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Investor Presentation(NYSE: HRTG)

January 2019

SAFE HARBORStatements in this presentation that are not historical facts are forward‐looking statements that are subject to certain risks and uncertainties that couldcause 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,” “approximate,” “plan,” “intend,” “could,” “would,” “estimate,” or similar expressions are intended to identifyforward‐looking statements. Forward looking statements include, but are not limited to, statements about the Company’s expectations with regard tonet investment income, underwriting margins and capital to support future premium growth and expansion initiatives. These statements are notguarantees of future performance and involve risks, uncertainties and assumptions that could cause the Company’s actual results to differ materiallyfrom those expressed or implied by such forward‐looking statements. Such risks and uncertainties include, among other things, risks related to thepossibility that actual losses may exceed reserves; the concentration of the Company’s business in coastal states, which could be impacted by hurricanelosses or other significant weather‐related events such as northeastern winter storms; the Company’s exposure to catastrophic weather events;increased costs of reinsurance, non‐availability of reinsurance, and non‐collectability of reinsurance; the Company’s failure to effectively manage itsgrowth and integrate acquired companies; increased competition, competitive pressures, and market conditions; the Company’s failure to accuratelyprice the risks it underwrites; the inherent uncertainty of the Company’s models and reliance on such models as a tool to evaluate risk; the failure of theCompany’s claims department to effectively manage or remediate claims; low renewal rates and failure of such renewals to meet the Company’sexpectations; the Company’s failure to execute its diversification strategy; failure of H the Company’s information technology systems and unsuccessfuldevelopment and implementation of new technologies; a lack of redundancy in the Company’s operations; the Company’s failure to attract and retainqualified employees and independent agents or loss of key personnel; the Company’s inability to generate investment income; the Company’s inability tomaintain its financial stability rating; effects of emerging claim and coverage issues relating to legal, judicial, environmental and social conditions; thefailure of the Company’s risk mitigation strategies or loss limitation methods; changes in regulations and the Company’s failure to meet increasedregulatory requirements; and other matters described from time to time by the Company in its filings with the Securities and Exchange Commission,including, but not limited to, those set forth in its Annual Report on Form 10‐K for the year ended December 31, 2017 and subsequent Quarterly Reportson Form 10‐Q (or such other reports that may be filed with the SEC). 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, except as required by law.Non‐GAAP Financial Information: This presentation includes financial measures that are not presented in accordance with generally acceptedaccounting principles in the U.S. (GAAP). A reconciliation of these non‐GAAP financial measures to the most directly comparable GAAP financial measurecan be found in the Appendix to this presentation on slide 24.Note: This presentation also contains information regarding securities analyst consensus and other financial professionals’ estimates of certain financialitems for Heritage and other industry participants derived from reports of FactSet Research Systems (“FactSet”). These estimates are projections madeby securities analysts and other financial professionals who cover Heritage and other industry participants. Any opinions, forecasts, estimates,projections or predictions regarding Heritage’s performance made by such third parties (and, therefore, such estimates) are theirs alone and do notrepresent the opinions, forecasts, estimates, projections or predictions of Heritage or its management. By providing these estimates, Heritage does notimply its adoption of, endorsement of or concurrence with such information, conclusions or recommendations. Heritage assumes no liability for theaccuracy of such estimates and undertakes no liability to update or revise such estimates based on new information or otherwise.

January 2019 Investor Presentation 2

TABLE OF CONTENTS

Company snapshot…………………………………………………………………………………………………………………………………………………………………………Slide 5Timeline of events………………………………………………………………………………………………………………………………………………………………………….Slide 6Management team……………………………………………………………………………………………………………………..…………………………………………………Slide 7Value proposition……………………………………………………………………………………………………………………………………..……………………………………Slide 8Valuation…………………………………………………………………………………………………………………………………………………………………………………Slides 9‐11Key themes……………………………………………………………………………………………………………………………………………………………......Slides 12‐17

Book of business…………………………………………………………………………………………………………………………………………………………………...Slides 19‐20Reinsurance program……………………………………………………………………………………………………………………………………………………………..……Slide 21Distribution…………………………………………………………………………………………………………………………………………………………………………………Slide 22Investments……………………………………………………………………………………………………………………………………………………………………….…….…Slide 23Appendix: Reconciliation of GAAP and non‐GAAP measures………………………………………………………………………………………………….…….Slide 24Investor relations contact details………………..……………………………………………………………………………………………………..………………….…….Slide 25


