Heritage Insurance Holdings, Inc.

Good morning and welcome to the Heritage Insurance Holdings first quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kirk Lusk, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining us today. We invite you to visit the Investors 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 upon management's current expectations and subject to uncertainty and changes in circumstances. In our earnings press release and 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 the 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. Our comments today will also include non-GAAP financial measures. The reconciliations of and other information regarding these measures can be found in our press release. With me on the call today is Ernie Garite, our Chief Executive Officer. I will now turn the call over to Ernie.

Thank you. Kirk and I would like to thank everyone for joining the call today. I would like to thank our Heritage employees for their dedication to the company as well as our policyholders. I also would like to thank our valued reinsurance partners for their commitment to our program. On this call, we will begin with an overview of our performance for the quarter ending March 31, 2022, provide updates on key financial performance metrics, and then open the call for Q&A. The first quarter of 2022 marked another quarter impacted by severe weather losses. These higher weather losses resulted in a net loss of $30.7 million, or $1.15 per diluted share. Despite the substantial increase in net current accident year weather losses during the quarter, we remain encouraged by the rate and form changes implemented throughout the book of business over the last 18 months. These changes, coupled with additional geographic diversification and more restrictive underwriting for new and renewal business, will continue to positively impact our portfolio. These changes are highlighted by the improvement in our attritional loss ratio for new business quarter over quarter. The initiatives to tighten underwriting and increase rates have improved our average premium per policy by 10.7% from the first quarter of 2021. The impact of existing rate increases has not worked its way through our entire book of business. Therefore, this amount does not include rate changes on policies which have not yet renewed. For perspective, Our 2022 voluntary homeowners renewals for all states are averaging a 21% rate increase over the prior year with our existing rate changes. We will continue to seek rate changes commensurate with our cost of doing business. Rate changes are implemented at policy renewal and are earned throughout one-year policy period. We are committed to proactively and appropriately raising rates to offset higher loss costs and taking underwriting actions to improve our profitability throughout the year. We look forward to finalizing our CATXOL reinsurance program, which should be completed by the end of this month. We used our SPV Citrus REIT again this year for a portion of our CATXOL program specific to the Northeast. We were pleased with the pricing of this $100 million reinsurance cap bond as we continue to successfully access the capital markets as part of our risk transfer program. This concludes my remarks. Let me now turn things over to Kirk Loss for a review of the key metrics and numbers.