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Universal Reports Second Quarter 2022 Results

  • Diluted GAAP earnings per share (“EPS”) of $0.24, adjusted EPS1 of $0.47
  • Annualized return on average common equity (“ROCE”) of 7.7%, adjusted1 ROCE of 12.8%
  • Direct premiums written of $532.5 million, up 12.4% from the prior year quarter
  • Repurchased 282,552 shares for $3.5 million. Total capital returned to shareholders of $8.5 million, including $0.16 per share regular quarterly dividend.

Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported 2022 second quarter diluted GAAP EPS of $0.24 and adjusted EPS of $0.47.

1 Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

“We reported a 12.8% annualized adjusted return on common equity in the quarter, an impressive feat in the current environment,” said Stephen J. Donaghy, Chief Executive Officer. “Direct premiums written growth of 12.4% accelerated from 8.5% in the first quarter of this year, and significantly outpaced an 8.5% policies in force decline. In addition to rate increases, we continue to optimize and rebalance our portfolio, increasing exposure to more profitable regions, while reducing exposure to less profitable geographies. Our capital position remains strong at both of our insurance subsidiaries and on an enterprise-wide basis, and I’m particularly proud of the robust reinsurance program that we completed prior to the June 1 renewal date. Despite the challenging reinsurance market, our program includes full protection for both hurricanes and tropical storms, has no gaps in coverage and no co-participation and provides coverage across multiple events. We are well prepared for hurricane season and expect the actions we’ve taken to bear fruit in future periods.”

Quarterly Financial Results

Summary Financial Results

 

($thousands, except per share data)

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

Change

 

 

 

2022

 

 

 

2021

 

 

Change

GAAP comparison

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

292,006

 

 

$

279,181

 

 

4.6

%

 

 

$

579,488

 

 

$

541,938

 

 

6.9

%

Income before income taxes

$

10,680

 

 

$

30,059

 

 

(64.5

) %

 

 

$

33,151

 

 

$

66,410

 

 

(50.1

) %

Income before income

taxes margin

3.7

 

%

10.8

 

%

(7.1

) pts

5.7

 

%

12.3

 

%

(6.6

) pts

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

7,370

 

 

$

21,941

 

 

(66.4

) %

 

 

$

24,907

 

 

$

48,349

 

 

(48.5

) %

Diluted EPS

$

0.24

 

 

$

0.70

 

 

(65.7

) %

 

 

$

0.80

 

 

$

1.54

 

 

(48.1

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized ROCE

7.7

%

18.8

%

(11.1

) pts

12.5

%

20.8

%

(8.3

) pts

Book value per share, end of period

$

11.93

 

 

$

15.37

 

 

(22.4

) %

 

 

 

11.93

 

 

 

15.37

 

 

(22.4

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP comparison2

 

 

 

 

 

 

 

 

 

 

 

 

Core revenue

$

301,615

 

 

$

277,456

 

 

8.7

%

 

 

$

592,435

 

 

$

540,165

 

 

9.7

%

Adjusted operating income

$

22,020

 

 

$

28,369

 

 

(22.4

) %

 

 

$

49,437

 

 

$

64,692

 

 

(23.6

) %

Adjusted operating income margin

7.3

 

%

10.2

 

%

(2.9

 

) pts

8.3

 

%

12.0

 

%

(3.7

) pts

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

14,648

 

 

$

20,627

 

 

(29.0

) %

 

 

$

34,711

 

 

$

46,995

 

 

(26.1

) %

Adjusted EPS

$

0.47

 

 

$

0.65

 

 

(27.7

) %

 

 

$

1.12

 

 

$

1.50

 

 

(25.3

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized adjusted ROCE

12.8

 

%

17.3

 

%

(4.5

 

) pts

15.3

 

%

20.2

 

%

(4.9

) pts

Adjusted book value per share, end of period

$

14.80

 

 

$

15.55

 

 

(4.8

) %

 

 

$

14.80

 

 

$

15.55

 

 

(4.8

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting Summary

 

 

 

 

 

 

 

 

 

 

 

 

