United Insurance Holdings (UIHC) Tops Q1 EPS by 12c, Revenues Miss

United Insurance Holdings (NASDAQ: UIHC) reported Q1 EPS of ($0.45), $0.12 better than the analyst estimate of ($0.57). Revenue for the quarter came in at $161.79 million versus the consensus estimate of $173.09 million.

"The first quarter yielded an Underlying Combined Ratio of 90.4%, a small improvement on a year-over-year basis but not yet where we want to be," said Dan Peed, CEO of UPC Insurance. "Premium rate increases continued very strong, with an average 10.4% renewal business and nearly 19% new business achieved in personal lines. Our first quarter catastrophes, including winter storm Uri, caused losses near $24 million net of reinsurance, somewhat better than expectations. Our Commercial Residential business fared well and we’re on track with a second half roll out of our E&S insurance company and Direct to Consumer Technology platforms.

However, due to unusual loss development patterns in February and March, at the end of the first quarter we did an analysis of our exposure to the accelerating litigation trend in Florida. This resulted in a $30 million strengthening of both catastrophe and non-catastrophe Prior Year Reserves for Florida personal lines exposures, driving a core after tax loss for the quarter of approximately $19.4 million. We are very encouraged with last Friday’s Florida legislative changes and believe they will mitigate the accelerating litigation trends, although it is too early to quantify the improvement.

The property catastrophe market remains firm, especially the Florida personal lines market which is expected to remain very firm for the foreseeable future. As stated previously, we expect 2021 to be a transition year, but we remain on track to continue expanding our underlying margin while also significantly cutting our net catastrophe retentions."

For earnings history and earnings-related data on United Insurance Holdings (UIHC) click here.

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