COMPANY OVERVIEW

INVESTMENT CONSIDERATIONS

Note 1: all pricing data as of the close on 1/7/2019 unless otherwise notedNote 2: all non‐market data as of 9/30/2018 unless otherwise noted

Investment considerationsHeritage Insurance

COMPANY SNAPSHOT

Active personal residential insurer in 11 coastal USstates & licensed in 4 additional states 6th largest homeowners insurer in FL and 21st

nationwide

Actively write commercial residential insurance in FL 2nd largest admitted commercial residential in FL and 7th

largest commercial multiple peril (CMP) insurer in thestate

Vertically integrated structure with in‐houseunderwriting, actuarial, customer service, claimsprocessing and adjusting functions (3rd parties used asneeded)

468 employees (462 full‐time)

Founded in 2012, followed by IPO in 2014

Headquartered in Clearwater, FLJanuary 2019 Investor Presentation

What we do: Heritage Insurance Holdings, Inc. is a Florida‐based holding company that primarily provides personal and commercial residential insurance in coastal US states.

NYSE: HRTG

Market Cap/Stock Price: $396 million/$14.87*

Annual Dividend/Yield Per Share: $0.24/1.6%*

Remaining share repurchase authorization: $50 million

Total Equity/BVPS: $390.6 million/$15.16

Total Assets: $1.8 billion

In‐Force Gross Premiums: $929.8 million

Financial Strength Ratings:Demotech: HPCIC (A), NBIC (A), ZIC (A Prime)Kroll: HPCIC (BBB+), NBIC (A‐), ZIC (BBB+)

Investment grade issuer rating (Kroll: “BBB‐”)

5

QUICK FACTS MARKET/FINANCIAL DATA

* Source = FactSet

THE HERITAGE STORYFounded in 2012, Heritage has quickly grown into a leading coastal US P&C insurer.


2012 Company inception Started writing

voluntary personal residential business in FL

Participated in first personal residential assumption from FL Citizens

2013 Formed Contractors’ Alliance

Network (CAN) in FL, Heritage’s vendor managed repair program

Formed Osprey, a captive reinsurer.

Retroactive quota share reinsurance agreement with Citizens

2014 HRTG IPO (NYSE): $11/share Sunshine State policy assumption Launched commercial residential

division and participated in first commercial residential assumption from FL Citizens

Acquired SVM Restoration Services (largest CAN vendor; provides water mitigation and repair services)

2016

2015 2017

2018

Acquired BRC Restoration Specialists, a FL‐based provider of restoration (e.g., construction) services and emergency and recovery assistance

Approved to write P&C insurance in NC, marking beginning of multi‐state expansion initiative (began writing NC business in 2016)

Announces acquisition of Zephyr, a wind‐only Hawaiian homeowners insurer

Initiated quarterly cash dividend

Closed Zephyr acquisition Began writing business in NC, SC Launched GL insurance Commenced National General

partnership FL tornado activity & Hurricanes

Hermine & Matthew AoB begins to impact results Final year Heritage participated in

Citizens assumptions

Began writing business in GA and AL Sawgrass Mutual policy assumption Hurricane Irma Acquired NBIC, a coastal

homeowners insurer in NY, NJ, CT, RI & MA

Received KBRA financial strength and investment grade issuer ratings

Hurricanes Lane, Florence and Michael

CAN expansion to non‐FL states

GEICO relationship expands

EXPERIENCED MANAGEMENT TEAMBruce Lucas: Chairman & CEO Co‐founded Heritage in 2012 and has

been with the company since inception Prior to Heritage, Mr. Lucas was CEO of

Infinity Investment Funds, a value‐oriented hedge fund

Before that, Mr. Lucas was an attorneywith Weil, Gotshal & Manges where herepresented large institutional clients suchas Enron and GE


Richard Widdicombe: President Co‐founded Heritage in 2012 and has

been with the company since inception Prior to Heritage, Mr. Widdicombe served

as Risk Manager of Homeowners ChoiceProperty & Casualty Insurance Company

Before that, Mr. Widdicombe wasPresident of People’s Trust InsuranceCompany and previously served aspresident of FedNat, both of which areFlorida‐based property insurers

Ernie Garateix: Chief Operating Officer Has been in his current role since 2014,

prior to which he served as Executive VicePresident since the company’s 2012founding

Prior to Heritage, Mr. Garateix served asVice President of Operations at AmericanIntegrity Insurance Group

Before that, Mr. Garateix was AssociateVice President of IT at FCCI InsuranceGroup

Kirk Lusk: Chief Financial Officer Has been in his current role since 2018 Joined Heritage in 2017 via the acquisition

of NBIC Holdings, Inc., where Mr. Lusk wasalso Chief Financial Officer.