Premiums:

 

 

 

 

 

 

 

 

 

 

 

 

Premiums in force

$

1,766,542

 

 

$

1,618,576

 

 

9.1

%

 

 

$

1,766,542

 

 

$

1,618,576

 

 

9.1

%

Policies in force

 

894,618

 

 

 

977,251

 

 

(8.5

) %

 

 

 

894,618

 

 

 

977,251

 

 

(8.5

) %

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums written

$

532,527

 

 

$

473,627

 

 

12.4

%

 

 

$

929,008

 

 

$

838,941

 

 

10.7

%

Direct premiums earned

$

428,805

 

 

$

392,574

 

 

9.2

%

 

 

$

843,408

 

 

$

768,180

 

 

9.8

%

Ceded premiums earned

$

(151,744

)

 

$

(136,402

)

 

11.2

%

 

 

$

(297,283

)

 

$

(268,703

)

 

10.6

%

Ceded premium

ratio

35.4

 

%

34.7

 

%

0.7

 

pts

35.2

 

%

35.0

 

%

0.2

pts

Net premiums earned

$

277,061

 

 

$

256,172

 

 

8.2

%

 

 

$

546,125

 

 

$

499,477

 

 

9.3

%

 

Net ratios:

Loss ratio

72.3

 

%

65.3

 

%

7.0

 

pts

70.6

 

%

62.3

 

%

8.3

pts

Expense ratio

28.6

 

%

32.0

 

%

(3.4

 

) pts

28.8

 

%

32.9

 

%

(4.1

) pts

Combined ratio

100.9

 

%

97.3

 

%

3.6

 

pts

99.4

 

%

95.2

 

%

4.2

pts

2 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted net income, adjusted EPS and core revenue exclude net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income excludes net realized and unrealized gains and losses on investments 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.

Net Income and Adjusted Net Income

Net income was $7.4 million, down from $21.9 million in the prior year quarter, and adjusted net income was $14.6 million, down from $20.6 million in the prior year quarter. The decline in adjusted net income primarily stems from a higher net loss ratio, partly offset by a lower net expense ratio and higher commission revenue and net investment income.

Revenues

Overall revenue was $292.0 million, up 4.6% from the prior year quarter and core revenue was $301.6 million, up 8.7% 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 $532.5 million, up 12.4% from the prior year quarter. The increase stems from 13.2% growth in Florida and 8.3% growth in other states. Overall growth primarily reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $428.8 million, up 9.2% from the prior year quarter. The increase stems from direct premiums written growth over the past twelve months.

The ceded premium ratio was 35.4%, up from 34.7% in the prior year quarter. The increase primarily reflects higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values.

Net premiums earned were $277.1 million, up 8.2% 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 $5.2 million, up from $2.9 million in the prior year quarter. The increase primarily stems from higher fixed income reinvestment yields and higher average invested assets.

Commissions, policy fees and other revenue were $19.3 million, up 4.9% 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 policy fee and other revenue declines associated with lower policies in force.

Margins

The income before income taxes margin was 3.7%, down 7.1 points from the prior year quarter and the adjusted operating margin was 7.3%, down from 10.2% in the prior year. The lower adjusted operating margin primarily reflects a higher net combined ratio, partly offset by higher net investment income and commission revenues.

The net loss ratio was 72.3%, up 7.0 points compared to the prior year quarter. The increase primarily reflects a higher initial accident year attritional loss pick associated with the challenging Florida claims environment and inflationary and weather trends, partly offset by lower adverse prior year reserve development as a percentage of net premiums earned.

The net expense ratio was 28.6%, down 3.4 points compared to the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners, economies of scale and disciplined expense management.

The net combined ratio was 100.9%, up 3.6 points compared to the prior year quarter. The increase reflects a higher net loss ratio, partly offset by a lower net expense ratio, as described above.

Capital Deployment

During the second quarter, the Company repurchased approximately 283 thousand shares at an aggregate cost of $3.5 million. The Company’s current share repurchase authorization program has $10.4 million remaining as of June 30, 2022 and runs through November 3, 2022.

