• 3Q20 total revenue up 35.7% to $311.7 million
  • 3Q20 direct premiums written up 19.4%
  • 3Q20 diluted GAAP earnings per share (“EPS”) of $(0.10), non-GAAP adjusted EPS1 of $(1.43)
  • Book value per share increased 0.1% since the end of 2019 to $15.15 despite elevated industry-wide weather activity
  • YTD annualized return on average equity of 10.0%

Universal Insurance Holdings (NYSE: UVE) (the “Company”) reported 2020 third quarter diluted EPS of $(0.10) on a GAAP basis and $(1.43) non-GAAP adjusted EPS1. Total revenue was up 35.7% from the year ago quarter to $311.7 million. Year-to-date annualized return on average equity was 10.0%.

 

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 continued to see headwinds in the third quarter as we dealt with elevated industry-wide weather events year-to-date. As previously announced, we were affected by full retention events from Hurricanes Isaias and Sally, in addition to other PCS events year-to-date. Furthermore, we saw an increase in prior year’s companion claims in the run up to the expiration of the statute of limitations for Hurricane Irma, which contributed to prior year’s reserve development,” said Stephen J. Donaghy, Chief Executive Officer.

“Our primary rate increases continue to flow through our book as evidenced by our strong direct premiums written growth of 19.4% in the quarter. We continue to selectively write new business in our existing states, including Florida. Specifically in Florida, we have seen a 9.5% year-over-year policy count growth, with 97% of this growth coming from outside of the tri-county area.”

Summary Financial Results

($thousands, except per share data)

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

(GAAP comparison)

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

311,665

 

 

$

229,641

 

 

35.7

%

 

 

$

799,644

 

 

$

699,949

 

 

14.2

%

Income (loss) before income taxes

(3,792

)

 

27,896

 

 

NM

 

 

 

51,230

 

 

132,570

 

 

(61.4

)%

Income (loss) before income taxes margin

(1.2

)%

 

12.1

%

 

NM

 

 

 

6.4

%

 

18.9

%

 

(12.5

)pts

Diluted EPS

$

(0.10

)

 

$

0.59

 

 

NM

 

 

$

1.14

 

 

$

2.82

 

 

(59.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized return on average equity (ROE)

(2.5

)%

 

14.0

%

 

NM

 

 

 

10.0

%

 

23.9

%

 

(13.9

)pts

Book value per share, end of period

$

15.15

 

 

$

17.13

 

 

(11.6

)%

 

 

$

15.15

 

 

$

17.13

 

 

(11.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

(Non-GAAP comparison)2

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income

(59,594

)

 

28,476

 

 

NM

 

 

 

(817

)

 

125,520

 

 

NM

 

Adjusted EPS

$

(1.43

)

 

$

0.61

 

 

NM

 

 

 

$

(0.08

)

 

$

2.67

 

 

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.

 

Total revenue grew double digits for the quarter driven primarily by realized gains on investments, growth in net premiums earned (organic new business growth and primary rate increases) and services revenue. GAAP diluted EPS and non-GAAP adjusted EPS results for the quarter were driven by increased loss and loss adjustment expense (“LAE”) from elevated industry-wide weather events and prior year’s reserve development. Despite elevated activity year-to-date, the Company produced an annualized year-to-date return on average equity of 10.0%.

Underwriting

($thousands, except policies in force)

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Policies in force (as of end of period)

965,462

 

 

872,603

 

 

10.6

%

 

 

965,462

 

 

872,603

 

 

10.6

%

Premiums in force (as of end of period)

$

1,459,971

 

 

$

1,267,681

 

 

15.2

%

 

 

$

1,459,971

 

 

$

1,267,681

 

 

15.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums written

$

409,418

 

 

$

342,872

 

 

19.4

%

 

 

$

1,148,656

 

 

$

990,066

 

 

16.0

%

Direct premiums earned

357,208

 

 

313,065

 

 

14.1

%

 

 

1,020,798

 

 

911,550

 

 

12.0

%

Net premiums earned

234,191

 

 

206,599

 

 

13.4

%

 

 

681,390

 

 

626,683

 

 

8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio3

32.9

%

 

33.5

%

 

(60.0

)bps

 

 

32.8

%

 

33.2

%

 

(40.0

)bps

Loss & LAE ratio

101.8

%

 

64.3

%

 

37.5

pts

 

 

77.0

%

 

57.3

%

 

19.7

pts

Combined ratio

134.7

%

 

97.8

%

 

36.9

pts

 

 

109.8

%

 

90.5

%

 

19.3

pts

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Expense ratio excludes interest expense.

