[PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Universal Insurance Holdings, Inc. and its subsidiaries for the periods ended March 31, 2025, and December 31, 2024, including balance sheets, income statements, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining the nature of operations, significant accounting policies, and specific financial components [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total invested assets | $1,428,256 | $1,371,276 | | Cash and cash equivalents | $398,184 | $259,441 | | Total assets | $2,714,716 | $2,841,861 | | Total liabilities | $2,292,329 | $2,468,611 | | Total stockholders' equity | $422,387 | $373,250 | [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands, except per share) | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Direct premiums written | $467,078 | $446,179 | | Premiums earned, net | $355,721 | $334,025 | | Net investment income | $16,060 | $13,523 | | Total revenues | $394,867 | $367,959 | | Losses and loss adjustment expenses | $250,555 | $240,187 | | General and administrative expenses | $87,244 | $78,666 | | Total operating costs and expenses | $337,799 | $318,853 | | Income before income taxes | $55,456 | $47,484 | | Net income | $41,439 | $33,657 | | Basic earnings per common share | $1.48 | $1.17 | | Diluted earnings per common share | $1.44 | $1.14 | | Cash dividend declared per common share | $0.16 | $0.16 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands) | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Net income (loss) | $41,439 | $33,657 | | Other comprehensive income (loss), net of taxes | $12,094 | $(2,542) | | Comprehensive income (loss) | $53,533 | $31,115 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Changes in Stockholders' Equity (Three Months Ended March 31, 2025) | Metric (in thousands) | Balance, Dec 31, 2024 | Net Income (Loss) | Other Comprehensive Income (Loss) | Declaration of Dividends | Balance, Mar 31, 2025 | | :-------------------- | :-------------------- | :---------------- | :-------------------------------- | :----------------------- | :-------------------- | | Total Stockholders' Equity | $373,250 | $41,439 | $12,094 | $(4,491) | $422,387 | Changes in Stockholders' Equity (Three Months Ended March 31, 2024) | Metric (in thousands) | Balance, Dec 31, 2023 | Net Income (Loss) | Other Comprehensive Income (Loss) | Declaration of Dividends | Balance, Mar 31, 2024 | | :-------------------- | :-------------------- | :---------------- | :-------------------------------- | :----------------------- | :-------------------- | | Total Stockholders' Equity | $341,297 | $33,657 | $(2,542) | $(4,762) | $364,664 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands) | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Net cash provided by (used in) operating activities | $186,769 | $82,916 | | Net cash provided by (used in) investing activities | $(41,548) | $(74,381) | | Net cash provided by (used in) financing activities | $(6,478) | $(9,518) | | Net increase (decrease) during the period | $138,743 | $(983) | | Balance, end of period (Cash & Restricted Cash) | $400,819 | $398,958 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS%20AND%20BASIS%20OF%20PRESENTATION) - Universal Insurance Holdings, Inc. (UVE) is a vertically integrated insurance holding company primarily engaged in property and casualty insurance, offering residential homeowners' insurance in 19 states, with Florida comprising the majority of policies in force. Revenues are generated from premiums, investment returns, brokerage commissions, and policy fees[25](index=25&type=chunk)[26](index=26&type=chunk) - The financial statements are prepared in conformity with U.S. GAAP and SEC rules for interim financial information, relying on management estimates for liabilities such as unpaid losses, loss adjustment expenses, and reinsurance recoveries[27](index=27&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk) [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The Company's significant accounting policies are consistent with those reported in its Annual Report on Form 10-K for the year ended December 31, 2024[32](index=32&type=chunk) [NOTE 3 - INVESTMENTS](index=12&type=section&id=NOTE%203%20-%20INVESTMENTS) Available-for-Sale Debt Securities Fair Value (March 31, 2025 vs. December 31, 2024) | Debt Securities (in thousands) | March 31, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------------- | :------------------------ | :------------------------- | | U.S. government obligations and agencies | $21,491 | $19,747 | | Corporate bonds | $901,783 | $868,948 | | Mortgage-backed and asset-backed securities | $377,522 | $357,030 | | Municipal bonds | $14,578 | $14,354 | | Redeemable preferred stock | $8,964 | $9,000 | | Total | $1,324,338 | $1,269,079 | Credit Quality of Available-for-Sale Debt Securities (March 31, 2025 vs. December 31, 2024) | Average Credit Ratings | March 31, 2025 Fair Value | % of Total | December 31, 2024 Fair Value | % of Total | | :--------------------- | :------------------------ | :--------- | :------------------------- | :--------- | | AAA | $403,447 | 30.4 % | $378,732 | 29.9 % | | AA | $145,768 | 11.0 % | $146,456 | 11.5 % | | A | $441,890 | 33.4 % | $425,503 | 33.5 % | | BBB | $328,126 | 24.8 % | $313,265 | 24.7 % | | No Rating Available | $5,107 | 0.4 % | $5,123 | 0.4 % | | Total | $1,324,338 | 100.0 % | $1,269,079 | 100.0 % | Net Investment Income Components (Three Months Ended March 31, 2025 vs. 2024) | Component (in thousands) | 2025 | 2024 | | :----------------------- | :----------- | :----------- | | Available-for-sale debt securities | $10,719 | $7,214 | | Equity securities | $796 | $894 | | Cash and cash equivalents | $5,122 | $5,823 | | Other | $166 | $177 | | Total investment income | $16,803 | $14,108 | | Less: Investment expenses | $(743) | $(585) | | Net investment income | $16,060 | $13,523 | [NOTE 4 - REINSURANCE](index=17&type=section&id=NOTE%204%20-%20REINSURANCE) - The Company uses reinsurance agreements to reduce risk from catastrophic losses, primarily through catastrophe excess of loss reinsurance. It remains responsible for retained loss amounts and losses exceeding reinsurance coverage. The Company evaluates the financial strength of reinsurers to mitigate credit risk[50](index=50&type=chunk) Reinsurance Recoverables and Prepaid Premiums (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Prepaid reinsurance premiums | $105,480 | $262,716 | | Reinsurance recoverables on paid losses and LAE | $37,519 | $65,681 | | Reinsurance recoverables on unpaid losses and LAE | $433,670 | $561,936 | | Total Reinsurance recoverables | $471,189 | $627,617 | [NOTE 5 - INSURANCE OPERATIONS](index=18&type=section&id=NOTE%205%20-%20INSURANCE%20OPERATIONS) Deferred Policy Acquisition Costs (DPAC) (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands) | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | DPAC, beginning of period | $121,178 | $109,985 | | Capitalized Costs | $54,108 | $50,852 | | Amortization of DPAC | $(59,456) | $(54,205) | | DPAC, end of period | $115,830 | $106,632 | - The Insurance Entities (UPCIC and APPCIC) are subject to Florida Office of Insurance Regulation (FLOIR) standards, requiring specific statutory capital levels and restricting dividend payments. As of March 31, 2025, neither UPCIC nor APPCIC could pay ordinary dividends, but both exceeded minimum statutory capitalization requirements[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) Statutory Capital and Surplus (March 31, 2025 vs. December 31, 2024) | Entity (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | UPCIC Statutory capital and surplus | $384,559 | $385,530 | | APPCIC Statutory capital and surplus | $28,195 | $27,985 | | UPCIC Ten percent of total liabilities | $175,350 | $161,438 | | APPCIC Ten percent of total liabilities | $3,096 | $3,179 | [NOTE 6 – LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES](index=19&type=section&id=NOTE%206%20%E2%80%93%20LIABILITY%20FOR%20UNPAID%20LOSSES%20AND%20LOSS%20ADJUSTMENT%20EXPENSES) Change in Liability for Unpaid Losses and LAE (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands) | 2025 | 2024 | | :-------------------- | :----------- | :----------- | | Balance at beginning of period | $959,291 | $510,117 | | Total incurred | $250,555 | $240,187 | | Total paid | $187,903 | $238,276 | | Balance at end of period | $893,677 | $429,629 | - The liability for unpaid losses and loss adjustment expenses decreased by **$65.6 million** to **$893.7 million** as of March 31, 2025, primarily due to the settlement of Hurricane Ian claims and other prior-year claims. There was no prior year development during the three months ended March 31, 2025 and 2024[62](index=62&type=chunk)[63](index=63&type=chunk) [NOTE 7 – LONG-TERM DEBT](index=21&type=section&id=NOTE%207%20%E2%80%93%20LONG-TERM%20DEBT) Long-Term Debt (March 31, 2025 vs. December 31, 2024) | Debt Type (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Surplus note | $2,206 | $2,573 | | 5.625% Senior unsecured notes | $100,000 | $100,000 | | Total principal amount | $102,206 | $102,573 | | Less: unamortized debt issuance costs | $(1,153) | $(1,330) | | Total long-term debt, net | $101,053 | $101,243 | - The Company has a **$25.0 million** surplus note with the State Board of Administration of Florida, with a 20-year term and variable interest. It also has **$100.0 million** in 5.625% Senior Unsecured Notes due 2026, redeemable after November 30, 2023. The Company was in compliance with all debt covenants as of March 31, 2025[66](index=66&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - A **$50.0 million** unsecured revolving credit line with JP Morgan Chase Bank, N.A. was established on May 31, 2024, replacing a previous **$40.0 million** line. No amount has been borrowed under this facility as of March 31, 2025[71](index=71&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=23&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) Common Stock Repurchases (Three Months Ended March 31, 2025 vs. 2024) | Repurchase Plan | Dollar Amount Authorized (in thousands) | Shares Repurchased (2025) | Shares Repurchased (2024) | Aggregate Purchase Price (2024, in thousands) | | :---------------- | :------------------------------------ | :------------------------ | :------------------------ | :-------------------------------------------- | | March 11, 2024 | $20,000 | — | 288 | $6 | | June 12, 2023 | $20,000 | — | 207,722 | $4,133 | [NOTE 9 – INCOME TAXES](index=23&type=section&id=NOTE%209%20%E2%80%93%20INCOME%20TAXES) - The effective tax rate for the three months ended March 31, 2025, was **25.3%**, a decrease from **29.1%** for the same period in 2024. The Company determined no valuation allowance was needed on its gross deferred tax assets[74](index=74&type=chunk)[75](index=75&type=chunk) Income Tax Expense Reconciliation (Three Months Ended March 31, 2025 vs. 2024) | Component | 2025 | 2024 | | :-------------------- | :---- | :---- | | Expected provision at federal statutory tax rate | 21.0 % | 21.0 % | | State income tax, net of federal tax benefit | 2.8 % | 3.6 % | | Disallowed compensation | 1.4 % | 1.3 % | | Equity compensation shortfall | — % | 3.3 % | | Nondeductible expenses | 0.2 % | 0.1 % | | Dividend received deduction | (0.1)% | (0.2)% | | Total income tax expense (benefit) | 25.3 % | 29.1 % | [NOTE 10 – EARNINGS (LOSS) PER SHARE](index=24&type=section&id=NOTE%2010%20%E2%80%93%20EARNINGS%20(LOSS)%20PER%20SHARE) EPS Reconciliation (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands, except per share) | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Net income (loss) | $41,439 | $33,657 | | Income (loss) available to common stockholders | $41,436 | $33,654 | | Weighted average common shares outstanding - Basic | 28,091 | 28,869 | | Weighted average diluted common shares outstanding | 28,779 | 29,404 | | Basic earnings (loss) per common share | $1.48 | $1.17 | | Diluted earnings (loss) per common share | $1.44 | $1.14 | [NOTE 11 – OTHER COMPREHENSIVE INCOME (LOSS)](index=25&type=section&id=NOTE%2011%20%E2%80%93%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Components of Other Comprehensive Income (Loss) (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands) | 2025 Pre-tax | 2025 After-tax | 2024 Pre-tax | 2024 After-tax | | :-------------------- | :----------- | :------------- | :----------- | :------------- | | Unrealized holding gains (losses) arising during the period | $16,015 | $12,083 | $(3,442) | $(2,594) | | Reclassification adjustments for (gains) losses realized in net income (loss) | $14 | $11 | $69 | $52 | | Other comprehensive income (loss) | $16,029 | $12,094 | $(3,373) | $(2,542) | [NOTE 12 – COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=NOTE%2012%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company has multi-year reinsurance contract commitments for future years, with obligations of **$73.8 million** in 2025, **$127.3 million** in 2026, and **$53.5 million** in 2027[80](index=80&type=chunk) - The Company is involved in various legal proceedings, primarily disputes over coverage or damages. Accrued liabilities are established for probable and estimable loss contingencies. Reasonably possible losses for legal proceedings are currently estimated to be immaterial[81](index=81&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [NOTE 13 – FAIR VALUE MEASUREMENTS](index=26&type=section&id=NOTE%2013%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) - The Company classifies assets measured at fair value into a three-level hierarchy: Level 1 (unadjusted quoted prices in active markets), Level 2 (observable market-based inputs or corroborated unobservable inputs), and Level 3 (unobservable inputs reflecting management's best estimate)[93](index=93&type=chunk) Assets Measured at Fair Value (March 31, 2025) | Asset Type (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------------------ | :------ | :---------- | :---------- | :---------- | | Available-For-Sale Debt Securities | — | $1,324,338 | — | $1,324,338 | | Equity Securities | $79,983 | — | — | $79,983 | | Investment in Private Equity Limited Partnership | — | — | $11,750 | $11,750 | | Total assets accounted for at fair value | $79,983 | $1,324,338 | $11,750 | $1,416,071 | | Investment in Private Equity Limited Partnerships (NAV, in thousands) | | | | $3,932 | | Total assets at fair value (in thousands) | | | | $1,420,003 | Level 3 Investment in Private Equity Limited Partnership (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------- | :------------------------ | :------------------------- | | Investment in Private Equity Limited Partnership | $11,750 | $12,202 | | Weighted Average Mean EBITDA Multiple | 6.6x | 5.8x | [NOTE 14 – VARIABLE INTEREST ENTITIES](index=29&type=section&id=NOTE%2014%20%E2%80%93%20VARIABLE%20INTEREST%20ENTITIES) - The Company consolidates Mangrove Risk Solutions Bermuda Ltd. (formerly Isosceles Insurance Ltd.), a captive reinsurance provider, as a variable interest entity (VIE) because the Company is its primary beneficiary[100](index=100&type=chunk) [NOTE 15 – SEGMENT INFORMATION](index=29&type=section&id=NOTE%2015%20%E2%80%93%20SEGMENT%20INFORMATION) - The Company operates as a single, integrated business segment, offering homeowners insurance policies across various states. The CEO, as the Chief Operating Decision Maker, evaluates the entire business as a unified entity for resource allocation and performance assessment[101](index=101&type=chunk)[102](index=102&type=chunk) [NOTE 16 – SUBSEQUENT EVENTS](index=30&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENTS) - On April 14, 2025, the Company declared a quarterly cash dividend of **$0.16** per share of common stock, payable on May 16, 2025, to shareholders of record on May 9, 2025[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key performance indicators, market trends, and the impact of legislative reforms in Florida. It details revenue and expense drivers, investment performance, and liquidity and capital resources, offering a comprehensive analysis of the Company's financial health and strategic direction [Cautionary Note Regarding Forward-Looking Statements](index=31&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements based on estimates, assumptions, and plans, which are subject to uncertainties and risks. Actual results may differ materially due to factors such as catastrophic events, Florida's regulatory and economic conditions, claims exceeding reserves, inadequate pricing, reinsurance availability, and litigation[108](index=108&type=chunk)[109](index=109&type=chunk) [OVERVIEW](index=33&type=section&id=OVERVIEW) - Universal Insurance Holdings, Inc. (UVE) is a