Before that, Mr. Lusk was InternationalChief Financial Officer of Aetna, Inc., ChiefFinancial Officer of Alea Group HoldingsBermuda Ltd. and Chief Financial Officerof GE ERC Global Casualty and GE CapitalAuto Warranty Services

VALUE PROPOSITION• Currently trading at significant discount to peers, despite attractive relative ROE and income metrics• Consistent track record of double‐digit book value growth• Vertically integrated structure provides a hedge in catastrophe years, reducing loss retention and

further reducing earnings volatility, supporting use of P/E‐based valuation for HRTG• Solid reinsurance program, including lowest reinsurance retention in our FL peer group as a % of

equity, protects against hurricanes and other severe events, reducing earnings volatility• Substantial organic premium growth, fueled by relationships with independent agents and auto

carriers • Diversification initiatives and re‐underwriting efforts in Florida’s Tri‐County – including rate

increases, policy form enhancements and conservative policy selection – should benefit underwriting margins

• Commercial residential business serves as an AoB‐hedge in Florida and provides us with additional growth opportunities

• Investment grade debt rating provides easy access to capital, allowing nimble response to market opportunities as they arise

• Below‐peer operating leverage = ample capital to fuel our growth• Track record of capital return via share repurchases and regular dividend• Successful M&A execution provides synergies and access to new markets• Significant insider ownership aligns management’s interest with shareholders

• CEO owns 4.6% of outstanding shares*• President owns 2.8% of outstanding shares*• Total insider ownership = 13.5% of outstanding shares*


Compelling financial metrics

Management has significant skin in the game

Growth & underwriting outlooks improving

Prudent capital management

Business model designed to reduce earnings volatility

* As of 1/7/2019, source = FactSet

SOLID BOOK VALUE PER SHARE GROWTH


Since inception, Heritage has provided investors with solid book value per share growth. Including cumulative dividends declared, Heritage’s book value per share compound annual growth rate (CAGR) is 31% since the Company’s 2012 inception.

$3.38

$7.20

$8.56

$11.71

$12.41

$14.67

$15.16

$3.38

$7.20

$8.56

$11.76$12.70

$15.20$15.87

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

2012 2013 2014 2015 2016 2017 3Q18

SOLID GROWTH IN BOOK VALUE & CUMULATIVE DIVIDENDS PER SHARE

Book Value Per Share Cumulative Dividends Per Share

Note: 1‐year book value and cumulative dividend per share CAGR shown above excludes a $6.9 million non‐cash, non‐tax deductible liability associated with Heritage’s convertible debt. This liability was reclassified toshareholders’ equity in 4Q17. Including this liability in 3Q17, consistent with GAAP reporting, results in a 19% book value and cumulative dividend per share CAGR (vs. the 17% shown in the chart above).

$93

$34$41

$29

$62

$27

‐$6

$26$27

$6$10 $11

‐$20

$0

$20

$40

$60

$80

$100

2015 2016 2017* 3Q18 YTD*

NET INCOME ($ in millions)

HRTG*

HCI

UIHC

Source: FactSet and peer company reports

HIGHLY ATTRACTIVE VALUATION RELATIVE TO PEERS

HRTG’s large valuation discount doesn’t correspond to HRTG’s returns relative to peers


* HRTG’s 2017 net income and ROE are non‐GAAP and adjusted to exclude a $42.2 million non‐cash, non‐tax deductible charge related to the mark‐to‐market of a derivative liability associated with the Company’s convertible debt. The derivative liability was reclassified to equity in 4Q17. HRTG’s 3Q18 YTD net income is non‐GAAP and adjusted to exclude $5 million of after‐tax non‐recurring business acquisition related costs ($7.1 million pre‐tax). Please see slide 24 for a reconciliation of non‐GAAP measures to their comparable GAAP measures.

$419$471

$803

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

HRTG HCI UIHC

MARKET CAP ($ in millions)

Source: FactSet and peer company reports

HRTG* had higher net income than HCI and UIHC in 2015, 2016, 2017 and YTD in 3Q18. In 2016 and 2017, HRTG* had higher net income than HCI and UIHC combined. Despite consistently generating more net income, HRTG has a lower market capitalization than both HCI and UIHC.

