amount     $ 10,000,000.0            
FHCF                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Reinsured risk percentage     90.00%            
2023 - 2024 Reinsurance Program                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Reinsurance purchase limit 3,300,000,000   $ 3,300,000,000   3,300,000,000        
2023 - 2024 Reinsurance Program | Maximum | First Catastrophe | Osprey                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
First event retention for insurance company subsidiary 34,000,000.0   34,000,000.0   34,000,000.0        
2023 - 2024 Reinsurance Program | Maximum | First Catastrophe | NBIC                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Retention under program to provide reinsurance coverage     1,100,000,000            
First event retention for insurance company subsidiary 31,800,000   31,800,000   31,800,000        
2023 - 2024 Reinsurance Program | Maximum | First Catastrophe | Heritage P&C                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Retention under program to provide reinsurance coverage     1,300,000,000            
First event retention for insurance company subsidiary 40,000,000.0   40,000,000.0   40,000,000.0        
2023 - 2024 Reinsurance Program | Maximum | First Catastrophe | Zephyr                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Retention under program to provide reinsurance coverage     750,000,000.0            
First event retention for insurance company subsidiary 32,000,000   32,000,000   32,000,000        
Ceded Premiums Written     8,000,000            
2023 - 2024 Reinsurance Program | Maximum | First Catastrophe | Osprey And Zephyr                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
First event retention for insurance company subsidiary 40,000,000   40,000,000   40,000,000        
Property Per Risk Coverage                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Coverage limit     8,500,000            
Reinsurance payable 25,500,000   25,500,000   25,500,000        
Property Per Risk Coverage | NBIC | Commercial Residential Losses                  
Reinsurance Premiums For Insurance Companies By Product Segment [Line Items]                  
Coverage limit     500,000            
Reinsurance payable $ 1,500,000   $ 1,500,000   $ 1,500,000        
v3.24.2.u1
Reinsurance - Schedule of Effect of Reinsurance Arrangements in Consolidated Statement of Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Premium written:        
Direct $ 424,530 $ 396,559 $ 781,214 $ 706,868
Ceded (488,210) (473,657) (532,678) (506,433)
Net (63,680) (77,098) 248,536 200,435
Premiums earned:        
Direct 350,073 330,015 691,462 647,037
Ceded (159,757) (153,211) (321,720) (304,204)
Net premiums earned 190,316 176,804 369,742 342,833
Loss and Loss Adjustment Expenses        
Direct 210,962 144,219 502,324 307,036
Ceded (105,034) (37,573) (294,361) (102,939)
Net $ 105,928 $ 106,646 $ 207,963 $ 204,098
v3.24.2.u1
Reserve for Unpaid Losses - Summary of Reserve for Unpaid Losses (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]        
Balance, beginning of period $ 843,687 $ 980,992 $ 845,955 $ 1,131,807
Less: reinsurance recoverable on unpaid losses 477,876 620,218 421,798 759,681
Net balance, beginning of period 365,811 360,774 424,157 372,126
Incurred related to:        
Current year 97,240 109,371 192,612 208,285
Prior years 8,688 (2,725) 15,351 (4,187)
Total incurred 105,928 106,646 207,963 204,098
Paid related to:        
Current year 51,201 53,569 81,383 83,944
Prior years 66,404 38,281 196,603 116,710
Total paid 117,605 91,850 277,986 200,654
Net balance, end of period 354,134 375,570 354,134 375,570
Plus: reinsurance recoverable on unpaid losses 468,137 442,289 468,137 442,289
Balance, end of period $ 822,271 $ 817,859 $ 822,271 $ 817,859
v3.24.2.u1
Reserve for Unpaid Losses - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Insurance Loss Reserves [Abstract]                
Unpaid losses and loss adjustment expenses $ 354,134 $ 375,570 $ 354,134 $ 375,570 $ 365,811 $ 424,157 $ 360,774 $ 372,126
Unpaid losses and loss adjustment expenses attributable to IBNR net of reinsurance recoverable $ 240,600   $ 240,600          
Net reserves for unpaid losses and loss adjustment expenses, percentage 67.90%   67.90%          
Prior year loss related to development incurred $ 8,700 $ 2,700 $ 15,400 $ 4,200        
v3.24.2.u1
Long-Term Debt - Additional Information (Detail) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 31, 2017
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Sep. 29, 2023
Jan. 31, 2022
Dec. 31, 2018
Sep. 30, 2017
Aug. 31, 2017
Debt Instrument [Line Items]                    
Unamortized issuance and debt discount costs             $ 242,700      
Long-term debt, net   $ 120,780,000 $ 120,780,000   $ 119,732,000          
Federal Home Loan Bank Of Atlanta                    
Debt Instrument [Line Items]                    
Fixed interest rate           5.109%        
Interest paid     498,828,000 $ 300,325,000            
FHLB advance Interest rate               3.094%    
Cash loan received under advance from FHLB               $ 19,200,000    
