EX-99.1 2 a2q23uveex-991xearningspre.htm EX-99.1 Document
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Exhibit 99.1
Universal Reports Second Quarter 2023 Results

•Diluted earnings per common share of $0.93; diluted adjusted* earnings per common share of $0.87
•Annualized return on average common equity (“ROCE”) of 34.8%, annualized adjusted* return on average common equity of 25.3%
•Direct premiums written of $547.1 million, up 2.7% from the prior year quarter
•Net combined ratio of 99.1%, down 1.8 points from the prior year quarter
•Book value per share of $11.12, up 17.4% from fourth quarter 2022; adjusted book value per share of $14.31, up 11.0% from fourth quarter 2022
•Repurchased approximately 396 thousand shares for $6.1 million. Total capital returned to shareholders of $11.1 million, including $0.16 per share regular quarterly dividend
*Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Fort Lauderdale, Fla., July 27, 2023 – Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported second quarter 2023 results.

“Results were solid, including a 25.3% annualized adjusted return on common equity and 85.1% adjusted diluted EPS growth year-over-year,” said Stephen J. Donaghy, Chief Executive Officer. While it’s still early days, we’re encouraged by favorable claims and litigation trends that are beginning to emerge as a result of recent legislative reforms and give us optimism as we look forward to 2024 and beyond. We continue to benefit from rate-driven premium growth and an improving spread of risk across our geographic footprint. I’m proud of the reinsurance program we put together for the 2023-2024 treaty year. Our program’s terms, conditions and coverage are consistent with the prior year, but we reduced our consolidated retention and ceded premium ratio.
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Quarterly Financial Results

Summary Financial Results
($thousands, except per share data)Three Months Ended June 30,Six Months Ended June 30,
20232022Change20232022Change
GAAP comparison
Total revenues$339,570 $292,006 16.3 %$656,078 $579,488 13.2 %
Operating income$39,168 $12,411 215.6 %$73,595 $36,490 101.7 %
Operating income margin11.5 %4.3 %7.2 pts11.2 %6.3 %4.9 pts
Net income available to common stockholders$28,564 $7,368 287.7 %$52,734 $24,902 111.8 %
Diluted earnings per common share$0.93 $0.24 287.5 %$1.72 $0.80 115.0 %
Annualized ROCE34.8 %7.7 %27.1  pts33.9 %12.5 %21.4 pts
Book value per share, end of period$11.12 $11.93 (6.8)%11.12$11.93 (6.8)%
Non-GAAP comparison1
Core revenue$336,957 $301,615 11.7 %$653,296 $592,435 10.3 %
Adjusted operating income$36,555 $22,020 66.0 %$70,813 $49,437 43.2 %
Adjusted operating income margin10.8 %7.3 %3.5 pts10.8 %8.3 %2.5 pts
Adjusted net income available to common stockholders$26,594 $14,648 81.6 %$50,636 $34,711 45.9 %
Adjusted diluted earnings per common share$0.87 $0.47 85.1 %$1.65 $1.12 47.3 %
Annualized adjusted ROCE25.3 %12.8 %12.5  pts24.7 %15.3 %9.4  pts
Adjusted book value per share, end of period$14.31 $14.80 (3.3)%$14.31 $14.80 (3.3)%
Underwriting Summary
Premiums:
Premiums in force$1,879,053 $1,766,542 6.4 %$1,879,053 $1,766,542 6.4 %
Policies in force809,685 894,618 (9.5)%809,685 894,618 (9.5)%
Direct premiums written$547,126 $532,527 2.7 %$957,228 $929,008 3.0 %
Direct premiums earned$463,324 $428,805 8.1 %$918,692 $843,408 8.9 %
Ceded premiums earned$(160,050)$(151,744)5.5 %$(333,194)$(297,283)12.1 %
Ceded premium ratio34.5 %35.4 %(0.9) pts36.3 %35.2 %1.1  pts
Net premiums earned$303,274 $277,061 9.5 %$585,498 $546,125 7.2 %
Net ratios:
Loss ratio73.8 %72.3 %1.5  pts73.4 %70.6 %2.8  pts
Expense ratio25.3 %28.6 %(3.3)pts26.1 %28.8 %(2.7)pts
Combined ratio99.1 %100.9 %(1.8) pts99.5 %99.4 %0.1  pts
1 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted net income available to common stockholders, adjusted diluted earnings per common share and core revenue exclude net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income excludes the items above and interest and amortization of debt issuance costs. Adjusted book value per share excludes accumulated other comprehensive income, net of taxes. Adjusted ROCE is calculated by dividing annualized adjusted net income available to common stockholders by average adjusted book value per share, with the denominator further excluding current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.





