Tampa insurer records $40M in losses

Tampa-based property and casualty insurer Heritage Insurance Holdings Inc. anticipates seeing $40 million in net retained losses in connection with recent natural disaster events. 

The insurer, which has financially suffered significant losses over the past year, noted that the expected catastrophe losses during the third quarter are a direct impact of the Lahaina wildfire in Hawaii, one of the four blazes that swept through Maui in early August. The wildfire, the most destructive wildfire in Hawaii’s history, represents the majority of the retained loss amount. 

The State of Hawaii makes up roughly $65 million of Heritage’s total in-force premium at the end of 2022, according to earning reports. 

Catastrophe modeling from the analyst team at risk assessment group Karen Clark & Company (KCC) estimates the gross loss for the wildfire to be roughly $3.6 billion. 

The property and casualty insurance equity analyst team at Bloomberg Intelligence also estimates a similar prediction, forecasting a net loss between $2.5 and $4.5 billion. Meanwhile, other private insurers determined the losses for Hurricane Idalia will fall between $2 to $5 billion. 

However, the Maui wildfire included a “modest amount” of reinsurance recoveries from the Per Risk reinsurance program, which allows an insurer to recover certain losses on an individual risk. 

Heritage Insurance Holdings Corp. (NYSE: HRTG) reported that it also received roughly 12,000 claims connected to Idalia, which made landfall earlier this year as a Category 4 hurricane, causing damage across parts of the southeastern U.S. 

The total gross loss of the events may be “well within our reinsurance tower, which provides up to $1.2 billion of limit for a first event,” Heritage CEO Ernie Garateix said in a prepared statement. 

According to the latest earnings report, Heritage had a second quarter net income of $7.8 million after experiencing a loss of $87.9 million during the prior quarter last year. 

The company previously cut over 6,000 from personal lines in Florida and nearly 30,000 polices within the last year as it is exiting Florida’s homeowners insurance market.