Heritage Insurance Holdings Inc (HRTG) 2025 Q4 法說會逐字稿

Good morning and welcome to the Heritage Insurance Holdings fourth-quarter and full-year 2025 earnings conference call. Please note today's event is being recorded. I would now like to turn the conference over to Kirk Lusk, Chief Financial Officer for the company. Please go ahead, sir.

早安，歡迎參加 Heritage Insurance Holdings 2025 年第四季暨全年財報電話會議。請注意，今天的活動將被錄音。現在我想把會議交給本公司財務長 Kirk Lusk。先生，請開始。

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.

早安，感謝各位今天加入我們。我們邀請您造訪我們網站的投資人專區 investors.heritagepci.com，財報新聞稿與本次財報電話會議內容將於該處存檔。這些資料可供您在方便時回放或查閱。

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.

今天的電話會議可能包含《1995 年私人證券訴訟改革法》所定義的前瞻性陳述。這些陳述係基於管理階層目前的預期，並受不確定性及情勢變化影響。我們在財報新聞稿及向美國證券交易委員會（SEC）提交的文件中，詳述可能導致未來結果與預期不同的重大風險。我們的陳述以今日為準，對於我們可能作出的任何前瞻性陳述，並無義務加以更新。關於前瞻性陳述之說明，以及可能導致我們的結果與前瞻性陳述所述內容出現重大差異的風險，請參閱我們的 Form 10-K 年度報告、財報新聞稿及其他 SEC 申報文件。

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.

我們今天的評論也將包含非 GAAP 財務衡量指標。這些衡量指標的調節表及其他相關資訊可在我們的新聞稿中找到。

With me on the call today is Ernie Garateix, our Chief Executive Officer. I will now turn the call over to Ernie.

今天與我一同參與電話會議的還有我們的執行長 Ernie Garateix。現在我把電話會議交給 Ernie。

Thank you, Kirk. Good morning, everyone, and thank you for joining us today. On this morning's call, I am going to review the successful execution of our strategic initiatives in 2025 and our full-year results, review the competitive advantages that Heritage has built over the years which positions us for success looking out over the medium term, and conclude with our strategic priorities for the year ahead. Kirk will then discuss our fourth quarter results, and we will open the call for your questions.

謝謝你，Kirk。各位早安，感謝大家今天加入我們。在今天早上的電話會議中，我將回顧我們在 2025 年成功執行策略性計畫及全年成果，回顧 Heritage 多年來建立的競爭優勢（使我們在中期展望上具備成功條件），並以我們來年之策略重點作結。接著 Kirk 將討論我們第四季的結果，然後我們將開放提問。

As we have been discussing over the past several years, we have been intentional and disciplined in reshaping the foundation of our business. As an organization, we set out to transform our business with the goal of developing a model that delivers consistent earnings and sustainable shareholder value even in a challenging and dynamic market.

正如我們過去幾年一直在討論的，我們一直有意識且有紀律地重塑我們業務的基礎。作為一個組織，我們著手轉型，目標是建立一個即使在充滿挑戰且動態的市場中，也能帶來穩定獲利與可持續股東價值的營運模式。

To do that, we anchored our strategy around three initiatives that continue to guide every major decision that we make. First, we committed to generating true underwriting profit, not through reliance on market cycles, but through rate adequacy and more selective disciplined underwriting, as well as a solid distribution network. We have made hard choices, re-underwriting our book where necessary, ensuring that every policy we write meets our profitability standards and aligning ourselves with the profitable and professional agents.

為此，我們將策略錨定在三項計畫上，並持續指引我們所做的每一項重大決策。第一，我們承諾創造真正的承保利潤，不依賴市場循環，而是透過費率充足性、更具選擇性且有紀律的承保，以及穩健的通路網絡來達成。我們做出艱難的取捨，在必要時重新承保我們的保單組合，確保我們承作的每一張保單都符合獲利標準，並與具獲利能力且專業的代理人合作。

Second, we focused on strategically allocating capital towards the products and geographies that offer the strongest returns while being deliberate about where we pause, where we reinvest, and where we expand. This capital discipline has positioned us for thoughtful measured growth, with a focus on underwriting discipline and risk management.

第二，我們聚焦於策略性配置資本至能提供最佳報酬的產品與地理區域，同時審慎決定在哪些地方暫停、在哪些地方再投資，以及在哪些地方擴張。這種資本紀律使我們得以進行審慎且有節制的成長，並以承保紀律與風險管理為核心。

And third, we prioritized targeting a balanced and diversified portfolio. By expanding across multiple states and product lines, we strengthened the stability of our earnings, reduced our exposure to regional volatility, and fortified the company against the risks that define our industry.

