FORT LAUDERDALE, Fla.,
Nov. 8, 2017 /PRNewswire/ -- Universal Insurance Holdings,
Inc. (NYSE: UVE) today reported net income and diluted earnings per
share (EPS) of $10.0 million and
$0.28, respectively for the third
quarter of 2017. For the first nine months of 2017, net income was
$70.5 million while diluted EPS was
$1.96.
Universal Insurance Holdings, Inc. Chairman and Chief Executive
Officer Sean P. Downes commented:
"While our bottom line results for the third quarter were
materially impacted by Hurricane Irma, we still delivered a 9.2%
return on average equity for the third quarter and a 23.0% ROE for
the first nine months of 2017. These results are a testament
to the fundamental strength of our business model, including the
benefits of our vertically integrated structure, our conservative
reinsurance program, our focus on maintaining high underwriting
standards, our superior claims handling abilities, and our
exceptional catastrophe response team. We reported excellent
top line growth during the third quarter, and continue to focus on
producing profitable and rate-adequate organic growth within
Florida and through our Other
State expansion, while growing our unique direct-to-consumer
platform, Universal DirectSM, and leveraging our
vertically integrated structure to deliver better service to our
policyholders. Universal weathered the storm that was
Hurricane Irma well in the third quarter, and we remain well
positioned to deliver outstanding value to our shareholders going
forward."
Third Quarter 2017 Highlights
- Growth Continues Both Within and Outside Florida
– Direct premiums written grew 13.6% during the third
quarter, with 10.5% growth in Florida and 38.8% growth in Other
States, and Universal DirectSM contributing to
growth across all geographies. In October, we wrote our first
homeowners policy in New York;
Universal currently writes in 16 states with licenses in another 3
states.
- Hurricane Irma Leads to Modest Underwriting Gain
– The third quarter net combined ratio was 99.5%, up from
80.4% in the prior year's quarter due to an increase in the loss
and LAE ratio, partially offset by a reduction in the G&A
expense ratio. Current quarter results include $37 million (21.2 points) of Hurricane Irma
losses and LAE, compared to $11
million (6.9 points) of weather losses above plan in third
quarter 2016.
- In Challenging Quarter, Universal Produces 3Q Net Income
– Despite meaningful losses from Hurricane Irma, our
conservative reinsurance program and vertically integrated
structure enabled Universal to produce net income for the quarter
of $10.0 million or $0.28 per share of diluted EPS. For the first
nine months of 2017, net income was $70.5
million and diluted EPS was $1.96 per share.
- Balance Sheet Remains Solid – Book value per
share grew by 1.0% from June 30, 2017
(or 14.6% from September 30, 2016) to
$12.21. Our balance sheet remains
solid, with a stable investment portfolio, minimal debt, and a
conservative reserve position, and is well protected by a
comprehensive reinsurance program placed with strong reinsurance
partners that helped to limit the overall financial impact of the
devastating catastrophic events that took place during the third
quarter.
- Focused on Shareholder Returns – Return on
Average Common Equity (ROE) was 9.2% for the third quarter of 2017
and 23.0% through the first nine months of 2017. We declared
dividends of $0.14 per share in the
third quarter, equating to an annualized dividend yield of 2.4% at
current share price levels. Universal repurchased 406,266 shares
for $9.0 million ($22.07 per share) during the quarter, nearly
exhausting our prior repurchase authorization, and the Board
subsequently approved a new $20
million program.
Third Quarter 2017 Results
Direct premiums written grew 13.6% from the prior year's quarter
to $274.7 million, with 10.5% growth
in our Florida book and
38.8% growth in our Other States book. Our organic
growth strategy within our home state of Florida remains on track, and our organic
geographic expansion efforts within our Other States book
continue to produce results. Additionally, we note that third
quarter 2017 results include an increased level of both new and
renewal business within our Florida book surrounding Hurricane
Irma. For the quarter, net premiums earned grew 9.4% to
$174.5 million. Commission revenue
and policy fees each produced double-digit growth, up 15.2% and
15.0% versus the prior year's quarter, respectively, driven by
increased premium volume and continued geographic footprint
expansion, while other revenue was flat with the prior year's
quarter.
The net combined ratio was 99.5% in the third quarter of 2017
compared to 80.4% in the prior year's quarter. The reduction
in underwriting profitability was driven by an increase in the loss
and loss adjustment expense ratio, partially offset by a reduction
in the general and administrative expense ratio.