On July 19, 2022, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on August 9, 2022, to shareholders of record as of the close of business on August 2, 2022.

Guidance

The Company is maintaining its guidance for 2022 (assuming no further extraordinary weather events):

  • Adjusted EPS in a range of $1.80 - $2.20
  • Annualized adjusted ROCE in a range of 12.5% - 15.0%

Conference Call and Webcast

  • Thursday, July 28, 2022 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/BIdd1435dd6e8c4f96b2f705a2f37d27d0. 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 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 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, 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 2021 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.

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share data)

 

 

 

June 30,

 

December 31,

 

 

2022

 

2021

ASSETS:

 

 

 

 

Invested Assets

 

 

 

 

Fixed maturities, at fair value

 

$

1,021,006

 

 

$

1,040,455

 

Equity securities, at fair value

 

 

79,844

 

 

 

47,334

 

Investment real estate, net

 

 

5,798

 

 

 

5,891

 

Total invested assets

 

 

1,106,648

 

 

 

1,093,680

 

Cash and cash equivalents

 

 

316,952

 

 

 

250,508

 

Restricted cash and cash equivalents

 

 

20,125

 

 

 

2,635

 

Prepaid reinsurance premiums

 

 

590,093

 

 

 

240,993

 

Reinsurance recoverable

 

 

33,344

 

 

 

185,589

 

Premiums receivable, net

 

 

79,309

 

 

 

64,923

 

Property and equipment, net

 

 

54,027

 

 

 

53,682

 

Deferred policy acquisition costs

 

 

110,983

 

 

 

108,822

 

Goodwill

 

 

2,319

 

 

 

2,319

 

Other assets

 

 

68,968

 

 

 

52,990

 

TOTAL ASSETS

 

$

2,382,768

 

 

$

2,056,141

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

186,349

 

 

$

346,216

 

Unearned premiums

 

 

943,369

 

 

 

857,769

 

Advance premium

 

 

86,271

 

 

 

53,694

 

Reinsurance payable, net

 

 

637,846

 

 

 

188,662

 

Long-term debt, net

 

 

103,161

 

 

 

103,676

 

Other liabilities

 

 

59,221

 

 

 

76,422

 

Total liabilities

 

 

2,016,217

 

 

 

1,626,439

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Cumulative convertible preferred stock ($0.01 par value)3

 

 

 

 

 

 

Common stock ($0.01 par value)4

 

 

471

 

 

 

470

 

Treasury shares, at cost - 16,400 and 15,797

 

 

(234,496

)

 

 

(227,115

)

Additional paid-in capital

 

 

110,089

 

 

 

108,202

 

Accumulated other comprehensive income (loss), net of taxes

 

 

(88,134

)

 

 

(15,568

)

Retained earnings

 

 

578,621

 

 

 

563,713

 

Total stockholders' equity

 

 

366,551

 

 

 

429,702

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

2,382,768

 

 

$

2,056,141

 

 

 

 

 

 

Notes:

 

 

 

 

3 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.

4 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 47,116 and 47,018 shares; Outstanding 30,716 and 31,221 shares.

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands)

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

2022

 

 

2021

REVENUES

 

 

 

 

Net premiums earned

$

277,061

 

$

256,172

$

546,125

 

$

499,477

Net investment income

 

5,221

 

 

2,858

 

9,263

 

 

5,844

Net realized gains (losses) on investments

 

(725

)

 

496

 

(667

)

 

1,038

Net change in unrealized gains (losses) of equity securities

 

(8,884

)

 

1,229

 

(12,280

)

 

735

Commission revenue

 

11,404

 

 

9,860

 

22,565

 

 

18,986

Policy fees

 

5,940

 

 

6,575

 

10,719

 

 

11,962

Other revenue

 

1,989

 

 

1,991

 

3,763

 

 

3,896

Total revenues

 

292,006

 

 

279,181

 

579,488

 

 

541,938

 

 

 

 

 

EXPENSES

 

 

 

 

Losses and loss adjustment expenses

 

200,304

 

 

167,221

 

385,410

 