vertically integrated holding company offering property and casualty insurance and related services, primarily residential homeowners' insurance in 19 states, with Florida accounting for **73.7%** of direct premiums written for the three months ended March 31, 2025[112](index=112&type=chunk) - The Company aims for long-term underwriting profit and growth in other revenue sources, including investment portfolio returns, reinsurance brokerage, and managing general agency fees[112](index=112&type=chunk) [Trends and Geographical Distribution](index=33&type=section&id=Trends%20and%20Geographical%20Distribution) [Florida Trends](index=33&type=section&id=Florida%20Trends) - The Florida personal lines homeowners' market has faced distressed conditions with significant increases in losses, LAE, and reinsurance costs, leading to higher premiums, reduced coverages, and tightened underwriting standards. Legislative reforms enacted in December 2022 aim to mitigate rising claims costs and premium increases by eliminating one-way attorneys' fees, restricting assignment of benefits, and reducing claim submission periods[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - While the Company is optimistic about the reforms improving the claims environment, the ultimate benefits are uncertain and subject to political, economic, and market factors. The active 2024 hurricane season added complexity, but the Company has cautiously increased its appetite for new business due to reforms and operational initiatives[117](index=117&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk) [Summary of Recent Rate Changes](index=35&type=section&id=Summary%20of%20Recent%20Rate%20Changes) - UPCIC implemented a **1.4%** rate decrease for Florida Homeowners' and **1.6%** for Dwelling Fire effective July 15, 2023, due to participation in the Reinsurance to Assist Policyholders Program (RAP), which expired May 31, 2024. Subsequently, a **7.5%** rate increase for Florida personal residential homeowners' was effective July 17, 2023 (new business) and November 4, 2023 (renewal business), and a **4.1%** rate increase for Florida personal dwelling-fire lines was effective January 15, 2024[125](index=125&type=chunk)[126](index=126&type=chunk) - In August 2024, UPCIC implemented an average rate decrease of **1.5%** for new homeowners policies in Florida, with renewal rates effective May 17, 2025. Various rate increases were approved for 2025 in other states, including Michigan (**+24.8%**), Georgia (**+7.4%**), Alabama (**+8.0%**), Indiana (**+6.0%**), North Carolina (**+7.5%**), Massachusetts (**+13.0%**), and South Carolina (**+8.7%**)[126](index=126&type=chunk)[130](index=130&type=chunk) [KEY PERFORMANCE INDICATORS](index=35&type=section&id=KEY%20PERFORMANCE%20INDICATORS) - The Company uses various key performance indicators (KPIs) and non-GAAP financial measures to understand underlying business trends and evaluate financial performance, including adjusted book value per common share, adjusted net income, combined ratio, core loss ratio, direct premiums written, and policies in force[127](index=127&type=chunk)[129](index=129&type=chunk) [Definitions of Key Performance Indicators and GAAP and Non-GAAP Measures](index=35&type=section&id=Definitions%20of%20Key%20Performance%20Indicators%20and%20GAAP%20and%20Non-GAAP%20Measures) - This section defines key performance indicators and both GAAP and non-GAAP financial measures used by the Company, such as Adjusted book value per common share, Adjusted common stockholders' equity, Adjusted net income (loss) available to common stockholders, Combined Ratio, Direct Premiums Written (DPW), Expense Ratio, Losses and Loss Adjustment Expense Ratio, and Policies in Force[130](index=130&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[138](index=138&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[150](index=150&type=chunk) [REINSURANCE](index=39&type=section&id=REINSURANCE) - The Company's 2024-2025 catastrophe reinsurance program, effective June 1, 2024, meets FLOIR and rating agency requirements, with a first event combined retention of **$45 million** and a tower extending to **$2.415 billion**. It includes full reinstatement availability and reinstatement premium protection (RPP)[155](index=155&type=chunk)[157](index=157&type=chunk) - The program utilizes a captive insurance arrangement for the first event layer (**$66 million** in excess of **$45 million**) and includes specific third and fourth event private market excess of loss coverage for frequency protection. The Florida Hurricane Catastrophe Fund (FHCF) provides approximately **$1.26 billion** for UPCIC and **$20.4 million** for APPCIC[157](index=157&type=chunk) - The 2024-2025 catastrophe reinsurance program is projected to cost **$676 million**, representing approximately **33.0%** of projected direct premium earned for the 12-month treaty period[159](index=159&type=chunk) [RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL CONDITION](index=41&type=section&id=RESULTS%20OF%20OPERATIONS%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION) [Highlights for the quarter ended March 31, 2025](index=41&type=section&id=Highlights%20for%20the%20quarter%20ended%20March%2031,%202025) - Direct written premium increased by **4.7%** to **$467.1 million**, driven by a **34.7%** growth in premiums outside of Florida. Net investment income rose by **18.8%** due to higher portfolio reinvestment rates and increased cash investments[162](index=162&type=chunk) - The Company observed favorable loss trends from policies issued after the 2022 legislative reforms and experienced reduced weather events compared to the previous four years. Demotech reaffirmed its A rating for UPCIC and APPCIC on April 8, 2025[162](index=162&type=chunk) [Results of Operations—Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024](index=42&type=section&id=Results%20of%20Operations%E2%80%94Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20Three%20Months%20Ended%20March%2031,%202024) Key Financial Results (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands, except per share) | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Direct premiums written | $467,078 | $446,179 | $20,899 | 4.7 % | | Premiums earned, net | $355,721 | $334,025 | $21,696 | 6.5 % | | Net investment income | $16,060 | $13,523 | $2,537 | 18.8 % | | Commission revenue | $16,275 | $11,033 | $5,242 | 47.5 % | | Total revenues | $394,867 | $367,959 | $26,908 | 7.3 % | | Losses and loss adjustment expenses | $250,555 | $240,187 | $10,368 | 4.3 % | | General and administrative expenses | $87,244 | $78,666 | $8,578 | 10.9 % | | Total operating costs and expenses | $337,799 | $318,853 | $18,946 | 5.9 % | | Net income | $41,439 | $33,657 | $7,782 | 23.1 % | | Diluted earnings per common share | $1.44 | $1.14 | $0.30 | 26.3 % | | Comprehensive income (loss) | $53,533 | $31,115 | $22,418 | 72.0 % | - Net income increased by **23.1%** to **$41.4 million**, and diluted EPS rose by **26.3%** to **$1.44**, driven by higher net premiums earned, investment income, and commission revenue. The net loss ratio improved to **70.5%** (from **71.9%**), and the combined ratio improved to **95.0%** (from **95.5%**)[163](index=163&type=chunk) [Premium Revenues](index=43&type=section&id=Premium%20Revenues) - Direct premiums written increased by **4.7%** to **$467.1 million**, primarily due to a **34.7%** growth in premiums outside Florida, offsetting a **3.0%** reduction in Florida business. This growth was influenced by new rate changes, policy inflation adjustments, and a **1.1%** increase in policies in force to **864,817**[166](index=166&type=chunk)[167](index=167&type=chunk) - Direct premium earned increased by **6.5%** to **$513.3 million**, reflecting premiums written over the past year, including rate filings, inflation adjustments, and higher policy counts[168](index=168&type=chunk) [Reinsurance](index=43&type=section&id=Reinsurance) - Ceded premium earned increased by **6.4%** for the three months ended March 31, 2025, primarily due to higher costs for the 2024/2025 reinsurance contract period and **$0.3 million** in reinstatement premiums for prior hurricanes. The ratio of ceded premiums to direct premiums remained steady at **30.7%**[168](index=168&type=chunk) [Investment Results](index=43&type=section&id=Investment%20Results) - Net investment income increased