Universal Insurance Holdings Reports Fourth Quarter 2020 Results

February 25, 2021 4:15 PM EST

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  • 4Q20 total revenue up 14.1% to $273.1 million; FY20 up 14.2% to $1.1 billion
  • More than $1.5 billion of premium now in force
  • 4Q20 diluted GAAP earnings per share (EPS) of $(0.57), non-GAAP adjusted EPS1 of $(0.84)
  • FY20 diluted GAAP EPS of $0.60, non-GAAP adjusted EPS1 of $(0.90)
  • Full year EPS impact predominantly driven by heightened 2020 weather events
  • Full year Florida primary rate increases approved of close to 20% for UPCIC (Includes 7.0% in 4Q20)
  • Initiating FY21 guidance: GAAP and non-GAAP adjusted EPS1 of $2.75 - $3.00 (assuming no extraordinary weather events in 2021); ROAE 17% - 19%.

 

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Universal Insurance Holdings (NYSE: UVE) (the “Company”) reported 2020 fourth quarter diluted EPS of $(0.57) on a GAAP basis and $(0.84) non-GAAP adjusted EPS1. Quarterly direct premiums written were up 21.9% from the year-ago quarter to $368.8 million.

1 Excludes net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions (“non-GAAP adjusted EPS”). Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

“We ended the year with a record of $1.5 billion of premium now in force. Unfortunately, we also saw a record-setting frequency of weather events during the 2020 wind season, which impacted our fourth quarter and full year results,” said Stephen J. Donaghy, Chief Executive Officer. “In 2020 we continued our focus on underwriting, increasing our primary rates in Florida close to 20% for the full year, including 7% in the fourth quarter for reinsurance costs, as well as primary rate increases in some of our other states. We have continued to maintain a resilient balance sheet that has self-funded our risk bearing entities capital requirements, in addition to enhancing our reserves. We continue to be backed by our great reinsurance program and partners with close to 75% of our first event reinsurance capacity for June 1st, 2021 secured already. We continued our geographic expansion efforts in 2020, and implemented our catastrophe rapid response teams during the COVID-19 pandemic, which accelerated our use of digital technology for adjusting claims. We also continue to develop adaptive adjusting approaches to address claims loss cost trends. We look forward to 2021 as we continue to focus on resiliency and taking the necessary steps to provide reliability to consumers and reduce uncertainty for shareholders.”

Summary Financial Results

($thousands, except per share data)

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

(GAAP comparison)

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

273,126

 

 

$

239,402

 

 

14.1

%

 

 

$

1,072,770

 

 

$

939,351

 

 

14.2

%

Income (loss) before income taxes

(26,999)

 

 

(69,053)

 

 

61.0

%

 

 

24,231

 

 

63,517

 

 

(61.9)

%

Income (loss) before income taxes margin

(9.9)

%

 

(28.8)

%

 

18.9 pts

 

 

2.3

%

 

6.8

%

 

(4.5) pts

Diluted EPS

(0.57)

 

 

(1.55)

 

 

63.2

%

 

 

0.60

 

 

1.36

 

 

(55.9)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average equity (ROE)

(15.4)

%

 

(38.4)

%

 

23.0 pts

 

 

4.1

%

 

9.2

%

 

(5.1) pts

Book value per share, end of period

14.43

 

 

15.13

 

 

(4.6)

%

 

 

14.43

 

 

15.13

 

 

(4.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(Non-GAAP comparison)2

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income

(38,227)

 

 

(69,687)

 

 

45.1

%

 

 

(39,044)

 

 

55,833

 

 

NM

Adjusted EPS

(0.84)

 

 

(1.57)

 

 

46.5

%

 

 

(0.90)

 

 

1.18

 

 

NM

 

2 Reconciliation of GAAP to non-GAAP financial measures are provided in the attached tables. Adjusted operating income excludes net realized and unrealized gains and losses on investments, interest expense, and extraordinary reinstatement premiums and associated commissions. Non-GAAP adjusted EPS excludes net realized and unrealized gains and losses on investments, as well as extraordinary reinstatement premiums and associated commissions.