 

311,184

Policy acquisition costs

 

54,100

 

 

56,766

 

108,823

 

 

113,224

Other operating expenses

 

25,191

 

 

25,100

 

48,765

 

 

51,065

Total operating costs and expenses

 

279,595

 

 

249,087

 

542,998

 

 

475,473

Interest and amortization of debt issuance costs

 

1,731

 

 

35

 

3,339

 

 

55

Income before income taxes

 

10,680

 

 

30,059

 

33,151

 

 

66,410

Income tax expense

 

3,310

 

 

8,118

 

8,244

 

 

18,061

NET INCOME

$

7,370

 

$

21,941

$

24,907

 

$

48,349

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SHARE AND PER SHARE INFORMATION

(in thousands, except per share data)

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Weighted average common shares outstanding - basic

 

30,829

 

 

31,240

 

 

30,987

 

 

31,224

 

Weighted average common shares outstanding - diluted

 

30,883

 

 

31,310

 

 

31,060

 

 

31,292

 

Shares outstanding, end of period

 

30,716

 

 

31,269

 

 

30,716

 

 

31,269

 

Basic earnings per common share

$

0.24

 

$

0.70

 

$

0.80

 

$

1.55

 

Diluted earnings per common share

$

0.24

 

$

0.70

 

$

0.80

 

$

1.54

 

Cash dividend declared per common share

$

0.16

 

$

0.16

 

$

0.32

 

$

0.32

 

Book value per share, end of period

$

11.93

 

$

15.37

 

$

11.93

 

$

15.37

 

Annualized return on average common equity (ROCE)

 

7.7

%

 

18.8

%

 

12.5

%

 

20.8

%

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION

(in thousands, except for Policies In Force data)

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Premiums

 

 

 

 

Direct premiums written - Florida

$

453,168

 

$

400,370

 

$

787,605

 

$

707,381

 

Direct premiums written - Other States

 

79,359

 

 

73,257

 

 

141,403

 

 

131,560

 

Direct premiums written - Total

$

532,527

 

$

473,627

 

$

929,008

 

$

838,941

 

Direct premiums earned

$

428,805

 

$

392,574

 

$

843,408

 

$

768,180

 

Net premiums earned

$

277,061

 

$

256,172

 

$

546,125

 

$

499,477

 

 

 

 

 

 

Underwriting Ratios - Net

 

 

 

 

Loss and loss adjustment expense ratio

 

72.3

%

 

65.3

%

 

70.6

%

 

62.3

%

Policy acquisition cost ratio

 

19.5

%

 

22.2

%

 

19.9

%

 

22.7

%

Other operating expense ratio

 

9.1

%

 

9.8

%

 

8.9

%

 

10.2

%

Expense ratio

 

28.6

%

 

32.0

%

 

28.8

%

 

32.9

%

Combined ratio

 

100.9

%

 

97.3

%

 

99.4

%

 

95.2

%

 

 

 

 

 

Other Items

 

 

 

 

(Favorable)/Unfavorable prior year's reserve development

$

3,710

 

$

7,731

 

$

4,365

 

$

6,494

 

Points on the loss and loss adjustment expense ratio

1.3 pts

3.0 pts

0.8 pts

1.3 pts

 

 

As of

 

 

June 30,

 

 

 

2022

 

 

2021

Policies in force

 

 

 

 

Florida

 

 

654,276

 

 

723,390

Other States

 

 

240,342

 

 

253,861

Total

 

 

894,618

 

 

977,251

 

 

 

 

 

Premiums in force

 

 

 

 

Florida

 

$

1,473,193

 

$

1,345,532

Other States

 

 

293,349

 

 

273,044

Total

 

$

1,766,542

 

$

1,618,576

 

 

 

 

 

Total Insured Value

 

 

 

 

Florida

 

$

202,691,987

 

$

200,600,028

Other States

 

 

118,766,758

 

 

112,637,726

Total

 

$

321,458,745

 

$

313,237,754

 

Three Months Ended June 30, 2022

 

