United Insurance Holdings Corp. (UIHC) Q1 2021 Results Conference Call May 5, 2021 5:00 PM ET Company Participants Adam Prior - Senior Vice President, The Equity Group Dan Peed - Chairman and Chief Executive Officer Brad Martz - President and Chief Financial Officer Conference Call Participants Charles Peters - Raymond James Elyse Greenspan - Wells Fargo Operator Hello, and welcome to the United Insurance Holdings Corp Q1 Conference Call. At this time, all participants are in a listen-only mode. [Operator I ...

Company Overview - United Insurance Holdings Corporation (UIHC) has total assets of $2.80 billion and total equity of $359 million as of March 31, 2021[2] - UPC Insurance has $1.26 billion in premium in-force[2] Q1-2021 Financial Results - The core loss was -$19.4 million or -$0.45 per share[3] - Net current year catastrophe loss & LAE incurred was $23.965 million[4] - Net unfavorable reserve development was $29.769 million[4] - The underlying combined ratio was 90.4%, a 0.3 point improvement year-over-year[3] - The net loss & LAE ratio was 79.3%[4] - The combined ratio was 127.2%[4] Florida Litigation & Legislative Changes - Insurers in Florida paid $15.3 billion in connection to lawsuits from 2013 to 2020, with 71% of payments funding plaintiff attorney fees[8] - Florida Senate Bills 76 and 1598 are expected to become law on July 1, 2021, which includes changes to the one-way attorney fees statute and reduces the time allowed to file claims[3, 10] - Restricting new FL homeowners' and filed a +14.7% rate increase (effective 7/1)[3]

United Insurance Holdings Corp. (UIHC) Q4 2020 Earnings Conference Call February 24, 2021 5:00 PM ET Company Participants Adam Prior - Senior Vice President, The Equity Group Daniel Peed - Chairman and Chief Executive Officer Brad Martz - President and Chief Financial Officer Conference Call Participants Greg Peters - Raymond James Elyse Greenspan - Wells Fargo Ron Bobman - Capital Returns Bill Broomall - Dowling & Partners Operator Greetings, and welcome to the United Insurance Holdings Corp. Fourth Quarte ...

United Insurance Holdings Corp. (UIHC) Q3 2020 Earnings Conference Call November 5, 2020 5:30 PM ET Company Participants Adam Prior - Senior Vice President, The Equity Group, Investor Relations Dan Peed - Chief Executive Officer Brad Martz - Chief Financial Officer Conference Call Participants Greg Peters - Raymond James Matt Carletti - JMP Securities Elyse Greenspan - Wells Fargo Bill Broomall - Dowling & Partners Operator Greetings, and welcome to the United Insurance Holdings Corp., Third Quarter 2020 Ea ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________ FORM 10-Q _______________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 001-35761 ____________________ United Insurance Holdings Corp. (Exact Nam ...

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section provides general information about the Form 10-Q filing, including company details, filer status, and forward-looking statements with associated risks [Filing Details](index=1&type=section&id=Filing%20Details) This section details the company's Form 10-Q filing, identifying United Insurance Holdings Corp. as an accelerated filer on Nasdaq - **Quarterly Report on Form 10-Q** for the period ended June 30, 2020[1](index=1&type=chunk) - **United Insurance Holdings Corp.** is a Delaware corporation[1](index=1&type=chunk)[2](index=2&type=chunk) - Listed on **Nasdaq Stock Market LLC** under trading symbol **UIHC**[2](index=2&type=chunk) - Classified as an **accelerated filer**, having submitted all required reports and Interactive Data Files[2](index=2&type=chunk)[3](index=3&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements regarding growth and financial performance, along with significant risks and uncertainties that could alter actual results - Forward-looking statements encompass anticipated growth in revenues, gross written premium, EPS, estimated unpaid losses, investment returns, diversification, liquidity, investment objectives, and market risk management[6](index=6&type=chunk) - Key risks include exposure to **catastrophic events**, regulatory/economic conditions in Florida, agent relationships, potential claims exceeding loss reserves, governmental assessments, internal control adequacy, IT/data security, vendor reliance, management retention, acquisition risks, indebtedness, market share, regulatory changes, reinsurance costs/collectability, investment income dependence, industry cyclicality, legal actions, ratings downgrades, stock price impact, dividend constraints, and the impact of **COVID-19**[6](index=6&type=chunk) - The company cautions against undue reliance on these statements, which are valid only as of their making date, and undertakes no obligation to update them except as required by law[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, including balance sheets, income, equity, and cash flows, with detailed explanatory notes [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) The balance sheets detail the company's financial position, showing a **$363.2 million increase in total assets** and a **$337.6 million increase in total liabilities** by June 30, 2020 | ASSETS (in thousands) | June 30, 2020 | December 31, 2019 | | :------------------------------------------------------- | :------------ | :---------------- | | Total investments | $1,158,304 | $1,011,723 | | Total cash, cash equivalents and restricted cash | $281,570 | $287,057 | | Premiums receivable, net | $113,288 | $86,568 | | Reinsurance recoverable on paid and unpaid losses, net | $486,805 | $550,136 | | Ceded unearned premiums | $498,838 | $270,034 | | Total Assets | $2,830,432 | $2,467,218 | | **LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands)** | | | | Unpaid losses and loss adjustment expenses | $683,471 | $760,357 | | Unearned premiums | $760,131 | $674,055 | | Reinsurance payable on premiums | $460,807 | $166,131 | | Notes payable, net | $158,340 | $158,932 | | Total Liabilities | $2,280,915 | $1,943,353 | | Total Stockholders' Equity | $549,517 | $523,865 | - Total Assets increased by **$363.2 million (14.7%)** to **$2,830.4 million** at June 30, 2020, from $2,467.2 million at December 31, 2019[9](index=9&type=chunk) - Total Liabilities increased by **$337.6 million (17.4%)** to **$2,280.9 million** at June 30, 2020, from $1,943.4 million at December 31, 2019[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Net income attributable to UIHC saw a significant turnaround, moving from a **$2.9 million loss in Q2 2019** to a **$24.3 million gain in Q2 2020** | REVENUE (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross premiums written | $439,651 | $449,762 | $774,834 | $768,321 | | Net premiums earned | $185,482 | $190,404 | $377,078 | $371,126 | | Net investment income | $5,907 | $7,570 | $12,824 | $14,865 | | Net unrealized gain (loss) on equity securities | $20,552 | $2,737 | $(5,904) | $12,910 | | Total revenue | $216,397 | $204,776 | $392,701 | $407,097 | | **EXPENSES (in thousands)** | | | | | | Losses and loss adjustment expenses | $101,693 | $116,252 | $204,530 | $220,799 | | Policy acquisition costs | $52,573 | $61,622 | $111,448 | $116,868 | | Total expenses | $186,929 | $208,402 | $379,065 | $398,396 | | Net income (loss) attributable to UIHC | $24,274 | $(2,903) | $11,551 | $6,566 | | Basic EPS | $0.57 | $(0.07) | $0.27 | $0.15 | | Diluted EPS | $0.56 | $(0.07) | $0.27 | $0.15 | - Net income attributable to UIHC for Q2 2020 increased by **$27.177 million (936.2%)** to **$24.274 million**, from a net loss of $2.903 million in the prior year[11](index=11&type=chunk) - Net unrealized gain on equity securities significantly increased to **$20.552 million** in Q2 2020 from $2.737 million in Q2 2019[11](index=11&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Stockholders' equity statements show changes, with total equity attributable to UIHC increasing to **$528.3 million** by June 30, 2020 | Stockholders' Equity (in thousands) | March 31, 2020 | Net Income | Other Comprehensive Income, Net | Stock Compensation | Cash Dividends | June 30, 2020 | | :---------------------------------- | :------------- | :--------- | :------------------------------ | :----------------- | :------------- | :------------ | | Common Stock | $4 | — | — | — | — | $4 | | Additional Paid-in Capital | $392,552 | — | — | $81 | — | $392,633 | | Treasury Stock | $(431) | — | — | — | — | $(431) | | Accumulated Other Comprehensive Income | $8,493 | — | $21,034 | — | — | $29,527 | | Retained Earnings | $84,838 | $24,274 | — | — | $(2,578) | $106,534 | | Total UIHC Stockholders' Equity | $485,456 | $24,274 | $21,034 | $81 | $(2,578) | $528,267 | | Noncontrolling Interests (NCI) | $20,701 | $168 | $381 | — | — | $21,250 | | Total Stockholders' Equity | $506,157 | $24,442 | $21,415 | $81 | $(2,578) | $549,517 | - Total Stockholders' Equity attributable to UIHC increased from **$503.138 million** at December 31, 2019, to **$528.267 million** at June 30, 2020[9](index=9&type=chunk)[14](index=14&type=chunk) - Accumulated Other Comprehensive Income increased significantly from **$11.319 million** at December 31, 2019, to **$29.527 million** at June 30, 2020, primarily due to changes in net unrealized gains on investments[9](index=9&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Cash flow statements show a decrease in operating cash, a shift to net outflow in investing activities, and consistent financing outflows for dividends | Cash Flows (in thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $139,320 | $179,278 | | Net cash provided by (used in) investing activities | $(138,896) | $5,652 | | Net cash used in financing activities | $(5,911) | $(5,901) | | Increase (decrease) in cash, cash equivalents and restricted cash | $(5,487) | $179,029 | | Cash, cash equivalents and restricted cash at end of period | $281,570 | $363,149 | - Net cash provided by operating activities decreased by **$39.958 million (22.3%)** to **$139.320 million** for the six months ended June 30, 2020[18](index=18&type=chunk) - Investing activities shifted from a net cash inflow of **$5.652 million** in 2019 to a net cash outflow of **$138.896 million** in 2020, primarily due to increased purchases of fixed maturities and equity securities[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the financial statements, covering business, accounting policies, investments, debt, and other financial aspects [Note 1) ORGANIZATION, CONSOLIDATION AND PRESENTATION](index=11&type=section&id=Note%201)%20ORGANIZATION,%20CONSOLIDATION%20AND%20PRESENTATION) This note describes UPC Insurance as a property and casualty holding company, its consolidation basis, and the immaterial impact of COVID-19 on operations - **UPC Insurance** is a property and casualty insurance holding company operating through five insurance subsidiaries[20](index=20&type=chunk) - Primarily offers **homeowners' insurance in 12 states** and commercial residential insurance in Florida[22](index=22&type=chunk) - Operates under a single reportable segment: **property and casualty insurance policies**[23](index=23&type=chunk) - **COVID-19** has not materially impacted business operations, financial position, or liquidity, except for investment portfolio volatility and an immaterial decline in Northeast new business premium in Q2 2020[30](index=30&type=chunk) [Note 2) SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=Note%202)%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines significant accounting policies, including credit loss allowances, CARES Act impact, and the adoption of new accounting pronouncements in 2020 - No changes were made to significant accounting policies, except for standards adopted in 2020[32](index=32&type=chunk) - The **CARES Act** increased federal tax recoverable by **$12.513 million** and decreased deferred tax asset by **$7.250 million** due to changes in net operating loss