EX-99.1 2 q422uveex-991pressrelease.htm EX-99.1 Document
a01uvelogoa03.jpg
Exhibit 99.1
Universal Reports Fourth Quarter 2022 Results

•Diluted GAAP earnings per common share (EPS) of $0.82; diluted adjusted* EPS of $0.72
•Book value per share of $9.47, up 10.9% from third quarter 2022; adjusted book value per share of $12.89, up 4.5% from third quarter 2022
•Net combined ratio of 101.4%, down from 131.4% in the prior year quarter
•Direct premiums written of $416.1 million, up 4.2% from the prior year quarter
* Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Fort Lauderdale, Fla., February 23, 2023 – Universal Insurance Holdings (NYSE: UVE) (the “Company” or “Universal”) reported fourth quarter and full year 2022 results.

“It was a tough year, but I’m proud of what our team accomplished despite the circumstances,” said Stephen J. Donaghy, Chief Executive Officer. “The Florida homeowners insurance market has faced significant challenges, but we remain committed to our home state and continue to write new and renewal business. We’re grateful to state officials for passing meaningful reforms at the recent special legislative session, including elimination of one-way attorney fees and assignment-of-benefits, shortening the claims filing deadline to one year and taking steps to reduce the competitiveness of Citizens, among other measures. It will take time for the reforms to benefit results, but we believe the legislature’s actions will restore the health of the market over the long term. Given our differentiated business model, solid balance sheet and strong reinsurer relationships, we’re uniquely positioned to succeed in the dynamic Florida landscape.”






















1
a01uvelogoa03.jpg
Summary Financial Results

($thousands, except per share data)Three Months Ended December 31,Twelve Months Ended December 31,
20222021Change20222021Change
GAAP comparison
Total revenues$330,360 $292,659 12.9 %$1,222,658 $1,121,851 9.0 %
GAAP operating income (loss) $34,479 $(63,907)NM$(20,638)$29,051 NM
GAAP operating income (loss) margin10.4 %(21.8)%NM(1.7)%2.6 %NM
Net income (loss)$25,111 $(48,125)NM$(22,257)$20,407 NM
Diluted earnings (loss) per common share$0.82 $(1.54)NM$(0.72)$0.65 NM
Annualized ROCE36.6 %(41.7)%NM(6.2)%4.6 %NM
Book value per share, end of period$9.47 $13.76 (31.2)%9.47$13.76 (31.2)%
Non-GAAP comparison1
Core revenue$326,352 $293,132 11.3 %$1,235,455 $1,119,991 10.3 %
Adjusted operating income (loss)$30,471 $(63,434)NM$(7,841)$27,191 NM
Adjusted operating income (loss) margin9.3 %(21.6)%NM(0.6)%2.4 %NM
Adjusted net income (loss)$22,087 $(47,761)NM$(12,618)$18,959 NM
Adjusted diluted earnings (loss) per common share$0.72 $(1.53)NM$(0.41)$0.61 NM
Annualized adjusted ROCE23.1 %(40.3)%NM(3.0)%4.3 %NM
Adjusted book value per share, end of period$12.89 $14.26 (9.6)%$12.89 $14.26 (9.6)%
Underwriting Summary
Premiums:
Premiums in force$1,856,339 $1,679,821 10.5 %$1,856,339 $1,679,821 10.5 %
Policies in force848,856 943,593 (10.0)%848,856 943,593 (10.0)%
Direct premiums written$416,101 $399,327 4.2 %$1,845,786 $1,671,252 10.4 %
Direct premiums earned$463,843 $417,817 11.0 %$1,759,701 $1,596,618 10.2 %
Ceded premiums earned$(171,973)$(146,485)17.4 %$(631,075)$(561,155)12.5 %
Ceded premium ratio37.1 %35.1 %2.0  pts35.9 %35.1 %0.8  pts
Net premiums earned$291,870 $271,332 7.6 %$1,128,626 $1,035,463 9.0 %
Net ratios:
Loss & LAE ratio76.3 %103.3 %(27.0) pts83.2 %75.3 %7.9  pts
Expense ratio25.1 %28.1 %(3.0)pts27.0 %30.2 %(3.2)pts
Combined ratio101.4 %131.4 %(30.0) pts110.2 %105.5 %4.7  pts
1 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted net income, 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 attributable 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.