 

Direct premiums written were up double digits for the quarter, led by strong direct premium growth of 18.8% in Other States (non-Florida), and 19.6% in Florida. The quarter’s growth benefited from organic new business growth, and primary rate increases continuing to flow through the book.

On the expense side, the combined ratio increased 36.9 points for the quarter. The increase was driven primarily by increased weather events, accruing reserves at a higher core loss ratio, prior year’s reserve development, and the impact of higher reinsurance costs, partially offset by a benefit from our claims adjusting business and a reduction in the expense ratio as set forth below.

  • The expense ratio improved by 60 basis points for the quarter, primarily related to an 80 basis point improvement in the other operating expense ratio due in large part to economies of scale and lower stock based compensation, partially offset by the effect of increased cost of reinsurance on the expense ratio.
  • The net loss and LAE ratio increased 37.5 points for the quarter. Quarterly drivers include:
    • Weather events in excess of plan of $68.0 million, or 29.0 points, for the quarter ($15.0 million in 3Q19) were primarily related to the previously announced hurricanes (Isaias and Sally), in addition to other PCS events that exceeded the plan year-to-date.
    • Prior year’s reserve development of $30.1 million, or 12.9 points, for the quarter ($3.2 million in 3Q19) was partially related to increased prior year’s companion claims being filed during the run up to the expiration of the 3-year catastrophe statute of limitations in September.
    • Core losses of $140.4 million, or 59.9 points, for the quarter ($114.4 million in 3Q19) were primarily related to accruing incremental reserves for the current accident year loss costs and diversified growth.

Services

($thousands)

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Commission revenue

$

8,997

 

 

$

7,380

 

 

21.9

%

 

 

$

23,770

 

 

$

18,933

 

 

25.5

%

Policy fees

6,167

 

 

5,569

 

 

10.7

%

 

 

18,253

 

 

16,587

 

 

10.0

%

Other revenue

1,935

 

 

1,929

 

 

0.3

%

 

 

6,529

 

 

5,369

 

 

21.6

%

Total

$

17,099

 

 

$

14,878

 

 

14.9

%

 

 

$

48,552

 

 

$

40,889

 

 

18.7

%

 

Total services revenue increased 14.9% for the quarter. The increase was driven by commission revenue earned on ceded premiums and an increase in policy fees.

Investments

($thousands)

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

2020

 

2019

 

Change

 

 

2020

 

2019

 

Change

Net investment income

$

4,557

 

 

$

7,613

 

 

(40.1

)%

 

 

$

17,570

 

 

$

23,165

 

 

(24.2

)%

Realized gains (losses)

53,827

 

 

(22

)

 

NM

 

 

 

54,294

 

 

(13,152

)

 

NM

 

Unrealized gains (losses)

1,991

 

 

573

 

 

247.5

%

 

 

(2,162

)

 

22,364

 

 

NM

 

NM = Not Meaningful

 

Net investment income decreased 40.1% for the quarter, driven by lower yields on cash and fixed-income investments during 2020 when compared to 2019. Realized gains for the quarter resulted from taking advantage of increased market prices on our available-for-sale debt investment portfolio. Cash and cash equivalents increased 122.5% to $405.1 million when compared to the end of 2019 as a result of the actions taken to realize investment gains, leading to higher investment cash flows. As a result of the sales and reinvestment, future portfolio investment income will reflect current market rates.

Capital Deployment

During the third quarter, the Company repurchased approximately 534 thousand shares at an aggregate cost of $9.9 million. Year-to-date, the Company repurchased approximately 1.4 million shares at an aggregate cost of $26.5 million.

On July 6, 2020, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, which was paid on August 7, 2020, to shareholders of record as of the close of business on July 31, 2020.