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Net Income and Adjusted Net Income
Net income available to common stockholders was $28.6 million, up from $7.4 million in the prior year quarter, and adjusted net income available to common stockholders was $26.6 million, up from $14.6 million in the prior year quarter. The increase in adjusted net income available to common stockholders mostly stems from higher underwriting income, net investment income and commission revenue.

Revenues
Revenue was $339.6 million, up 16.3% from the prior year quarter and core revenue was $337.0 million, up 11.7% from the prior year quarter. The increase in core revenue primarily stems from higher net premiums earned, net investment income and commission revenue.

Direct premiums written were $547.1 million, up 2.7% from the prior year quarter. The increase stems from 0.8% growth in Florida and 13.6% growth in other states. Growth reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $463.3 million, up 8.1% from the prior year quarter. The increase stems from rate-driven direct premiums written growth over the past twelve months.

The ceded premium ratio was 34.5%, down from 35.4% in the prior year quarter. The decrease primarily reflects a lower ceded premium ratio associated with the 2023-2024 reinsurance program, direct premiums earned growth associated with primary rate increases and reinsurance savings associated with leveraging our self-insurance captive, partly offset by reinstatement premiums associated with Hurricane Ian and higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values.

Net premiums earned were $303.3 million, up 9.5% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio, as described above.

Net investment income was $11.3 million, up from $5.2 million in the prior year quarter. The increase primarily stems from higher fixed income reinvestment yields and higher yields on cash.

Commissions, policy fees and other revenue were $22.4 million, up 15.9% from the prior year quarter. The increase primarily reflects higher reinsurance brokerage commission revenue, which benefited from higher ceded premiums, including reinstatement premiums associated with Hurricane Ian, and the difference in our reinsurance program’s structure relative to the prior year quarter, partly offset by a decline in policy fees associated with lower policies in force.

Margins
The GAAP operating income margin was 11.5%, up from a GAAP operating income margin of 4.3% in the prior year quarter and the adjusted operating income margin was 10.8%, up from an adjusted operating income margin of 7.3% in the prior year quarter. The higher adjusted operating income margin primarily reflects higher net investment income and commission revenue and a lower net combined ratio.

The net loss ratio was 73.8%, up 1.5 points compared to the prior year quarter. The increase primarily reflects higher unfavorable prior year reserve development, partly offset by a lower consolidated current accident year net loss ratio.

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The net expense ratio was 25.3%, down 3.3 points from 28.6% in the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners.

The net combined ratio was 99.1%, down 1.8 points compared to the prior year quarter. The decrease reflects a lower net expense ratio, partly offset by a higher net loss ratio, as described above.

Capital Deployment
During the second quarter, the Company repurchased approximately 396 thousand shares at an aggregate cost of $6.1 million. The Company currently has $20.1 million of share repurchase authorization remaining.

On July 20, 2023, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on August 11, 2023, to shareholders of record as of the close of business on August 4, 2023.


Conference Call and Webcast
•Friday, July 28, 2023 at 10:00 a.m. ET
•Investors and other interested parties may listen to the call by accessing the online, real-time webcast at universalinsuranceholdings.com/investors or by registering in advance via teleconference at https://register.vevent.com/register/BI4ff80513f7174714bca5653f1ea2cd34. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. An online replay of the call will be available at universalinsuranceholdings.com/investors soon after the investor call concludes.


About Universal
Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company providing property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We provide insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 19 states (primarily Florida). Learn more at universalinsuranceholdings.com.

Non-GAAP Financial Measures and Key Performance Indicators
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission (“SEC”), including core revenue, adjusted net income available to common stockholders and diluted adjusted earnings (loss) per common share, which exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income and adjusted operating income margin exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities and interest and amortization of debt issuance costs. Adjusted common stockholders’ equity and adjusted book value per share exclude accumulated other comprehensive income (AOCI), net of taxes. Adjusted return on common equity excludes after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the numerator and AOCI, net of taxes, and current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the denominator. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and
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presented in accordance with generally accepted accounting principles (“GAAP”). UVE management believes that these non-GAAP financial measures are meaningful, as they allow investors to evaluate underlying revenue and profitability trends and enhance comparability across periods. When considered together with the GAAP financial measures, management believes these metrics provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE’s business trends and to understand UVE’s operational performance. UVE’s management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP. For more information regarding our key performance indicators, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” in our forthcoming Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “will,” “plan,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, including those risks and uncertainties described under the heading “Risk Factors” and “Liquidity and Capital Resources” in our 2022 Annual Report on Form 10-K, and supplemented in our subsequent Quarterly Reports on Form 10-Q. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K and the most recent quarterly reports on Form 10-Q.



