At Silverberg|Brito, PLLC not only do we focus on our clients but we are keeping track of the insurance industry as a whole. As many may know, recently, Heritage P&C requested a rate hike of approximately 14.9% throughout the State of Florida. After receiving intense public scrutiny, Heritage relinquished and did not raise rates. However, let’s look at whether Heritage really needed to raise rates or whether the executives were looking at padding their already overstuffed wallets and portfolios.
On August 3, 2016 Heritage released its 2nd quarterly earnings. Their second quarterly earnings take a snap shot of the company’s financial state from April 1, 2016 to June 30, 2016. What did we see from this three month period in time? Well, I at least expected a company’s financial situation crumbling, thus the need for an almost 15% rate hike throughout the State of Florida, where they have the most policies. However, we saw them beat estimates on earnings per share, earning $0.62 a share vs. estimates of $0.55 a share. Moreover, we saw Heritage give six cents to every shareholder for ever share they own. Therefore, if you own 100 shares of Heritage’s stock, you would receive $6.00. For a nice example, the CEO Bruce Lucas, owns in one form or another approximately 1,525,705 shares. Multiply that by the $0.06 a share and Mr. Lucas effectively made $90,942.30 in three months. Meanwhile this almost $91,000 is on top of the $2 million dollars a year in salary he makes. Also, this does not take into account any other forms of payment Mr. Lucas receives.
Despite not raising its rates to policyholders across the State of Florida, Heritage in just 3 months made $18.4 million in net income!! How can they be asking for money? This is all done at the expense of Homeowners and business throughout the State of Florida where most of their premiums come from.
Heritage even showed during this quarter that the amount of money they expended in claims went down by about 10%. Heritage is one of the biggest insurers in the State of Florida and they want to raise their rates by 14.9% because they are not making enough money but why? Mr. Lucas even said in regards to their earnings in these 3 months ““I am pleased to report a significant increase in profitability and return on equity in the second quarter.”
To all insurance companies in Florida, especially Heritage there is not a crisis in the State in regards to claims. There is not even a large issue that deserves legislative attention. What deserves attention is the propaganda you are spewing into the media and tricking your customers into believing. Stop padding your wallets, retirement plans, 401K’s, company retreats, and really ask yourself one thing, how do you go to sleep at night lying as much as you do? Ohh, I forgot on a nice Tempurpedic bed because of all the money you have; while your customers are sleeping in toxic mold every night…