Direct

Loss

Ratio

Ceded

Loss

Ratio

Net

Loss

Ratio

Premiums earned

$

428,805

 

$

151,744

 

$

277,061

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

Core losses

$

196,630

45.9

%

$

36

%

$

196,594

71.0

%

Weather events5

 

%

 

%

 

%

Prior year’s reserve development

 

63,600

14.8

%

 

59,890

39.5

%

 

3,710

1.3

%

Total losses and loss adjustment expenses

$

260,230

60.7

%

$

59,926

39.5

%

$

200,304

72.3

%

 

 

 

 

 

 

 

5 Includes only current year weather events beyond those expected.

 

Three Months Ended June 30, 2021

 

Direct

Loss

Ratio

Ceded

Loss

Ratio

Net

Loss

Ratio

Premiums earned

$

392,574

 

 

136,402

 

 

$

256,172

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

Core losses

$

159,412

40.6

%

$

(78

)

(0.1

)%

$

159,490

62.3

%

Weather events5

 

%

 

 

%

 

%

Prior year’s reserve development

 

116,890

29.8

%

 

109,159

 

80.0

%

 

7,731

3.0

%

Total losses and loss adjustment expenses

$

276,302

70.4

%

$

109,081

 

80.0

%

$

167,221

65.3

%

 

 

 

 

 

 

 

5 Includes only current year weather events beyond those expected.

 

Six Months Ended June 30, 2022

 

Direct

Loss

Ratio

Ceded

Loss

Ratio

Net

Loss

Ratio

Premiums earned

$

843,408

 

$

297,283

 

$

546,125

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

Core losses

$

376,580

44.7

%

$

80

%

$

376,500

69.0

%

Weather events5

 

4,545

0.5

%

 

%

 

4,545

0.8

%

Prior year’s reserve development

 

74,260

8.8

%

 

69,895

23.5

%

 

4,365

0.8

%

Total losses and loss adjustment expenses

$

455,385

54.0

%

$

69,975

23.5

%

$

385,410

70.6

%

 

 

 

 

 

 

 

5 Includes only current year weather events beyond those expected.

 

Six Months Ended June 30, 2021

 

Direct

Loss

Ratio

Ceded

Loss

Ratio

Net

Loss

Ratio

Premiums earned

$

768,180

 

$

268,703

 

 

$

499,477

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

Core losses

$

304,640

39.7

%

$

(50

)

%

$

304,690

61.0

%

Weather events5

 

%

 

 

%

 

%

Prior year’s reserve development

 

208,960

27.2

%

 

202,466

 

75.3

%

 

6,494

1.3

%

Total losses and loss adjustment expenses

$

513,600

66.9

%

$

202,416

 

75.3

%

$

311,184

62.3

%

 

 

 

 

 

 

 

5 Includes only current year weather events beyond those expected.

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 Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

2022

 

 

2021

GAAP revenue

$

292,006

 

$

279,181

$

579,488

 

$

541,938

less: Net realized gains (losses) on investments

 

(725

)

 

496

 

(667

)

 

1,038

less: Net change in unrealized gains (losses) of equity securities

 

(8,884

)

 

1,229

 

(12,280

)

 

735

Core revenue

$

301,615

 

$

277,456

$

592,435

 

$

540,165

GAAP income before income taxes to adjusted operating income

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

2022

 

 

2021

GAAP income before income taxes

$

10,680

 

$

30,059

$

33,151

 

$

66,410

add: Interest and amortization of debt issuance costs

 

1,731

 

 

35

 

3,339

 

 

55

GAAP operating income

 

12,411

 

 

30,094

 

36,490

 

 

66,465

less: Net realized gains (losses) on investments

 

(725

)

 

496

 

(667

)

 

1,038

less: Net change in unrealized gains (losses) of equity securities

 

(8,884

)

 

1,229

 

(12,280

)

 

735

Adjusted operating income

$

22,020

 

$

28,369

$

49,437

 

$

64,692

GAAP operating income margin to adjusted operating income margin

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP operating income (a)

$

12,411

 

$

30,094

 

$

36,490

 

$

66,465

 

GAAP revenue (b)