by **18.8%** to **$16.1 million** for the three months ended March 31, 2025, driven by higher returns from new investments and a **$55.3 million** increase in invested balances, partially offset by reduced yields from invested cash[169](index=169&type=chunk) - Realized and unrealized gains and losses on the equity portfolio were insignificant in Q1 2025, contrasting with a **$3.1 million** unrealized gain in Q1 2024. The Company is monitoring downward pressure on reinvestment book yields due to Federal policy and geopolitical events[170](index=170&type=chunk)[171](index=171&type=chunk) [Commissions, Policy Fees and Other Revenue](index=44&type=section&id=Commissions,%20Policy%20Fees%20and%20Other%20Revenue) - Commission revenue increased by **47.5%** to **$16.3 million**, mainly from reinstatement premiums for Hurricanes Helene and Milton, and increased reinsurance spending. Policy fees rose by **2.0%** to **$4.5 million** due to an increase in policies written in states permitting such fees. Other revenue increased by **19.4%** to **$2.3 million**[172](index=172&type=chunk)[173](index=173&type=chunk) [Operating Costs and Expenses](index=44&type=section&id=Operating%20Costs%20and%20Expenses) [Losses and Loss Adjustment Expenses](index=44&type=section&id=Losses%20and%20Loss%20Adjustment%20Expenses) - Net losses and LAE increased by **4.3%** to **$250.6 million**, with a net loss ratio of **70.5%** (down from **71.9%** in Q1 2024), primarily due to increased premium volume. Weather-related losses significantly decreased in Q1 2025 compared to previous years, with no major weather events[174](index=174&type=chunk)[175](index=175&type=chunk) - There was no prior-year development on catastrophe or non-catastrophe losses in Q1 2025 or Q1 2024. The Company observes favorable claim trends on Florida losses for policies issued after the December 2022 reforms, but pre-reform claims still exhibit greater uncertainty[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) [General and Administrative Expenses](index=45&type=section&id=General%20and%20Administrative%20Expenses) General and Administrative Expenses (Three Months Ended March 31, 2025 vs. 2024) | Expense (in thousands) | 2025 | 2025 Ratio | 2024 | 2024 Ratio | | :--------------------- | :----------- | :--------- | :----------- | :--------- | | Policy acquisition costs | $60,574 | 17.0 % | $54,821 | 16.4 % | | Other operating costs | $26,670 | 7.5 % | $23,845 | 7.2 % | | Total general and administrative expenses | $87,244 | 24.5 % | $78,666 | 23.6 % | - Total general and administrative expenses increased by **$8.6 million**, or **10.9%**, driven by a **$5.8 million** increase in policy acquisition costs (due to higher commissions from increased net earned premiums and growth outside Florida) and a **$2.8 million** increase in other operating costs (due to employee compensation and policy-related costs)[181](index=181&type=chunk)[186](index=186&type=chunk) [Combined Ratio](index=45&type=section&id=Combined%20Ratio) - The combined ratio improved to **95.0%** for the three months ended March 31, 2025, compared to **95.5%** for the same period in 2024, indicating improved underwriting profitability[182](index=182&type=chunk) [Interest and Amortization of Debt Issuance Costs](index=45&type=section&id=Interest%20and%20Amortization%20of%20Debt%20Issuance%20Costs) - Interest and amortization of debt issuance costs remained stable at **$1.6 million** for both three-month periods ended March 31, 2025 and 2024, primarily related to senior unsecured notes[183](index=183&type=chunk) [Income Tax Expense (Benefit)](index=45&type=section&id=Income%20Tax%20Expense%20(Benefit)) - Income tax expense was **$14.0 million** in Q1 2025, up from **$13.8 million** in Q1 2024. The effective tax rate decreased to **25.3%** in Q1 2025 from **29.1%** in Q1 2024[184](index=184&type=chunk) [Other Comprehensive Income (Loss)](index=45&type=section&id=Other%20Comprehensive%20Income%20(Loss)) - Other comprehensive income, net of taxes, was **$12.1 million** for Q1 2025, a significant improvement from a **$2.5 million** loss in Q1 2024, reflecting favorable shifts in market prices and reduced unrealized losses on debt securities as they approach maturity[185](index=185&type=chunk) [Non-GAAP](index=46&type=section&id=Non-GAAP) Non-GAAP Financial Measures (Three Months Ended March 31, 2025 vs. 2024) | Metric (in thousands, except per share) | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Core revenue | $394,871 | $364,930 | | Adjusted operating income (loss) | $57,072 | $46,077 | | Adjusted operating income (loss) margin | 14.5 % | 12.6 % | | Adjusted net income (loss) available to common stockholders | $41,439 | $31,370 | | Diluted adjusted earnings (loss) per common share | $1.44 | $1.07 | [Analysis of Financial Condition—As of March 31, 2025 compared to December 31, 2024](index=47&type=section&id=Analysis%20of%20Financial%20Condition%E2%80%94As%20of%20March%2031,%202025%20compared%20to%20December%2031,%202024) Key Balance Sheet Changes (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | Change ($) | | :-------------------- | :------------- | :---------------- | :----------- | | Total invested assets | $1,428,256 | $1,371,276 | $56,980 | | Cash and cash equivalents | $398,184 | $259,441 | $138,743 | | Prepaid reinsurance premiums | $105,480 | $262,716 | $(157,236) | | Reinsurance recoverables | $471,189 | $627,617 | $(156,428) | | Deferred policy acquisition costs | $115,830 | $121,178 | $(5,348) | | Deferred income tax asset, net | $46,217 | $42,163 | $4,054 | | Unpaid losses and LAE | $893,677 | $959,291 | $(65,614) | | Unearned premiums | $1,014,267 | $1,060,446 | $(46,179) | | Advance premium | $81,922 | $46,237 | $35,685 | | Reinsurance payable, net | $115,136 | $220,328 | $(105,192) | | Income taxes payable | $28,567 | $6,561 | $22,006 | - Total invested assets increased by **$57.0 million**, and cash and cash equivalents increased by **$138.7 million**, primarily due to investment of excess cash and unrealized gains. Prepaid reinsurance premiums and reinsurance recoverables decreased due to amortization and collection of ceded paid losses[193](index=193&type=chunk)[195](index=195&type=chunk) - Unpaid losses and LAE decreased by **$65.6 million** due to claim settlements, while unearned premiums decreased by **$46.2 million** reflecting business seasonality. Advance premiums increased by **$35.7 million** due to customer payment behavior[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=48&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [Liquidity](index=48&type=section&id=Liquidity) - Cash and cash equivalents increased by **$138.7 million** to **$398.2 million** as of March 31, 2025, primarily from operating activities. Restricted cash and cash equivalents remained stable at **$2.6 million**[205](index=205&type=chunk) - Holding company liquidity is supported by dividends from service entities, brokerage commissions, policy fees, and a high-quality investment portfolio. Dividends from Insurance Entities to the parent are restricted by FLOIR regulations; neither UPCIC nor APPCIC had capacity to pay ordinary dividends as of March 31, 2025[206](index=206&type=chunk)[207](index=207&type=chunk) - The Insurance Entities maintain liquidity through premiums earned, investment income, reinsurance recoverables, and highly liquid marketable securities. The average credit rating on available-for-sale securities was **A+** with a duration of **3.3 years**[208](index=208&type=chunk)[209](index=209&type=chunk) [Capital Resources](index=50&type=section&id=Capital%20Resources) Capital Resources (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Stockholders' equity | $422,387 | $373,250 | | Total long-term debt | $101,053 | $101,243 | | Total capital resources | $523,440 | $474,493 | | Debt-to-total capital ratio | 19.3 % | 21.3 % | | Debt-to-equity ratio | 23.9 % | 27.1 % | - Capital resources increased by **$48.9 million**, driven by a net increase in stockholders' equity (due to net income and improved AOCI) partially offset by a slight decline in long-term debt. Additional paid-in capital increased by **$0.1 million** from share-based compensation[211](index=211&type=chunk)[212](index=212&type=chunk) Adjusted Capital Metrics (March 31, 2025 vs. December 31, 2024) | Metric (in thousands, except per share) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Adjusted