Source: FactSet

Ticker Company 2019E 2020E FQ0 2018E 2019E 2020E 2015 2016 2017 2018E 2019E FY3E 2015 2016 2017HRTG* Heritage Insurance Holdings, Inc. 6.8 5.9 0.98 0.98 0.90 0.76 30.3% 9.5% 11.1% 8.0% 13.8% 14.1% 30.3% 10.6% 20.0%FNHC FedNat Holding Company 6.9 6.3 1.11 1.13 1.02 0.91 19.2% 0.5% 3.7% 8.9% 15.5% 15.2% 19.3% 0.4% 3.7%HCI HCI Group, Inc. 10.9 9.5 2.18 2.19 2.01 1.75 29.7% 11.4% -2.9% 14.2% 19.2% 19.7% 29.7% 11.5% -3.0%UIHC United Insurance Holdings Corp. 9.3 8.0 1.31 1.32 1.18 1.05 12.4% 2.4% 2.6% 3.0% 13.5% 13.9% 12.4% 2.5% 3.1%UVE Universal Insurance Holdings, Inc. 8.0 8.0 2.43 2.55 2.07 1.74 43.2% 29.9% 26.4% 29.6% 28.6% 23.7% 43.2% 29.9% 26.4%KINS Kingstone Companies, Inc. 11.9 10.1 2.01 1.97 1.75 1.54 16.2% 17.5% 13.2% 7.9% 15.6% 16.2% 17.0% 18.0% 13.4%

Ex-HRTG coastal property avg 9.4 8.4 1.81 1.83 1.61 1.40 24.1% 12.3% 8.6% 12.7% 18.5% 17.8% 24.3% 12.5% 8.7%HRTG vs. ex-HRTG coastal property avg -27.4% -29.9% -45.7% -46.7% -43.7% -45.7% 6.1% -2.8% 2.5% -4.8% -4.7% -3.7% 5.9% -1.9% 11.3%

P/E P/BV ROATEROAE

ABOVE‐PEER ROE, BUT BELOW‐PEER VALUATION


50.7%

28.1% 30.3%

9.5% 11.1% 9.9%

0%

10%

20%

30%

40%

50%

2013 2014 2015 2016 2017 3Q18 YTD

RETURN ON AVERAGE EQUITY

HRTG*

Avg

Citizens depopulation transactions benefit ROEs

Severe 1Q16 FL tornadoes, Hurricanes Hermine & Matthew

Hurricane Irma

Assignment of benefits (AoB) abuse

1.1x

2.0x

1.3x1.5x

2.0x

2.4x

3.0x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

HRTG Peer average FNHC UIHC KINS HCI UVE

PRICE/BOOK VALUE

HRTG’s P/BV multiple is at a 45% discount to peers

7.1x

10.2x

8.0x

10.1x 10.2x10.9x

0x

2x

4x

6x

8x

10x

12x

HRTG Peer average FNHC UIHC UVE KINS

PRICE/2019E EPSHRTG’s P/E multiple is at a 25% discount to peers

TRADING AT A MEANINGFUL DISCOUNT TO PEERSSOLID ROE PERFORMANCE, EVEN IN HURRICANE YEARS

11.1%

20.0%

8.6% 8.7%

0%

5%

10%

15%

20%

25%

ROE ROTE

2017 RETURN ON EQUITY VS. PEERS

HRTG*

Peer Avg

Note: Peers include FNHC, HCI, KINS, UIHC & UVE

* HRTG’s 2017 ROE is non‐GAAP and adjusted to exclude a $42.2 million non‐cash, non‐tax deductible charge related to the mark‐to‐market of a derivative liability associated with the Company’s convertible debt. The derivative liability was reclassified to equity in 4Q17. HRTG’s 3Q18 YTD ROE is annualized; it is also non‐GAAP and adjusted to exclude $5 million of after‐tax non‐recurring business acquisition related costs ($7.1 million pre‐tax). Please see slide 24 for a reconciliation of non‐GAAP measures to their comparable GAAP measures.

Source: FactSet

Source: FactSet

28.7%17.8% 14.9%

6.6% 5.7%

14.9%

11.5%9.6%

3.8% 3.1%

56.4%

41.3% 46.3%

21.7% 23.0%

100.0%

70.6% 70.8%

32.1% 31.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4Q15 4Q16 3Q17 4Q17 3Q18

% OF CONSOLIDATED TIV IN FL

PRES TC CRES TC Other FL

DIVERSIFICATION STRATEGY UNDERWAY


Through a combination of M&A and organic growth, Heritage has been diversifying its book of business to newstates, resulting in a better spread of risk and lower reinsurance costs. Diversification has been occurring within theFL book too, as Heritage has steadily been reducing its personal residential (PRES) & commercial residential (CRES)exposure to Tri‐County (TC). PRES exposure reduction in Tri‐County is intended to limit exposure to AoB abuse,while CRES exposure reduction in Tri‐County is intended to reduce concentration risk in the event of a storm.

