• Adjusted Diluted Earnings Per Share: $0.25, down from $0.43 in the prior year quarter.
• Core Revenue: $386.4 million, up 5.7% year over year.
• Direct Premiums Written: $470.9 million, up 8.8% from the prior year quarter.
• Direct Premiums Earned: $519.3 million, up 7.7% year over year.
• Net Premiums Earned: $348.4 million, up 3.9% from the prior year quarter.
• Net Combined Ratio: 107.9%, up 4.2 points from the prior year quarter.
• Loss Ratio: 82.3%, up 0.4 points from the prior year quarter.
• Net Expense Ratio: 25.6%, up 3.8 points from 21.8% in the prior year quarter.
• Share Repurchase: Approximately 370,000 shares repurchased at an aggregate cost of $7.7 million.
• Quarterly Cash Dividend: $0.16 per common share declared, payable March 14, 2025.

• Warning! GuruFocus has detected 9 Warning Signs with UVE.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Universal Insurance Holdings Inc (NYSE:UVE) reported a 5.7% year-over-year increase in core revenue, driven by higher net premiums earned, net investment income, and commission revenue.
• Direct premiums written increased by 8.8% from the prior year quarter, with notable growth of 38.4% in states outside Florida.
• The company successfully placed 92% of its first event catastrophe tower for the 2025 reinsurance program, indicating strong reinsurance market support.
• Universal Insurance Holdings Inc (NYSE:UVE) repurchased approximately 370,000 shares, demonstrating a commitment to returning value to shareholders.
• The board declared a regular quarterly cash dividend of $0.16 per common share, maintaining shareholder returns.

Negative Points

• Adjusted diluted earnings per share decreased to $0.25 from $0.43 in the prior year quarter, primarily due to lower underwriting income.
• The net combined ratio increased to 107.9%, up 4.2 points from the prior year quarter, reflecting higher net loss and expense ratios.
• The loss ratio rose to 82.3%, driven by higher weather losses, particularly from Hurricane Milton.
• The net expense ratio increased to 25.6%, up 3.8 points, due to higher policy acquisition costs and other operating expenses.
• Prior year reserve development was significantly down, impacting financial performance.

Q & A Highlights

Q: Could you talk about the size of the reserve development in the quarter and provide more detail on the level of catastrophe losses, including Hurricane Milton? A: Frank Wilcox, CFO, explained that Hurricane Milton was a $45 million net retention event, with $66 million in excess covered by third parties. Prior year development was significantly down to $45 million from $76 million last year.

Q: Can you provide more color on your growth efforts and where you see the most opportunity? A: Stephen Donaghy, CEO, stated that the company remains focused on profitability and writing business where it makes the most sense. Growth in other states is attributed to entry into new markets over the past 12 months, with a focus on profitability and rate adequacy.

Q: What are your thoughts on reinsurance renewals as they come forward later this year? A: Stephen Donaghy, CEO, mentioned that they are 92% accomplished in securing their first reinsurance tower and found the market receptive. They aim to secure reinsurance early and have renewed some multi-year capabilities for 2026, with full details to be released in May.

Q: How did the recent hurricanes impact your financial results? A: Stephen Donaghy, CEO, noted that the company experienced three hurricanes in 2024, including Debbie, Helene, and Milton. These events contributed to higher weather losses, impacting the loss ratio, which increased to 82.3%.

Q: Can you discuss the changes in your net combined ratio and what factors contributed to it? A: Frank Wilcox, CFO, explained that the net combined ratio increased to 107.9%, reflecting higher net loss and expense ratios. The increase was driven by higher weather losses and higher policy acquisition costs associated with growth outside Florida.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.