Heritage Insurance Holdings, Inc. Segments Disclosure
Note. 25. Segment Reporting
The Company conducts its business as a residential property insurer, which is based upon the Company's business organizational and management structure, as well as information used to allocate the Company’s resources and assess performance by the Company's and Board of Directors, who are collectively the chief operating decision maker ("CODM").
The Company's business is reported as one operating and reportable segment, which is residential property insurance. The Company's residential property insurance business was determined to be one operating and reportable segment based on the Company's approach to making decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents, and monitoring the regulatory environment.
As the Company operates as one reportable segment, all significant expenses presented to the CODM are presented on the face of the Consolidated Statements of Income and Comprehensive Income. The CODM uses net income to evaluate income generated from segment assets, such as return on assets, in deciding whether to reinvest profits into the business or other parts of the entity, such as for acquisitions or to pay dividends.
The residential property insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with the Company's independent agents. The Company's property insurance business is comprised of commercial lines insurance and personal lines insurance and is evaluated on a consolidated basis.
Certain members of the Board of Directors also serve on the Audit Committee and, in that capacity, review selected statutory financial information separate from the consolidated GAAP financial information provided to the CODM. This statutory information is reviewed for regulatory and oversight purposes and does not affect the Company’s conclusion that it has one operating and reportable segment.
The accounting policies applied in measuring segment results are the same as those described in Note 1, “Summary of Significant Accounting Policies,” to the consolidated financial statements..
The following table summarizes the components of the Company's segments revenue and expenses for the following years:
|
|
For the Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Revenues: |
|
(in thousands) |
|
|||||||||
Earned premium, net of ceded premium |
|
$ |
794,157 |
|
|
$ |
767,860 |
|
|
$ |
697,185 |
|
Net investment income |
|
|
37,156 |
|
|
|
36,631 |
|
|
|
25,756 |
|
Net realized gains (losses) on debt securities and other investments |
|
|
2,713 |
|
|
|
(705 |
) |
|
|
(972 |
) |
Other revenue |
|
|
13,304 |
|
|
|
13,199 |
|
|
|
13,529 |
|
Total revenues |
|
|
847,330 |
|
|
|
816,985 |
|
|
|
735,498 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|||
Losses and loss adjustment expense - current year |
|
|
326,700 |
|
|
|
421,633 |
|
|
|
427,702 |
|
Losses and loss adjustment expense - prior year |
|
|
(13,454 |
) |
|
|
25,415 |
|
|
|
(1,573 |
) |
Policy acquisition costs |
|
|
173,961 |
|
|
|
191,189 |
|
|
|
167,610 |
|
General and administration costs (1)(2) |
|
|
80,273 |
|
|
|
75,588 |
|
|
|
69,855 |
|
Depreciation & amortization |
|
|
12,699 |
|
|
|
9,551 |
|
|
|
8,689 |
|
Interest expense |
|
|
7,887 |
|
|
|
10,934 |
|
|
|
11,210 |
|
Income tax expense |
|
|
63,670 |
|
|
|
21,136 |
|
|
|
6,698 |
|
Segment net income |
|
|
195,594 |
|
|
|
61,539 |
|
|
|
45,307 |
|
Reconciliation of profit or loss: |
|
|
|
|
|
|
|
|
|
|||
Adjustment and reconciling items: |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consolidated net income |
|
$ |
195,594 |
|
|
$ |
61,539 |
|
|
$ |
45,307 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.