Note: PRES = personal residential, CRES = commercial residential & TC = tri‐county (FL)

FAVORABLE CLAIMS TRENDSHeritage’s Tri‐County FL exposure reduction efforts are bearing fruit, as the region’s contribution to open non‐catastrophe claim counts continues to decline for both litigated and non‐litigated claims. This is benefiting overallclaims trends – beginning with 1Q18, litigated claims have been accounting for an increasingly smaller percentageof Heritage’s non‐catastrophe open claims inventory.


35%38% 37%

41%45% 45% 45%

49%52%

49%51% 53%

43%

35%

31%

0%

10%

20%

30%

40%

50%

60%

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

LITIGATED NON‐CAT CLAIMS AS % OF TOTAL CLAIMS

84%

82%

81%

82%

82%

79% 80%

79%

79%

79%

79%

78%

76%

73%

67%

51%

47%

46%

58%

55%

52% 54

% 56%

56%

56%

55%

52%

50%

46%

41%

30%

40%

50%

60%

70%

80%

90%

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

TRI‐COUNTY FL NON‐CAT CLAIMS TRENDS

Tri‐County open litigated claims as % of total open litigated claims

Tri‐County non‐litigated open claims as % of total open non‐litigated claims

A decline in litigated claims should benefit underwriting margins, given that litigated claims are typically more expensive to resolve

Tri‐County FL claims are typically more expensive given the prevalence of assignment of benefits abuse in the region

Note: Excludes NBIC and 3,135 Sawgrass policies (excluded Sawgrass policies represent roughly $5.7 million of gross premiums in‐force).

VERTICALLY INTEGRATED STRUCTURE Unique, vertically integrated structure reduces our reliance on third parties, benefiting our loss, LAE and operating expenses,

while also serving as a hedge during catastrophe years.

CAN, our water mitigation and construction subsidiary, benefits our loss ratio in non‐catastrophe years via in‐sourcing work that would otherwise go to third parties. In hurricane years, CAN serves as a catastrophe hedge, reducing our earnings volatility and supporting P/E‐based valuation for HRTG.

MGA structure allows us to meet holding company capital needs (e.g., debt servicing, share repurchases, M&A, etc.)

Not currently using Osprey, our captive reinsurer, due to attractive market rates for third‐party reinsurance


Heritage Insurance Holdings, Inc. (NYSE: HRTG)

Heritage Property & Casualty Insurance Company (HPCIC)

NBIC Holdings, Inc

NBIC Financial Holdings, Inc.

Narragansett Bay Insurance

Company (NBIC)

NBIC Service Company

Westwind Underwriters, Inc.

Zephyr Acquisition Company

HI Holdings, Inc.

Zephyr Insurance Company, Inc. (ZIC)

Heritage MGA, LLC Heritage Insurance Claims, LLC

Contractors’ Alliance Network

(CAN)Osprey Re Ltd.

First Access Insurance Group,

LLC

Skye Lane Properties, LLC

Risk bearing entity (AL, GA, FL, MS, NC, SC)

Risk bearing entity (CT, RI, MA, MD, PA, NY, NJ, VA)

Risk bearing entity (HI)

Captive reinsurerProvides HPCIC & ZIC with underwriting, personnel and other services

Provides NBIC with underwriting, personnel and other services

Subsidiary that owns Heritage’s corporate headquarters

Mitigation and construction division, serves as a hedge in catastrophe years

ORGANIZATIONAL STRUCTURE

CONSERVATIVE REINSURANCE RETENTION


3.8%

6.9%

5.2%

6.2%

7.7%

8.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

HRTG FL peer avg UVE HCI FNHC UIHC

AFTER‐TAX FIRST EVENT FLORIDA RETENTION AS % OF 3Q18 GAAP EQUITYHeritage has the lowest reinsurance retention as a % of 3Q18 GAAP shareholders’ equity, suggesting the smallest hit to book value from a hurricane (excluding storm‐related ancillary income streams).