NM = Not Meaningful

Total revenue grew double digits for both the quarter and the year, driven primarily by growth in net premiums earned (organic new business growth and primary rate increases), partially offset by increased reinsurance costs. Revenue growth was also attributable to realized gains on investments, and increases in service revenue, partially offset by decreases in net investment income. GAAP diluted EPS and non-GAAP adjusted EPS results for the quarter and the year benefited from the aforementioned items, but were impacted predominantly by weather events and related social dynamics and increased reinsurance costs.

Underwriting

($thousands, except policies in force)

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Policies in force (as of end of period)

984,830

 

 

888,361

 

 

10.9

%

 

 

984,830

 

 

888,361

 

 

10.9

%

Premiums in force (as of end of period)

$

1,519,949

 

 

$

1,296,416

 

 

17.2

%

 

 

$

1,519,949

 

 

$

1,296,416

 

 

17.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums written

368,823

 

 

302,655

 

 

21.9

%

 

 

1,517,479

 

 

1,292,721

 

 

17.4

%

Direct premiums earned

374,825

 

 

321,571

 

 

16.6

%

 

 

1,395,623

 

 

1,233,121

 

 

13.2

%

Net premiums earned

242,173

 

 

215,819

 

 

12.2

%

 

 

923,563

 

 

842,502

 

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio3

27.3

%

 

29.6

%

 

(2.3) pts

 

 

31.4

%

 

32.3

%

 

(90) bps

Loss & LAE ratio

96.7

%

 

113.3

%

 

(16.6) pts

 

 

82.2

%

 

71.6

%

 

10.6 pts

Combined ratio

124.0

%

 

142.9

%

 

(18.9) pts

 

 

113.6

%

 

103.9

%

 

9.7 pts

 

3 Expense ratio excludes interest expense.

Direct premiums written were up more than 20% for the quarter, led by the continued impact of rate increases in Florida and other states, as well as strong direct premium growth of 18.9% in Other States (non-Florida). For the year, direct premiums written were up double digits, led by rate increases and volume, with strong direct premium growth of 17.7% in Other States (non-Florida), and a slightly improved policy retention. In 2020 we implemented new guidelines on new business to address emerging loss trends that have since slowed the rate of growth in Florida.

On the expense side, the combined ratio decreased 18.9 points for the quarter, but increased 9.7 points for the year. The increases for the year were driven primarily by increased weather events in 2020, an increase in our core loss pick when compared to the full prior year, and the effect on the ratio from increased reinsurance costs. The increases were partially offset by lower prior year development, a benefit from our claims adjusting business, and an improvement in the expense ratio as set forth below.

  • The expense ratio improved 2.3 points for the quarter driven by a 3.1 point improvement in the other operating expense ratio, partially offset by a 80 basis point increase in policy acquisition costs. For the year, the expense ratio improved 90 basis points driven by a 1.4 point improvement in other operating expenses, partially offset by a 50 basis point increase in policy acquisition costs. Increases in the policy acquisition cost ratio were primarily driven by the effect of reinsurance costs.
  • The net loss and loss adjustment expense ratio increased 16.6 points for the quarter and 10.6 points for the year. Quarterly and full year drivers for 2020 include:
    • Core losses of $134.5 million or 55.6 points for the quarter and $538.5 million or 58.3 points for the year were primarily related to accruing incremental reserves as the industry continues to see increased severity in represented claims, which were offset by a benefit from our claims adjusting business. Reinsurance costs also drove increases in the core net loss ratio.
    • Weather events in excess of plan of $76.0 million or 31.4 points ($16.7 million in 4Q19) for the quarter were related to a number of weather events in the states where we do business. For the full year, weather events in excess of plan were $162.0 million or 17.6 points ($38.7 million in FY19), which includes one significant hurricane, Hurricane Sally, and a significant number of other smaller hurricanes and other PCS events.
    • Prior years’ reserve development of $23.4 million or 9.7 points for the quarter and $58.3 million or 6.3 points for the year were primarily related to the continued adjusting and settlement of Hurricane Irma and companion claims.