2
a01uvelogoa03.jpg
Net Income and Adjusted Net Income
Net income was $25.1 million, up from net loss of $48.1 million in the prior year quarter, and adjusted net income was $22.1 million, up from adjusted net loss of $47.8 million in the prior year quarter. The increase in adjusted net income mostly stems from lower net loss and expense ratios and higher net investment income and commission revenue.

Revenues
Overall revenue was $330.4 million, up 12.9% from the prior year quarter and core revenue was $326.4 million, up 11.3% 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 $416.1 million, up 4.2% from the prior year quarter. The increase stems from 3.6% growth in Florida and 6.8% growth in other states. Overall growth reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $463.8 million, up 11.0% 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 37.1%, up from 35.1%, in the prior year quarter. The increase primarily reflects reinstatement premiums associated with Hurricane Ian, higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values, partly offset by direct premiums earned growth associated with primary rate increases and reinsurance savings associated with leveraging our self-insured captive to a greater degree than the prior year.

Net premiums earned were $291.9 million, up 7.6% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, partly offset by higher ceded premiums earned, as described above.

Net investment income was $10.4 million, up from $3.9 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 $24.0 million, up 34.2% from the prior year quarter. The increase primarily reflects higher reinsurance brokerage commission revenue, which benefited from higher ceded premiums 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 10.4%, up from a GAAP operating loss margin of 21.8% in the prior year quarter. The adjusted operating income margin was 9.3%, up from an adjusted operating loss margin of 21.6% in the prior year quarter. The higher adjusted operating income margin primarily reflects a lower net combined ratio and higher net investment income and commission revenue, partly offset by lower policy fees.

The net loss ratio was 76.3%, down 27.0 points compared to the prior year quarter. The decrease primarily reflects a lower current accident year net loss ratio and lower adverse prior year reserve development ($17.9 million in the current year quarter, down from $36.5 million in the prior year quarter).

The net expense ratio was 25.1%, down 3.0 points from 28.1% in the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners.
3
a01uvelogoa03.jpg

The net combined ratio was 101.4%, down 30.0 points compared to the prior year quarter. The decrease reflects lower net loss and expense ratios, as described above.

Capital Deployment
During the fourth quarter, the Company repurchased approximately 186 thousand shares at an aggregate cost of $1.8 million. The Company’s current share repurchase authorization program has $6.2 million remaining as of December 31, 2022 and runs through December 15, 2024.

On February 9, 2023, the Board of Directors declared a regular quarterly cash dividend of 16 cents per share of common stock, payable March 16, 2023 to shareholders of record as of the close of business on March 9, 2023.

Conference Call and Webcast
•Friday, February 24, 2023 at 9:30 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/BI271bba0f21b746d8aafebbe6a6c51c55. 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 shortly after the investor call concludes.


About Universal
Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company offering 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 sell 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 attributable 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 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
4
a01uvelogoa03.jpg
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 Annual Report on Form 10-K for the quarter ended December 31, 2022.

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/Media:
Arash Soleimani, CFA, CPA
Chief Strategy Officer
954-804-8874
asoleimani@universalproperty.com

5
a01uvelogoa03.jpg
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share data)
December 31,December 31,
20222021
ASSETS
Invested Assets
  Fixed maturities, at fair value$1,014,626 $1,040,455 
  Equity securities, at fair value85,469 47,334 
  Investment real estate, net5,711 5,891 
  Total invested assets1,105,806 1,093,680 
Cash and cash equivalents388,706 250,508 
Restricted cash and cash equivalents2,635 2,635 
Prepaid reinsurance premiums282,427 240,993 
Reinsurance recoverable808,850 185,589 
Premiums receivable, net69,574 64,923 
Property and equipment, net51,404 53,682 
Deferred policy acquisition costs103,654 108,822 
Goodwill2,319 2,319 
Other assets74,779 52,990 
TOTAL ASSETS$2,890,154 $2,056,141 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses$1,038,790 $346,216 
Unearned premiums943,854 857,769 
Advance premium54,964 53,694 
Reinsurance payable, net384,504 188,662 
Long-term debt, net102,769 103,676 
Other liabilities77,377 76,422 
     Total liabilities2,602,258 1,626,439 
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock ($0.01 par value)2
— — 
Common stock ($0.01 par value)3
472 470 
Treasury shares, at cost - 16,790 and 15,797(238,758)(227,115)
Additional paid-in capital112,509 108,202 
Accumulated other comprehensive income (loss), net of taxes(103,782)(15,568)
Retained earnings517,455 563,713 
     Total stockholders' equity287,896 429,702 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,890,154 $2,056,141 
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 - 47,179 and 47,018 shares; Outstanding - 30,389 and 31,221 shares.