Guidance

The Company is updating its guidance for 2020 to reflect increased top line revenue, offset by elevated third quarter loss and LAE (assuming no further extraordinary weather events and no realized or unrealized gains in 4Q20):

  • GAAP EPS in a range of $1.80 - $2.10 (reduced from previous range of $2.31 - $2.61)
  • Non-GAAP Adjusted EPS in a range of $0.55 - $0.85 (reduced from previous range of $2.40 - $2.70)
  • Annualized return on average equity (derived from GAAP measures) in a range of 11.1% - 14.1% (reduced from previous range of 13.5% - 16.5%)

Conference Call and Webcast

  • Wednesday, October 28, 2020 at 9:00 a.m. ET
  • U.S. Dial-in Number: (855) 752-6647
  • International: (503) 343-6667
  • Participant code: 5317328
  • Listen to live webcast and view presentation: 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: 5317328 through November 12, 2020

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings, Inc. (“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 18 states (primarily Florida). Learn more at UniversalInsuranceHoldings.com.

Non-GAAP Financial Measures and Key Performance Indicators

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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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 2019 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)

 

 

 

September 30,

 

December 31,

 

 

2020

 

2019

ASSETS:

 

 

 

 

Invested Assets

 

 

 

 

Fixed maturities, at fair value

 

$

842,574

 

 

$

855,284

 

Equity securities, at fair value

 

52,700

 

 

43,717

 

Investment real estate, net

 

15,280

 

 

15,585

 

Total invested assets

 

910,554

 

 

914,586

 

Cash and cash equivalents

 

405,132

 

 

182,109

 

Restricted cash and cash equivalents

 

21,115

 

 

2,635

 

Prepaid reinsurance premiums

 

333,062

 

 

175,208

 

Reinsurance recoverable

 

95,078

 

 

193,236

 

Premiums receivable, net

 

76,800

 

 

63,883

 

Property and equipment, net

 

52,300

 

 

41,351

 

Deferred policy acquisition costs

 

111,295

 

 

91,882

 

Goodwill

 

2,319

 

 

2,319

 

Other assets

 

42,529

 

 

52,643

 

TOTAL ASSETS

 

$

2,050,184

 

 

$

1,719,852

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

202,720

 

 

$

267,760

 

Unearned premiums

 

789,137

 

 

661,279

 

Advance premium

 

55,334

 

 

30,975

 

Reinsurance payable, net

 

351,255

 

 

122,581

 

Long-term debt

 

8,823

 

 

9,926

 

Other liabilities

 

168,152

 

 

133,430

 

Total liabilities

 

1,575,421

 

 

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 - 15,487 and 14,069

 

(223,086

)

 

(196,585

)

Additional paid-in capital

 

101,438

 

 

96,036

 

Accumulated other comprehensive income (loss), net of taxes

 

1,662

 

 

20,364

 

Retained earnings

 

594,281

 

 

573,619

 

Total stockholders' equity

 

474,763

 

 

493,901

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

2,050,184

 

 

$

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 - 46,821 and 46,707 shares; Outstanding 31,334 and 32,638 shares.

 

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2020

 

2019

 

 

2020

 

2019

REVENUES

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

234,191

 

 

$

206,599

 

 

 

$

681,390

 

 

$

626,683

 

Net investment income

 

4,557

 

 

7,613

 

 

 

17,570

 

 

23,165

 

Net realized gains/(losses) on investments

 

53,827

 

 

(22

)

 

 

54,294

 

 

(13,152

)

Net change in unrealized gains/(losses) of equity securities

 

1,991

 

 

573

 

 

 

(2,162

)

 

22,364

 

Commission revenue

 

8,997

 

 

7,380

 

 

 

23,770

 

 

18,933

 

Policy fees

 

6,167

 

 

5,569

 

 

 

18,253

 

 

16,587

 

Other revenue

 

1,935

 

 

1,929

 

 

 

6,529

 

 

5,369

 

Total revenues

 

311,665

 

 

229,641

 

 

 

799,644

 

 

699,949

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

238,477

 

 

132,571

 

 

 

524,870

 

 

358,961

 

Policy acquisition costs

 

51,594

 

 

45,131

 

 

 

146,982

 

 

132,863

 

Other operating expenses

 

25,370

 

 

23,986

 

 

 

76,477

 

 

75,352

 

Interest expense

 

16

 

 

57

 

 

 

85

 

 

203

 

Total expenses

 

315,457

 

 

201,745

 

 

 

748,414

 

 

567,379

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax expense

 

(3,792

)