 

292,006

 

 

279,181

 

 

579,488

 

 

541,938

 

GAAP operating income margin (a÷b)

 

4.3

%

 

10.8

%

 

6.3

%

 

12.3

%

Adjusted operating income (c)

 

22,020

 

 

28,369

 

 

49,437

 

 

64,692

 

Core revenue (d)

 

301,615

 

 

277,456

 

 

592,435

 

 

540,165

 

Adjusted operating income margin (c÷d)

 

7.3

%

 

10.2

%

 

8.3

%

 

12.0

%

GAAP net income (NI) to adjusted NI attributable to common stockholders

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

 

2022

 

 

2021

 

2022

 

 

2021

GAAP NI

$

7,370

 

$

21,941

$

24,907

 

$

48,349

less: Preferred dividends

 

2

 

 

2

 

5

 

 

5

GAAP NI attributable to common stockholders (e)

 

7,368

 

 

21,939

 

24,902

 

 

48,344

less: Net realized gains (losses) on investments

 

(725

)

 

496

 

(667

)

 

1,038

less: Net change in unrealized gains (losses) of equity securities

 

(8,884

)

 

1,229

 

(12,280

)

 

735

add: Income tax effect on above adjustments

 

(2,329

)

 

413

 

(3,138

)

 

424

Adjusted NI attributable to common stockholders (f)

$

14,648

 

$

20,627

$

34,711

 

$

46,995

 

 

 

 

 

Weighted average diluted common shares outstanding (g)

 

30,883

 

 

31,310

 

31,060

 

 

31,292

Diluted earnings per common share (e÷g)

$

0.24

 

$

0.70

$

0.80

 

$

1.54

Diluted adjusted earnings per common share (f÷g)

$

0.47

 

$

0.65

$

1.12

 

$

1.50

GAAP stockholders’ equity to adjusted common stockholders’ equity

 

As of

 

June 30,

 

June 30,

 

 

December 31,

 

 

2022

 

 

 

2021

 

 

 

 

2021

 

GAAP stockholders’ equity

$

366,551

 

 

$

480,842

 

 

 

$

429,702

 

less: Preferred equity

 

100

 

 

 

100

 

 

 

 

100

 

Common stockholders’ equity (h)

 

366,451

 

 

 

480,742

 

 

 

 

429,602

 

less: Accumulated other comprehensive (loss), net of taxes

 

(88,134

)

 

 

(5,571

)

 

 

 

(15,568

)

Adjusted common stockholders’ equity (i)

$

454,585

 

 

$

486,313

 

 

 

$

445,170

 

 

 

 

 

 

 

 

Shares outstanding (j)

 

30,716

 

 

 

31,269

 

 

 

 

31,221

 

Book value per common share (h÷j)

$

11.93

 

 

$

15.37

 

 

 

$

13.76

 

Adjusted book value per common share (i÷j)

$

14.80

 

 

$

15.55

 

 

 

$

14.26

 

GAAP return on common equity (ROCE) to adjusted ROCE

 

 

Three Months Ended

Six Months Ended

Year Ended

 

June 30,

June 30,

December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2021

 

Annualized NI attributable to common stockholders (k)

$

29,472

 

$

87,756

 

$

49,804

 

$

96,688

 

$

20,397

 

Average common stockholders’ equity (l)

 

381,346

 

 

467,654

 

 

398,027

 

 

464,952

 

 

439,382

 

ROCE (k÷l)

 

7.7

%

 

18.8

%

 

12.5

%

 

20.8

%

 

4.6

%

Annualized adjusted NI attributable to common stockholders (m)

$

58,592

 

$

82,508

 

$

69,422

 

$

93,990

 

$

18,959

 

 

 

 

 

 

 

Adjusted average common stockholders’ equity6 (n)

 

458,292

 

 

476,567

 

 

454,782

 

 

465,392

 

 

444,775

 

Adjusted ROCE (m÷n)

 

12.8

%

 

17.3

%

 

15.3

%

 

20.2

%

 

4.3

%

 

 

 

 

 

 

6 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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