Investors:
Arash Soleimani, CFA, CPA, CPCU, ARe
Chief Strategy Officer
954-804-8874
asoleimani@universalproperty.com
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)
June 30,December 31,
20232022
ASSETS:
Invested Assets
  Fixed maturities, at fair value$1,051,508 $1,014,626 
  Equity securities, at fair value75,571 85,469 
  Investment real estate, net5,618 5,711 
  Total invested assets1,132,697 1,105,806 
Cash and cash equivalents291,681 388,706 
Restricted cash and cash equivalents68,636 2,635 
Prepaid reinsurance premiums525,489 282,427 
Reinsurance recoverable590,409 808,850 
Premiums receivable, net79,503 69,574 
Property and equipment, net49,538 51,404 
Deferred policy acquisition costs107,047 103,654 
Goodwill2,319 2,319 
Other assets70,691 74,779 
TOTAL ASSETS$2,918,010 $2,890,154 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses$663,019 $1,038,790 
Unearned premiums982,390 943,854 
Advance premium91,011 54,964 
Reinsurance payable, net607,552 384,504 
Long-term debt, net102,387 102,769 
Other liabilities136,979 77,377 
     Total liabilities2,583,338 2,602,258 
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock ($0.01 par value)2
— — 
Common stock ($0.01 par value)3
473 472 
Treasury shares, at cost - 17,186 and 16,790(244,846)(238,758)
Additional paid-in capital114,685 112,509 
Accumulated other comprehensive income (loss), net of taxes(95,857)(103,782)
Retained earnings560,217 517,455 
     Total stockholders' equity334,672 287,896 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,918,010 $2,890,154 
Notes:
2 Cumulative convertible preferred stock ($0.01 par value): Authorized - 1,000 shares; Issued - 10 and 10 shares; Outstanding - 10 and 10 shares; Minimum liquidation preference - $9.99 and $9.99 per share.
3 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 47,266 and 47,179 shares; Outstanding 30,080 and 30,389 shares.


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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
REVENUES
Net premiums earned$303,274 $277,061 $585,498 $546,125 
Net investment income11,282 5,221 21,980 9,263 
Net realized gains (losses) on investments882 (725)94 (667)
Net change in unrealized gains (losses) of equity securities1,731 (8,884)2,688 (12,280)
Commission revenue14,986 11,404 32,268 22,565 
Policy fees5,384 5,940 9,551 10,719 
Other revenue2,031 1,989 3,999 3,763 
     Total revenues339,570 292,006 656,078 579,488 
EXPENSES
Losses and loss adjustment expenses223,727 200,304 429,881 385,410 
Policy acquisition costs52,006 54,100 103,697 108,823 
Other operating expenses24,669 25,191 48,905 48,765 
     Total operating costs and expenses300,402 279,595 582,483 542,998 
Interest and amortization of debt issuance costs1,629 1,731 3,265 3,339 
Income before income tax expense37,539 10,680 70,330 33,151 
     Income tax expense8,973 3,310 17,591 8,244 
NET INCOME$28,566 $7,370 $52,739 $24,907 


UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SHARE AND PER SHARE INFORMATION
(in thousands, except per share data)
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Weighted average common shares outstanding - basic30,265 30,829 30,323 30,987 
Weighted average common shares outstanding - diluted30,659 30,883 30,633 31,060 
Shares outstanding, end of period30,080 30,716 30,080 30,716 
Basic earnings per common share$0.94 $0.24 $1.74 $0.80 
Diluted earnings per common share$0.93 $0.24 $1.72 $0.80 
Cash dividend declared per common share$0.16 $0.16 $0.32 $0.32 
Book value per share, end of period$11.12 $11.93 $11.12 $11.93 
Annualized return on average common equity (ROCE)34.8 %7.7 %33.9 %12.5 %