- The net loss and LAE ratio was 66.7% in the third quarter of
2017, compared to 46.1% for the prior year's quarter. The increase
in the current quarter's loss and LAE ratio was primarily driven by
loss and loss adjustment expenses of $37
million (21.2 points on the loss and LAE ratio) relating to
Hurricane Irma, compared to $11
million (6.9 points) of weather losses beyond plan in the
third quarter of 2016. Additionally, the current year's quarter
also included an increased underlying loss ratio reflecting
continued growth in our Other States book and current
marketplace dynamics. Third quarter 2017 results include
$0.1 million (0.1 points) of
unfavorable prior year reserve development, while 2016's third
quarter included $0.2 million (0.1
points) of favorable prior year reserve development.
- The net general and administrative expense ratio was 32.8% in
the third quarter of 2017, compared to 34.3% for the same period
last year, driven primarily by a reduction in the other operating
expense ratio, while the policy acquisition cost ratio remained
flat with the prior year's quarter. The net other operating expense
ratio was 12.5% compared to 14.1% in the prior year's quarter,
while the net policy acquisition cost ratio was 20.2% compared to
20.2% in the prior year's quarter.
Net investment income grew by 33.9% from the prior year's
quarter to $3.1 million, driven by
the increasing size of our investment portfolio and a shift in
asset mix. Net realized investment gains were $0.8 million in the third quarter of 2017,
compared to net realized gains of $0.1
million in the prior year's quarter. Total
unrestricted cash and invested assets grew to $1,017.8 million at September 30, 2017 from $880.4 million at June 30,
2017 and $849.1 million at
September 30, 2016.
Unrestricted cash and cash equivalents as of September 30, 2017 increased by $120.7 million compared to June 30, 2017, primarily related to payments
received from reinsurers for claims related to Hurricane
Irma.
Interest expense was $80 thousand
for the third quarter of 2017, compared to $60 thousand in the prior year's quarter, with
long term debt of $13.2 million at
September 30, 2017 (debt-to-equity of
3.1%), compared to $15.4 million as
of September 30, 2016 (debt-to-equity
of 4.1%).
The effective tax rate for the third quarter of 2017 was 40.0%,
compared to 39.1% in the prior year's quarter.
Stockholders' equity was $420.6
million at September 30, 2017,
down 0.1% from June 30, 2017, but up
12.7% from September 30, 2016.
Book value per common was $12.21 at
September 30, 2017, growth of 1.0%
from $12.09 at June 30, 2017, or 14.6% from $10.66 at September
30, 2016. Return on Average Common Equity (ROE) was
9.2% for the third quarter of 2017 and 23.0% for the first nine
months of 2017.
During the third quarter, the Company repurchased 406,266 shares
for $9.0 million, or an average cost
of $22.07 per share, nearly
exhausting our prior share repurchase authorization. The
Board of Directors has approved a new share repurchase program
under which the Company may repurchase up to $20 million of its outstanding shares of common
stock through December 31,
2018.
On August 31, 2017, the Company
announced that its Board of Directors declared a cash dividend of
$0.14 per share of common stock paid
on October 24, 2017 to shareholders
of record on September 12,
2017.
Conference Call
Members of the Universal management
team will host a conference call on Thursday, November 9, 2017 at 10:00 AM ET to discuss third quarter 2017
financial results. Following prepared remarks, management will
conduct a question and answer session. The call will be accessible
by dialing toll free at (888) 887-7180 or internationally (toll) at
(270) 823-1518 using the Conference ID: 8188499. A live audio
webcast of the call will also be accessible on the Universal
Insurance website at www.universalinsuranceholdings.com. A
replay of the call can be accessed toll free at (855) 859-2056 or
internationally (toll) at (404) 537-3406 using the Conference ID:
8188499, and will be available through November 24, 2017.
About Universal Insurance Holdings, Inc.
Universal
Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a
vertically integrated insurance holding company performing all
aspects of insurance underwriting, distribution and claims.
Universal Property & Casualty Insurance Company (UPCIC), a
wholly-owned subsidiary of the Company, is one of the leading
writers of homeowners insurance in Florida and is now fully licensed and has
commenced its operations in North
Carolina, South Carolina,
Hawaii, Georgia, Massachusetts, Maryland, Delaware, Indiana, Pennsylvania, Minnesota, Michigan, Alabama, Virginia, New
Jersey, and New York.
American Platinum Property and Casualty Insurance Company (APPCIC),
also a wholly-owned subsidiary, currently writes homeowners
multi-peril insurance on Florida
homes valued in excess of $1 million,
which are limits and coverages currently not targeted through its
affiliate UPCIC. APPCIC is additionally licensed and has commenced
writing Fire, Commercial Multi-Peril, and Other Liability lines of
business in Florida. For
additional information on the Company, please visit our investor
relations website at www.universalinsuranceholdings.com.
