Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported second quarter 2023 results.
“Results were solid, including a 25.3% annualized adjusted return on common equity and 85.1% adjusted diluted EPS growth year-over-year,” said Stephen J. Donaghy, Chief Executive Officer. “While it’s still early days, we’re encouraged by favorable claims and litigation trends that are beginning to emerge as a result of recent legislative reforms and give us optimism as we look forward to 2024 and beyond. We continue to benefit from rate-driven premium growth and an improving spread of risk across our geographic footprint. I’m proud of the reinsurance program we put together for the 2023-2024 treaty year. Our program’s terms, conditions and coverage are consistent with the prior year, but we reduced our consolidated retention and ceded premium ratio.”
*Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.
Quarterly Financial Results | ||||||||||||||||||||||
Summary Financial Results | ||||||||||||||||||||||
($thousands, except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||
GAAP comparison | ||||||||||||||||||||||
Total revenues | $ | 339,570 | $ | 292,006 | 16.3 | % | $ | 656,078 | $ | 579,488 | 13.2 | % | ||||||||||
Operating income | $ | 39,168 | $ | 12,411 | 215.6 | % | $ | 73,595 | $ | 36,490 | 101.7 | % | ||||||||||
Operating income margin | 11.5 | % | 4.3 | % | 7.2 pts | 11.2 | % | 6.3 | % | 4.9 pts | ||||||||||||
Net income available to common stockholders | $ | 28,564 | $ | 7,368 | 287.7 | % | $ | 52,734 | $ | 24,902 | 111.8 | % | ||||||||||
Diluted earnings per common share | $ | 0.93 | $ | 0.24 | 287.5 | % | $ | 1.72 | $ | 0.80 | 115.0 | % | ||||||||||
Annualized ROCE | 34.8 | % | 7.7 | % | 27.1 pts | 33.9 | % | 12.5 | % | 21.4 pts | ||||||||||||
Book value per share, end of period | $ | 11.12 | $ | 11.93 | (6.8 | )% | 11.12 | $ | 11.93 | (6.8 | )% | |||||||||||
Non-GAAP comparison1 | ||||||||||||||||||||||
Core revenue | $ | 336,957 | $ | 301,615 | 11.7 | % | $ | 653,296 | $ | 592,435 | 10.3 | % | ||||||||||
Adjusted operating income | $ | 36,555 | $ | 22,020 | 66.0 | % | $ | 70,813 | $ | 49,437 | 43.2 | % | ||||||||||
Adjusted operating income margin | 10.8 | % | 7.3 | % | 3.5 pts | 10.8 | % | 8.3 | % | 2.5 pts | ||||||||||||
Adjusted net income available to common stockholders | $ | 26,594 | $ | 14,648 | 81.6 | % | $ | 50,636 | $ | 34,711 | 45.9 | % | ||||||||||
Adjusted diluted earnings per common share | $ | 0.87 | $ | 0.47 | 85.1 | % | $ | 1.65 | $ | 1.12 | 47.3 | % | ||||||||||
Annualized adjusted ROCE | 25.3 | % | 12.8 | % | 12.5 pts | 24.7 | % | 15.3 | % | 9.4 pts | ||||||||||||
Adjusted book value per share, end of period | $ | 14.31 | $ | 14.80 | (3.3 | )% | $ | 14.31 | $ | 14.80 | (3.3 | )% | ||||||||||
Underwriting Summary | ||||||||||||||||||||||
Premiums: | ||||||||||||||||||||||
Premiums in force | $ | 1,879,053 | $ | 1,766,542 | 6.4 | % | $ | 1,879,053 | $ | 1,766,542 | 6.4 | % | ||||||||||
Policies in force | 809,685 | 894,618 | (9.5 | )% | 809,685 | 894,618 | (9.5 | )% | ||||||||||||||
Direct premiums written | $ | 547,126 | $ | 532,527 | 2.7 | % | $ | 957,228 | $ | 929,008 | 3.0 | % | ||||||||||
Direct premiums earned | $ | 463,324 | $ | 428,805 | 8.1 | % | $ | 918,692 | $ | 843,408 | 8.9 | % | ||||||||||
Ceded premiums earned | $ | (160,050 | ) | $ | (151,744 | ) | 5.5 | % | $ | (333,194 | ) | $ | (297,283 | ) | 12.1 | % | ||||||
Ceded premium ratio | 34.5 | % | 35.4 | % | (0.9) pts | 36.3 | % | 35.2 | % | 1.1 pts | ||||||||||||
Net premiums earned | $ | 303,274 | $ | 277,061 | 9.5 | % | $ | 585,498 | $ | 546,125 | 7.2 | % | ||||||||||
Net ratios: | ||||||||||||||||||||||
Loss ratio | 73.8 | % | 72.3 | % | 1.5 pts | 73.4 | % | 70.6 | % | 2.8 pts | ||||||||||||
Expense ratio | 25.3 | % | ||||||||||||||||||||