第三，我們優先鎖定建立均衡且多元化的投資組合。透過擴展至多個州與多條產品線，我們強化了獲利的穩定性、降低對區域性波動的曝險，並使公司更能抵禦本產業所面臨的風險。

I'm proud to say that in 2025, we executed on these initiatives with precision and measurable success. We reopened profitable geographies, deploying capital in a thoughtful way designed to sustain long-term profitability. We maintained persistent underwriting discipline, supported by an ongoing focus on achieving and maintaining rate adequacy.

我很自豪地說，2025 年我們精準執行這些計畫，並取得可衡量的成功。我們重新開放具獲利性的地理區域，以審慎方式部署資本，旨在維持長期獲利能力。我們持續維持承保紀律，並以持續聚焦於達成與維持費率充足性作為支撐。

We deepened our use of data-driven analytics, further strengthening the quality of our decision making. We enhanced our customer service and claim capabilities, ensuring that the experience we deliver continues to improve. And importantly, we leveraged our infrastructure and operational capabilities, building a scalable platform that positions us for responsible, profitable growth in the years ahead.

我們加深對數據驅動分析的運用，進一步提升決策品質。我們強化客戶服務與理賠能力，確保我們提供的體驗持續改善。更重要的是，我們善用既有基礎設施與營運能力，打造可擴展的平台，使我們在未來幾年能以負責任且具獲利性的方式成長。

These initiatives and the consistent execution behind them are what continue to strengthen Heritage's earnings power which can further be seen in our full-year 2025 results where we delivered net income of $195.6 million or $6.32 per share, representing a strong increase from the full-year 2024's net income of $61.5 million or $2.01 per share.

這些計畫以及背後一貫的執行力，持續強化 Heritage 的獲利能力；從我們 2025 年全年結果亦可見一斑：我們實現淨利 1.956 億美元（每股 6.32 美元），相較 2024 年全年淨利 6,150 萬美元（每股 2.01 美元）大幅成長。

Of note, our full-year results included $31.8 million of net pretax losses and loss adjustment expenses related to the California wildfires in the first quarter of 2025 which further highlights the significant earnings power within Heritage and which we remain focused on growing further.

值得注意的是，我們全年結果包含 2025 年第一季與加州野火相關的 3,180 萬美元稅前淨損失及損失調整費用，這也進一步凸顯 Heritage 內在的顯著獲利能力，而我們仍將專注於持續擴大這項能力。

We also grew our tangible book value per share 72.5% to $16.39 at December 31, 2025, from $9.50 at December 31, 2024, while achieving an ROE of 49% for the year ending December 31, 2025.

我們的每股有形帳面價值亦成長 72.5%，由 2024 年 12 月 31 日的 9.50 美元提升至 2025 年 12 月 31 日的 16.39 美元，同時在截至 2025 年 12 月 31 日止年度達成 49% 的股東權益報酬率（ROE）。

As we look ahead to 2026, our strategy continues to build on the strong foundation that we have created. First and foremost, we have achieved rate adequacy in more than 90% of the geographies where we operate, and they are currently open for new business. In fact, new business premium production increased over 60% in the fourth quarter as compared to the fourth quarter last year.

展望 2026 年，我們的策略將持續建立在已打造的堅實基礎之上。首先也是最重要的，我們在超過 90% 的營運地理區域已達成費率充足性，且目前皆已開放承作新業務。事實上，第四季新業務保費產出較去年第四季增加逾 60%。

We have continued to evaluate new geographies and products that will advance our diversification and expansion efforts. As a result of that rigorous evaluation process, I would like to mention that we plan to enter Texas later this year on an excess and surplus lines basis. Our production will focus predominantly on Tier 1 and some Tier 2 geographies and we'll leverage our existing relationships as well as some new distribution partners.

我們持續評估可推進多元化與擴張工作的新的地理區域與產品。基於該嚴謹的評估流程，我想提到我們計畫於今年稍晚以超額及剩餘保險（E&S）業務模式進入德州市場。我們的產出將主要聚焦於第一級（Tier 1）以及部分第二級（Tier 2）地理區域，並將運用既有合作關係以及一些新的通路合作夥伴。

As we have done in California, which is also ENS, we will have underwriting and marketing employees in the state of Texas to stay abreast of the changing market needs and issues. As expected, we will maintain our focus on underwriting discipline, exposure management, and rate adequacy in our existing and new geographies. We have a long runway ahead to profitably grow our business and deliver value to our shareholders.