Note 1: UVE retention includes both UPCIC & APPCIC and FNHC retention includes both FNIC and MNIC.Note 2: Calculation based on 21% and 5.5% US federal and Florida statutory corporate income tax rates, respectively.Source: Peer company reports

UNDERWRITING PERFORMANCEHeritage has experienced significant premiums growth since inception, stemming primarily from Citizensdepopulation transactions through 2015 and from M&A and organic growth in subsequent years. Importantly,Heritage’s core underwriting operation has been profitable every full calendar year since inception.


40.5% 40.1% 37.5%58.0% 53.1% 53.0%

32.4% 31.3% 27.5%

34.8% 41.0% 36.7%72.9% 71.4% 65.0%

92.8%94.1%

89.7%80.8%74.8% 78.4%

93.3%98.5%

90.3%

‐10%

10%

30%

50%

70%

90%

110%

2013 2014 2015 2016 2017 3Q18 YTD

SOLID UNDERWRITING MARGINS

Loss ratio Expense ratio Peers

Citizens takeouts benefit HRTG’s margins

Tornadoes, Hermine, Matthew, AOB

Irma, AoB Florence, AoB

Note 1: HRTG’s 3Q18 YTD expense and combined ratios are non‐GAAP and adjusted to exclude $7.1 million of pre‐tax non‐recurring business acquisition related costs. Please see slide 24 for a reconciliation of non‐GAAP measures to their comparable GAAP measures.Note 2: Peers include FNHC, HCI, KINS, UIHC & UVESource: FactSet and peer company reports

51.6 200.1 398.3 478.1 458.6 465.4 452.2

92.1

113.5 118.6 90.1 87.1

331.5 336.7

58.1

55.4 53.8

$51.6

$200.1

$490.3

$591.5$635.3

$942.4 $929.8

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2012 2013 2014 2015 2016 2017 3Q18

IN‐FORCE PREMIUM

HPCIC FL CRES NBIC Zephyr

Heritage’s combined ratios have outperformed peers every full calendar year it has been inexistence

Heritage’s premium growth is unprecedented, reaching almost $1 billion ofgross in‐force premiums 5 years after the company’s founding. The modestpremium decline as of 3Q18 stemmed from Tri‐County FL exposure reductionefforts in response to assignment‐of‐benefits (AoB) claims abuse.

CAPITAL MANAGEMENT & OPERATING LEVERAGEHeritage has been a responsible steward of shareholder capital and currently has a $50 million share repurchase authorization in place. Since 2016, the Company has returned over $50 million to shareholders through common share repurchases and dividends.

Heritage’s ratio of TTM net premiums written to 3Q18 equity is only 1.1x , tied for lowest in its FL homeowners insurance peer group, which is indicative of its conservative balance sheet. Looking ahead, Heritage has adequate capital to fuel its premium growth and multi‐state expansion initiatives.


7.0 6.5 4.8

25.621.6

2.0

25.2

13.2

$32.6

$53.3

$20.0

20.7%

15.7%16.8%

0%

5%

10%

15%

20%

25%

$0

$10

$20

$30

$40

$50

$60

2016 2017 3Q18 YTD

Divide

nd payou

t ratio

$ in m

illions

DISCIPLINED CAPITAL MANAGEMENT

Dividends Share repo Debt repo Div payout ratio (right axis)

1.1x 1.1x1.3x

1.4x1.5x 1.5x

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

HCI HRTG UIHC Peer avg UVE FNHC

Net ope

ratin

g leverage (N

PW/Equ

ity)

CONSERVATIVE NET OPERATING LEVERAGE

HCI HRTG UIHC Peer avg UVE FNHC

Company overviewHeritage Insurance

FL, 55.1%

NY, 19.5%

NJ, 7.7%

MA, 6.4%HI, 5.8%

Other, 5.6%

PREMIUM SPREAD BY GEOGRAPHY

BOOK OF BUSINESSAs of 3Q18, we have $929.8 million of gross premiums in‐force (estimated net = $470.5 million) across 3 statutory insurance entities(Heritage/NBIC/Zephyr) and write 2 main lines of business, including personal residential (PRES) and commercial residential (CRES). We also write somecommercial general liability (CGL) insurance. We’re actively writing in 11 states (CRES and CGL are only written in Florida), but have licenses in 15 states.


