• Adjusted Diluted Earnings Per Share: $1.44, up from $1.07 in the prior year quarter.
• Core Revenue: $394.9 million, an increase of 8.2% year-over-year.
• Direct Premiums Written: $467.1 million, up 4.7% from the prior year quarter.
• Direct Premiums Earned: $513.3 million, up 6.5% from the prior year quarter.
• Net Premiums Earned: $355.7 million, up 6.5% from the prior year quarter.
• Net Combined Ratio: 95%, down 0.5 points compared to the prior year quarter.
• Net Loss Ratio: 70.5%, down 1.4 points compared to the prior year quarter.
• Net Expense Ratio: 24.5%, up 0.9 points compared to the prior year quarter.
• Quarterly Cash Dividend: $0.16 per share, payable on May 16, 2025.

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

Release Date: April 25, 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 an increase in adjusted diluted earnings per common share to $1.44 from $1.07 in the prior year quarter, driven by higher underwriting and net investment income.
• Core revenue increased by 8.2% year-over-year to $394.9 million, primarily due to higher net premiums earned, net investment income, and commission revenue.
• The company successfully completed its 2025-2026 reinsurance renewal ahead of schedule, securing $352 million of additional multiyear coverage through the 2026-2027 hurricane season.
• The net combined ratio improved to 95%, down 0.5 points from the prior year quarter, reflecting a lower net loss ratio.
• Universal Insurance Holdings Inc (NYSE:UVE) declared a regular quarterly cash dividend of $0.16 per share, demonstrating a commitment to returning value to shareholders.

Negative Points

• Direct premiums written in Florida decreased by 3%, partially offsetting growth in other states.
• The net expense ratio increased by 0.9 points to 24.5%, driven by higher policy acquisition costs and other operating costs.
• Despite growth in other states, the competitive environment in Florida remains challenging with new entrants and specific areas of focus for growth.
• There was no prior year reserve development, indicating a conservative approach but potentially limiting flexibility in financial adjustments.
• The company faces ongoing uncertainties related to the impact of legislative changes and market conditions on reinsurance pricing and capacity.

Q & A Highlights

Q: Can you provide more detail on the competitive environment and your growth prospects, both in Florida and outside of Florida? A: Stephen Donaghy, CEO: We are focused on profitability and managing our business book. We aim to grow where we can do so profitably, without letting competition dictate our pricing. The Florida market is becoming healthier, which is positive for everyone.

Q: Could you elaborate on the reinsurance renewals and how they compare to market expectations? A: Stephen Donaghy, CEO: We were pleased with the capacity and response to our offer. Despite recent hurricanes, we secured favorable rates, reflecting the positive impact of the 2022 legislative changes. We'll provide more details in May.

Q: Have reinsurers reflected the impacts of tort reform in their pricing? A: Stephen Donaghy, CEO: The favorable pricing and capacity suggest that reinsurers are considering the legislative changes. This healthier market benefits both P&C and reinsurance sectors, and we expect this trend to continue.

Q: Was there any reserve development in the quarter? A: Frank Wilcox, CFO: No, there was no prior year development. We maintained a conservative approach, and non-catastrophe weather was lighter this quarter.

Q: Can you provide details on the claims handling benefit booked in the quarter? A: Frank Wilcox, CFO: The claims handling benefit was negligible.

Q: Will the GAAP retention for reinsurance be similar to last year? A: Frank Wilcox, CFO: Yes, we plan to use the cover in the same capacity, with $66 million in excess of $45 million, translating to $111 million net for the first event. The second event is covered by third-party coverage.

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