如同我們在加州所做的（加州同樣為 E&S），我們將在德州配置承保與行銷人員，以掌握不斷變化的市場需求與議題。如預期，我們將在既有及新進入的地理區域持續聚焦於承保紀律、曝險管理與費率充足性。我們未來仍有很長的跑道，可在具獲利性的前提下擴大業務並為股東創造價值。

A major emphasis in 2026 will also be the continued enhancement of our data-driven analytics, including deeper integration of AI and advanced technology tools. These capabilities will sharpen our risk selection, improve operational efficiency, and help us identify opportunities across regions with greater precision while being compliant with regulatory requirements for AI use.

2026 年的另一項重點也將是持續強化我們以數據驅動的分析能力，包括更深度整合 AI 與先進科技工具。這些能力將提升我們的風險篩選、改善營運效率，並在符合 AI 使用相關監管要求的前提下，協助我們更精準地辨識各地區的機會。

At the same time, we remain committed to refining our customer service and claim capabilities, building on the improvements already underway to deliver a more streamlined, transparent experience for agents and policyholders.

同時，我們仍致力於精進客戶服務與理賠能力，在既有改善措施的基礎上，為代理人與保單持有人提供更精簡、透明的體驗。

And throughout 2026, we will continue leveraging the scale and flexibility of our infrastructure, our systems, processes, and regional operating model to support sustainable future growth. Fortunately, we have ample room to grow our business and can choose to be selective across our geographic footprint.

而在 2026 年全年，我們將持續運用我們基礎設施、系統、流程與區域營運模式的規模與彈性，以支持可持續的未來成長。所幸的是，我們的業務仍有充足的成長空間，並可在我們的地理布局中選擇性地拓展。

Lastly, reinsurance remains a critical component of our business, and we have maintained a stable indemnity-based reinsurance program at manageable cost, with an excellent panel of highly rated and collateralized reinsurers. We regularly meet with our reinsurance and ILS partners who continue to support our growth and whom we anticipate will offer incremental capacity as we look to our June 1st renewal.

最後，再保險仍是我們業務的關鍵組成部分；我們以可控成本維持穩定的以賠款補償為基礎（indemnity-based）的再保險方案，並擁有一個由高評級且提供擔保的再保險人所組成的優質承保團。我們定期與再保險及 ILS 合作夥伴會面；他們持續支持我們的成長，且我們預期在 6 月 1 日續約之際，將提供額外的承保容量。

Additionally, we continue to see the benefits of tort reform as industry loss expectations for Hurricane Milton have been steadily coming down, largely due to reduced litigation which benefits not only us, but our panel of reinsurers.

此外，隨著颶風 Milton 的產業損失預期持續下修，我們也持續看到侵權改革帶來的效益；這主要歸因於訴訟減少，不僅對我們有利，也有利於我們的再保險承保團。

Given the improved litigation environment in Florida, the lack of catastrophe losses, and the reinsurance capacity entering the traditional NILS markets, we are optimistic that reinsurance pricing will continue to improve in 2026. We also believe that favorable reinsurance will benefit the consumer in the terms of cost of insurance.

鑑於佛羅里達州訴訟環境改善、缺乏巨災損失，以及再保險承保容量進入傳統 NILS 市場，我們樂觀認為 2026 年再保險定價將持續改善。我們也相信，有利的再保險條件將在保險成本方面使消費者受益。

To conclude, we have strong momentum as we enter 2026 with a positive outlook for both our growth and profitability. That said, we are not complacent with our results and strive to improve our organization and operations.

總結而言，我們在邁入 2026 年之際動能強勁，對成長與獲利前景皆持正面看法。儘管如此，我們不會對成果自滿，並將持續努力改善組織與營運。

I would also like to reiterate our dedication to navigating the complexities of our market with a strategic focus that prioritizes long-term profitability, shareholder value, and customer service driven by our dedicated workforce, who I would like to personally thank for their efforts over the last year.

我也想再次強調，我們致力於以策略性重點來應對市場的複雜性，優先考量長期獲利能力、股東價值與客戶服務；這一切皆仰賴我們敬業的員工隊伍，我也想親自感謝他們在過去一年中的付出。

Kirk, over to you.