= actively writing= licensed

GEOGRAPHIC FOOTPRINT

PRES = personal residentialCRES = commercial residentialCGL = commercial general liability

3 Statutory Insurance Entities

HI

AL, FL, GA, MS, NC, SC

CT, MA, MD, PA, NJ, NY, RI, VA

PRES, 90.2%

CRES, 9.4% CGL, 0.4%

PREMIUM SPREAD BY PRODUCT

$ in millionsGross Premiums Policies Avg Premium/

Products In‐Force In‐Force PolicyPRES (multiple states) $839.2 513,086 $1,635.7Homeowners (multiple states) 692.8 363,252 1,907.3Hurricane‐only (HI only) 53.8 67,966 792.2Dwelling/landlord (multiple states) 48.8 27,521 1,772.6Condo owners (multiple states) 35.6 41,319 861.7Mobile homeowners (FL only) 7.1 6,593 1,075.5Renters (multiple states) 1.1 3,300 330.0

CRES (FL only) 87.2 3,132 27,827.6CGL (FL only) 3.4 3,796 900.4Total $929.8 520,014 $1,788.1Note: assumes 19% of Sawgrass policies ($5.7 million of gross premiums in‐force as of 9/30/2018) that are not yet on Heritage’s main policy system, all fall into the “Homeowners” line of business.

TOTAL INSURED VALUE SNAPSHOT Florida accounts for 55% of Heritage’s consolidated gross premiums in force, but it only reflects 32% of total insured value (TIV) – the $4.91 average premium per $1,000 of TIV in Florida ($5.41 for Florida PRES policies) is almost triple the $1.91 non‐Florida average (Florida’s more expensive policies reflect its higher hurricane risk), while the $445,989 average insured value in Florida ($342,957 for Florida PRES policies) is well below the $763,966 average for non‐Florida states (property values in Florida trail those in Heritage’s Northeast US states).

January 2019 Investor Presentation 20$3

42,957

$445

,989

$763

,966

$425

,239

$454

,048

$505

,802

$513

,543

$632

,601

$649

,053

$749

,826

$844

,576

$899

,222

$990

,591

$5.41

$4.91

$1.91 $2.46

$2.38

$1.57

$2.06 $2

.36

$2.41

$1.81

$2.13

$1.72

$1.95

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

FL PRE

S

FL (a

ll lin

es)

Non

‐FL (100

% PRE

S) AL GA HI NC SC RI NJ

MA CT NY

Prem

ium/$1K

TIV

Average insured value pe

r policy

TIV Metrics

Avg insured value (left axis)

Premium/$1K TIV (right axis)

FL PRES24.1%

FL CRES7.2%

NY28.8%

NJ12.3%

HI10.7%

MA8.6%

Other8.3%

TIV SPREAD

Includes FL CGL, which accounts for 1.0% of Heritage’s TIV. The remaining 7.3% comes from PRES in: AL, CT, GA, NC, RI, SC

In addition to PRES, FL (all lines) includes: CRES, which has a $7,416,827 average insured value

and $3.73 of average premium per $1K of TIV CGL, which has a $821,863 average insured value

and $1.10 of average premium per $1K of TIV

REINSURANCE PROGRAMHeritage has a conservative 2018‐2019 reinsurance program, protecting the Company against hurricanes and severe weather events and reducing earnings volatility.


2017 Citrus 100% of

$117.2M xs $40MLa

yer 4

100%

of

$185

M x

s $

40M

2016 Citrus E 100% of $44.1M xs $40M

$1,592

$1,107

$498

$378.6

$1,320

$568

FL 1st Event

Top/Agg80% of $25M xs $10M

$997

$568

$40

Millions

2016Citrus

D35% of $428.6M

xs$568M

($150M)

$90

$215

Layer 3 100% of $229M xs $40M

1 @ 100% w/ RPP

Layer 192.1% of $50M xs $40M

1 @ 100% w/ RPP

Layer 292.1% of $125M xs $40M

1 @ 100% w/ RPP

$15Retention

FHCF Layer45% of

$1.213Bxs

$378.6M($546.0M)

$1,392$1,400

20% Co‐Par

Stub Layer 1$58

Stub Layer 2

Cat437.9% of

$63.4M xs $57.9M ($5M)

$121

Retention

80% of $25M xs $10M Top/Agg

2016 Citrus E 100% of $44.1M xs $40M

Layer 3 100% of $229M xs $40M 1 @ 100% w/ RPP

Layer 192.1% of $50M

xs $40M 1 @ 100% w/ RPP

Layer 292.1% of

$125M xs $40M 1 @ 100%w/ RPP

NE 1st Event

Millions

NBIC Multi – YearLayer 2

41.125% of$80M xs $60M (~$33M)

$40

$60

$818

$1,000

$122

$368

Net Quota Share

Gro

ss Q

uota

Sha

re 2

017

MY

–8.