Forward-Looking Statements and Risk Factors
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," 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. Future results could differ
materially from those described, and the Company undertakes no
obligation to correct or update any forward-looking statements. 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 Form 10-K for the year ended December 31, 2016 and Form 10-Q for the quarter
ended June 30, 2017.
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
Invested
Assets
|
|
|
|
|
Fixed
maturities, at fair value
|
|
$
609,179
|
|
$
584,361
|
Equity
securities, at fair value
|
|
26,075
|
|
50,803
|
Short-term
investments, at fair value
|
|
—
|
|
5,002
|
Investment
real estate, net
|
|
16,324
|
|
11,435
|
Total
invested assets
|
|
651,578
|
|
651,601
|
|
|
|
|
|
Cash and cash
equivalents
|
|
366,176
|
|
105,730
|
Restricted cash and
cash equivalents
|
|
2,635
|
|
2,635
|
Prepaid reinsurance
premiums
|
|
212,489
|
|
124,385
|
Reinsurance
recoverable
|
|
412,697
|
|
106
|
Premiums receivable,
net
|
|
66,687
|
|
53,833
|
Property and
equipment, net
|
|
32,959
|
|
32,162
|
Deferred policy
acquisition costs
|
|
75,934
|
|
64,912
|
Goodwill
|
|
2,319
|
|
2,319
|
Other
assets
|
|
33,587
|
|
22,324
|
TOTAL
ASSETS
|
|
$
1,857,061
|
|
$
1,060,007
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
Unpaid losses and
loss adjustment expenses
|
|
$
440,443
|
|
$
58,494
|
Unearned
premiums
|
|
556,299
|
|
475,756
|
Advance
premium
|
|
28,667
|
|
17,796
|
Reinsurance payable,
net
|
|
341,356
|
|
80,891
|
Long-term
debt
|
|
13,235
|
|
15,028
|
Other
liabilities
|
|
56,504
|
|
40,852
|
Total
liabilities
|
|
1,436,504
|
|
688,817
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
Cumulative
convertible preferred stock ($0.01 par value)
1
|
|
—
|
|
—
|
Common stock ($0.01
par value) 2
|
|
455
|
|
453
|
Treasury shares, at
cost - 11,033 and 10,272
|
|
(104,866)
|
|
(86,982)
|
Additional paid-in
capital
|
|
89,429
|
|
82,263
|
Accumulated other
comprehensive income (loss), net of taxes
|
|
(2,207)
|
|
(6,408)
|
Retained
earnings
|
|
437,746
|
|
381,864
|
Total stockholders'
equity
|
|
420,557
|
|
371,190
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
1,857,061
|
|
$
1,060,007
|
|
|
|
|
|
Notes:
|
|
|
|
|
1 - 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.
|
2 - Common stock
($0.01 par value): Authorized - 55,000 shares; Issued -
45,473 and 45,324 shares; Outstanding 34,440 and 35,052
shares.
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
REVENUES
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
$
174,517
|
|
$
159,534
|
|
|
$
505,085
|
|
$
468,443
|
Net investment
income
|
|
3,085
|
|
2,304
|
|
|
9,012
|
|
6,051
|
Net realized
gains/(losses) on investments
|
|
803
|
|
101
|
|
|
2,450
|
|
1,344
|
Commission
revenue
|
|
5,304
|
|
4,603
|
|
|
14,546
|
|
12,927
|
Policy
fees
|
|
4,861
|
|
4,226
|
|
|
14,594
|
|
13,093
|
Other
revenue
|
|
1,673
|
|
1,668
|
|
|
4,917
|
|
4,827
|
Total
revenues
|
|
$
190,243
|
|
$
172,436
|
|
|
$
550,604
|
|
$
506,685
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Losses and loss
adjustment expenses
|
|
$
116,375
|
|
$
73,548
|
|
|
$
267,129
|
|
$
199,749
|
Policy acquisition
costs
|
|
35,304
|
|
32,216
|
|
|
100,754
|
|
92,455
|
Other operating
expenses
|
|
21,885
|
|
22,449
|
|
|
70,559
|
|
73,962
|
Interest
expense
|
|
80
|
|
60
|
|
|
269
|
|
363
|
Total expenses
|
|
$
173,644
|
|
$
128,273
|
|
|
$
438,711
|
|
$
366,529
|
|
|
|
|
|
|
|
|
|
|