Kirk，交給你。

Thank you, Ernie. Good morning. Turning to our financial highlights, we reported net income of $66.7 million or $2.15 per diluted share in the fourth quarter, compared with net income of $20.3 million or $0.66 per diluted share in the fourth quarter of the prior year. The period-over-period increase primarily reflected higher net premiums earned and net investment income, lower losses and loss adjustment expense, and lower policy acquisition costs.

謝謝你，Ernie。各位早安。接著看我們的財務重點：第四季我們的淨利為 6,670 萬美元，或稀釋後每股盈餘 2.15 美元；相較之下，去年同期第四季淨利為 2,030 萬美元，或稀釋後每股盈餘 0.66 美元。期間同比增加主要反映已賺取淨保費與淨投資收益提高、損失及損失調整費用降低，以及保單取得成本下降。

In-force premiums of $1.432 billion, a decrease of 0.1% from $1.433 billion in the prior year quarter, primarily driven by competitive market conditions, reducing our commercial residential business while our personalized business increased. Although we think many opportunities for controlled growth exist, we will not write policies that we believe are underpriced or do not meet our underwriting standards.

在保保費（in-force premiums）為 14.32 億美元，較去年同期的 14.33 億美元下降 0.1%，主要受競爭性市場環境影響，使我們的商業住宅業務縮減，而個人化業務則增加。儘管我們認為仍存在許多可控成長的機會，但我們不會承作我們認為定價偏低或不符合核保標準的保單。

Gross premiums earned were $361.7 million, up 0.4% from $360.4 million in the prior-year quarter, reflecting higher gross premiums written over the last year. We continue to focus on new business initiatives across existing and new geographies subject to market conditions and our underwriting and pricing discipline.

已賺取毛保費為 3.617 億美元，較去年同期的 3.604 億美元增加 0.4%，反映過去一年毛簽單保費提高。我們將持續在既有與新地理區域推動新業務計畫，但仍取決於市場狀況以及我們的核保與定價紀律。

Ceded premiums decreased by $2.1 million, predominantly reflecting a catastrophe excess of loss premium reduction true-up, as well as reinstatement premium during 2024 that did not recur in 2025. Net premiums earned were $202.7 million, up 1.7% from $199.3 million, reflecting the reduction in ceded premiums.

分出保費（ceded premiums）減少 210 萬美元，主要反映巨災超額損失再保險保費減少的調整（true-up），以及 2024 年發生但 2025 年未再發生的復效保費（reinstatement premium）。已賺取淨保費為 2.027 億美元，較 1.993 億美元增加 1.7%，反映分出保費下降。

Net investment income for the quarter was $9.8 million, up $1.3 million or 15.9% from $8.5 million in the prior-year quarter, reflecting higher invested asset balances, coupled with actions to align the investments with the yield curve. The average duration of the fixed income portfolio is 3.2 years as the company has extended duration from the prior year to take advantage of higher yields further out on the yield curve while still maintaining a short-duration, high-credit quality portfolio.

本季淨投資收益為 980 萬美元，較去年同期的 850 萬美元增加 130 萬美元或 15.9%，反映投資資產餘額提高，並配合採取措施使投資配置與殖利率曲線一致。固定收益投資組合的平均存續期間為 3.2 年；公司相較去年已延長存續期間，以把握殖利率曲線較遠端的較高收益，同時仍維持短存續期間、高信用品質的投資組合。

Our total revenues for the quarter were $215.3 million, up 2.4% from the fourth quarter of 2024. As discussed, we expect our revenue growth to accelerate through 2026 as we ramp up our new business efforts.

本季總營收為 2.153 億美元，較 2024 年第四季增加 2.4%。如前所述，隨著我們加速推進新業務投入，我們預期營收成長將一路加快至 2026 年。

The net loss ratio was 31.3% for the quarter, compared to 54.7% in the prior-year quarter, reflecting lower net losses and loss adjustment expense. Both attritional and weather-related losses were lower than in the prior-year quarter.

本季淨損失率為 31.3%，相較去年同期為 54.7%，反映淨損失及損失調整費用較低。無論是常態性（attritional）損失或天候相關損失，均低於去年同期。

Net weather-related losses for the quarter were $7.7 million, compared to $45.6 million in the prior-year quarter. There were no catastrophe losses in the current quarter compared with $40 million in the prior-year quarter. The decrease in weather-related losses was accompanied by lower attritional losses and a reduction in unfavorable reserve development versus the prior-year quarter. Our attritional losses have been trending favorable, which we believe is associated with the underwriting strategy over the last several years.

