Heritage Announces Full Placement of 2026-2027 CAT XOL Reinsurance Program

Rhea-AI Summary

Heritage (NYSE:HRTG) fully placed its 2026-2027 indemnity-based catastrophe excess-of-loss reinsurance program covering Heritage Property Casualty, Narragansett Bay, and Zephyr.

Key points include over $2.2 billion of limit, total cost of about $367.5 million, and $712 million of multi-year coverage, including $550 million via catastrophe bonds.

Positive

• Reinsurance limit placed of over $2.2 billion, including two catastrophe bonds
• Total consolidated reinsurance cost about $367.5 million, down $63.2 million year over year
• $712 million of multi-year coverage, with $550 million via fully collateralized catastrophe bonds
• First event tower exhaustion points up to $1.865 billion in the Southeast, $1.245 billion Northeast, $1.0 billion Hawaii
• Florida Hurricane Catastrophe Fund participation at 90%, unchanged from prior program

Negative

• None.

News Market Reaction – HRTG

-1.45%

-1.45% Session close to close

In the May 29 session, HRTG declined 1.45%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement details completion of Heritage’s 2026-2027 catastrophe excess-of-loss program, hig...

Analysis

This announcement details completion of Heritage’s 2026-2027 catastrophe excess-of-loss program, highlighting over $2.2B of limit, total cost of about $367.5M, and a $63.2M reduction from the prior renewal. The mix includes $712M of multi-year protection, with $550M via catastrophe bonds. In context of recent strong earnings and capital returns, investors may watch how these reinsurance terms influence future loss volatility, combined ratios, and growth across regions like the Southeast, Northeast, and Hawaii.

Key Figures

Reinsurance limit placed: $2.2 billion Total reinsurance cost: $367.5 million Cost reduction: $63.2 million +5 more

8 metrics

Reinsurance limit placed $2.2 billion 2026-2027 catastrophe excess-of-loss program

Total reinsurance cost $367.5 million Consolidated 2026-2027 program cost

Cost reduction $63.2 million Decrease vs prior renewal cost of ~$430.7M

Southeast tower limit $1.865 billion External party first event tower exhaustion point

Northeast tower limit $1.245 billion External party first event tower exhaustion point

Hawaii tower limit $1.00 billion External party first event tower exhaustion point

Multi-year coverage $712 million Includes $550M catastrophe bonds, $162M private market

Program retentions $50M / $38M Loss retention SE & HI ~$50M, NE ~$38M before Osprey Re

Historical Context

5 past events · Latest: May 07 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
May 07	Q1 2026 earnings	Positive	-20.1%	Reported higher net income, EPS and improved combined ratio for Q1 2026.
Apr 21	Earnings date set	Neutral	+1.7%	Announced timing and access details for Q1 2026 earnings release and call.
Mar 12	Conference participation	Neutral	+0.3%	Management scheduled to present and hold investor meetings at Sidoti conference.
Mar 09	Q4 & 2025 earnings	Positive	+0.8%	Strong Q4 and full-year 2025 results with underwriting gains and book value growth.
Feb 23	Preliminary Q4 update	Positive	+17.9%	Guided to Q4 2025 net income above $60M and ROE above 45% with set call date.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent fundamentally strong earnings sometimes saw sharp downside reactions, but other earnings and scheduling updates were met with modest gains.

Recent Company History

Over the last several months, Heritage reported strong results across Q4 2025 and Q1 2026, including record net income and improved combined ratios, while also suspending its dividend and emphasizing share repurchases up to $50.0M. Preliminary Q4 2025 guidance in excess of $60M net income drove a notable positive move of 17.9%, whereas the detailed Q1 2026 report coincided with a -20.05% reaction. Against this backdrop, today’s reinsurance program completion fits into a broader narrative of underwriting discipline and capital management.

Key Terms

catastrophe excess-of-loss reinsurance, catastrophe bonds, multi-year coverage, captive reinsurer, +3 more

7 terms

catastrophe excess-of-loss reinsurance financial

"fully placed its 2026-2027 indemnity based, catastrophe excess-of-loss reinsurance program"

Catastrophe excess-of-loss reinsurance is a type of insurance for insurers that kicks in only after an insurer’s losses from a single major disaster (like a hurricane or earthquake) exceed a set threshold; it covers the portion of the loss above that threshold up to a cap. For investors, this matters because it limits an insurer’s exposure to extreme, sudden claims—reducing the chance of a catastrophic hit to the company’s capital and earnings, much like a backup vault that only opens for very large losses.

catastrophe bonds financial

"placed over $2.2 billion of limit including two new catastrophe bonds."