Required fair value of reinvestment in FHLB common stock.   1,500,000 1,500,000         $ 1,400,000    
Estimated fair value of collateral with FHLB   23,600,000 23,600,000              
Federal Home Loan Bank Boston                    
Debt Instrument [Line Items]                    
Interest paid     177,197   $ 177,197          
Federal Home Loan Bank Des Moines                    
Debt Instrument [Line Items]                    
Interest paid   58,809,000 117,103,000              
FHLB advance Interest rate               4.23%    
Cash loan received under advance from FHLB               $ 5,500,000    
Required fair value of reinvestment in FHLB common stock.   295,500,000 295,500,000         $ 133,200,000    
Estimated fair value of collateral with FHLB   8,000,000 8,000,000              
Revolving credit facility | Line of Credit                    
Debt Instrument [Line Items]                    
Maximum borrowing capacity   50,000,000 50,000,000              
Outstanding borrowing capacity amount   10,000,000 10,000,000              
Line of credit facility, periodic payment, interest     413,668 332,106            
Line of credit facility, commitment fee amount     66,535              
Convertible Senior Notes                    
Debt Instrument [Line Items]                    
Aggregate principal amount                 $ 136,800,000 $ 136,800,000
Fixed interest rate                 5.875%  
Long-term debt, net   885,000 885,000              
Interest paid     25,115,000 26,000,000            
Convertible Senior Notes | Subsidiaries Member                    
Debt Instrument [Line Items]                    
Repurchase of convertible notes   $ 21,100,000 $ 21,100,000              
Convertible debt | Parent company member                    
Debt Instrument [Line Items]                    
Repurchase of convertible notes             $ 11,700,000      
Senior Secured Credit Facility | Secured Overnight Financing Rate (SOFR)                    
Debt Instrument [Line Items]                    
Debt instrument, basis spread on variable rate     1.00%              
Senior Secured Credit Facility | Seventh Amendment                    
Debt Instrument [Line Items]                    
Debt instrument, basis spread on variable rate     0.10%              
Senior Secured Credit Facility | Seventh Amendment | Federal funds effective swap rate member                    
Debt Instrument [Line Items]                    
Debt instrument, basis spread on variable rate     0.50%              
Senior Secured Credit Facility | Term loan facility                    
Debt Instrument [Line Items]                    
Interest paid     $ 4,800,000 3,400,000            
Term loan, Quarterly principal payments     $ 4,800,000 3,300,000            
Effective interest rate   8.171% 8.171%              
Senior Secured Credit Facility | Term loan facility | Seventh Amendment                    
Debt Instrument [Line Items]                    
Aggregate principal amount   $ 74,900,000 $ 74,900,000              
Notes maturity period     5 years              
Maximum borrowing capacity   $ 100,000,000 $ 100,000,000              
Senior Secured Credit Facility | Term loan facility | Seventh Amendment | Term Loan Payable Prior to July 29, 2021                    
Debt Instrument [Line Items]                    
Term loan, Quarterly principal payments     1,900,000              
Senior Secured Credit Facility | Term loan facility | Seventh Amendment | Term Loan Payable in December 2021                    
Debt Instrument [Line Items]                    
Term loan, Quarterly principal payments     875,000              
Senior Secured Credit Facility | Term loan facility | Seventh Amendment | Term Loan Payable After December 2021                    
Debt Instrument [Line Items]                    
Term loan, Quarterly principal payments     $ 2,400,000              
Senior Secured Credit Facility | Revolving credit facility                    
Debt Instrument [Line Items]                    
Effective interest rate   8.179% 8.179%              
Senior Secured Credit Facility | Revolving credit facility | Seventh Amendment                    
Debt Instrument [Line Items]                    
Aggregate principal amount   $ 10,000,000 $ 10,000,000              
Notes maturity period     5 years              
Maximum borrowing capacity   50,000,000 $ 50,000,000              
Senior Secured Credit Facility | Swingline Loan | Seventh Amendment                    
Debt Instrument [Line Items]                    
Maximum borrowing capacity   25,000,000 25,000,000              
Swingline Loan | Revolving credit facility | Line of Credit                    
Debt Instrument [Line Items]                    
Maximum borrowing capacity   $ 25,000,000 25,000,000              
Collateral Financial Arrangement | Skye Lane Properties LLC | Mortgage loan                    
Debt Instrument [Line Items]                    
Aggregate principal amount $ 12,700,000                  
Fixed interest rate 4.95%                  
Payment of principal and interest     $ 548,131,000 $ 518,746,000            
Collateral Financial Arrangement | Skye Lane Properties LLC | Mortgage loan | Minimum                    