 

27,896

 

 

 

51,230

 

 

132,570

 

Income tax expense (benefit)

 

(623

)

 

7,750

 

 

 

14,450

 

 

34,983

 

NET INCOME (LOSS)

 

$

(3,169

)

 

$

20,146

 

 

 

$

36,780

 

 

$

97,587

 

 

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,

 

 

2020

 

2019

 

 

2020

 

2019

Weighted average common shares outstanding - basic

 

31,659

 

 

33,649

 

 

 

32,116

 

 

34,230

 

Weighted average common shares outstanding - diluted

 

31,659

 

 

33,930

 

 

 

32,202

 

 

34,565

 

Shares outstanding, end of period

 

31,334

 

 

33,211

 

 

 

31,334

 

 

33,211

 

Basic earnings (loss) per common share

 

$

(0.10

)

 

$

0.60

 

 

 

$

1.14

 

 

$

2.85

 

Diluted earnings (loss) per common share

 

$

(0.10

)

 

$

0.59

 

 

 

$

1.14

 

 

$

2.82

 

Cash dividend declared per common share

 

$

0.16

 

 

$

0.16

 

 

 

$

0.48

 

 

$

0.48

 

Book value per share, end of period

 

$

15.15

 

 

$

17.13

 

 

 

$

15.15

 

 

$

17.13

 

Annualized return on average equity (ROE)

 

(2.5

)%

 

14.0

%

 

 

10.0

%

 

23.9

%

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

SUPPLEMENTARY INFORMATION

(in thousands, except for Policies In Force data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2020

 

2019

 

 

2020

 

2019

Premiums

 

 

 

 

 

 

 

 

 

Direct premiums written - Florida

 

$

334,916

 

 

$

280,141

 

 

 

$

948,196

 

 

$

819,185

 

Direct premiums written - Other States

 

74,502

 

 

62,731

 

 

 

200,460

 

 

170,881

 

Direct premiums written - Total

 

$

409,418

 

 

$

342,872

 

 

 

$

1,148,656

 

 

$

990,066

 

Direct premiums earned

 

$

357,208

 

 

$

313,065

 

 

 

$

1,020,798

 

 

$

911,550

 

Net premiums earned

 

$

234,191

 

 

$

206,599

 

 

 

$

681,390

 

 

$

626,683

 

 

 

 

 

 

 

 

 

 

 

Underwriting Ratios - Net

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expense ratio

 

101.8

%

 

64.3

%

 

 

77.0

%

 

57.3

%

Policy acquisition cost ratio

 

22.1

%

 

21.8

%

 

 

21.6

%

 

21.2

%

Other operating expense ratio6

 

10.8

%

 

11.6

%

 

 

11.2

%

 

12.0

%

General and administrative expense ratio6

 

32.9

%

 

33.5

%

 

 

32.8

%

 

33.2

%

Combined ratio

 

134.7

%

 

97.8

%

 

 

109.8

%

 

90.5

%

 

 

 

 

 

 

 

 

 

 

Other Items

 

 

 

 

 

 

 

 

 

(Favorable)/Unfavorable prior year's reserve development

 

$

30,085

 

 

$

3,218

 

 

 

$

34,904

 

 

$

3,703

 

Points on the loss and loss adjustment expense ratio

 

 

12.9

pts

 

1.6

pts

 

 

5.1

pts

 

59

bps

 

 

 

 

 

 

 

 

 

 

6 Expense ratio excludes interest expense.

 

 

 

As of

 

 

September 30,

 

 

2020

 

2019

Policies in force

 

 

 

 

Florida

 

715,130

 

 

653,202

 

Other States

 

250,332

 

 

219,401

 

Total

 

965,462

 

 

872,603

 

 

 

 

 

 

Premiums in force

 

 

 

 

Florida

 

$

1,202,318

 

 

$

1,051,030

 

Other States

 

257,653

 

 

216,651

 

Total

 

$

1,459,971

 

 

$

1,267,681

 

 

 

 

 

 

Total Insured Value

 

 

 

 

Florida

 

$

185,382,817

 

 

$

161,761,450

 

Other States

 

105,432,408

 

 

87,516,672

 

Total

 

$

290,815,225

 

 

$

249,278,122

 

 

Three Months Ended September 30, 2020

 

Direct

 