common stockholders' equity | $473,359 | $436,316 | | Adjusted book value per common share | $16.79 | $15.53 | | Adjusted return on common equity | 36.4 % | 12.4 % | [Revolving Loan](index=50&type=section&id=Revolving%20Loan) - The Company has an unused **$50.0 million** unsecured revolving credit line with JP Morgan Chase Bank, N.A., maturing on May 30, 2025. The Company was in compliance with all covenants as of March 31, 2025[215](index=215&type=chunk) [Long-term Debt](index=50&type=section&id=Long-term%20Debt) - The Company has **$100 million** in 5.625% Senior Unsecured Notes due November 30, 2026, which are redeemable after November 30, 2023. The Company was in compliance with all applicable covenants as of March 31, 2025[216](index=216&type=chunk) - The Company continues to evaluate opportunities to access debt capital markets for additional capital, primarily for general corporate purposes and investing in the capital and surplus of its Insurance Entities[217](index=217&type=chunk) [Common Stock Repurchases](index=51&type=section&id=Common%20Stock%20Repurchases) - Under the March 11, 2024, authorization, the Company can repurchase up to **$20.0 million** of common stock through March 11, 2026. As of March 31, 2025, approximately **$2.6 million** remains available for repurchase, with no shares repurchased during Q1 2025[221](index=221&type=chunk) [Off-Balance Sheet Arrangements](index=51&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has no material off-balance sheet arrangements, except for multi-year reinsurance contract commitments for future years that will be recorded at the commencement of their coverage periods[222](index=222&type=chunk) [Cash Dividends](index=51&type=section&id=Cash%20Dividends) Cash Dividend Declared (Q1 2025) | Quarter | Dividend Declared Date | Shareholders Record Date | Payable Date | Per Common Share Amount | | :---------- | :--------------------- | :----------------------- | :----------- | :---------------------- | | First Quarter | February 6, 2025 | March 7, 2025 | March 14, 2025 | $0.16 | [MATERIAL CASH REQUIREMENTS](index=52&type=section&id=MATERIAL%20CASH%20REQUIREMENTS) Material Cash Requirements (as of March 31, 2025, in thousands) | Requirement | Total | Next 12 Months | Beyond 12 Months | | :-------------------------- | :----------- | :------------- | :--------------- | | Reinsurance payable and multi-year commitments | $369,742 | $215,706 | $154,036 | | Unpaid losses and LAE, direct | $893,677 | $539,969 | $353,708 | | Long-term debt | $113,544 | $7,171 | $106,373 | | Total material cash requirements | $1,376,963 | $762,846 | $614,117 | [IMPACT OF INFLATION AND CHANGING PRICES](index=52&type=section&id=IMPACT%20OF%20INFLATION%20AND%20CHANGING%20PRICES) - The Company's financial statements reflect historical dollar values without inflation adjustments. Performance is influenced by economic, regulatory, and market factors, including interest rates and inflation. Prolonged inflation could significantly impact future costs, particularly for settling estimated losses and LAE liabilities[225](index=225&type=chunk) [ARRANGEMENTS WITH VARIABLE INTEREST ENTITIES](index=52&type=section&id=ARRANGEMENTS%20WITH%20VARIABLE%20INTEREST%20ENTITIES) - The Company consolidates a captive reinsurance arrangement with a Variable Interest Entity (VIE) because it is the primary beneficiary, as detailed in Note 14[226](index=226&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=52&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - There have been no material changes to the Company's Critical Accounting Policies and Estimates during the period covered by this Quarterly Report on Form 10-Q[226](index=226&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=53&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) Reconciliation of GAAP Revenue to Core Revenue (in thousands) | Metric (in thousands) | March 31, 2025 | March 31, 2024 | | :-------------------- | :------------- | :------------- | | GAAP revenue | $394,867 | $367,959 | | less: Net realized gains (losses) on investments | (14) | (77) | | less: Net change in unrealized gains (losses) on investments | 10 | 3,106 | | Core Revenue | $394,871 | $364,930 | Reconciliation of GAAP Operating Income (Loss) to Adjusted Operating Income (Loss) (in thousands) | Metric (in thousands) | March 31, 2025 | March 31, 2024 | | :-------------------- | :------------- | :------------- | | GAAP income (loss) before income tax expense (benefit) | $55,456 | $47,484 | | add: Interest and amortization of debt issuance costs | 1,612 | 1,622 | | GAAP operating income (loss) | $57,068 | $49,106 | | less: Net realized gains (losses) on investments | (14) | (77) | | less: Net changes in unrealized gains (losses) on investments | 10 | 3,106 | | Adjusted operating income (loss) | $57,072 | $46,077 | Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Net Income (Loss) Available to Common Stockholders (in thousands) | Metric (in thousands, except per share) | March 31, 2025 | March 31, 2024 | | :------------------------------------ | :------------- | :------------- | | GAAP net income (loss) available to common stockholders | $41,436 | $33,654 | | less: Net realized gains (losses) on investments | (14) | (77) | | less: Net changes in unrealized gains (losses) on investments | 10 | 3,106 | | add: Income tax effect on above adjustments | (1) | 745 | | Adjusted net income (loss) available to common stockholders | $41,439 | $31,370 | | Diluted earnings (loss) per common share | $1.44 | $1.14 | | Diluted adjusted earnings (loss) per common share | $1.44 | $1.07 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the Company's exposure to market risk, primarily from changes in interest rates and equity prices, affecting its investment portfolio. It outlines the objectives of the investment portfolio, which prioritize capital preservation and liquidity, followed by total return with an emphasis on investment income [Interest Rate Risk](index=56&type=section&id=Interest%20Rate%20Risk) - Interest rate risk refers to the sensitivity of the fair market value of fixed-rate financial instruments to changes in interest rates. The Company's fixed income portfolio, primarily available-for-sale debt securities, is exposed to this risk[234](index=234&type=chunk) Fixed Income Financial Instruments (March 31, 2025 vs. December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Amortized cost | $1,392,573 | $1,353,532 | | Fair market value | $1,324,338 | $1,269,079 | | Coupon rate | 3.36 % | 2.94 % | | Book yield | 3.14 % | 2.34 % | | Years to effective maturity | 4.0 years | 4.1 years | [Equity Price Risk](index=56&type=section&id=Equity%20Price%20Risk) - Equity price risk is the potential for loss in fair value of common stock and mutual funds due to adverse changes in market prices. A hypothetical **20%** decrease in market prices of equity securities would result in a **$16.0 million** decrease in fair value as of March 31, 2025[236](index=236&type=chunk)[237](index=237&type=chunk) Equity Securities Subject to Price Risk (March 31, 2025 vs. December 31, 2024) | Equity Securities (in thousands) | March 31, 2025 Fair Value | Percent | December 31, 2024 Fair Value | Percent | | :------------------------------- | :------------------------ | :------ | :------------------------- | :------ | | Common stock | $17,170 | 21.5 % | $14,409 | 18.5 % | | Mutual funds and other | $62,813 | 78.5 % | $63,343 | 81.5 % | | Total equity securities | $79,983 | 100.0 % | $77,752 | 100.0 % | [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's evaluation of its disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=57&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2025, ensuring timely and accurate reporting of information required under the Exchange Act[238](index=238&type=chunk) [Changes in Internal Control Over Financial Reporting](index=57&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There were no material changes in the Company's internal controls over financial reporting during the period covered by this report[239](index=239&type=chunk) [PART II – OTHER INFORMATION](index=57&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) This section outlines the nature of legal proceedings against the Company, primarily disputes related to insurance coverage and damages, and states the Company's