carryback rules[38](index=38&type=chunk) Allowance for Expected Credit Losses (in thousands) | Allowance for Expected Credit Losses (in thousands) | December 31, 2019 | Provision for expected credit losses | Write-offs | June 30, 2020 | | :---------------------------------- | :---------------- | :----------------------------------- | :--------- | :------------ | | Premiums Receivable | $165 | $27 | $— | $192 | | Reinsurance Recoverables | $256 | $(30) | $— | $226 | | Note Receivable | $141 | $(59) | $— | $82 | | Total | $562 | $(62) | $— | $500 | - Adopted **ASU 2016-13 (Credit Losses)** on January 1, 2020, resulting in a cumulative effect decrease of **$262,000** to the opening balance of retained earnings[42](index=42&type=chunk) [Note 3) INVESTMENTS](index=14&type=section&id=Note%203)%20INVESTMENTS) This note details the investment portfolio, including fixed maturities and equity securities, fair values, net investment income, and confirms no credit loss allowance for fixed-income securities Fixed Maturities, Available-for-Sale (in thousands) | Fixed Maturities, Available-for-Sale (in thousands) | June 30, 2020 Fair Value | December 31, 2019 Fair Value | | :-------------------------------------------------- | :----------------------- | :--------------------------- | | U.S. government and agency securities | $123,894 | $120,816 | | States, municipalities and political subdivisions | $133,538 | $133,751 | | Corporate securities | $348,447 | $288,872 | | Mortgage-backed securities | $290,902 | $251,903 | | Total fixed maturities | $1,015,291 | $884,861 | Equity Securities (in thousands) | Equity Securities (in thousands) | June 30, 2020 Fair Value | December 31, 2019 Fair Value | | :------------------------------- | :----------------------- | :--------------------------- | | Mutual funds | $63,019 | $65,453 | | Other common stocks | $53,647 | $44,492 | | Total equity securities | $131,003 | $116,610 | Net Investment Income (in thousands) | Net Investment Income (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fixed maturities | $5,592 | $5,560 | $11,062 | $11,622 | | Equity securities | $728 | $622 | $1,499 | $1,114 | | Cash and cash equivalents | $66 | $1,661 | $737 | $1,796 | | Net investment income | $5,907 | $7,570 | $12,824 | $14,865 | - No credit loss allowance was recorded for fixed-income securities at June 30, 2020, as fair value declines were not credit-related, and the company does not intend to sell them before amortized cost recovery[54](index=54&type=chunk) [Note 4) EARNINGS PER SHARE (EPS)](index=23&type=section&id=Note%204)%20EARNINGS%20PER%20SHARE%20(EPS)) This note details basic and diluted EPS computations, showing a significant increase in **Basic EPS to $0.57 in Q2 2020** from $(0.07) in Q2 2019 EPS Data | EPS Data | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to UIHC common stockholders (in thousands) | $24,274 | $(2,903) | $11,551 | $6,566 | | Weighted-average shares outstanding (Basic) | 42,860,922 | 42,762,417 | 42,833,225 | 42,729,730 | | Weighted-average diluted shares | 43,055,115 | 42,762,417 | 43,041,623 | 43,097,244 | | Basic EPS | $0.57 | $(0.07) | $0.27 | $0.15 | | Diluted EPS | $0.56 | $(0.07) | $0.27 | $0.15 | - Basic EPS for UIHC common stockholders increased from **$(0.07)** in Q2 2019 to **$0.57** in Q2 2020[70](index=70&type=chunk) - Diluted EPS for UIHC common stockholders increased from **$(0.07)** in Q2 2019 to **$0.56** in Q2 2020[70](index=70&type=chunk) [Note 5) PROPERTY AND EQUIPMENT, NET](index=24&type=section&id=Note%205)%20PROPERTY%20AND%20EQUIPMENT,%20NET) This note breaks down property and equipment, net, showing an increase to **$37.9 million** by June 30, 2020, driven by computer hardware and software investments Property and Equipment, Net (in thousands) | Property and Equipment, Net (in thousands) | June 30, 2020 | December 31, 2019 | | :----------------------------------------- | :------------ | :---------------- | | Land | $2,114 | $2,114 | | Building and building improvements | $11,907 | $11,315 | | Computer hardware and software | $39,021 | $33,219 | | Office furniture and equipment | $3,204 | $3,260 | | Leasehold improvements | $739 | $20 | | Leased vehicles | $2,188 | $1,693 | | Total, at cost | $59,173 | $51,621 | | Less: accumulated depreciation and amortization | $(21,224) | $(18,893) | | Property and equipment, net | $37,949 | $32,728 | - Property and equipment, net, increased by **$5.221 million (16.0%)** to **$37.949 million** at June 30, 2020[71](index=71&type=chunk) - Computer hardware and software, including software in progress, increased by **$5.802 million** to **$39.021 million**[71](index=71&type=chunk) [Note 6) GOODWILL AND INTANGIBLE ASSETS](index=24&type=section&id=Note%206)%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details goodwill, which remained unchanged at **$73.045 million**, and intangible assets, which decreased to **$20.259 million** due to amortization - Goodwill carrying amount remained constant at **$73.045 million** at June 30, 2020, with no impairment recognized[73](index=73&type=chunk)[75](index=75&type=chunk) Intangible Assets (in thousands) | Intangible Assets (in thousands) | June 30, 2020 | December 31, 2019 | | :--------------------------------- | :------------ | :---------------- | | Intangible assets subject to amortization | $20,259 | $22,440 | | Indefinite-lived intangible assets | $3,639 | $3,639 | | Total | $23,898 | $26,079 | - Amortization expense for intangible assets was **$1.044 million** for Q2 2020 and **$2.181 million** for the six months ended June 30, 2020[78](index=78&type=chunk) [Note 7) REINSURANCE](index=28&type=section&id=Note%207)%20REINSURANCE) This note describes the reinsurance program, including catastrophe protection, and details a decrease in reinsurance recoverable to **$486.8 million** by June 30, 2020 - The reinsurance program includes excess of loss, aggregate excess of loss, and quota share treaties to cover catastrophe