本季淨天候相關損失為 770 萬美元，相較去年同期為 4,560 萬美元。本季沒有巨災損失，而去年同期為 4,000 萬美元。天候相關損失下降的同時，常態性損失也較低，且相較去年同期，不利準備金發展（reserve development）亦有所減少。我們的常態性損失呈現有利趨勢，我們認為這與過去數年的核保策略相關。

The net expense ratio for the quarter was 30.7% compared to 35% in the prior-year quarter. The change primarily reflected higher ceding commission income, relatively flat general and administrative expenses, and higher net premiums earned. Policy acquisition costs were lower primarily due to higher ceding commission income associated with both a larger amount of premium ceded under the net quota share program and a higher ceding commission rate due to favorable loss experience within that program.

本季淨費用率為 30.7%，相較去年同期為 35%。變動主要反映分出佣金收入提高、一般及管理費用相對持平，以及已賺取淨保費增加。保單取得成本下降，主要因分出佣金收入提高，這與淨比例分保（net quota share）計畫下分出保費金額增加，以及因該計畫內損失經驗有利而使分出佣金率提高有關。

The net combined ratio for the quarter was 62%, an improvement of 27.7 points from 89.7% in the prior-quarter, driven by the lower net loss ratio and the lower net expense ratio.

本季淨綜合率為 62%，較前一季的 89.7% 改善 27.7 個點，主要由較低的淨損失率與較低的淨費用率所帶動。

Turning to the balance sheet. We ended the quarter with total assets of $2.2 billion and shareholders' equity of $505.3 million. Book value per share was $16.39 at December 31, 2025, up 72% from the fourth quarter of 2024 and up 125% from the fourth quarter of 2023. The increase from December 2024 primarily reflected net income for the year and an $18 million net of tax reduction in unrealized losses on the company's fixed income securities portfolio. Unrealized losses related to a decline in interest rates during the year.

接著看資產負債表。本季期末總資產為 22 億美元，股東權益為 5.053 億美元。截至 2025 年 12 月 31 日，每股帳面價值為 16.39 美元，較 2024 年第四季上升 72%，較 2023 年第四季上升 125%。相較 2024 年 12 月的增加，主要反映本年度淨利，以及公司固定收益證券投資組合未實現損失在扣稅後減少 1,800 萬美元。未實現損失與本年度利率下降有關。

Non-regulated cash at quarter end was $57.9 million. In addition, combined statutory surplus of our insurance company affiliates at quarter end was $392.6 million, an increase of $106.9 million from year-end 2024. The increase in statutory surplus provides for additional growth capacity as open and new territories get up to full capacity for new business.

季度末未受監管的現金為5,790萬美元。此外，我們保險公司關係企業於季度末的合併法定盈餘為3億9,260萬美元，較2024年年底增加1億690萬美元。法定盈餘的增加提供了額外的成長承載能力，隨著既有與新開拓地區的新業務逐步提升至滿載。

As the earnings power of the company has grown, we have built capital. We have prioritized the use of capital for organic growth and share repurchases when we believe our shares are undervalued. Considering our financial performance, demonstrated earnings resilience, and future earnings potential, we believe our stock is undervalued.

隨著公司獲利能力的提升，我們已累積資本。我們優先將資本用於內生成長，並在我們認為股價被低估時進行庫藏股回購。考量我們的財務表現、已展現的獲利韌性以及未來獲利潛力，我們認為本公司股票被低估。

Under our $10 million share repurchase plan, we repurchased 106,135 shares in 2025 at a cost of $2.3 million. In November of 2025, our Board of Directors established a new $25 million share repurchase plan that will expire on December 31, 2026. We will continue to be opportunistic with share repurchases and purchased 112,858 shares at a cost of $3 million during the first quarter of 2026.

依據我們1,000萬美元的股票回購計畫，我們於2025年以230萬美元的成本回購106,135股。於2025年11月，我們董事會核准一項新的2,500萬美元股票回購計畫，將於2026年12月31日到期。我們將持續把握機會進行股票回購，並於2026年第一季以300萬美元的成本買回112,858股。

Looking ahead, we remain focused on executing our strategic initiatives aimed at driving long-term shareholder value and providing our policyholders and agents with the service they deserve and expect. We believe that our diversified portfolio and distribution capabilities, along with our overall proactive management approach to exposures, rate adequacy, and investing in technology and infrastructure, will position us well for continued success.

