Demotech Affirms the Financial Stability Ratings® of the Carriers in Heritage Insurance Holdings, Inc.

Columbus, Ohio, September 15, 2021: The Financial Stability Ratings® (FSR) of A, Exceptional, assigned to Heritage Property & Casualty Insurance Company and Narragansett Bay Insurance Company, and the FSR of Aʹ (A Prime), Unsurpassed, assigned to Zephyr Insurance Company, Inc., have been affirmed by Demotech, Inc.

Demotech founder and President, Joe Petrelli, noted that additional information was considered to supplement the Q2 2021 financial statements and operating results.  We obtained information through conversations and meetings with executive management subsequent to publication of the most recent statutory statements. Given our current understanding of the revisions in the corporate business plan and in anticipation of the favorable impact of management’s efforts on the Company’s future operating results, in conjunction with the Company’s immediate access to sufficient capital to honor or defend meritorious claims as they come due, including recent catastrophe losses and loss adjustment expenses, we issue this affirmation of the Financial Stability Rating® based upon the totality of the June 30, 2021 operating results and actions of management.  Any future affirmations will require demonstrable evidence of the impact of the revisions on the company’s financial stability.

Ernie Garateix, Heritage’s CEO, said, “Demotech has a deep understanding of our company, risk exposure and coastal insurance markets nationwide, allowing them to appropriately assess our capital position and reinsurance coverage, a skill that’s particularly critical in one of the world’s largest peak catastrophe zones. We’re confident that our business plan, including underwriting enhancements, rate increases and other actions, will benefit our results in future periods. Despite active named storm activity in July and August, we don’t expect to cede losses to our excess-of-loss reinsurance partners, as we intentionally have no exposure to Texas or Louisiana given the high correlation of weather losses between the southeast and the gulf, which has served both our and our reinsurers’ balance sheets well.”

Petrelli noted, “In 1989, when we became the first to review and rate independent, regional and specialty insurers, we recognized, and our process reflected, the quality and quantity of reinsurance purchased as a critical component of a review of the financial stability of regional and specialty insurers.  Also important was the need for the reinsurance program to supplement the business model of the insurer.   For specialty insurers protecting consumers and businesses from wind, wildfire, flood, hail, earthquake, etc., a rigorous horizontal catastrophe program must supplement the need for vertical limit associated with a “Big One.”

About Demotech, Inc.

Demotech, Inc. is a financial analysis firm specializing in evaluating the financial stability of regional and specialty insurers.  Since 1985, Demotech has served the insurance industry by assigning accurate, reliable, and proven Financial Stability Ratings® (FSRs) for Property & Casualty insurers and Title underwriters.  FSRs are a leading indicator of financial stability, providing an objective baseline of the future solvency of an insurer.  Demotech’s philosophy is to review and evaluate insurers based on their area of focus and execution of their business model rather than solely on financial size.  Demotech was the first to review and rate independent regional and specialty insurers. Demotech’s consistently increasing list of accreditations and acceptances has resulted in rating and reviewing more than 400 insurers operating in the US.  Visit for additional information.

About Heritage

Heritage Insurance Holdings, Inc. is a super-regional Property and Casualty insurance holding company headquartered in Clearwater, Florida. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately $1.2 billion of gross personal and commercial residential premium across its multi-state footprint.


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