losses[80](index=80&type=chunk)[81](index=81&type=chunk) - Approximately **$3.3 billion** in catastrophe excess of loss reinsurance protection was purchased for the 2020 hurricane season, effective June 1, 2020[158](index=158&type=chunk) Reinsurance Recoverable (in thousands) | Reinsurance Recoverable (in thousands) | June 30, 2020 | December 31, 2019 | | :------------------------------------- | :------------ | :---------------- | | Reinsurance recoverable on unpaid losses and loss adjustment expenses | $398,369 | $482,315 | | Reinsurance recoverable on paid losses and loss adjustment expenses | $88,436 | $67,821 | | Total Reinsurance recoverable | $486,805 | $550,136 | - The company cedes **100% of flood insurance premiums and risk** to the National Flood Insurance Program, earning commissions of **$431,000** in Q2 2020 and **$764,000** for the six months ended June 30, 2020[82](index=82&type=chunk) [Note 8) LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSE (LAE)](index=29&type=section&id=Note%208)%20LIABILITY%20FOR%20UNPAID%20LOSSES%20AND%20LOSS%20ADJUSTMENT%20EXPENSE%20(LAE)) This note details the reserve for unpaid losses and LAE, which decreased to **$683.5 million** by June 30, 2020, with favorable prior year development Reserve for Unpaid Losses and LAE (in thousands) | Reserve for Unpaid Losses and LAE (in thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------------------- | :----------------------------- | :----------------------------- | | Balance at January 1 | $760,357 | $661,203 | | Less: reinsurance recoverable on unpaid losses | $482,315 | $477,870 | | Net balance at January 1 | $278,042 | $183,333 | | Total incurred | $204,530 | $220,799 | | Total paid | $197,470 | $206,185 | | Net balance at June 30 | $285,102 | $197,947 | | Plus: reinsurance recoverable on unpaid losses | $398,369 | $379,402 | | Balance at June 30 | $683,471 | $577,349 | - Total unpaid losses and LAE decreased by **$76.886 million (10.1%)** to **$683.471 million** at June 30, 2020[84](index=84&type=chunk) - The decrease was a result of a decrease in reinsurance recoverables on unpaid losses balance[169](index=169&type=chunk) - The company experienced **favorable development of $(1.952) million** in 2020 related to prior year losses, compared to $20.967 million in 2019[84](index=84&type=chunk)[85](index=85&type=chunk) [Note 9) LONG-TERM DEBT](index=30&type=section&id=Note%209)%20LONG-TERM%20DEBT) This note outlines long-term debt, which remained stable at **$160.8 million** by June 30, 2020, and discusses compliance with financial covenants, including a Truist Note waiver Long-Term Debt Outstanding (in thousands) | Long-Term Debt Outstanding (in thousands) | Maturity Date | Effective Interest Rate | June 30, 2020 Carrying Value | December 31, 2019 Carrying Value | | :---------------------------------------- | :--------------- | :---------------------- | :--------------------------- | :------------------------------- | | Senior Notes Payable | December 15, 2027 | 6.25% | $150,000 | $150,000 | | Florida State Board of Administration Note Payable | July 1, 2026 | 0.70% | $7,059 | $7,647 | | Truist Term Note Payable | May 26, 2031 | 1.88% | $3,784 | $3,958 | | Total long-term debt | | | $160,843 | $161,605 | - The company was in compliance with covenants for **Senior Notes** and the **SBA Note** at June 30, 2020[90](index=90&type=chunk)[91](index=91&type=chunk) - The company was not in compliance with the **Truist Note's minimum cash flow coverage ratio covenant** at December 31, 2019, but obtained a waiver for this non-compliance[92](index=92&type=chunk)[93](index=93&type=chunk) [Note 10) COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=Note%2010)%20COMMITMENTS%20AND%20CONTINGENCIES) This note covers commitments and contingencies, including routine legal actions, **$2.161 million in unfunded partnership commitments**, and **$2.411 million in total lease liabilities** - The company is involved in routine claims-related legal actions, accruing amounts when an unfavorable outcome is probable and estimable[95](index=95&type=chunk) - Unfunded commitments for limited partnership investments totaled **$2.161 million** at June 30, 2020[97](index=97&type=chunk) Lease Balances (in thousands) | Lease Balances (in thousands) | June 30, 2020 | December 31, 2019 | | :------------------------------ | :------------ | :---------------- | | Operating lease assets | $2,225 | $335 | | Financing lease assets | $1,431 | $1,263 | | Total lease assets | $3,656 | $1,598 | | Operating lease liabilities | $2,369 | $324 | | Financing lease liabilities | $42 | $34 | | Total lease liabilities | $2,411 | $358 | [Note 11) STATUTORY ACCOUNTING AND REGULATION](index=35&type=section&id=Note%2011)%20STATUTORY%20ACCOUNTING%20AND%20REGULATION) This note discusses insurance industry regulation, requiring minimum statutory surplus and RBC, with all subsidiaries meeting requirements and combined statutory net income of **$4.495 million** in Q2 2020 - Insurance subsidiaries are subject to state laws and **NAIC RBC guidelines**, requiring minimum statutory surplus and capital[103](index=103&type=chunk)[104](index=104&type=chunk) - All insurance subsidiaries met regulatory requirements at June 30, 2020, with no significant assessments received[103](index=103&type=chunk)[109](index=109&type=chunk) Statutory Net Income (in thousands) | Statutory Net Income (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Combined statutory net income (loss) | $4,495 | $1,154 | $11,703 | $(6,581) | [Note 12) RELATED PARTY TRANSACTIONS](index=36&type=section&id=Note%2012)%20RELATED%20PARTY%20TRANSACTIONS) This note details related party transactions, noting the termination of the relationship with **AmRisc, LLC** on December 31, 2019, following R. Daniel Peed's resignation - The related party relationship with **AmRisc, LLC** terminated on December 31, 2019, following R. Daniel Peed's resignation[110](index=110&type=chunk) - For the three and six months