Services

($thousands)

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Commission revenue

$

9,393

 

 

$

7,168

 

 

31.0

%

 

 

$

33,163

 

 

$

26,101

 

 

27.1

%

Policy fees

5,520

 

 

4,973

 

 

11.0

%

 

 

23,773

 

 

21,560

 

 

10.3

%

Other revenue

1,972

 

 

2,603

 

 

(24.2)

%

 

 

8,501

 

 

7,972

 

 

6.6

%

Total

16,885

 

 

14,744

 

 

14.5

%

 

 

65,437

 

 

55,633

 

 

17.6

%

Total services revenue increased 14.5% for the quarter and 17.6% for the full year. The increase was driven by commission revenue earned on ceded premiums and an increase in policy fees due to an increase in volume, partially offset by other revenue.

Investments

($thousands)

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Net investment income

$

2,823

 

 

$

7,578

 

 

(62.7)

%

 

 

$

20,393

 

 

$

30,743

 

 

(33.7)

%

Realized gains (losses)

9,058

 

 

437

 

 

1,972.8

%

 

 

63,352

 

 

(12,715)

 

 

NM

Unrealized gains (losses)

2,187

 

 

824

 

 

165.4

%

 

 

25

 

 

23,188

 

 

(99.9)

%

NM = Not Meaningful

Net investment income decreased 62.7% for the quarter and 33.7% for the year, primarily due to lower yields on cash and fixed-income investments during 2020 when compared to 2019. Realized gains for the quarter and for the full year resulted primarily from taking advantage of increased market prices on our available-for-sale debt investment portfolio, and to a lesser extent aided by the sale of equity securities. Unrealized gains were driven by market fluctuations in equity securities resulting in a favorable outcome for the quarter and the full year.

Capital Deployment

During the fourth quarter, the Company repurchased approximately 193 thousand shares at an aggregate cost of $2.4 million. For the full year, the Company repurchased approximately 1.6 million shares at an aggregate cost of $28.9 million. The Company’s current share repurchase authorization program has $19.4 million remaining as of December 31, 2020 and runs through November 3, 2022.

Guidance

Universal initiated the following guidance for fiscal 2021:

  • GAAP and Non-GAAP Adjusted EPS in a range of $2.75 - $3.00 (assuming no extraordinary weather events in 2021)
  • Annualized return on average equity in a range of 17% - 19%

Conference Call and Webcast

  • Friday, February 26, 2021 at 9:00 a.m. ET
  • U.S. Dial-in Number: (855) 752-6647
  • International: (503) 343-6667
  • Participant code: 9074399
  • Listen to live webcast: UniversalInsuranceHoldings.com
  • Replay of the call will be available on the UVE website and by phone at (855) 859-2056 or internationally at (404) 537-3406 using the participant code: 9074399 through March 13, 2021

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings (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

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 adjusted earnings per diluted share, which excludes the impact of the net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions. Extraordinary reinstatement premiums are not covered by reinstatement premium protection and attach just below the Florida Hurricane Catastrophe Fund (“FHCF”) reinsurance layer. Adjusted operating income excludes the impact of the net realized and unrealized gains and losses on investments, as well as interest expense and extraordinary reinstatement premiums and associated commissions. 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, when considered together with the GAAP financial measures, 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 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 year ended December 31, 2020.

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 2020 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)

 

 

December 31,

 

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

Invested Assets

 

 

 

 

Fixed maturities, at fair value

 

$

819,861

 

 

$

855,284

 

Equity securities, at fair value

 

84,887

 

 

43,717

 

Investment real estate, net

 

15,176

 

 

15,585

 

Total invested assets

 

919,924

 

 

914,586

 

Cash and cash equivalents

 

167,156

 

 

182,109

 

Restricted cash and cash equivalents

 

12,715

 

 

2,635

 

Prepaid reinsurance premiums

 

215,723

 

 

175,208

 

Reinsurance recoverable

 

160,417

 

 

193,236

 

Premiums receivable, net

 

66,883

 

 

63,883

 

Property and equipment, net

 