Catastrophe bonds are debt securities issued by insurers or reinsurers to transfer the financial risk of large natural disasters to investors: buyers receive higher interest payments but can lose some or all of their invested principal if a specified catastrophe (like a major hurricane or earthquake) occurs. They matter to investors because they offer attractive yields and portfolio diversification that is not tied to market movements, but carry concentrated event risk similar to buying insurance against disasters.

multi-year coverage financial

"We placed more multi-year coverage this year and achieved substantial reinsurance cost savings"

Multi-year coverage means that financial analysts, research firms, or media outlets will track and report on a company’s performance, strategy, and outlook over several consecutive years. For investors this matters because sustained coverage increases the amount of publicly available information, helps spot long-term trends or risks, and can improve market visibility — similar to having a series of periodic checkups rather than a single snapshot.

captive reinsurer financial

"reduced by limit purchased through the Company's affiliate captive reinsurer, Osprey Re."

A captive reinsurer is an insurance company created and owned by a business or group to cover that owner’s own risks instead of buying coverage from a third-party insurer. Think of it like a firm setting up its own in-house insurer to keep premiums, smooth costs, and control claims; for investors this can change a company’s risk profile, cash flow, capital needs and tax or regulatory exposure, making financial results less predictable or potentially more efficient.

Florida Hurricane Catastrophe Fund financial

"Florida Hurricane Catastrophe Fund participation of 90.0%, consistent with the prior year program."

A state-run insurance backstop that helps pay a portion of insured hurricane losses in Florida by reimbursing private insurers after major storms. It acts like a shared emergency reserve or communal safety net: by absorbing some of the biggest payouts, it helps keep insurance companies solvent, limits sudden premium spikes for homeowners, and affects the financial exposure and regulatory risk that investors face when owning insurance companies or related bonds.

indemnity based financial

"The entire program is indemnity based,with no parametric covers."

An indemnity based arrangement is a payment model where a payer promises to cover losses or expenses after they occur, reimbursing valid claims rather than providing upfront services or fixed payments. For investors, this matters because it shifts financial risk to the payer and creates variable cash flows tied to the frequency and size of claims, like a homeowner getting reimbursed by insurance after a storm rather than receiving a set monthly benefit in advance.

parametric covers financial

"The entire program is indemnity based,with no parametric covers."

Parametric covers are insurance policies that pay a fixed or formula-based amount when a predefined measurable event occurs—like wind speed, earthquake magnitude, or rainfall—rather than reimbursing actual loss. For investors, they matter because payouts are faster and more predictable than traditional claims, which can reduce a company’s cash-flow uncertainty and lower recovery time after disasters, affecting risk profiles, reserve needs, and valuation of firms that use or sell them.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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TAMPA, Fla., May 28, 2026 /PRNewswire/ -- Heritage Insurance Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a super-regional property and casualty insurance holding company, announced today that it has fully placed its 2026-2027 indemnity based, catastrophe excess-of-loss reinsurance program for its insurance subsidiaries, Heritage Property Casualty Insurance Company, Narragansett Bay Insurance Company, and Zephyr Insurance Company.

Ernie Garateix, CEO of Heritage, commented, "I am very pleased to announce the successful completion of our 2026-2027 catastrophe excess of loss reinsurance program which demonstrates the strong commitment that we have from our reinsurance partners. In this year's renewal, we placed over $2.2 billion of limit including two new catastrophe bonds. We placed more multi-year coverage this year and achieved substantial reinsurance cost savings while providing enhanced vertical protection for each of our insurance entities. I would like to thank our dedicated reinsurance partners who have supported our business through multiple catastrophic events over the last several years and look forward to their continued partnership as we work to prudently grow the Company."

Key highlights of the 2026-2027 catastrophe reinsurance program include:

• Total consolidated cost of approximately $367.5 million, a decrease of $63.2 million from the prior year's renewal cost of approximately $430.7 million.
• External party first event reinsurance tower exhaustion points of approximately $1.865 billion for the Southeast, $1.245 billion in the Northeast, and $1.00 billion in Hawaii. Each reinsurance tower maybe supplemented with limit purchased through affiliate Osprey Re.
• Includes $712 million of multi-year coverage with $550 million through fully collateralized catastrophe bonds and $162 million through the private reinsurance market.
• The loss retention for the Company remains at approximately $50 million for the Southeast and Hawaii, respectively, and $38 million for the Northeast. The retention for each insurance company is expected to be reduced by limit purchased through the Company's affiliate captive reinsurer, Osprey Re.
• Florida Hurricane Catastrophe Fund participation of 90.0%, consistent with the prior year program.
• The entire program is indemnity based,with no parametric covers.