ended June 30, 2019, gross written premiums of **$163.045 million** and **$270.663 million** were recorded with AmRisc, resulting in gross fees and commissions of **$46.014 million** and **$74.993 million**[111](index=111&type=chunk) [Note 13) ACCUMULATED OTHER COMPREHENSIVE INCOME](index=36&type=section&id=Note%2013)%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) This note details AOCI components, showing a significant increase to **$29.527 million** by June 30, 2020, driven by changes in net unrealized gains on investments Accumulated Other Comprehensive Income (in thousands) | Accumulated Other Comprehensive Income (in thousands) | Pre-Tax Amount | Tax (Expense) Benefit | Net Amount | | :-------------------------------------------------- | :------------- | :-------------------- | :--------- | | December 31, 2019 | $14,962 | $(3,643) | $11,319 | | Changes in net unrealized gains on investments | $24,022 | $(5,830) | $18,192 | | Reclassification adjustment for realized gains | $13 | $3 | $16 | | June 30, 2020 | $38,997 | $(9,470) | $29,527 | - Accumulated other comprehensive income increased by **$18.208 million** to **$29.527 million** at June 30, 2020[113](index=113&type=chunk) [Note 14) STOCKHOLDERS' EQUITY](index=37&type=section&id=Note%2014)%20STOCKHOLDERS'%20EQUITY) This note details cash dividends of **$0.06 per share** and a **$25 million stock repurchase plan** authorized in July 2019, under which no shares were repurchased Cash Dividends Declared (in thousands, except per share) | Cash Dividends Declared (in thousands, except per share) | First Quarter 2020 | First Quarter 2019 | Second Quarter 2020 | Second Quarter 2019 | | :------------------------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Per Share Amount | $0.06 | $0.06 | $0.06 | $0.06 | | Aggregate Amount | $2,571 | $2,569 | $2,578 | $2,570 | - A stock repurchase plan of up to **$25 million** was authorized in July 2019, but no shares had been repurchased as of June 30, 2020[114](index=114&type=chunk) [Note 15) STOCK-BASED COMPENSATION](index=37&type=section&id=Note%2015)%20STOCK-BASED%20COMPENSATION) This note details stock-based compensation, including employee and director expenses, and reports **$3.043 million** in unrecognized employee stock compensation expense Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Employee stock-based compensation expense (Pre-tax) | $(52) | $416 | $474 | $946 | | Director stock-based compensation expense (Pre-tax) | $133 | $261 | $307 | $632 | - Unrecognized stock compensation expense totaled approximately **$3.043 million** for non-vested stock-based compensation and **$333,000** for non-vested director stock-based compensation at June 30, 2020[119](index=119&type=chunk) Non-Vested Common Stock Grants Activity | Non-Vested Common Stock Grants Activity | Number of Restricted Shares | Weighted Average Grant Date Fair Value | | :-------------------------------------- | :-------------------------- | :------------------------------------- | | Outstanding as of December 31, 2019 | 214,495 | $17.49 | | Granted | 347,254 | $9.57 | | Forfeited | 165,102 | $12.95 | | Vested | 104,115 | $16.47 | | Outstanding as of June 30, 2020 | 292,532 | $11.01 | [Note 16) SUBSEQUENT EVENTS](index=39&type=section&id=Note%2016)%20SUBSEQUENT%20EVENTS) This note discloses subsequent events, including a **$0.06 per share quarterly cash dividend** and the impact of Hurricanes Hanna and Isaias - On July 28, 2020, the Board of Directors declared a **$0.06 per share quarterly cash dividend**, payable on August 18, 2020[126](index=126&type=chunk) - **Hurricane Hanna** (July 2020) and **Hurricane Isaias** (August 2020) made landfall, with total incurred losses yet to be estimated[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operations, key performance indicators, COVID-19 impact, liquidity, and non-GAAP measures [EXECUTIVE SUMMARY](index=40&type=section&id=EXECUTIVE%20SUMMARY) This summary provides an overview of UPC Insurance, highlighting growth in policies in-force by **2.5%** and the immaterial impact of COVID-19 on operations - **UPC Insurance** is a holding company primarily engaged in residential personal and commercial property and casualty insurance in the U.S[129](index=129&type=chunk) - Policies in-force increased by **2.5%** from **615,357** at June 30, 2019, to **630,542** at June 30, 2020, driven by organic growth and strategic acquisitions[131](index=131&type=chunk) - **COVID-19** has not materially impacted business operations, financial position, or liquidity, except for investment portfolio volatility and an immaterial decline in Northeast new business premium in Q2 2020[136](index=136&type=chunk) 2020 Highlights (in thousands, except per share) | 2020 Highlights (in thousands, except per share) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross premiums written | $439,651 | $449,762 | $774,834 | $768,321 | | Net premiums earned | $185,482 | $190,404 | $377,078 | $371,126 | | Consolidated net income (loss) attributable to UIHC | $24,274 | $(2,903) | $11,551 | $6,566 | | Net income (loss) available to UIHC stockholders per diluted share | $0.56 | $(0.07) | $0.27 | $0.15 | | Core income (loss) | $8,816 | $(3,459) | $17,945 | $(257) | | Core income (loss) per diluted share | $0.20 | $(0.08) | $0.42 | $(0.01) | [Consolidated Net Income](index=42&type=section&id=Consolidated%20Net%20Income) Consolidated net income attributable to UIHC significantly improved, with the combined ratio improving to **99.4% for Q2 2020** and **99.2% for the six-month period** Financial Performance (in thousands, except ratios) | Financial Performance (in thousands, except ratios) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to UIHC | $24,274 | $(2,903) | $11,551 | $6,566 | | Diluted EPS | $0.57 | $(0.07) | $0.27 | $0.15 | | Loss ratio, net | 54.8% | 61.1% | 54.2% | 59.5% | | Expense ratio | 44.6% | 47.1% | 45.0% | 46.5% | | Combined ratio | 99.4% | 108.2% | 99.2% | 106.0% | | Effect