6
a01uvelogoa03.jpg
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
(in thousands)
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
REVENUES
Net premiums earned$291,870 $271,332 $1,128,626 $1,035,463 
Net investment income10,448 3,894 25,785 12,535 
Net realized gains (losses) on sale of investments723 535 348 5,892 
Net change in unrealized gains (losses) of equity securities3,285 (1,008)(13,145)(4,032)
Commission revenue18,011 11,245 53,168 41,649 
Policy fees4,191 4,892 20,182 22,713 
Other revenue1,832 1,769 7,694 7,631 
  Total revenues330,360 292,659 1,222,658 1,121,851 
EXPENSES
Losses and loss adjustment expenses222,545 280,440 938,399 779,205 
Policy acquisition costs50,827 55,880 214,259 226,167 
Other operating expenses22,509 20,246 90,638 87,428 
     Total operating costs and expenses295,881 356,566 1,243,296 1,092,800 
Interest and amortization of debt issuance costs1,640 554 6,609 638 
Income (loss) before income tax expense (benefit)32,839 (64,461)(27,247)28,413 
     Income tax expense (benefit)7,728 (16,336)(4,990)8,006 
NET INCOME (LOSS)$25,111 $(48,125)$(22,257)$20,407 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SHARE AND PER SHARE INFORMATION
(in thousands, except per share data)
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
Weighted average common shares outstanding - basic30,434 31,177 30,751 31,218 
Weighted average common shares outstanding - diluted30,535 31,177 30,751 31,307 
Shares outstanding, end of period30,389 31,221 30,389 31,221 
Basic earnings (loss) per common share$0.83 $(1.54)$(0.72)$0.65 
Diluted earnings (loss) per common share$0.82 $(1.54)$(0.72)$0.65 
Cash dividend declared per common share$0.29 $0.29 $0.77 $0.77 
Book value per share, end of period$9.47 $13.76 $9.47 $13.76 
Annualized return on average common equity (ROCE)36.6 %(41.7)%(6.2)%4.6 %

7
a01uvelogoa03.jpg
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
(in thousands, except for Policies In-Force data)
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
Premiums
     Direct premiums written - Florida$337,950 $326,138 $1,538,143 $1,388,318 
     Direct premiums written - Other States78,151 73,189 307,643 282,934 
Direct premiums written - Total$416,101 $399,327 $1,845,786 $1,671,252 
Direct premiums earned$463,843 $417,817 $1,759,701 $1,596,618 
Net premiums earned$291,870 $271,332 $1,128,626 $1,035,463 
Underwriting Ratios - Net
Loss and loss adjustment expense ratio76.3 %103.3 %83.2 %75.3 %
General and administrative expense ratio25.1 %28.1 %27.0 %30.2 %
  Policy acquisition cost ratio17.4 %20.6 %19.0 %21.8 %
  Other operating expense ratio7.7 %7.5 %8.0 %8.4 %
Combined ratio101.4 %131.4 %110.2 %105.5 %
Other Items
   (Favorable)/Unfavorable prior year reserve
   development		$17,900 $36,467 $24,980 $54,450 
Net loss & LAE ratio impact6.1  pts13.4  pts2.2  pts5.3  pts
As of
December 31,
20222021
Policies in force
Florida615,796 695,533 
Other States233,060 248,060 
Total848,856 943,593 
Premiums in force
Florida$1,547,383 $1,395,476 
Other States308,956 284,345 
Total1,856,339 1,679,821 
Total Insured Value
Florida$201,237,145 $203,062,948 
Other States121,005,995 117,835,486 
Total322,243,140 320,898,434 