Loss

 

Ceded

 

Loss

 

Net

 

Loss

Premiums earned

$

357,208

 

 

 

 

$

123,017

 

 

 

 

$

234,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

 

 

 

 

 

Core losses

$

140,470

 

 

39.3

%

 

$

78

 

 

0.1

%

 

$

140,392

 

 

59.9

%

Weather events7

70,000

 

 

19.6

%

 

2,000

 

 

1.6

%

 

68,000

 

 

29.0

%

Prior year’s reserve development

136,737

 

 

38.3

%

 

106,652

 

 

86.7

%

 

30,085

 

 

12.9

%

Total losses and loss adjustment expenses

$

347,207

 

 

97.2

%

 

$

108,730

 

 

88.4

%

 

$

238,477

 

 

101.8

%

 

 

 

 

 

 

 

 

 

 

 

 

7Includes only current year weather events beyond those expected.

 

 

Nine Months Ended September 30, 2020

 

Direct

 

Loss

 

Ceded

 

Loss

 

Net

 

Loss

Premiums earned

$

1,020,798

 

 

 

 

$

339,408

 

 

 

 

$

681,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and loss adjustment expenses:

 

 

 

 

 

 

 

 

 

 

 

Core losses

$

404,092

 

 

39.6

%

 

$

126

 

 

%

 

$

403,966

 

 

59.3

%

Weather events7

88,000

 

 

8.6

%

 

2,000

 

 

0.6

%

 

86,000

 

 

12.6

%

Prior year’s reserve development

190,804

 

 

18.7

%

 

155,900

 

 

46.0

%

 

34,904

 

 

5.1

%

Total losses and loss adjustment expenses

$

682,896

 

 

66.9

%

 

$

158,026

 

 

46.6

%

 

$

524,870

 

 

77.0

%

 

 

 

 

 

 

 

 

 

 

 

 

7Includes 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

 

 

Nine Months Ended

 

 

Guidance

 

September 30,

 

 

September 30,

 

 

Full Year 2020E

 

2020

 

2019

 

 

2020

 

2019

 

 

 

Income (Loss) Before Income Taxes

$

(3,792

)

 

$

27,896

 

 

 

$

51,230

 

 

$

132,570

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions8

 

 

1,074

 

 

 

 

 

1,959

 

 

 

 

Net unrealized (gains)/losses on equity securities

(1,991

)

 

(573

)

 

 

2,162

 

 

(22,364

)

 

 

 

Net realized (gains)/losses on investments

(53,827

)

 

22

 

 

 

(54,294

)

 

13,152

 

 

 

 

Interest Expense

16

 

 

57

 

 

 

85

 

 

203

 

 

 

 

Total Adjustments

(55,802

)

 

580

 

 

 

(52,047

)

 

(7,050

)

 

 

 

Non-GAAP Adjusted Operating Income

$

(59,594

)

 

$

28,476

 

 

 

$

(817

)

 

$

125,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted EPS

$

(0.10

)

 

$

0.59

 

 

 

$

1.14

 

 

$

2.82

 

 

 

$ 1.80 - 2.10

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Reinstatement premium, net of commissions8

 

 

0.03

 

 

 

 

 

0.06

 

 

 

 

Net unrealized (gains)/losses on equity securities

(0.06

)

 

(0.01

)

 

 

0.07

 

 

(0.64

)

 

 

0.07

 

Net realized (gains)/losses on investments

(1.70

)

 

 

 

 

(1.69

)

 

0.38

 

 

 

(1.69

)

Total Pre-Tax Adjustments

(1.76

)

 

0.02

 

 

 

(1.62

)

 

(0.20

)

 

 

(1.62

)

Income Tax on Above Adjustments

0.43

 

 

 

 

 

0.40

 

 

0.05

 

 

 

0.40

 

Total Adjustments

(1.33

)

 

0.02

 

 

 

(1.22

)

 

(0.15

)

 

 

(1.22

)

Non-GAAP Adjusted EPS

$

(1.43

)

 

$

0.61

 

 

 

$

(0.08

)

 

$

2.67

 

 

 

$ 0.55 - 0.85

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Investor Relations Contact: Rob Luther, 954-958-1200 ext. 6750 VP, Corporate Development, Strategy & IR rluther@universalproperty.com

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

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