of current year catastrophe losses on combined ratio | 16.1% | 8.3% | 12.4% | 7.4% | | Effect of prior year development on combined ratio | (0.4)% | 8.1% | (0.5)% | 5.6% | | Underlying combined ratio | 83.7% | 91.8% | 87.3% | 93.0% | - Net income attributable to UIHC increased by **$27.177 million** for Q2 2020 and by **$4.985 million** for the six months ended June 30, 2020[140](index=140&type=chunk) - The combined ratio improved by **8.8 percentage points to 99.4%** for Q2 2020 and by **6.8 percentage points to 99.2%** for the six months ended June 30, 2020[140](index=140&type=chunk) [Definitions of Non-GAAP Measures](index=43&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines non-GAAP measures like underlying combined ratio, underlying loss and LAE, and core income, used to enhance performance understanding - **Underlying combined ratio** is a non-GAAP measure that subtracts current year catastrophe losses and prior year development from the combined ratio to highlight business trends[142](index=142&type=chunk) - **Underlying loss and LAE** is a non-GAAP measure that subtracts current year catastrophe losses and prior year reserve development from net loss and LAE to analyze loss trends[143](index=143&type=chunk) - **Core income** is a non-GAAP measure that adjusts net income by adding back amortization of intangible assets and subtracting realized/unrealized gains/losses on equity securities, net of tax, to focus on operational profitability[144](index=144&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=44&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) No material changes or additions were made to critical accounting policies and estimates during the period, except for standards adopted in 2020 as detailed in Note 2 - No material changes or additions were made to critical accounting policies and estimates during the three and six months ended June 30, 2020, except for standards adopted in 2020[145](index=145&type=chunk) [RECENT ACCOUNTING STANDARDS](index=44&type=section&id=RECENT%20ACCOUNTING%20STANDARDS) This section refers to Note 2 for a discussion of recent accounting standards that may affect the company - Refer to Note 2 for a discussion of recent accounting standards that may affect the company[146](index=146&type=chunk) [ANALYSIS OF FINANCIAL CONDITION - JUNE 30, 2020 COMPARED TO DECEMBER 31, 2019](index=45&type=section&id=ANALYSIS%20OF%20FINANCIAL%20CONDITION%20-%20JUNE%2030,%202020%20COMPARED%20TO%20DECEMBER%2031,%202019) This analysis compares financial condition, focusing on investments, reinsurance, and unpaid losses, with total cash and investments increasing by **$141.1 million** [Investments](index=45&type=section&id=Investments) The investment strategy prioritizes capital preservation and liquidity, with total cash and investments increasing to **$1.44 billion** by June 30, 2020 - Investment strategy focuses on **capital preservation**, maximizing after-tax income, liquidity, and risk minimization, primarily through debt securities and moderate equity exposure[150](index=150&type=chunk) - Total cash, cash equivalents, restricted cash, and investment portfolio increased by **$141.094 million (10.9%)** to **$1.439 billion** at June 30, 2020[152](index=152&type=chunk)[153](index=153&type=chunk) - **COVID-19** caused fluctuations in investment portfolios, resulting in an unrealized gain on equity securities of **$20.552 million** in Q2 2020, but a six-month unrealized loss of **$5.904 million**[155](index=155&type=chunk) [Reinsurance](index=46&type=section&id=Reinsurance) The reinsurance program manages catastrophe exposure, with **$3.3 billion** in protection purchased for 2020, and reinsurance costs increasing to **(46.1)% of gross earned premium** in Q2 2020 - The reinsurance program includes catastrophe excess of loss, aggregate excess of loss, and quota share treaties to manage catastrophe risk[157](index=157&type=chunk)[159](index=159&type=chunk) - Approximately **$3.3 billion** in catastrophe excess of loss reinsurance protection was purchased for the 2020 hurricane season, effective June 1, 2020[158](index=158&type=chunk) Reinsurance Costs as % of Gross Earned Premium | Reinsurance Costs as % of Gross Earned Premium | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Reinsurance costs as % of gross earned premium | (46.1)% | (42.3)% | (45.3)% | (42.2)% | [Unpaid Losses and Loss Adjustments](index=48&type=section&id=Unpaid%20Losses%20and%20Loss%20Adjustments) Unpaid losses and LAE decreased to **$683.471 million** by June 30, 2020, primarily due to reduced reinsurance recoverables, with estimates subject to significant judgment - Unpaid losses and LAE decreased by **$76.886 million (10.1%)** to **$683.471 million** at June 30, 2020[169](index=169&type=chunk) - The decrease was a result of a decrease in reinsurance recoverables on unpaid losses balance[169](index=169&type=chunk) - Estimating loss reserves requires significant judgment due to variables like inflation, judicial decisions, legislative changes, and claims handling procedures, with ultimate liability likely differing from estimates[170](index=170&type=chunk) [RESULTS OF OPERATIONS - COMPARISON OF THE THREE MONTH PERIODS ENDED JUNE 30, 2020 AND 2019](index=49&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20COMPARISON%20OF%20THE%20THREE%20MONTH%20PERIODS%20ENDED%20JUNE%2030,%202020%20AND%202019) Net income attributable to UIHC for Q2 2020 significantly increased to **$24.274 million** from a **$2.903 million net loss** in Q2 2019 - Net income attributable to UIHC increased by **$27.177 million (936.2%)** to **$24.274 million** for Q2 2020, from a net loss of $2.903 million in Q2 2019[173](index=173&type=chunk) - The increase in net income was primarily due to increased unrealized gains on equity securities, decreased loss and LAE, and decreased policy acquisition costs[173](index=173&type=chunk) [Revenue](index=49&type=section&id=Revenue_Q2) Gross written premiums