approach to establishing reserves and estimating potential losses - The Company is involved in various legal proceedings, mainly disputes concerning insurance coverage or the scope and amount of damages. Accrued liabilities are established for probable and estimable loss contingencies[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - The Company estimates that reasonably possible losses for legal proceedings, whether in excess of accrued liabilities or where no liability exists, are immaterial. These estimates are based on current information and may vary significantly from actual results[243](index=243&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive discussion of risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - For a detailed discussion of risk factors, refer to 'Part I, Item 1A—Risk Factors' in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[244](index=244&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides an update on the Company's common stock repurchase program, including the authorized amount, shares repurchased, and remaining capacity - The Board of Directors authorized a **$20.0 million** common stock repurchase program on March 11, 2024, valid through March 11, 2026. As of March 31, 2025, approximately **$2.6 million** remains available for repurchase, with no shares repurchased during Q1 2025[246](index=246&type=chunk) - No shares were repurchased under this program during the quarterly period ended March 31, 2025[246](index=246&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section reports on other information not covered elsewhere, specifically regarding Rule 10b5-1 plans and non-Rule 10b5-1 trading arrangements - During the three months ended March 31, 2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements[247](index=247&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, certifications, and financial statements in iXBRL format - Key exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, Accountants' Acknowledgment, CEO and CFO Certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and financial statements formatted in iXBRL[248](index=248&type=chunk) [Signatures](index=61&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q filing, confirming its submission by authorized officers of Universal Insurance Holdings, Inc - The report was signed on April 30, 2025, by Stephen J. Donaghy, Chief Executive Officer, and Gary Lloyd Ropiecki, Principal Accounting Officer[253](index=253&type=chunk)

Financial Performance - The company's FY24 direct premiums written were approximately $2.1 billion[8] - The company's 5-year average return on common equity is 8.1%[8] - The company's book value per share increased from $5.86 in FY14 to $21.19 in FY24[21] - The company's direct premiums written in Q1 2025 reached $467.1 million, a 4.7% increase year-over-year[89] - The company's diluted GAAP earnings per common share (EPS) in Q1 2025 was $1.44, with an annualized return on average common equity (ROCE) of 41.7%[89] Business Overview - The company actively operates in 19 states[8] - The company manages approximately 864,800 customer policies[8] - The company has approximately 9,600 independent agents in its distribution channel[8] - The U S & territories Homeowners Multi-Peril Direct Premiums Written increased from $51.6 billion in CY19 to $173.0 billion in CY24, representing a CAGR of 10.9%[30] - The company's net investment income increased from $30.7 million in FY19 to $59.1 million in FY24[14,80]

Financial Data and Key Metrics Changes - Adjusted diluted earnings per common share increased to $1.44, up from $1.07 in the prior year quarter, primarily due to higher underwriting and net investment income, as well as increased commission revenue [7] - Core revenue reached $394.9 million, reflecting an 8.2% year-over-year growth driven by higher net premiums earned and net investment income [7] - Direct premiums written were $467.1 million, a 4.7% increase from the prior year quarter, with significant growth in other states offset by a decrease in Florida [8] Business Line Data and Key Metrics Changes - Direct premiums earned totaled $513.3 million, up 6.5% from the prior year quarter, reflecting growth in direct premiums written [9] - Net premiums earned were $355.7 million, also up 6.5% year-over-year, primarily due to higher direct premiums earned [9] - The net combined ratio improved to 95%, down 0.5 percentage points from the prior year quarter, attributed to a lower net loss ratio [10] Market Data and Key Metrics Changes - The net loss ratio decreased to 70.5%, down 1.4 percentage points compared to the prior year quarter, mainly due to lower weather losses [10] - The net expense ratio increased to 24.5%, up 0.9 percentage points from the prior year quarter, driven by higher policy acquisition costs and other operating costs [10] Company Strategy and Development Direction - The company is focused on profitability and managing its overall book of business, aiming to grow in areas where it can do so profitably [14] - The completion of the 2025-2026 reinsurance renewal was highlighted, with $352 million of additional multiyear coverage secured through the 2026-2027 hurricane season [6] - Legislative reforms in Florida are seen as beneficial, providing stability to the property insurance market and increasing certainty for policyholders [4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the competitive environment, noting that new entrants in Florida have not significantly impacted the overall market [15] - The company is pleased with the favorable reinsurance rates and capacity, indicating a healthy market environment influenced by legislative changes [20] - Management emphasized a conservative approach to reserves, with no prior development reported for the quarter [25] Other Important Information - A regular quarterly cash dividend of $0.16 per share was declared, payable on May 16, 2025 [11] Q&A Session Summary Question: Can you provide more detail on the competitive environment and growth perspectives? - Management stated that they are focused on profitability and managing the book of business, with a healthy competitive environment in Florida [14][15] Question: Any updates on reinsurance and market conditions? - Management expressed satisfaction with the reinsurance capacity and favorable pricing, indicating a positive outlook for the market [18][20] Question: Was there any reserve development in the quarter? - Management confirmed that there was no prior development, maintaining a conservative approach to reserves [25] Question: Was there any claims handling benefit booked in the quarter? - Management indicated that any claims handling benefit was negligible [30] Question: Can you elaborate on the gap retention and coverage? - Management confirmed plans to use the same coverage structure as the previous year, with specific details to be provided later [32]

Financial Data and Key Metrics Changes - Adjusted diluted earnings per common share was $1.44, down from $1.70 in the prior year quarter, primarily due to higher underwriting and net investment income and higher commission revenue [6] - Core revenue reached $394.9 million, an increase of 8.2% year over year, driven by higher net premiums earned, net investment income, and commission revenue [6] - Direct premiums written were $467.1 million, up 4.7% from the prior year quarter, with a 34.7% growth in other states, partially offset by a 3% decrease in Florida [7] - Net combined ratio improved to 95%, down 0.5 points compared to the prior year quarter, reflecting a lower net loss ratio [9] Business Line Data and Key Metrics Changes - Direct premiums earned were $513.3 million, up 6.5% from the prior year quarter, reflecting growth in direct premiums written [8] - Net premiums earned increased to $355.7 million, also up 6.5% from the prior year quarter, primarily due to higher direct premiums earned [8] - The net loss ratio was 70.5%, down 1.4 points compared to the prior year quarter, attributed to lower weather losses [9] Market Data and Key Metrics Changes - The company experienced lower weather losses in the current quarter, benefiting the loss and LAE ratio [4] - The competitive environment in Florida is improving, with new entrants but no significant growth across the entire state [13][14] Company Strategy and Development Direction - The company