Income before income
tax expense
|
|
16,599
|
|
$
44,163
|
|
|
111,893
|
|
140,156
|
Income tax
expense
|
|
6,635
|
|
17,281
|
|
|
41,354
|
|
54,400
|
NET
INCOME
|
|
$
9,964
|
|
$
26,882
|
|
|
$
70,539
|
|
$
85,756
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
SHARE AND PER
SHARE INFORMATION
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
34,686
|
|
35,042
|
|
|
34,927
|
|
34,878
|
Weighted average
common shares outstanding - diluted
|
|
35,615
|
|
35,723
|
|
|
35,917
|
|
35,594
|
Shares outstanding,
end of period
|
|
34,440
|
|
35,024
|
|
|
34,440
|
|
35,024
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
|
$
0.29
|
|
$
0.77
|
|
|
$
2.02
|
|
$
2.46
|
Diluted earnings per
common share
|
|
$
0.28
|
|
$
0.75
|
|
|
$
1.96
|
|
$
2.41
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per common share
|
|
$
0.14
|
|
$
0.14
|
|
|
$
0.42
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
Book value per
share
|
|
$
12.21
|
|
$
10.66
|
|
|
$
12.21
|
|
$
10.66
|
|
|
|
|
|
|
|
|
|
|
Return on average
equity (ROE)
|
|
9.2%
|
|
29.1%
|
|
|
23.0%
|
|
33.8%
|
UNIVERSAL
INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
|
SUPPLEMENTARY
INFORMATION
|
(in thousands,
except Policies In-Force)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Premiums
|
|
|
|
|
|
|
|
|
|
Direct premiums written -
Florida
|
|
$
238,309
|
|
$
215,634
|
|
|
$
718,177
|
|
$
672,477
|
Direct premiums written -
Other States
|
|
36,435
|
|
26,254
|
|
|
98,173
|
|
69,305
|
Direct premiums
written - Total
|
|
$
274,744
|
|
$
241,888
|
|
|
$
816,350
|
|
$
741,782
|
|
|
|
|
|
|
|
|
|
|
Direct premiums
earned
|
|
$
254,809
|
|
$
234,500
|
|
|
$
735,807
|
|
$
682,571
|
Net premiums
earned
|
|
$
174,517
|
|
$
159,534
|
|
|
$
505,085
|
|
$
468,443
|
|
|
|
|
|
|
|
|
|
|
Underwriting
Ratios - Net
|
|
|
|
|
|
|
|
|
|
Loss and loss
adjustment expense ratio
|
|
66.7%
|
|
46.1%
|
|
|
52.9%
|
|
42.6%
|
Policy
acquisition cost ratio
|
|
20.2%
|
|
20.2%
|
|
|
19.9%
|
|
19.7%
|
Other
operating expense ratio
|
|
12.5%
|
|
14.1%
|
|
|
14.0%
|
|
15.8%
|
General and
administrative expense ratio
|
|
32.8%
|
|
34.3%
|
|
|
33.9%
|
|
35.5%
|
Combined
ratio
|
|
99.5%
|
|
80.4%
|
|
|
86.8%
|
|
78.2%
|
|
|
|
|
|
|
|
|
|
|
Other
Items
|
|
|
|
|
|
|
|
|
|
(Favorable)/Unfavorable prior year reserve
development
|
113
|
|
(173)
|
|
|
1,318
|
|
(158)
|
Points on the
loss and loss adjustment expense ratio
|
|
0.1%
|
|
-0.1%
|
|
|
0.3%
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Policies
In-Force
|
|
|
|
|
|
|
|
|
|
Florida
|
|
612,713
|
|
573,413
|
|
|
|
|
|
Other
States
|
|
136,895
|
|
97,953
|
|
|
|
|
|
Total
|
|
749,608
|
|
671,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Premium
|
|
|
|
|
|
|
|
|
|
Florida
|
|
$
912,636
|
|
$
858,351
|
|
|
|
|
|
Other
States
|
|
122,968
|
|
86,827
|
|
|
|
|
|
Total
|
|
$
1,035,604
|
|
$
945,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Insured
Value
|
|
|
|
|
|
|
|
|
|
Florida
|
|
$143,993,671
|
|
$133,480,504
|
|
|
|
|
|
Other
States
|
|
47,829,382
|
|
32,805,783
|
|
|
|
|
|
Total
|
|
$191,823,053
|
|
$166,286,287
|
|
|
|
|
|
Contacts:
|
|
|
|
Investors
|
Media
|
Dean Evans
|
Andy Brimmer /
Mahmoud Siddig
|
VP Investor
Relations
|
Joele Frank,
Wilkinson Brimmer Katcher
|
954-958-1306
|
212-355-4449
|
de0130@universalproperty.com
|
|
View original
content:http://www.prnewswire.com/news-releases/universal-insurance-holdings-inc-reports-third-quarter-2017-financial-results-300552144.html
SOURCE Universal Insurance Holdings, Inc.