53,572

 

 

41,351

 

Deferred policy acquisition costs

 

110,614

 

 

91,882

 

Goodwill

 

2,319

 

 

2,319

 

Other assets

 

49,418

 

 

52,643

 

TOTAL ASSETS

 

$

1,758,741

 

 

$

1,719,852

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

322,465

 

 

$

267,760

 

Unearned premiums

 

783,135

 

 

661,279

 

Advance premium

 

49,562

 

 

30,975

 

Reinsurance payable, net

 

10,312

 

 

122,581

 

Long-term debt

 

8,456

 

 

9,926

 

Other liabilities

 

135,549

 

 

133,430

 

Total liabilities

 

1,309,479

 

 

1,225,951

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Cumulative convertible preferred stock ($0.01 par value)4

 

 

 

 

Common stock ($0.01 par value)5

 

468

 

 

467

 

Treasury shares, at cost - 15,680 and 14,069

 

(225,506)

 

 

(196,585)

 

Additional paid-in capital

 

103,445

 

 

96,036

 

Accumulated other comprehensive income (loss), net of taxes

 

3,343

 

 

20,364

 

Retained earnings

 

567,512

 

 

573,619

 

Total stockholders' equity

 

449,262

 

 

493,901

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,758,741

 

 

$

1,719,852

 

 

 

 

 

 

Notes:

 

 

 

 

4 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.

5 Common stock ($0.01 par value): Authorized - 55,000 shares; Issued - 46,817 and 46,707 shares; Outstanding 31,137 and 32,638 shares.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(in thousands)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2020

 

2019

 

 

2020

 

2019

REVENUES

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

242,173

 

 

$

215,819

 

 

 

$

923,563

 

 

$

842,502

 

Net investment income

 

2,823

 

 

7,578

 

 

 

20,393

 

 

30,743

 

Net realized gains (losses) on sale on investments

 

9,058

 

 

437

 

 

 

63,352

 

 

(12,715)

 

Net change in unrealized gains (losses) of equity securities

 

2,187

 

 

824

 

 

 

25

 

 

23,188

 

Commission revenue

 

9,393

 

 

7,168

 

 

 

33,163

 

 

26,101

 

Policy fees

 

5,520

 

 

4,973

 

 

 

23,773

 

 

21,560

 

Other revenue

 

1,972

 

 

2,603

 

 

 

8,501

 

 

7,972

 

Total revenues

 

273,126

 

 

239,402

 

 

 

1,072,770

 

 

939,351

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

233,940

 

 

244,445

 

 

 

758,810

 

 

603,406

 

Policy acquisition costs

 

52,120

 

 

44,667

 

 

 

199,102

 

 

177,530

 

Other operating expenses

 

14,048

 

 

19,298

 

 

 

90,525

 

 

94,650

 

Interest expense

 

17

 

 

45

 

 

 

102

 

 

248

 

Total expenses

 

300,125

 

 

308,455

 

 

 

1,048,539

 

 

875,834

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax expense

 

(26,999)

 

 

(69,053)

 

 

 

24,231

 

 

63,517

 

Income tax expense (benefit)

 

(9,324)

 

 

(17,980)

 

 

 

5,126

 

 

17,003

 

NET INCOME (LOSS)

 

$

(17,675)

 

 

$

(51,073)

 

 

 

$

19,105

 

 

$

46,514

 

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SHARE AND PER SHARE INFORMATION

(in thousands, except per share data)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2020

 

2019

 

 

2020

 

2019

Weighted average common shares outstanding - basic

 

31,193

 

 

32,889

 

 

 

31,884

 

 

33,893

 

Weighted average common shares outstanding - diluted

 

31,295

 

 

32,889

 

 

 

31,972

 

 

34,233

 

Shares outstanding, end of period

 

31,137

 

 

32,638

 

 

 

31,137

 

 

32,638

 

Basic earnings (loss) per common share

 

$

(0.57)

 

 

$

(1.55)

 

 

 

$

0.60

 

 

$

1.37

 

Diluted earnings (loss) per common share

 

$

(0.57)

 