8
a01uvelogoa03.jpg
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 EndedTwelve Months Ended
December 31,December 31,
2022202120222021
GAAP revenue$330,360 $292,659 $1,222,658 $1,121,851 
less: Net realized gains (losses) on investments723 535 348 5,892 
less: Net change in unrealized gains (losses) of equity securities3,285 (1,008)(13,145)(4,032)
Core revenue$326,352 $293,132 $1,235,455 $1,119,991 

GAAP operating income (loss) to adjusted operating income (loss)
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
GAAP income (loss) before income tax expense (benefit)$32,839 $(64,461)$(27,247)$28,413 
add: Interest and amortization of debt issuance costs1,640 554 6,609 638 
GAAP operating income (loss)34,479 (63,907)(20,638)29,051 
less: Net realized gains (losses) on investments723 535 348 5,892 
less: Net change in unrealized gains (losses) of equity securities3,285 (1,008)(13,145)(4,032)
Adjusted operating income (loss)$30,471 $(63,434)$(7,841)$27,191 

GAAP operating income (loss) margin to adjusted operating income (loss) margin
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
GAAP operating income (loss) (a)$34,479 $(63,907)$(20,638)$29,051 
GAAP revenue (b)330,360 292,659 1,222,658 1,121,851 
GAAP operating income (loss) margin (a÷b)10.4 %(21.8)%(1.7)%2.6 %
Adjusted operating income (loss) (c)30,471 (63,434)(7,841)27,191 
Core revenue (d)326,352 293,132 1,235,455 1,119,991 
Adjusted operating income (loss) margin (c÷d)9.3 %(21.6)%(0.6)%2.4 %

9
a01uvelogoa03.jpg
GAAP net income (loss) (NI) to adjusted NI (loss) available to common stockholders
Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
GAAP NI (loss)$25,111 $(48,125)$(22,257)$20,407 
less: Preferred dividends2 2 10 10 
GAAP NI (loss) available to common stockholders (e)25,109 (48,127)(22,267)20,397 
less: Net realized gains (losses) on investments723 535 348 5,892 
less: Net change in unrealized gains (losses) of equity securities3,285 (1,008)(13,145)(4,032)
add: Income tax effect on above adjustments986 (107)(3,148)422 
Adjusted NI (loss) available to common stockholders (f)$22,087 $(47,761)$(12,618)$18,959 
Weighted average diluted common shares outstanding (g)30,535 31,177 30,751 31,307 
Diluted earnings (loss) per common share (e÷g)$0.82 $(1.54)$(0.72)$0.65 
Diluted adjusted earnings (loss) per common share (f÷g)$0.72 $(1.53)$(0.41)$0.61 

GAAP stockholders’ equity to adjusted common stockholders’ equity
As of
December 31,December 31,December 31,
202220212020
GAAP stockholders’ equity$287,896 $429,702 $449,262 
less: Preferred equity100100100
Common stockholders’ equity (h)287,796 429,602 449,162 
less: Accumulated other comprehensive (loss), net of taxes(103,782)(15,568)3,343 
Adjusted common stockholders’ equity (i)$391,578 $445,170 $445,819 
Common shares outstanding (j)30,389 31,221 31,137 
Book value per common share (h÷j)$9.47 $13.76 $14.43 
Adjusted book value per common share (i÷j)$12.89 $14.26 $14.32 

GAAP return on common equity (ROCE) to adjusted ROCE
Three Months EndedTwelve Months Ended
December 31,December 31,
20222021202220212020
Actual or Annualized NI (loss) attributable to common stockholders (k)$100,436 $(192,508)$(22,267)$20,397 $19,095 
Average common stockholders’ equity (l)274,167 461,889 358,699 439,382 471,482 
ROCE (k÷l)36.6 %(41.7)%(6.2)%4.6 %4.0 %
Annualized adjusted NI (loss) attributable to common stockholders (m)$88,348 $(191,044)$(12,618)$18,959 $(29,008)
Adjusted average common stockholders’ equity4 (n)
382,379 473,555 423,199 444,776 435,577 
Adjusted ROCE (m÷n)23.1 %(40.3)%(3.0)%4.3 %(6.7)%
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.

10