Universal Insurance (UVE) Tops Q1 EPS by 21c

Universal Insurance (NYSE: UVE) reported Q1 EPS of $1.12, $0.21 better than the analyst estimate of $0.91. Revenue for the quarter came in at $191.5 million versus the consensus estimate of $198.02 million.

First Quarter 2018 Highlights

• Continued Organic Growth – Direct premiums written grew 10.0% in the first quarter, with 7.2% growth in Florida and 32.7% growth in Other States; Universal DirectSM contributed to growth in all geographies. We began writing in New Hampshire on April 4, 2018, and currently write in 17 states with licenses in 3 additional states.
• Strong Underwriting Profitability – The first quarter net combined ratio was 76.5% compared to 78.9% in the prior year\'s quarter, with improvement in both the loss and LAE ratio and the G&A expense ratio. The current quarter includes approximately $10.4 million (5.7 points) of estimated pretax profit relating to additional income generated by Universal Adjusting Corporation (UAC) following Hurricane Irma. The current quarter includes no impact from weather events beyond plan, compared to $3.0 million (1.9 points) of weather losses beyond plan in the first quarter of 2017. There was a de minimis amount of prior year reserve movements in both the current year and prior year\'s quarter. Our underwriting results reflect increased underlying loss trends resulting from the impact of continued geographic expansion, an increased level of catastrophic activity in recent years, and the marketplace dynamics within Florida, including the impact of Assignment of Benefits (AOB) related claims.
• Solid Balance Sheet – Book value per share grew 4.8% from December 31, 2017 (16.8% from March 31, 2017) to $13.28. Our investment portfolio is conservative and composed of high quality securities, we have minimal debt or goodwill, we believe our loss reserves are appropriately set at current levels, and we are protected by a comprehensive reinsurance program.
• Focused on Shareholder Returns – Return on Average Common Equity (ROE) was 34.6% for the first quarter of 2018. We paid dividends of $0.14 per share in the first quarter, equating to an annualized dividend yield of 1.7% at current share price levels. During the first quarter, we repurchased 92,749 shares for $2.7 million ($29.61 per share) and $17.0 million remains on our current share repurchase authorization.

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

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