UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________________________ FORM 10-K ________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 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 001-33251 UNIVERSAL INS ...

Universal Insurance Holdings, Inc. (NYSE:UVE) Q4 2023 Earnings Conference Call February 23, 2024 10:00 AM ET Corporate Participants Arash Soleimani - Chief Strategy Officer Steve Donaghy - Chief Executive Officer Frank Wilcox - Chief Financial Officer Conference Call Participants Paul Newsome - Piper Sandler Nicolas Iacoviello - Dowling & Partners Operator Good morning, ladies and gentlemen, and welcome to Universal's Fourth Quarter 2023 Earnings Conference Call. As a reminder this conference call is being ...

Exhibit 99.1 Universal Reports Fourth Quarter 2023 Results * Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables. Fort Lauderdale, Fla., February 22, 2024 – Universal Insurance Holdings (NYSE: UVE) ("Universal" or the "Company") reported fourth quarter and full year 2023 results. "We closed out both the fourth quarter and full year with double-digit adjusted returns on common equity and I believe that even stronger results are firmly in our future," said Stephen J. Don ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Universal Insurance Holdings, Inc [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and detailed notes for the specified interim periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table provides a snapshot of the company's assets, liabilities, and stockholders' equity at two specific dates **Condensed Consolidated Balance Sheets (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | **ASSETS** | | | | Total invested assets | $1,114,125 | $1,105,806 | | Cash and cash equivalents | $343,532 | $388,706 | | Restricted cash and cash equivalents | $69,488 | $2,635 | | Prepaid reinsurance premiums | $379,501 | $282,427 | | Reinsurance recoverable | $322,986 | $808,850 | | Total assets | $2,558,855 | $2,890,154 | | **LIABILITIES** | | | | Unpaid losses and loss adjustment expenses | $551,007 | $1,038,790 | | Unearned premiums | $1,040,067 | $943,854 | | Total liabilities | $2,257,353 | $2,602,258 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | $301,502 | $287,896 | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This table details the company's revenues, expenses, and net income (loss) over specific three and nine-month periods **Condensed Consolidated Statements of Income (in thousands, except per share data):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Direct premiums written | $531,988 | $500,677 | $1,489,216 | $1,429,685 | | Premiums earned, net | $331,040 | $290,631 | $916,538 | $836,756 | | Net investment income | $12,755 | $6,074 | $34,735 | $15,337 | | Total revenues | $360,048 | $312,810 | $1,016,126 | $892,298 | | Losses and loss adjustment expenses | $287,972 | $330,444 | $717,853 | $715,854 | | Total operating costs and expenses | $366,294 | $404,417 | $948,777 | $947,415 | | Income (loss) before income taxes | $(7,877) | $(93,237) | $62,453 | $(60,086) | | Net income (loss) | $(5,915) | $(72,275) | $46,824 | $(47,368) | | Basic earnings (loss) per common share | $(0.20) | $(2.36) | $1.56 | $(1.54) | | Diluted earnings (loss) per common share | $(0.20) | $(2.36) | $1.54 | $(1.54) | | Cash dividend declared per common share | $0.16 | $0.16 | $0.48 | $0.48 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This table presents the net income (loss) and other comprehensive income (loss) for the specified interim periods **Condensed Consolidated Statements of Comprehensive Income (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $(5,915) | $(72,275) | $46,824 | $(47,368) | | Other comprehensive income (loss), net of taxes | $(11,258) | $(27,531) | $(3,333) | $(100,097) | | Comprehensive income (loss) | $(17,173) | $(99,806) | $43,491 | $(147,465) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This table outlines changes in the company's total stockholders' equity over the nine-month period **Condensed Consolidated Statements of Stockholders' Equity (in thousands):** | Item | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :----------------------------------- | :-------------------- | :-------------------- | | Total Stockholders' Equity | $287,896 | $301,502 | | Net income (loss) (9 months) | N/A | $46,824 | | Other comprehensive income (loss), net of taxes (9 months) | N/A | $(3,333) | | Declaration of dividends (9 months) | N/A | $(14,914) | | Purchases of treasury stock (9 months) | N/A | $(18,385) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes the cash flows from operating, investing, and financing activities for the nine-month periods **Condensed Consolidated Statements of Cash Flows (in thousands, 9 Months Ended Sep 30):** | Item | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Net cash provided by (used in) operating activities | $70,631 | $223,157 | | Net cash provided by (used in) investing activities | $(14,462) | $(140,031) | | Net cash provided by (used in) financing activities | $(34,490) | $(26,131) | | Net increase (decrease) during the period | $21,679 | $56,995 | | Balance, end of period | $413,020 | $310,138 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Nature of Operations and Basis of Presentation](index=10&type=section&id=1.%20Nature%20of%20Operations%20and%20Basis%20of%20Presentation) UVE is a vertically integrated insurance holding company focused on residential homeowners' insurance, with financial statements prepared under SEC interim rules - UVE is a vertically integrated insurance holding company, primarily offering residential homeowners' insurance in 19 states, with Florida comprising the majority of policies in force[33](index=33&type=chunk) - Revenue sources include premiums, investment returns, brokerage commissions from reinsurers, policy fees, and payment plan fees[34](index=34&type=chunk) [2. Significant Accounting Policies](index=11&type=section&id=2.