Debt Instrument [Line Items]                    
Fixed interest rate 4.95%                  
Collateral Financial Arrangement | Skye Lane Properties LLC | Mortgage loan | Maximum                    
Debt Instrument [Line Items]                    
Fixed interest rate 7.42%                  
Collateral Financial Arrangement | Skye Lane Properties LLC | 5-year Treasury Security | Mortgage loan                    
Debt Instrument [Line Items]                    
Debt instrument, basis spread on variable rate 3.10%                  
v3.24.2.u1
Long-Term Debt - Schedule of Company's Long Term Debt and Credit Facilities (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Principal amount $ 121,349 $ 120,729
Deferred finance costs 569 997
Total long-term debt 120,780 119,732
Term loan facility    
Debt Instrument [Line Items]    
Principal amount 74,875 79,625
Revolving credit facility    
Debt Instrument [Line Items]    
Principal amount 10,000 10,000
Convertible debt    
Debt Instrument [Line Items]    
Principal amount 885 885
FHLB loan agreements    
Debt Instrument [Line Items]    
Principal amount 24,700 19,200
Mortgage loan    
Debt Instrument [Line Items]    
Principal amount $ 10,889 $ 11,019
v3.24.2.u1
Long-Term Debt - Schedule of Principal Payments on Long-Term Debt (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
2024 remaining $ 4,975  
2025 29,074  
2026 71,018  
2027 9,897  
2028 0  
Thereafter 6,385  
Total $ 121,349 $ 120,729
v3.24.2.u1
Accounts Payable and Other Liabilities - Schedule of Accounts Payable and Other Liabilities (Detail) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Other Liabilities Disclosure [Abstract]    
Deferred ceding commission $ 33,602 $ 33,627
Accounts payable and other payables 15,058 16,185
Taxes, licenses and fees 4,908 0
Accrued interest and issuance costs 261 325
Other liabilities 213 329
Premium tax 0 1,486
Commission payables 17,682 17,714
Total other liabilities $ 71,724 $ 69,666
v3.24.2.u1
Statutory Accounting and Regulations - Additional Information (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Heritage P&C    
Statutory Accounting Practices [Line Items]    
Minimum required amount of capital and surplus maintained by the insurance subsidiary $ 15,000  
Statutory capital and surplus requirements, percentage 10.00%  
Zephyr    
Statutory Accounting Practices [Line Items]    
Deposits held $ 750  
NBIC    
Statutory Accounting Practices [Line Items]    
Statutory capital and surplus 3,000  
Heritage P&C, NBIC, and Zephyr    
Statutory Accounting Practices [Line Items]    
Statutory capital and surplus $ 253,000 $ 259,600
v3.24.2.u1
Related Party Transactions - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Related Party | Comegys Insurance Agency, Inc.        
Related Party Transaction [Line Items]        
Agency commission $ 39,280 $ 33,160 $ 80,088 $ 69,901
v3.24.2.u1
Employee Benefit Plans - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Defined Contribution Plan Disclosure [Line Items]        
Contribution for participating employees $ 368,500 $ 330,470 $ 821,700 $ 729,670
Medical premium cost $ 1,500,000 $ 1,500,000 $ 2,700,000 $ 3,000,000.0
Defined Contribution Plan, Tranche One        
Defined Contribution Plan Disclosure [Line Items]        
Percentage of contribution on employee salary     3.00%  
Defined Contribution Plan, Employer Matching Contribution, Percent of Match     100.00%  
Defined Contribution Plan, Tranche Two        
Defined Contribution Plan Disclosure [Line Items]        
Percentage of contribution on employee salary     2.00%  
Defined Contribution Plan, Employer Matching Contribution, Percent of Match     50.00%  
Maximum        
Defined Contribution Plan Disclosure [Line Items]        
Percentage of contribution on employee salary     4.00%  
v3.24.2.u1
Equity - Additional Information (Detail)
$ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2024
USD ($)
vote
shares
Dec. 31, 2023
USD ($)
shares
Mar. 11, 2024
USD ($)
Dec. 15, 2022
USD ($)
Class Of Stock [Line Items]        
Common stock, shares authorized (in shares) 50,000,000 50,000,000    
Preferred stock, shares authorized (in shares) 5,000,000      
Common stock, shares outstanding (in shares) 30,684,198 30,218,938    
Treasury stock, shares (in shares) 12,231,674 12,231,674    
Non-vested beginning balance (in shares) 1,161,811      
Additional paid-in capital | $ $ 361,789 $ 360,310    
Common stock voting rights | vote 1      
Stock repurchase program, authorized amount | $ $ 10,000      
New Share Repurchase Plan        
Class Of Stock [Line Items]        
Stock repurchase program, authorized amount | $     $ 10,000 $ 10,000
Treasury shares repurchased, shares 0 0    
v3.24.2.u1
Stock-Based Compensation - Additional Information (Detail) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 05, 2024
Feb. 26, 2024
Jul. 11, 2023
Aug. 31, 2023
Jul. 31, 2023
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 07, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Stock-based compensation expense             $ 833,000 $ 403,000 $ 1,400,000 $ 797,980  
Unrecognized expense related to non-vested stock             1,500,000   $ 1,500,000    
Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Vested (in shares)                 77,296    
