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Executives were speaking after the company reported a combined ratio of 308.8% for the fourth quarter, a 200-point hike from the prior-year period.
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Heritage’s net current accident-year catastrophe losses in the quarter went down 8% to $27.5mn from $29.8mn in Q4 2021.
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The firm said the loss is related to replacement coverage costs from policies that were placed in 2022 but were underwritten by an unsatisfactory carrier.
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Those two lines, along with transactional E&S and captives, generated gross written premium growth of over 35% in the fourth quarter of 2022.
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2022 represented a period of bumper legacy deal-making for the legacy carrier.
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The broker earlier reported that its Q4 organic growth decelerated 3.4 points sequentially and 5.1 points year-on-year to 10.3%, amid an overall public broker market slowdown.
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The carrier’s Q4 underwriting results benefited from a shift in the mix of its portfolio, continued run-off of some exited businesses and lower catastrophe losses.
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This marked a 5.1-point slowdown compared to the prior-year period.
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Management spoke with analysts after the carrier released its 10-K and the CEO’s shareholder letter.
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The firm booked a Q4 $5mn reserve release that represented a favorable effect on its results of 2%, down from 6.7% in Q4 2021.
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Despite the suspension of the casualty reinsurance business, CFO Sarah Doran told analysts that she expects the company’s total gross premium to grow in 2023.