展望未來，我們仍專注於執行策略性計畫，以推動長期股東價值，並為保戶與代理人提供他們應得且期待的服務。我們相信，多元化的產品組合與通路能力，加上我們在曝險管理、費率充足性，以及投資科技與基礎建設方面整體積極主動的管理方式，將使我們具備持續成功的良好定位。

Thank you for your time today. Operator, we are now ready for questions.

感謝各位今天撥冗參與。主持人，我們現在準備開始問答。

(Operator Instructions)

(主持人指示)

Mark Hughes, Truist.

Mark Hughes，Truist。

Thanks. Good morning. The top line growth outlook you talked about the impact of commercial residential being a headwind. Your underlying residential book is growing. That dynamic, is it already worked through your P&L? Is there a little bit more headwind to go?

謝謝。早安。關於你提到的營收端成長展望，商業住宅帶來的逆風影響。你們的核心住宅保單組合正在成長。這個動態是否已經反映在你們的損益表（P&L）裡了？還會不會再有一些逆風？

We have seen some more competition in the commercial residential in Florida, so we'll see what '26 brings. But also, we've pivoted to commercial residential as well out of New York, New Jersey, as well as Hawaii. But we think, we've seen most of that competition in '25.

我們在佛羅里達的商業住宅領域看到更多競爭，所以要看2026年會如何發展。不過，我們也已將商業住宅的布局轉向紐約、新澤西以及夏威夷等地。但我們認為，大部分的競爭壓力在2025年已經出現了。

Okay. And then when you look at the profitability in the business, can you give us a sense of Florida, Northeast, other markets, as you grow maybe in the markets that you see more opportunity? Is that going to mean anything for the overall loss ratio?

了解。接著看業務的獲利能力，你能否就佛羅里達、東北部及其他市場提供一些概況？隨著你們在看到更多機會的市場擴張，這對整體損失率會有什麼影響嗎？

Sure. Great question. As we've said, we're rate adequate in 90% of our geography. So if you take the Southeast Florida, obviously, the book with the tort reform and what we're seeing, right, with minimal cats this year. Florida is very profitable. The Northeast has taken rates, so we're seeing profitability up in the Northeast.

當然。問得很好。如同我們所說，我們在90%的地理區域費率是充足的。以佛州東南部來看，顯然在侵權改革以及我們所看到的情況下，再加上今年重大災害（cat）相對少。佛羅里達非常獲利。東北部已經調升費率，因此我們看到東北部的獲利能力正在提升。

We go all the way out to Zephyr Insurance that they have taken rate and we're seeing an uptake there from the profitability side. So we'll continue to get the remaining, let's say, 5% to 10% of the geography rate adequate. But we're really excited about 90% of rate adequacy throughout geographies which opens up all business, and those areas will be opened up throughout '26.

我們一路延伸到Zephyr Insurance，他們也已調升費率，我們在獲利面看到改善。因此我們會持續讓剩餘約5%到10%的地理區域達到費率充足。但我們對於各地理區域90%已達費率充足感到非常振奮，這將開放所有業務，而這些區域將在2026年陸續開放。

Very good. Kirk, the $392 million, $393 million in surplus, is that sufficient for 2026? Do you think you'll have to add any more --

很好。Kirk，3億9,200萬到3億9,300萬美元的盈餘，對2026年來說足夠嗎？你認為還需要再增加嗎--

We think that that actually is, yeah, pretty adequate. I mean, it's up about $106 million from last year, so really nice increase in the statutory surplus which really positions us well for the growth we're anticipating. And particularly given the combined ratios we've been running, that actually has been adding to the capital also. So we're in good shape there.

我們認為那其實是，是的，相當充足。我的意思是，較去年增加約1億600萬美元，所以法定盈餘有非常不錯的提升，這讓我們在預期的成長方面具備很好的條件。而且特別是考量我們一直維持的綜合比率，這也在增加資本。所以我們在這方面狀況良好。

Yeah. And assuming you maintained decent profitability, that $25 million share repurchase authorization seems low, I mean, just relative to your net income this quarter, for instance, that $25 million seems low. Could there be more action on that front in the near term, picking that up a little bit perhaps?

是的。假設你們維持不錯的獲利能力，2,500萬美元的股票回購授權看起來偏低；例如相較於你們本季的淨利，2,500萬美元似乎不高。短期內在這方面會不會有更多動作，可能把力度提高一些？

Yeah. I mean, our Board, they would authorize. We can go back to them at any point for reauthorization on that. And again, we did buy a little bit back in the first quarter, and so we'll be looking at that going forward.