decreased by **$10.111 million (2.2%)** to **$439.651 million** for Q2 2020, primarily due to decreased assumed premiums Gross Written Premium (in thousands) | Gross Written Premium (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :----- | | Total gross written premium by region | $439,651 | $449,762 | $(10,111) | | Personal property | $307,965 | $286,106 | $21,859 | | Commercial property | $131,686 | $163,656 | $(31,970) | - Gross written premiums decreased by **$10.111 million (2.2%)** for Q2 2020, driven by a **$43.032 million decrease in assumed premiums**[174](index=174&type=chunk)[175](index=175&type=chunk) - Direct written premium increased in Florida by **$19.984 million**, Gulf by **$10.360 million**, and Southeast by **$3.202 million**[175](index=175&type=chunk) [Expenses](index=50&type=section&id=Expenses_Q2) Total expenses decreased by **$21.473 million (10.3%)** to **$186.929 million** for Q2 2020, driven by lower loss and LAE and policy acquisition costs Expenses (in thousands, except ratios) | Expenses (in thousands, except ratios) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change | | :------------------------------------- | :------------------------------- | :------------------------------- | :----- | | Net loss and LAE | $101,693 | $116,252 | $(14,559) | | Policy acquisition costs | $52,573 | $61,622 | $(9,049) | | Operating and underwriting expenses | $13,977 | $11,199 | $2,778 | | General and administrative expenses | $16,121 | $16,802 | $(681) | | Total Operating Expenses | $82,671 | $89,623 | $(6,952) | | Net loss and LAE as % of net earned premiums | 54.8% | 61.1% | (6.3) pts | | Policy acquisition costs as % of net earned premiums | 28.3% | 32.4% | (4.1) pts | | Operating expenses as % of net earned premiums | 7.5% | 5.9% | 1.6 pts | | General and administrative expenses as % of net earned premiums | 8.7% | 8.8% | (0.1) pts | - Loss and LAE decreased by **$14.559 million (12.5%)** to **$101.693 million**, with the net loss ratio improving by **6.3 points to 54.8%**[179](index=179&type=chunk) - Policy acquisition costs decreased by **$9.049 million (14.7%)** due to a net increase of **$18.331 million** in ceding commission income[180](index=180&type=chunk) [RESULTS OF OPERATIONS - COMPARISON OF THE SIX MONTH PERIODS ENDED JUNE 30, 2020 AND 2019](index=51&type=section&id=RESULTS%20OF%20OPERATIONS%20-%20COMPARISON%20OF%20THE%20SIX%20MONTH%20PERIODS%20ENDED%20JUNE%2030,%202020%20AND%202019) Net earnings attributable to UIHC for the six months ended June 30, 2020, increased by **$4.985 million (75.9%)** to **$11.551 million**, primarily due to decreased loss and LAE expenses - Net earnings attributable to UIHC increased by **$4.985 million (75.9%)** to **$11.551 million** for the six months ended June 30, 2020[184](index=184&type=chunk) - The increase was primarily due to a decrease in loss and LAE expenses[184](index=184&type=chunk) [Revenue](index=51&type=section&id=Revenue_6M) Gross written premiums increased by **$6.513 million (0.8%)** to **$774.834 million** for the six months ended June 30, 2020, driven by organic growth and rate increases Gross Written Premium (in thousands) | Gross Written Premium (in thousands) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :----- | | Total gross written premium by region | $774,834 | $768,321 | $6,513 | | Personal property | $532,581 | $496,787 | $35,794 | | Commercial property | $242,253 | $271,534 | $(29,281) | - Gross written premiums increased by **$6.513 million (0.8%)** for the six months ended June 30, 2020, primarily reflecting organic growth and rate increases[185](index=185&type=chunk) - Direct written premium increased by **$59.236 million**, while assumed premium decreased by **$52.723 million**[186](index=186&type=chunk) [Expenses](index=52&type=section&id=Expenses_6M) Total expenses decreased by **$19.331 million (4.9%)** to **$379.065 million** for the six months ended June 30, 2020, mainly due to lower loss and LAE and policy acquisition costs Expenses (in thousands, except ratios) | Expenses (in thousands, except ratios) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | | :------------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net loss and LAE | $204,530 | $220,799 | $(16,269) | | Policy acquisition costs | $111,448 | $116,868 | $(5,420) | | Operating and underwriting expenses | $23,681 | $21,410 | $2,271 | | General and administrative expenses | $34,422 | $34,383 | $39 | | Total operating expenses | $169,551 | $172,661 | $(3,110) | | Net loss and LAE as % of net earned premiums | 54.2% | 59.5% | (5.3) pts | | Policy acquisition costs as % of net earned premiums | 29.6% | 31.5% | (1.9) pts | | Operating expenses as % of net earned premiums | 6.3% | 5.8% | 0.5 pts | | General and administrative expenses as % of net earned premiums | 9.1% | 9.3% | (0.2) pts | - Loss and LAE decreased by **$16.269 million (7.4%)** to **$204.530 million**, with the net loss ratio improving by **5.3 points to 54.2%**[190](index=190&type=chunk) - Policy acquisition costs decreased by **$5.420 million (4.6%)** due to a **$14.932 million increase** in ceding commission income[191](index=191&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=53&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses liquidity and capital resources, highlighting decreased operating cash, a shift to net investing outflow, and consistent financing activities for dividends - Cash is generated from premium collections, reinsurance recoveries, investment income, asset sales/maturities, debt issuance, and stock issuance[194](index=194&type=chunk) - As a holding company, liquidity relies on cash dividends or intercompany loans from management subsidiaries, which are regulated by state insurance authorities[195](index=195&type=chunk) - **COVID-19** has not impacted access to credit and capital markets for liquidity, and the company expects to maintain financing flexibility[197](index=197&type=chunk) [Operating