Heritage Insurance Holdings, Inc.

Good morning and welcome to the Heritage Insurance Holdings Second Quarter 2020 Financial Results Conference Call. My name is Andrea and I will be the operator for today. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Please note this event is being recorded. I would now like to turn the conference over to Arash Soleimani, Executive Vice President at Heritage. Please go ahead.

Good morning and thanks for joining us today. We invite you to visit the investor section of our website, investors.heritagepci.com, where the earnings release and our earnings call will be archived. These materials are available for replay or review at your convenience. Today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. In our earnings press release and in our SEC filings, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, and we have no obligation to update any forward-looking statements we may make. For a description of the forward-looking statements and risks that could cause our results to differ materially from those described in the forward-looking statements, please refer to our annual report on Form 10-K, earnings release, and other SEC filings. With us on the call today are Bruce Lucas, our Chairman and Chief Executive Officer, and Kirk Lusk, our Chief Financial Officer. I will now turn the call over to Bruce. Thank you, Arash.

I would like to welcome all of you to our second quarter 2020 earnings call. Before we begin the call, I'd like to thank all of our employees for their dedication to our company. The core fundamentals of the company continue to improve year over year and quarter over quarter. New business revenue is an important metric that contributes to future profitability. Our organic multi-state growth has been steadily accelerating. In the third quarter of 2019, we returned to positive organic growth as our tri-county non-renewal process reached its conclusion. Starting in that quarter, our growth rate began to accelerate and set new quarterly records. In the third quarter of 2019, we wrote 27.5 million of new business followed by $36.1 million in the fourth quarter, $37.4 million in the first quarter of 2020, and we set yet another record of $56.7 million in the second quarter of this year. Our gross premiums written increased by an impressive 14% year over year. We have been remarkably resilient during the economic slowdown related to COVID-19. While there is no guarantee that we will continue to maintain this level of production, it's worth noting that new business sales in July set a new monthly record as we enter the third quarter. At the end of the second quarter, our in-force premium was $994.6 million and will surpass $1 billion in the third quarter. Our national partnerships and diversified footprint are key factors in our continued growth and expansion. During the quarter, we announced our most recent partnership with AIG, and I look forward to working with our partners at AIG and Safeco going forward. Despite our tremendous growth, the second quarter was marked by higher than normal severe convective storm activity. During the quarter, we had 13 PCS weather events. Virtually all of them were minor losses, but when aggregated with a few larger events, produced 26.8 million in weather losses that negatively impacted the quarter. Despite the elevated weather losses, we were able to post a profit in the quarter. Additionally, we closed the second quarter with favorable prior year reserve development. This marks the eighth consecutive quarter of favorable reserve development, and to my knowledge, we are the only Florida-based carrier to achieve this result. Our increasing sales in favorable reserve development have resulted in solid gains to our book value per share, which was up 11.2% year over year and grew at a 12.9% annualized growth rate since year end 2019. I will now turn the call over to Kirk to provide more details on our financials.