是的。我的意思是，我們董事會會核准。我們隨時都可以回去請他們重新核准（提高）授權額度。另外，我們確實在第一季回購了一些，接下來也會持續評估。

Yeah. Is there any target run rate combined ratio that you have in mind when you think about the overall book where should it settle in?

是的。你們在思考整體保單組合時，有沒有一個目標的綜合比率水準，希望最終落在什麼區間？

Well, I mean, I think that right now, we have some pretty good headwinds looking at even into next year. Particularly, I think that we're looking at some reinsurance rate decreases which is going to be favorably impacting that. So I think it's going to continue to be rather favorable for the next couple of years. And I think that over a longer period of time, I think that it could start tweaking up a little bit simply from the standpoint of as the rate starts stabilizing, I think it could start going up. But I think for the next couple of years, I think it could be comparable to where we are.

嗯，我的意思是，我認為目前我們有一些相當有利的因素，即使展望到明年也是如此。特別是我們預期再保費率會下降，這將對綜合比率帶來正面影響。所以我認為未來幾年應該會持續相當有利。而從更長期來看，我認為綜合比率可能會稍微上調，原因只是隨著費率開始趨於穩定，我認為它可能會開始上升。但我認為在接下來幾年，應該會與我們目前的水準相近。

So combined ratio, absent the storms on an underlying basis, you would say, reasonably steady the next couple, helped by reinsurance and then maybe some normalization in rates starts to move that up a little bit?

所以，若以剔除風暴影響的基礎、也就是在核心基礎上來看，你會說綜合比率在接下來幾年大致維持穩定，受惠於再保，之後隨著費率某種程度正常化，可能會稍微往上？

Correct, yeah.

沒錯，是的。

Yeah. Okay. All right. Thank you very much.

是的。好的。好。非常感謝。

Paul Newsome, Piper Sandler.

Paul Newsome，Piper Sandler。

Good morning. Can we just maybe unpack a little bit of the gross premium policy outlook and the results, to date? Just a little bit more color on what's going on with commercial residential and how that's -- is the relative decline just the commercial auto or are there other pieces there that we should be thinking about when we're thinking about the gross written premium outlook?

早安。我們能否稍微拆解一下總保費（gross premium）的保單展望以及迄今為止的結果？能否再多提供一些關於商業住宅（commercial residential）目前狀況的細節——相對下滑主要只是商用車險（commercial auto）造成的，還是還有其他部分也需要納入考量，當我們在思考總簽單保費（gross written premium）展望時？

Yeah. So on the commercial residential, as you mentioned, we saw some increased competition coming in. But that being said, from P&L and profitability, it is still very profitable. Again, there are some competition where we decided to walk away just because it was that the rate was not there. But overall, we're still very satisfied from the profitability standpoint on the commercial residential. But we do expect to grow that in 2026. So Kirk, I don't know if you want to add a little bit more on overall.

是的。關於商業住宅，如你所提到的，我們看到競爭有所加劇。但即便如此，從損益表（P&L）與獲利能力來看，這一塊仍然非常有利可圖。同樣地，面對部分競爭，我們選擇退出，主要是因為費率不到位。但整體而言，就商業住宅的獲利表現而言，我們仍然非常滿意。不過我們確實預期在 2026 年會讓這一塊恢復成長。Kirk，我不知道你是否想就整體再補充一些？

Yeah. Paul, yeah, we did see a lot of competition there. But one thing to keep in mind, I mean, we have a dedicated team, dedicated president, dedicated underwriters, dedicated claims handling folks, for those. So that really gives us a little bit of competitive advantages when you think about that commercial business. And I would think that we're able to work through the market inflows and outflows, and so I think that you're going to see that stabilize and possibly increase this year.

是的。Paul，是的，我們確實看到那裡競爭很激烈。但有一點要記住：我們有專責團隊、專責總裁、專責核保人員，以及專責理賠處理人員來負責這些業務。因此，當你思考這類商業業務時，這確實讓我們具備一些競爭優勢。而且我認為我們能夠因應市場資金流入與流出，所以我覺得你會看到它趨於穩定，並且今年可能會增加。

Right. Not a huge number, but can you talk a little bit about the reserve development?