Activities](index=54&type=section&id=Operating%20Activities) Net cash provided by operating activities decreased to **$139.320 million** for the six months ended June 30, 2020, primarily due to fewer reinsurance recoverables - Net cash provided by operating activities decreased by **$39.958 million** to **$139.320 million** for the six months ended June 30, 2020[200](index=200&type=chunk) - The decrease was attributed to fewer reinsurance recoverables outstanding in 2020, compared to higher balances in 2019 from Hurricanes Michael, Florence, and Irma[200](index=200&type=chunk) [Investing Activities](index=54&type=section&id=Investing%20Activities) Investing activities shifted from a **$5.652 million net cash inflow** in 2019 to a **$138.896 million net cash outflow** in 2020 due to increased investment purchases - Net cash used in investing activities was **$(138.896) million** for the six months ended June 30, 2020, a significant shift from a net cash provided of $5.652 million in 2019[18](index=18&type=chunk) - This change was due to net purchases of investments totaling **$131.280 million** in 2020, compared to net sales of $11.883 million in 2019[201](index=201&type=chunk) [Financing Activities](index=54&type=section&id=Financing%20Activities) Cash used in financing activities remained consistent at approximately **$5.9 million** for both periods, primarily due to dividend payments - Cash used in financing activities was consistent at **$5.911 million** for the six months ended June 30, 2020, compared to $5.901 million in 2019[202](index=202&type=chunk) - The primary outflow was due to dividend payments in the first two quarters of both years[202](index=202&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=54&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) As of June 30, 2020, the company had no off-balance-sheet arrangements or material changes to contractual obligations - No off-balance-sheet arrangements or material changes to contractual obligations existed at June 30, 2020[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses exposure to market risks, including interest rate, credit, and equity price risks, with no material changes during the six months ended June 30, 2020 - The company is exposed to **interest rate risk, credit risk, and equity price risk**[204](index=204&type=chunk) - No material changes in market risk occurred during the six months ended June 30, 2020[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures, noting no material changes in internal control over financial reporting despite remote work - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2020[206](index=206&type=chunk)[207](index=207&type=chunk) [Changes in Internal Control over Financial Reporting](index=55&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Despite the shift to remote work due to COVID-19, no material changes in internal control over financial reporting occurred during the quarter - The shift to remote work environments due to **COVID-19** did not impact the effectiveness of internal controls[208](index=208&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2020[208](index=208&type=chunk) [PART II. OTHER INFORMATION](index=55&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, updated risk factors including COVID-19 impacts, equity security sales, defaults, and a list of exhibits [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine claims-related legal actions, accruing amounts when probable and estimable, with no material non-claims-related actions pending - The company is involved in routine claims-related legal actions, accruing amounts when an unfavorable outcome is probable and estimable[209](index=209&type=chunk) - No material non-claims-related legal actions were pending at June 30, 2020[210](index=210&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, focusing on potential adverse impacts of the **COVID-19 pandemic**, including increased defaults, regulatory challenges, and investment value declines - The **COVID-19 pandemic** and related economic uncertainty could adversely impact the business, results of operations, and financial condition[211](index=211&type=chunk) - Potential risks include increased premium defaults, challenges in meeting regulatory/debt requirements, declining premiums, operational inefficiencies from remote work, contraction of reinsurance markets, higher claims frequency/severity, investment portfolio value declines, and third-party vendor disruptions[214](index=214&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - The full extent of **COVID-19's** impact is highly uncertain and depends on future developments[213](index=213&type=chunk)[218](index=218&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2020, the company did not sell any unregistered equity securities or repurchase its own equity securities - No unregistered equity securities were sold, and no equity securities were repurchased during the three months ended June 30, 2020[220](index=220&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred[220](index=220&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[220](index=220&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report[220](index=220&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a Separation Agreement, executive officer certifications, and XBRL documents - Exhibits include a Separation Agreement, certifications of Principal Executive Officer and Principal Financial Officer (Sarbanes-Oxley Act Sections 302 and 906), and XBRL Instance Document, Schema, Calculation, Definition, Label, and Presentation Linkbases[222](index=222&type=chunk) [SIGNATURES](index=58&type=section&id=SIGNATURES) The report was duly signed on August 7, 2020, by the Chief Executive Officer and Chief Financial Officer of United Insurance Holdings Corp - Report signed on **August 7, 2020**, by **R. Daniel Peed (CEO)** and **B. Bradford Martz (CFO and President)**[224](index=224&type=chunk)[225](index=225&type=chunk)