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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
(in thousands, except for Policies In Force data)
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Premiums
     Direct premiums written - Florida$456,984 $453,168 $794,349 $787,605 
     Direct premiums written - Other States90,142 79,359 162,879 141,403 
Direct premiums written - Total$547,126 $532,527 $957,228 $929,008 
Direct premiums earned$463,324 $428,805 $918,692 $843,408 
Net premiums earned$303,274 $277,061 $585,498 $546,125 
Underwriting Ratios - Net
Loss and loss adjustment expense ratio73.8 %72.3 %73.4 %70.6 %
  Policy acquisition cost ratio17.2 %19.5 %17.7 %19.9 %
  Other operating expense ratio8.1 %9.1 %8.4 %8.9 %
Expense ratio25.3 %28.6 %26.1 %28.8 %
Combined ratio99.1 %100.9 %99.5 %99.4 %
Other Items
Net prior years’ reserve development$13,825 $3,710 $17,143 $4,365 
Points on the net loss and loss adjustment expense ratio4.6 pts1.3 pts2.9 pts0.8 pts
As of
June 30,
20232022
Policies in force
Florida576,407 654,276 
Other States233,278 240,342 
Total809,685 894,618 
Premiums in force
Florida$1,549,410 $1,473,193 
Other States329,643 293,349 
Total$1,879,053 $1,766,542 
Total Insured Value
Florida$192,324,456 $202,691,987 
Other States126,539,944 118,766,758 
Total$318,864,400 $321,458,745 







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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except for per share data)
GAAP revenue to core revenue
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
GAAP revenue$339,570 $292,006 $656,078 $579,488 
less: Net realized gains (losses) on investments882 (725)94 (667)
less: Net change in unrealized gains (losses) of equity securities1,731 (8,884)2,688 (12,280)
Core revenue$336,957 $301,615 $653,296 $592,435 

GAAP operating income to adjusted operating income
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
GAAP income before income tax expense$37,539 $10,680 $70,330 $33,151 
add: Interest and amortization of debt issuance costs1,629 1,731 3,265 3,339 
GAAP operating income39,168 12,411 73,595 36,490 
less: Net realized gains (losses) on investments882 (725)94 (667)
less: Net change in unrealized gains (losses) of equity securities1,731 (8,884)2,688 (12,280)
Adjusted operating income$36,555 $22,020 $70,813 $49,437 

GAAP operating income margin to adjusted operating income margin
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
GAAP operating income (a)$39,168 $12,411 $73,595 $36,490 
GAAP revenue (b)339,570 292,006 656,078 579,488 
GAAP operating income margin (a÷b)11.5 %4.3 %11.2 %6.3 %
Adjusted operating income (c)36,555 22,020 70,813 49,437 
Core revenue (d)336,957 301,615 653,296 592,435 
Adjusted operating income margin (c÷d)10.8 %7.3 %10.8 %8.3 %

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GAAP net income (NI) to adjusted NI available to common stockholders
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
GAAP NI$28,566 $7,370 $52,739 $24,907 
less: Preferred dividends2 2 5 5 
GAAP NI available to common stockholders (e)28,564 7,368 52,734 24,902 
less: Net realized gains (losses) on investments882 (725)94 (667)
less: Net change in unrealized gains (losses) of equity securities1,731 (8,884)2,688 (12,280)
add: Income tax effect on above adjustments643 (2,329)684 (3,138)
Adjusted NI available to common stockholders (f)$26,594 $14,648 $50,636 $34,711 
Weighted average diluted common shares outstanding (g)30,659 30,883 30,633 31,060 
Diluted earnings per common share (e÷g)$0.93 $0.24 $1.72 $0.80 
Diluted adjusted earnings per common share (f÷g)$0.87 $0.47 $1.65 $1.12 

GAAP stockholders’ equity to adjusted common stockholders’ equity
As of
June 30,June 30,December 31,
202320222022
GAAP stockholders’ equity$334,672 $366,551 $287,896 
less: Preferred equity100100100
Common stockholders’ equity (h)334,572 366,451 287,796 
less: Accumulated other comprehensive (loss), net of taxes(95,857)(88,134)(103,782)
Adjusted common stockholders’ equity (i)$430,429 $454,585 $391,578 
Shares outstanding (j)30,080 30,716 30,389 
Book value per common share (h÷j)$11.12 $11.93 $9.47 
Adjusted book value per common share (i÷j)$14.31 $14.80 $12.89 

GAAP return on common equity (ROCE) to adjusted ROCE
Three Months EndedSix Months EndedYear Ended
June 30,June 30,December 31,
20232022202320222022
Actual or Annualized NI available to common stockholders (k)$114,256 $29,472 $105,468 $49,804 $(22,267)
Average common stockholders’ equity (l)328,139 381,346 311,184 398,027 358,699 
ROCE (k÷l)34.8 %7.7 %33.9 %12.5 %(6.2)%
Actual or Annualized adjusted NI available to common stockholders (m)$106,376 $58,592 $101,272 $69,422 $(12,618)
Adjusted average common stockholders’ equity4 (n)
420,078 458,292 409,955 454,782 423,199 
Adjusted ROCE (m÷n)25.3 %12.8 %24.7 %15.3 %(3.0)%
4 Adjusted average common stockholders’ equity excludes current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities.
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