is focused on profitability and managing the overall book of business, aiming to grow where it can do so profitably [13] - The completion of the 2025-2026 reinsurance renewal was announced, securing $352 million of additional multiyear coverage [5] - Legislative reforms in Florida are seen as beneficial, providing stability to the property insurance market [4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the legislative changes and their positive impact on the market, indicating a healthier environment for growth [14][17] - The company is pleased with the reinsurance capacity and favorable rates, which reflect the market's response to recent legislative changes [16][17] - There was no prior year reserve development, indicating a conservative approach to reserves [19] Other Important Information - A regular quarterly cash dividend of $0.16 per share was declared, payable on May 16, 2025 [10] Q&A Session Summary Question: Can you provide more detail on the competitive environment and growth prospects? - Management emphasized a focus on profitability and managing the book of business, noting that competition does not drive pricing decisions [13] Question: Any updates on reinsurance costs and market conditions? - Management expressed satisfaction with the reinsurance response and indicated favorable rates compared to expectations, despite recent hurricanes [16] Question: Was there any reserve development in the quarter? - Management confirmed there was no prior year development, maintaining a conservative approach [19] Question: Any claims handling benefits booked in the quarter? - Management stated that any claims handling benefits were negligible [23] Question: What about GAAP retention and coverage? - Management confirmed plans to use the captive cover in the same capacity as before, covering the first layer above the retention [25]

Core Viewpoint - Universal Insurance Holdings (UVE) reported strong quarterly earnings, exceeding expectations and showing growth compared to the previous year [1][2]. Financial Performance - The company achieved earnings of $1.44 per share, surpassing the Zacks Consensus Estimate of $1.12 per share, and up from $1.07 per share a year ago [1]. - The earnings surprise for the quarter was 28.57%, and over the last four quarters, the company has consistently exceeded consensus EPS estimates [2]. - Revenues for the quarter reached $394.87 million, exceeding the Zacks Consensus Estimate by 11.24%, and up from $367.96 million year-over-year [3]. Stock Performance - Universal Insurance shares have increased approximately 11.4% since the beginning of the year, contrasting with the S&P 500's decline of 8.6% [4]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.14, with projected revenues of $358.23 million, and for the current fiscal year, the EPS estimate is $2.65 on revenues of $1.44 billion [8]. - The outlook for the insurance industry is favorable, with the Insurance - Property and Casualty sector ranking in the top 14% of over 250 Zacks industries, suggesting strong potential for stock performance [9].

Insurance Market Dynamics - The Florida residential property insurance market has been characterized by increasing losses and loss adjustment expenses due to various regulatory and judicial factors[46]. - The December 2022 reforms aimed to address key drivers of the insurance market's deterioration, including eliminating policyholders' statutory one-way right to attorneys' fees[47]. - The current Florida homeowners' insurance market is impacted by claimant behaviors, resulting in losses and LAE exceeding historical trends[74]. - Changes in Florida's insurance laws can have a pronounced effect on the Company, with annual amendments impacting operations and profitability[72]. - Legislative changes and their interpretations may impact claims handling and resolution practices, affecting financial results[81]. - The competitive nature of the insurance industry may lead to reduced underwriting margins and declining sales if competitors lower rates[99]. Reinsurance and Risk Management - The Insurance Entities' reinsurance programs for 2024-2025 meet the Florida Office of Insurance Regulation's (FLOIR) requirements, demonstrating cohesive and comprehensive reinsurance strategies[41]. - The Insurance Entities utilize excess of loss reinsurance to limit potential exposures to catastrophic events, which is a key strategic priority[41]. - The availability and cost of reinsurance may limit the company's ability to write new business or mitigate exposure to loss[89]. - The Insurance Entities may face increased claims-related costs due to climate change and the frequency of catastrophic events[69]. Financial Performance and Capital Management - As of December 31, 2024, the Insurance Entities' Risk-Based Capital (RBC) ratios exceed applicable statutory requirements[53]. - The maximum dividend that can be paid by the Insurance Entities without prior approval is limited to the lesser of statutory net income from operations of the preceding year or statutory unassigned surplus[55]. - The company is required to maintain minimum capital and surplus levels, with potential regulatory actions if these requirements are not met, which could impact its ability to operate[120][123]. - The company is dependent on dividends and permissible payments from its subsidiaries for cash flow, which may be affected by changes in premium volumes or regulatory conditions[116]. Claims and Underwriting Risks - Actual claims incurred have exceeded reserves established for claims, adversely affecting operating results and financial condition[74]. - Paid losses have exceeded prior reserve estimates due to inflationary pressures on building materials and labor[75]. - The effectiveness of subrogation efforts has decreased due to changes in Florida's claims environment and legal climate[76]. - The company faces risks of underpricing or overpricing risks, which could lead to significant underwriting losses or reduced market share[79]. - The company relies on claims professionals to manage claims effectively; failures in this area could lead to litigation and negatively affect financial results[96]. Employee and Operational Considerations - The Company had 1,068 full-time employees as of December 31, 2024, with 80% based in Florida and 66% working in claims management operations[61]. - The ability to attract and retain talented employees is crucial for the company's success, and losing key personnel could adversely impact operations[94]. - The company utilizes third-party adjusters and call center support during high claim volumes to maintain service standards[61]. Regulatory and Compliance Issues - The company relies on comprehensive regulatory oversight, including periodic reporting and examinations to maintain compliance with statutory requirements[57]. - Regulatory compliance costs may increase due to complex and changing insurance laws, potentially limiting growth and profitability[111][115]. - Regulatory authorities have broad discretion to deny or revoke licenses, which could adversely affect the company's ability to operate and its reputation[114]. Investment and Market Risks - The company's financial performance is significantly influenced by the returns on its investment portfolio, which is subject to market volatility[110]. - Market risks related to equity prices and interest rates could negatively impact the company's investment income, with fluctuations in interest rates posing increased financial risks[109][110]. - Interest rate risk is significant, as rising rates could lead to a decline in the fair market value of fixed-rate financial instruments[356]. - The company faces risks related to its indebtedness, which could adversely affect financial results and obligations under the Notes[127]. Technology and Cybersecurity - Cybersecurity threats pose significant risks to the company's operations and reputation, with potential for data breaches and operational disruptions[104]. - The company faces operational risks due to increased reliance on cloud technologies and online transactions, which may lead to potential cyberattacks and data breaches[105][106]. - The company is investing in AI technologies for applications such as risk assessment, claims processing, and fraud detection, but there are concerns about the ability to effectively implement these technologies[107].