0% o

f $1,

000M

xs

$0M

($80

M)


41.125% of$450M xs $550M

(~$185M)


41.125% of$410M xs $140M

(~$169M)

$550

$140

$20$15

$905

$867

20% Co‐Par

Stub Layer 1$59

Stub Layer 2

Cat437.9% of

$63.4M xs $57.9M ($5M)

$183

Top/Agg15.3%

of$313M

xs$40M

($48M)

$40

$444

Millions

HI 1st Event

Multi-Zonal84.7% of

$313M xs $40M($265M)

$757

Layer 3 100% of $229M xs $40M

1 @ 100% w/ RPP

Layer 192.1% of $50M xs $40M

1 @ 100% w/ RPP

Layer 292.1% of $125M xs $40M

1 @ 100% w/ RPP

$215

$90

$801

Top/Agg80% of $25M xs $10M

$15Retention

$683

20% Co‐Par

Stub Layer 1$58

Stub Layer 2

Cat437.9% of

$63.4M xs $57.9M ($5M)

$121

2016 Citrus E 100% of $44.1M xs $40M

Substantial severity and frequency protection

Roughly $2.5 billion of total catastrophe reinsurance coverage across multiple events ($1.4 billion available for a single event)

$20 million first event retention and $16 million 2nd event retention

Heritage’s third‐party reinsurers are rated “A‐” or higher by A.M. Best or S&P or are fully collateralized

DISTRIBUTION• Over 6,000 appointed producers across our multi‐state platform

• The CEO of SIAA, one of the largest independent agency networks in the US, is a member of Heritage’s Board of Directors, providing us with a strong growth platform in both new and existing states.

• Relationships with multiple auto carriers, whereby the policyholder receives a bundled product discount.


Overview

NBIC

• Over 2,500 actively writing independent agents

• 25% of voluntary premium is written by agents affiliated with eight large agency networks that have master agency agreements with HPCIC

• CRES policies are written through roughly 400 independent agents in FL

• Relationships with multiple auto carriers

HPCIC

• Roughly 200 retail independent agents representing approximately 500 agency locations

• 8 wholesale relationships that have access to 1,500 retail locations

Zephyr• Relationships with 70 actively writing independent agencies

• Over 50% of voluntary premium is written by agents affiliated with three large agency networks

INVESTMENT PORTFOLIOHeritage has a very conservative investment portfolio, consisting predominantly of low duration, fixed income securities. As yields increase, investment income should benefit.


US government,

8.6%

Munis, 11.3%

Special revenue bonds, 48.1%

Industrial bonds, 28.1%

Preferred stock, 3.4%

Equities, 0.5%INVESTMENT PORTFOLIO BREAKDOWN

$136

.2

$331

.2

$400

.1

$603

.0

$567

.0

$531

.3

1.4%1.6%

2.0%1.8% 1.9%

2.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$0

$100

$200

$300

$400

$500

$600

$700

2013 2014 2015 2016 2017 3Q18 YTD

$ in m

illions

NET INVESTMENT INCOME PERFORMANCE

Investments (left axis) Net Investment Income yield (right axis)

APPENDIX: NON‐GAAP RECONCILIATIONS


RECONCILIATION OF GAAP AND NON‐GAAP MEASURES$ in millions

2017 3Q18 YTDGAAP Net income (loss) (1.1)$ 23.2$ Conversion option liability fair value 42.2 ‐ Non‐recurring business acquisition related expenses ‐ 7.1 Tax impact ‐ 1.8 Adjusted net income 41.1$ 28.5$

2017 3Q18 YTD*GAAP ROE ‐0.3% 8.0%Conversion option liability fair value 11.4% 0.0%Non‐recurring business acquisition related expenses 0.0% 2.5%Tax impact 0.0% 0.6%Adjusted ROE (non‐GAAP) 11.1% 9.9%*annualized

3Q18 YTDGAAP expense ratio 38.8%Non‐recurring business acquisition related expenses 2.1%Adjusted expense ratio (Non‐GAAP) 36.7%

GAAP combined ratio 91.8%Non‐recurring business acquisition related expenses 2.1%Adjusted combined ratio (Non‐GAAP) 89.7%

3Q17GAAP book value per share 12.84$ Conversion option liability fair value 0.29 Tax impact ‐ Adjusted book value per share (non‐GAAP) 13.13$

Arash Soleimani, CFA, CPAExecutive Vice President & Director of Investor [email protected]

Website: investors.heritagepci.com

ADDITIONAL INFORMATION

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