了解。數字不是很大，但你能談談準備金發展（reserve development）嗎？

Oh, yeah. Absolutely. Yeah, that really stems from when we look back at -- overall, we've had a fair amount of favorable developments this year for the full year. When we look back at the storms that are still outstanding, there's a few lingering claims out there. And what we did is we just felt that it was prudent to then boost the reserves to make sure that those are adequate for anything that we could foresee on those last few remaining claims.

喔，當然。絕對可以。這主要源自於我們回頭檢視——整體而言，今年全年我們有相當程度的有利發展（favorable development）。當我們回頭看仍未結案的風暴事件時，還有少數尚未處理完的理賠案件。我們所做的是，我們認為審慎起見，應提高準備金，以確保對於最後幾件尚未結案的理賠，在我們可預見的情況下準備金是充足的。

So all the development would be under the cat category, correct?

所以所有的發展都會歸在巨災（cat）類別之下，對嗎？

Correct.

對。

Okay. Thanks. I appreciate the help, guys.

好的。謝謝。感謝各位的協助。

Karol Chmiel, Citizens.

Karol Chmiel，Citizens。

Thank you. Good morning. Just to follow-up on the top line questions and specifically, Florida, can you just comment on the Florida residential market and if there is [stopping] going around?

謝謝。早安。延續剛才關於營收端的問題，特別是佛羅里達州，你能否評論一下佛州住宅市場，以及是否有任何[stopping]的情況正在發生？

So on the Florida residential market, a lot of the new competition that you're seeing is still going through, basically, the assumption process, the takeout process. So we would probably anticipate more of the voluntary competition coming in at the later half of '26, more into '27, since their initial focus is mostly on the takeout business.

關於佛羅里達州住宅市場，你目前看到的許多新競爭者，基本上仍在進行承接（assumption）流程、接管（takeout）流程。因此，我們可能預期更多自願性競爭（voluntary competition）會在 2026 年下半年、並延伸到 2027 年才會進來，因為他們初期的重點多半放在接管業務（takeout business）。

Thank you. That's all.

謝謝。就這些。

Mark Hughes, Truist.

Mark Hughes，Truist。

Thanks. Kirk, anything on the policy acquisition front in terms of just the ratio? Is that going to move up a little bit as you pursue a new business?

謝謝。Kirk，在保單取得（policy acquisition）方面，就比率而言有什麼看法嗎？當你們追求新業務時，這個比率會不會稍微上升？

It will up slightly. Also, we did have the net quota share program at NBIC, and we reduced that at year end. When we look at the ceding commission that we were getting from that program, that will reduce a little bit. So therefore, our acquisition costs will go up a little bit. So will our net earned premium by reducing that net quota share.

會小幅上升。另外，我們在 NBIC 有淨額比例分保（net quota share）計畫，並且在年底降低了該比例。當我們看該計畫帶來的分出佣金（ceding commission）時，這部分會略為下降。因此，我們的取得成本（acquisition costs）會小幅上升。同時，因為降低了該淨額比例分保，我們的淨已賺保費（net earned premium）也會增加。

Yeah. And then, net investment income. Nothing unusual. It looks like it was just up a bit sequentially. Do you think that'll keep moving up? Just sort of thinking a new money yields, the duration, is that still on an upward trajectory?

了解。另外，淨投資收益（net investment income）。看起來沒有什麼異常。似乎只是較前一季略有上升。你認為它會繼續往上走嗎？就新資金收益率（new money yields）、存續期間（duration）來看，是否仍在上升軌道？

Yeah. Despite the drop in interest rates, I mean, we've been actually able to kind of because we were so short before we were able to move out on the yield curve which gives us a little bit more yield there. And then also because of the increasing cash flow, we're anticipating that that's going to actually give us a little bit of boost on the investment income.

是的。儘管利率下滑，但因為我們之前的存續期間很短，所以我們其實能把配置往殖利率曲線（yield curve）較長端移動，從而帶來更高一些的收益率。另外，由於現金流增加，我們預期這也會對投資收益帶來一些提振。

Very good. Thank you.

很好。謝謝。

Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

各位女士、先生，我們的問答環節到此結束。我想把電話會議交回管理團隊，請他們做最後結語。

Thank you for joining us today. I would like to thank our employees for all their efforts, and we wish everyone a great week.

感謝各位今天加入我們。我也要感謝我們的員工所付出的所有努力，並祝大家有美好的一週。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

本次電話會議到此結束。感謝各位參加今天的簡報。您現在可以斷線。