Heritage Insurance Holdings, Inc.

Heritage Insurance Holdings 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 touchtone phone. 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, Heritage 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 good morning to everyone. As we review our fourth quarter and full year 2023 results, I'm pleased to reflect on a period of achievement and strategic advancement for our company. Our efforts over the past two years include deliberate actions and focused execution, culminating in improved financial outcomes and a strengthened market position. Our financial results for the fourth quarter demonstrate the positive impact of our efforts towards tightening underwriting, working towards rate adequacy, diversifying our portfolio, and managing our reinsurance costs. Our net income for Q4 2023 was $30.9 million, marking a substantial improvement from $12.5 million in the same quarter last year. Over the last two years, the actions we have implemented are now being realized. and reflected in our financial statements as premium from rate increases is earned over the policy period. A cornerstone of our strategy has been our disciplined approach to exposure management. Our strategy to reduce the Florida Personalized Book of Business and obtain adequate rates significantly improved the Book of Business. We have extended the strategy to all states within our 16 state platforms. We intentionally reduced our multi-state personal lines policies in Inforce by 15%, and total insured value by 6.9%, to not only manage our reinsurance costs, but more effectively, but also improve the overall quality of our book of business. This strategic reduction led to only a slight decline in Inforce premium from our overall personal lines business of 2.3%. a move we deem necessary to align with our long-term vision of rate adequacy and selective geographic expansion. The commercial residential segment has seen a remarkable increase in premiums enforced by 63.9% year over year. This growth, set against a backdrop of market opportunity, underscores our ability to allocate capital to products and regions with the potential for improved margins. Our exposure management strategy has been particularly effective, resulting in a deliberate decrease in our policies in force, while in force premiums once again hit an all-time high at $1.4 billion and up 5.6% year-over-year. These moves were made to manage our reinsurance costs efficiently and ensure that we maintain our portfolio where the premium is adequately reflective of the risk. We continue to foster our relationships with our reinsurance partners that provide critical support to our core strategy. Looking ahead, our strategy remains clear and focused. With a successful equity raise recently completed, we are well positioned to pursue selective growth opportunities, especially in geographies where our rate adequacy meets our stringent criteria. Our commitment to operational excellence, coupled with strategic clarity provides a solid foundation for sustained growth and value creation for our shareholders. In conclusion, the achievements of 2023 reflect our team's dedication, strategic insight, and operational discipline. As we move forward, I am confident in our ability to maintain this momentum, driven by our solid foundation and the unyielding dedication of our team across our 16 state platform. Let me turn things over to Kirk for a review of the results in the quarter and key financial performance metrics.