Restricted stock vested and released (in shares)               86,954   111,954  
Restricted stock, shares issued net of shares for tax withholdings (in shares)                   4,200  
Restricted stock, value, shares issued net of tax withholdings                   $ 7,560  
Canceled and surrendered, number of shares (in shares)                 1,482    
Restricted Stock | Employee and Non Employee Director                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Restricted stock vested and released (in shares)                 77,296    
Restricted Stock | Maximum                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Vesting period                 3 years    
Restricted Stock | Minimum                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Vesting period                 1 year    
Performance Based Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Unrecognized expense related to non-vested stock             3,200,000   $ 3,200,000    
Time Based Unvested Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Unrecognized expense related to non-vested stock             $ 2,000,000.0   $ 2,000,000.0    
Omnibus Incentive Plan                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Common stock reserved for issuance (in shares)                     2,125,000
Omnibus Incentive Plan | Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Granted (in shares)   39,312   77,296 63,744 63,744          
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share)   $ 8.14       $ 5.02          
Vested (in shares) 77,296                    
Omnibus Incentive Plan | Time Based Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Granted (in shares)   163,640 351,716                
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share)   $ 7.02 $ 4.08                
Omnibus Incentive Plan | Time Based Restricted Stock | Maximum                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Vesting period   3 years 3 years                
Omnibus Incentive Plan | Performance Based Restricted Stock                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Granted (in shares)   253,918 857,843                
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share)   $ 7.02 $ 4.08                
2023 Plan                      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                      
Shares available for grant             854,857   854,857    
v3.24.2.u1
Stock-Based Compensation - Schedule of Restricted Stock Activity (Detail)
6 Months Ended
Jun. 30, 2024
$ / shares
shares
Number of shares  
Non-vested beginning balance (in shares) 1,161,811
Non-vested ending balance (in shares) 1,549,775
Restricted Stock  
Number of shares  
Non-vested beginning balance (in shares) 1,161,811
Vested (in shares) (77,296)
Canceled and surrendered (in shares) 0
Non-vested ending balance (in shares) 1,549,775
Weighted-Average Grant-Date Fair Value per Share  
Beginning balance (in dollars per share) | $ / shares $ 4.25
Vested (in dollars per share) | $ / shares 4.14
Canceled and surrendered (in dollars per share) | $ / shares 0
Ending balance (in dollars per share) | $ / shares $ 6.07
Restricted Stock | Performance Based Restricted Stock  
Number of shares  
Granted (in shares) 253,918
Weighted-Average Grant-Date Fair Value per Share  
Granted (in dollars per share) | $ / shares $ 7.12
Restricted Stock | Time Based Restricted Stock  
Number of shares  
Granted (in shares) 211,342
Weighted-Average Grant-Date Fair Value per Share  
Granted (in dollars per share) | $ / shares $ 7.02
v3.24.2.u1
Stock-Based Compensation - Additional Information Regarding Outstanding Non-vested Time-based Restricted Stock and Performance-based Restricted Stock (Details) - $ / shares
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 1,549,775 1,161,811
Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 1,549,775 1,161,811
March 16, 2022 | Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 37,947  
Share value at grant date per share (in dollars per share) $ 6.72  
Remaining Restriction Period (Years) 7 months 6 days  
July 11, 2023 | Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 1,046,568  
Share value at grant date per share (in dollars per share) $ 4.08  
Remaining Restriction Period (Years) 1 year 3 months 18 days  
February 26, 2024 | Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 417,558  
Share value at grant date per share (in dollars per share) $ 7.02  
Remaining Restriction Period (Years) 2 years 6 months  
March 11, 2024 | Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 8,390  
Share value at grant date per share (in dollars per share) $ 7.15  
Remaining Restriction Period (Years) 7 months 6 days  
June 6, 2024 | Restricted Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restricted shares unvested (in shares) 39,312  
Share value at grant date per share (in dollars per share) $ 8.14  
Remaining Restriction Period (Years) 1 year  

Heritage Insurance (NYSE:HRTG)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Heritage Insurance Charts.
Heritage Insurance (NYSE:HRTG)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Heritage Insurance Charts.