About Heritage
Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company. Through its insurance subsidiaries and a large network of experienced agents, the Company writes approximately $1.4 billion of gross personal and commercial residential premium across its multi-state footprint covering the northeast, southeast, Hawaii and California excess and surplus lines. As a catastrophe focused property insurer, our personnel have devoted efforts to policyholders impacted by wildfires, hurricanes, winter storms, and severe convective storms.

Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. This release includes forward-looking statements relating to our 2026-2027 catastrophe reinsurance program. The risks and uncertainties that could cause our actual results to differ from those expressed or implied herein include, without limitation: the success of the Company's underwriting and profitability initiatives; inflation and other changes in economic conditions (including changes in interest rates and financial and real estate markets), including changes that may impact demand for our products and our operations; lack of effectiveness of exclusions and loss limitation methods in the insurance policies we assume or write; inherent uncertainty of our models and our reliance on artificial intelligence as a tool in creating and using such models; the impact of macroeconomic and geopolitical conditions, including the impact of interest rates, supply chain constraints, inflationary pressures, tariffs, labor availability and geopolitical conflicts; the impact of new federal and state regulations that affect the property and casualty insurance market and our failure to meet increased regulatory requirements, including minimum capital and surplus requirements; continued and increased impact of abusive and unwarranted claims; the cost of reinsurance, the collectability of reinsurance and our ability to obtain reinsurance coverage on terms and at a cost acceptable to us; assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for losses and loss adjustment expense; our ability to build and maintain relationships with insurance agents; claims experience; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes, wildfires and hail); changes in loss trends; acts of war and terrorist activities; court decisions and trends in litigation; and other matters described from time to time by us in our filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 13, 2025, and subsequent filings. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.

Investor Contact:
Kirk Lusk
Chief Financial Officer
investors@heritagepci.com

View original content:https://www.prnewswire.com/news-releases/heritage-announces-full-placement-of-2026-2027-cat-xol-reinsurance-program-302785014.html

SOURCE Heritage Insurance Holdings, Inc.

FAQ

What did Heritage (HRTG) announce about its 2026-2027 CAT XOL reinsurance program?

Heritage announced full placement of its 2026-2027 indemnity-based catastrophe excess-of-loss reinsurance program. According to Heritage, the program covers its Heritage Property Casualty, Narragansett Bay, and Zephyr subsidiaries with over $2.2 billion of reinsurance limit, including two catastrophe bonds.

How much will Heritage (HRTG) pay for its 2026-2027 catastrophe reinsurance program?

Heritage expects a total consolidated reinsurance cost of about $367.5 million. According to Heritage, this is a decrease of $63.2 million from the prior renewal cost of approximately $430.7 million, reflecting substantial reinsurance cost savings year over year.

What are the tower exhaustion points in Heritage (HRTG) 2026-2027 CAT XOL program?

Heritage’s external party first event reinsurance tower exhaustion points are about $1.865 billion for the Southeast, $1.245 billion in the Northeast, and $1.0 billion in Hawaii. According to Heritage, each tower may be supplemented by affiliate Osprey Re limits.

How much multi-year catastrophe coverage did Heritage (HRTG) secure for 2026-2027?

Heritage secured $712 million of multi-year catastrophe reinsurance coverage. According to Heritage, $550 million comes through fully collateralized catastrophe bonds and $162 million from the private reinsurance market, expanding duration and stability of its protection across upcoming years.

What are Heritage (HRTG) loss retentions under the 2026-2027 CAT XOL program?

Heritage’s loss retention remains about $50 million for the Southeast and Hawaii, and $38 million for the Northeast. According to Heritage, retentions for each insurance company are expected to be reduced by limit purchased through captive affiliate reinsurer Osprey Re.

What is Heritage (HRTG) Florida Hurricane Catastrophe Fund participation in 2026-2027?

Heritage’s Florida Hurricane Catastrophe Fund participation is 90.0% for the 2026-2027 program year. According to Heritage, this FHCF participation level is consistent with the prior year reinsurance structure and forms a key layer of its catastrophe risk protection.