Universal Insurance (UVE) Tops Q1 EPS by 15c, Revenues Beat; Offers FY21 EPS Guidance Above Consensus

Universal Insurance (NYSE: UVE) reported Q1 EPS of $0.84, $0.15 better than the analyst estimate of $0.69. Revenue for the quarter came in at $262.8 million versus the consensus estimate of $249.14 million.

• 1Q21 total revenue up 11.7% to $262.8 million
• 1Q21 direct premiums written up 9.2%
• 1Q21 diluted GAAP and non-GAAP1 adjusted earnings per share (“EPS”) of $0.84
• 1Q21 combined ratio of 93.1%
• 1Q21 margin expansion in excess of 200 basis points
• 1Q21 annualized return on average equity of 23.2%

“We are off to a strong start to 2021 with solid first quarter results, including close to 12% top line growth, margin expansion in excess of 200 basis points, and a total annualized return on average equity of 23.2%,” said Stephen J. Donaghy, Chief Executive Officer. “We continue to make progress on our reinsurance program renewal, and were oversubscribed on our first CAT bond in March at rates below the low end of our initial range. We have now completed procurement of our All States first event reinsurance program for UPCIC for the 2021 wind season and will have additional details in May as we finalize the remainder. In addition, we were encouraged earlier this month when the Florida Senate passed Bill 76, which would enable Floridians to have reliable access to property insurance. For a number of years Florida has been a significant outlier compared to the rest of the country when it comes to litigated property claims, which has put significant pressure on the Florida property insurance marketplace. We have not been immune to these market dynamics and during the first quarter we actively reduced our policies in force sequentially and reduced new and renewal policy counts in aggregate this quarter when compared to the first quarter of 2020. That being said, we continue to monitor closely the companion bill in the House (House Bill 305), which has differences from Senate Bill 76.”

GUIDANCE:

Universal Insurance sees FY2021 EPS of $2.75-$3.00, versus the consensus of $2.20.

The Company is maintaining its guidance for 2021 (assuming no further extraordinary weather events and no realized or unrealized gains in 2021):

• GAAP and Non-GAAP Adjusted EPS in a range of $2.75 - $3.00
• Annualized return on average equity in a range of 17.0% - 19.0%

For earnings history and earnings-related data on Universal Insurance (UVE) click here.

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