 

$

(1.55)

 

 

 

$

0.60

 

 

$

1.36

 

Cash dividend declared per common share

 

$

0.29

 

 

$

0.29

 

 

 

$

0.77

 

 

$

0.77

 

Book value per share, end of period

 

$

14.43

 

 

$

15.13

 

 

 

$

14.43

 

 

$

15.13

 

Annualized return on average equity (ROE)

 

(15.4)

%

 

(38.4)

%

 

 

4.1

%

 

9.2

%

NM = Not Meaningful

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION

(in thousands, except for Policies In-Force data)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

December 31,

 

 

December 31,

 

 

2020

 

2019

 

 

2020

 

2019

Premiums

 

 

 

 

 

 

 

 

 

Direct premiums written - Florida

 

$

302,552

 

 

$

246,927

 

 

 

$

1,250,748

 

 

$

1,066,112

 

Direct premiums written - Other States

 

66,271

 

 

55,728

 

 

 

266,731

 

 

226,609

 

Direct premiums written - Total

 

$

368,823

 

 

$

302,655

 

 

 

$

1,517,479

 

 

$

1,292,721

 

Direct premiums earned

 

$

374,825

 

 

$

321,571

 

 

 

$

1,395,623

 

 

$

1,233,121

 

Net premiums earned

 

$

242,173

 

 

$

215,819

 

 

 

$

923,563

 

 

$

842,502

 

 

 

 

 

 

 

 

 

 

 

Underwriting Ratios - Net

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expense ratio

 

96.7

%

 

113.3

%

 

 

82.2

%

 

71.6

%

General and administrative expense ratio6

 

27.3

%

 

29.6

%

 

 

31.4

%

 

32.3

%

Policy acquisition cost ratio

 

21.5

%

 

20.7

%

 

 

21.6

%

 

21.1

%

Other operating expense ratio6

 

5.8

%

 

8.9

%

 

 

9.8

%

 

11.2

%

Combined ratio

 

124.0

%

 

142.9

%

 

 

113.6

%

 

103.9

%

 

 

 

 

 

 

 

 

 

 

Other Items

 

 

 

 

 

 

 

 

 

(Favorable)/Unfavorable prior year reserve development

 

$

23,433

 

 

$

84,365

 

 

 

$

58,337

 

 

$

88,068

 

Points on the loss and loss adjustment expense ratio

 

9.7

pts

 

39.1

pts

 

 

6.3

pts

 

10.4

pts

6 Expense ratio excludes interest expense.

 

 

 

As of

 

 

December 31,

 

 

2020

 

2019

Policies in force

 

 

 

 

Florida

 

728,211

 

 

662,343

 

Other States

 

256,619

 

 

226,018

 

Total

 

984,830

 

 

888,361

 

 

 

 

 

 

Premiums in force

 

 

 

 

Florida

 

$

1,252,916

 

 

$

1,070,034

 

Other States

 

267,033

 

 

226,382

 

Total

 

1,519,949

 

 

1,296,416

 

 

 

 

 

 

Total Insured Value

 

 

 

 

Florida

 

$

192,504,430

 

 

$

164,654,848

 

Other States

 

109,976,625

 

 

91,401,560

 

Total

 

302,481,055

 

 

256,056,408

 

 

 

Three Months Ended December 31, 2020

 

Direct

 

Loss Ratio

 

Ceded

 

Loss Ratio

 

Net

 

Loss Ratio

Premiums earned

$

374,825

 

 

 

 

$

132,652

 

 

 

 

$

242,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

 

 

 

 

 

Core losses

$

134,734

 

 

35.9

%

 

$

190

 

 

0.1

%

 

$

134,544

 

 

55.6

%

Weather events7

168,917

 

 

45.1

%

 

92,954

 

 

70.1

%

 

75,963

 

 

31.4

%

Prior years’ reserve development

93,511

 

 

24.9

%

 

70,078

 

 

52.8

%

 

23,433

 

 

9.7

%

Total losses and loss adjustment expenses

$

397,162

 

 

105.9

%

 

$

163,222

 

 