Financial Data and Key Metrics Changes - Adjusted diluted earnings per common share decreased to $0.25 from $0.43 in the prior year quarter [8] - Core revenue increased to $386.4 million, up 5.7% year-over-year, driven by higher net premiums earned, net investment income, and commission revenue [9] - Direct premiums written rose to $470.9 million, an increase of 8.8% from the prior year quarter [9] - Net combined ratio increased to 107.9%, up 4.2 percentage points compared to the prior year quarter [11] - The loss ratio was 82.3%, up 0.4 percentage points compared to the prior year quarter [12] Business Line Data and Key Metrics Changes - Direct premiums earned were $519.3 million, up 7.7% year-over-year [10] - Net premiums earned increased to $348.4 million, up 3.9% from the prior year quarter [10] - Growth in Florida was 0.8%, while other states saw a significant growth of 38.4% [9] Market Data and Key Metrics Changes - The company experienced three hurricanes in 2024, impacting claims trends [5] - The company filed a modest rate decrease in Florida, correlated with legislative changes made in December 2022 [6] Company Strategy and Development Direction - The company is focused on profitability and writing business where it makes the most sense, with a strong emphasis on rate adequacy across all markets [19] - Growth in other states is attributed to entry into new markets over the last 12 months [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the reinsurance market, noting that 92% of the first event catastrophe tower has already been placed for 2025 [22] - The company is pleased with the interest from reinsurers and the renewal of multiyear capabilities, which alleviates pressure [23] Other Important Information - The company repurchased approximately 370,000 shares at an aggregate cost of $7.7 million [13] - A quarterly cash dividend of $0.16 per common share was declared, payable on March 14, 2025 [14] Q&A Session Summary Question: Can you discuss the size of the reserve development in the quarter and the level of cat losses? - The net retention event from Hurricane Milton was $45 million, with prior year development down significantly to $45 million from $76 million [17] Question: Can you provide more details on growth efforts and reinsurance renewals? - The company is focused on profitability and has seen growth in new markets, with a positive outlook on reinsurance renewals [19][22]

Core Viewpoint - Universal Insurance Holdings (UVE) reported quarterly earnings of $0.25 per share, significantly exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.43 per share a year ago, indicating a 177.78% earnings surprise [1] Financial Performance - The company achieved revenues of $384.81 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.97% and showing an increase from $375.46 million year-over-year [2] - Over the last four quarters, Universal Insurance has consistently exceeded consensus EPS estimates and revenue estimates [2] Stock Performance and Outlook - Universal Insurance shares have declined approximately 5.9% since the beginning of the year, contrasting with the S&P 500's gain of 1.7% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $352.57 million, and for the current fiscal year, it is $2.65 on revenues of $1.43 billion [7] - The estimate revisions trend for Universal Insurance is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Insurance - Property and Casualty industry is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Diluted GAAP earnings per share (EPS) were $0.21, down 69.1% from $0.68 in the prior year quarter[4] - Adjusted net income available to common stockholders was $7.2 million, down 42.9% from $12.6 million in the prior year quarter[7] - The company reported a net income of $6,018 thousand for Q4 2024, a decrease of 69.9% compared to $19,999 thousand in Q4 2023[25] - GAAP net income available to common stockholders for Q4 2024 was $6,016 million, a decrease from $19,997 million in Q4 2023, leading to diluted earnings per common share of $0.21 compared to $0.68 in the prior year[34] - Adjusted net income available to common stockholders for the twelve months ended December 31, 2024, was $52,418 million, down from $58,657 million in 2023, with diluted adjusted earnings per common share of $1.79 compared to $1.95 in 2023[34] Revenue and Growth - Total revenues for Q4 2024 were $384.8 million, a 2.5% increase from $375.5 million in Q4 2023[5] - The company reported core revenue of $386,414 million for Q4 2024, an increase from $365,705 million in Q4 2023, indicating growth in core operations[33] - The total revenue for the twelve months ended December 31, 2024, was $1,520,536 million, up from $1,391,582 million in 2023, reflecting a year-over-year growth of approximately 9.3%[33] Premiums and Underwriting - Direct premiums written reached $470.9 million, up 8.8% from the prior year quarter, with a 38.4% growth in states outside Florida[9] - Direct premiums written in Florida increased to $342,565 thousand in Q4 2024 from $339,902 thousand in Q4 2023, showing a growth of 0.5%[29] - Net premiums earned rose to $348,354 thousand for Q4 2024, up from $335,398 thousand in Q4 2023, reflecting a growth of 5.8%[25] - The combined ratio for Q4 2024 was 107.9%, compared to 103.7% in Q4 2023, indicating a deterioration in underwriting performance[29] - The net combined ratio was 107.9%, up 4.2 percentage points compared to the prior year quarter[14] Equity and Book Value - Book value per share increased to $13.28, up 12.7% year-over-year[4] - GAAP stockholders' equity increased to $373,250 million as of December 31, 2024, from $341,297 million in 2023, while adjusted common stockholders' equity rose to $436,316 million from $415,369 million[35] - Book value per common share increased to $13.28 in 2024 from $11.78 in 2023, while adjusted book value per common share rose to $15.53 from $14.34[35] Returns and Ratios - The annualized return on average common equity (ROCE) was 6.2%, a decrease of 18.7 percentage points from 24.9% in the prior year quarter[5] - The annualized return on average common equity (ROCE) decreased to 6.2% in Q4 2024 from 24.9% in Q4 2023, indicating a significant decline in profitability[27] - Return on common equity (ROCE) for Q4 2024 was 6.2%, down from 24.9% in Q4 2023, while adjusted ROCE was 6.5% compared to 12.4% in the previous year[36] Investment and Assets - Net investment income rose to $15.6 million, an increase from $13.7 million in the prior year quarter[11] - Total assets increased to $2,841,861 thousand in 2024 from $2,316,561 thousand in 2023, representing a growth of approximately 22.6%[23] - The company’s total liabilities increased to $2,468,611 thousand in 2024 from $1,975,264 thousand in 2023, an increase of 25%[23] Shareholder Returns - The company returned a total of $16.2 million to shareholders, including $7.7 million in share repurchases and dividends[4] Cash and Cash Equivalents - Cash and cash equivalents decreased to $259,441 thousand in 2024 from $397,306 thousand in 2023, a decline of 34.8%[23] Operating Income - GAAP operating income for Q4 2024 was $8,957 million, down from $27,531 million in Q4 2023, resulting in a GAAP operating income margin of 2.3% compared to 7.3% in the previous year[33] - Adjusted operating income for the twelve months ended December 31, 2024, was $82,466 million, slightly down from $84,063 million in 2023, with an adjusted operating income margin of 5.5% compared to 6.1% in 2023[33] Unrealized Gains and Losses - The company experienced a net change in unrealized gains (losses) on investments of $9,936 million for the twelve months ended December 31, 2024, compared to $12,046 million in 2023[33] Policies in Force - Policies in force increased to 855,526 in 2024 from 809,932 in 2023, representing a growth of 5.6%[29]

Group 1 - Universal Insurance Holdings (UVE) is currently rated 2 (Buy) by Zacks and has a Value grade of A [1] - UVE has a P/CF ratio of 6.67, which is lower than the industry average of 8, indicating potential undervaluation [3][6] - Over the past 52 weeks, UVE's P/CF has fluctuated between 5.33 and 7.64, with a median of 6.28 [3] Group 2 - UVE's P/B ratio is 1.46, which is also lower than the industry average of 1.53, suggesting it may be undervalued [7] - The P/B ratio for UVE has ranged from 1.19 to 1.80 in the past year, with a median of 1.50 [7] - The strength of UVE's earnings outlook further supports its position as a strong value stock [6]