123.0

%

 

$

233,940

 

 

96.7

%

 

 

 

 

 

 

 

 

 

 

 

 

7 Includes only current year weather events beyond those expected.

 

 

Twelve Months Ended December 31, 2020

 

Direct

 

Loss Ratio

 

Ceded

 

Loss Ratio

 

Net

 

Loss Ratio

Premiums earned

$

1,395,623

 

 

 

 

$

472,060

 

 

 

 

$

923,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

 

 

 

 

 

Core losses

$

538,826

 

 

38.6

%

 

$

316

 

 

0.1

%

 

$

538,510

 

 

58.3

%

Weather events7

256,917

 

 

18.4

%

 

94,954

 

 

20.1

%

 

161,963

 

 

17.6

%

Prior years’ reserve development

284,315

 

 

20.4

%

 

225,978

 

 

47.9

%

 

58,337

 

 

6.3

%

Total losses and loss adjustment expenses

$

1,080,058

 

 

77.4

%

 

$

321,248

 

 

68.1

%

 

$

758,810

 

 

82.2

%

 

 

 

 

 

 

 

 

 

 

 

 

7 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)

 

Three Months Ended

 

 

Twelve Months Ended

 

 

Guidance

 

December 31,

 

 

December 31,

 

 

Full Year 2021E

 

2020

 

2019

 

 

2020

 

2019

 

 

 

Income (Loss) Before Income Taxes

$

(26,999)

 

 

$

(69,053)

 

 

 

$

24,231

 

 

$

63,517

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions8

 

 

 

 

582

 

 

 

 

 

 

 

2,541

 

 

 

 

Net unrealized (gains)/losses on equity securities

 

(2,187)

 

 

 

(824)

 

 

 

 

(25)

 

 

 

(23,188)

 

 

 

 

Net realized (gains)/losses on investments

 

(9,058)

 

 

 

(437)

 

 

 

 

(63,352)

 

 

 

12,715

 

 

 

 

Interest Expense

 

17

 

 

 

45

 

 

 

 

102

 

 

 

248

 

 

 

 

Total Adjustments

 

(11,228)

 

 

 

(634)

 

 

 

 

(63,275)

 

 

 

(7,684)

 

 

 

 

Non-GAAP Adjusted Operating Income

$

(38,227)

 

 

$

(69,687)

 

 

 

$

(39,044)

 

 

$

55,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted EPS

$

(0.57)

 

 

$

(1.55)

 

 

 

$

0.60

 

 

$

1.36

 

 

 

$2.75 - $3.00

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions8

 

 

 

 

0.02

 

 

 

 

 

 

 

0.07

 

 

 

 

Net unrealized (gains)/losses on equity securities

 

(0.07)

 

 

 

(0.03)

 

 

 

 

 

 

 

(0.68)

 

 

 

 

Net realized (gains)/losses on investments

 

(0.29)

 

 

 

(0.01)

 

 

 

 

(1.98)

 

 

 

0.37

 

 

 

 

Total Pre-Tax Adjustments

 

(0.36)

 

 

 

(0.02)

 

 

 

 

(1.98)

 

 

 

(0.24)

 

 

 

 

Income Tax on Above Adjustments

 

0.09

 

 

 

 

 

 

 

0.48

 

 

 

0.06

 

 

 

 

Total Adjustments

 

(0.27)

 

 

 

(0.02)

 

 

 

 

(1.50)

 

 

 

(0.18)

 

 

 

 

Non-GAAP Adjusted EPS

$

(0.84)

 

 

$

(1.57)

 

 

 

$

(0.90)

 

 

$

1.18

 

 

 

$2.75 - $3.00

8 Includes reinstatement premiums not covered by reinstatement premium protection and related commissions.

 

Investor Relations Contact:
Rob Luther, 954-595-7272
VP, Corporate Development, Strategy & IR
rluther@universalproperty.com

Media Relations Contact:
Andy Brimmer / Mahmoud Siddig, 212-355-4449
Joele Frank, Wilkinson Brimmer Katcher

Source: Universal Insurance Holdings



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