%20Significant%20Accounting%20Policies) No new or revised significant accounting policies were disclosed for the current quarterly period, referencing the prior annual report - No new or revised significant accounting policies were disclosed for the current quarterly period[39](index=39&type=chunk) [3. Investments](index=12&type=section&id=3.%20Investments) The investment portfolio, primarily available-for-sale debt securities, saw increased net investment income despite unrealized losses from interest rate changes **Available-for-Sale Debt Securities (in thousands):** | Item | Sep 30, 2023 (Fair Value) | Dec 31, 2022 (Fair Value) | | :----------------------------------- | :------------------------ | :------------------------ | | U.S. government obligations and agencies | $24,757 | $11,664 | | Corporate bonds | $699,357 | $695,061 | | Mortgage-backed and asset-backed securities | $283,771 | $287,607 | | Municipal bonds | $14,713 | $12,371 | | Redeemable preferred stock | $8,960 | $7,923 | | Total | $1,031,558 | $1,014,626 | **Gross Unrealized Losses on Available-for-Sale Debt Securities (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Total Gross Unrealized Losses | $(141,778) | $(137,584) | **Net Investment Income (in thousands):** | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net investment income | $12,755 | $6,074 | $34,735 | $15,337 | | YoY Change (3 months) | +110.0% | N/A | N/A | N/A | | YoY Change (9 months) | N/A | N/A | +126.5% | N/A | - Unrealized losses on available-for-sale debt securities are primarily due to changes in interest rates, and management does not intend to sell these securities before recovery[42](index=42&type=chunk) [4. Reinsurance](index=17&type=section&id=4.%20Reinsurance) Reinsurance recoverable decreased significantly due to Hurricane Ian claim settlements, while ceded premium earned declined due to the RAP program and no reinstatement premiums - Reinsurance recoverable decreased by **$485.9 million** to **$322.986 million** as of September 30, 2023, primarily due to Hurricane Ian claim settlements and commutations[56](index=56&type=chunk)[233](index=233&type=chunk) **Reinsurance Recoverable (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Reinsurance recoverable on paid losses and LAE | $66,299 | $10,170 | | Reinsurance recoverable on unpaid losses and LAE | $256,687 | $798,680 | | Total Reinsurance recoverable | $322,986 | $808,850 | **Ceded Premium Earned (in thousands):** | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Ceded premium earned | $(143,271) | $(161,819) | $(476,465) | $(459,102) | | YoY Change (3 months) | -11.5% | N/A | N/A | N/A | | YoY Change (9 months) | N/A | N/A | +3.8% | N/A | - The decrease in ceded premium earned for the quarter was due to mandatory participation in Florida's RAP program and the absence of Hurricane Ian reinstatement premiums[174](index=174&type=chunk) [5. Insurance Operations](index=19&type=section&id=5.%20Insurance%20Operations) Insurance entities exceeded statutory capital requirements but lacked dividend capacity, while deferred policy acquisition costs increased consistent with premium trends **Statutory Capital and Surplus (in thousands):** | Entity | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | UPCIC | $294,002 | $400,866 | | APPCIC | $24,802 | $22,786 | **Ten percent of total liabilities (in thousands):** | Entity | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | UPCIC | $164,130 | $151,190 | | APPCIC | $2,551 | $2,023 | - UPCIC and APPCIC exceeded minimum statutory capitalization requirements as of September 30, 2023[60](index=60&type=chunk) - No ordinary dividends were paid from the Insurance Entities to PSI during the nine months ended September 30, 2023, and they currently lack the capacity to pay ordinary dividends[59](index=59&type=chunk)[248](index=248&type=chunk) **Deferred Policy Acquisition Costs (DPAC) (in thousands):** | Period | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | | DPAC, end of period | $114,590 | $111,861 | [6. Liability for Unpaid Losses and Loss Adjustment Expenses](index=21&type=section&id=6.%20Liability%20for%20Unpaid%20Losses%20and%20Loss%20Adjustment%20Expenses) Unpaid losses and LAE decreased due to Hurricane Ian settlements, but prior years' development increased from higher non-CAT claim costs **Change in Liability for Unpaid Losses and LAE (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Balance at beginning of period | $663,019 | $186,349 | $1,038,790 | $346,216 | | Total incurred | $287,972 | $330,444 | $717,853 | $715,854 | | Total paid | $161,421 | $273,962 | $663,643 | $722,351 | | Balance at end of period | $551,007 | $1,153,627 | $551,007 | $1,153,627 | **Prior Years' Development (in thousands):** | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Prior years' development | $17,706 | $2,715 | $34,849 | $7,080 | - The increase in prior years' development in 2023 was due to increased costs to settle prior year non-CAT claims, which predate significant Florida property insurance reform legislation[64](index=64&type=chunk) [7. Long-term Debt](index=22&type=section&id=7.%20Long-term%20Debt) Long-term debt totaled $102.2 million, with the company in compliance with all covenants and a new $40.0 million credit line unutilized **Long-term Debt (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Surplus note | $4,411 | $5,515 | | 5.625% Senior unsecured notes | $100,000 | $100,000 | | Total long-term debt, net | $102,196 | $102,769 | - The company was in compliance with all covenants for its Senior Unsecured Notes and the new **$40.0 million** revolving credit line as of September 30, 2023[71](index=71&type=chunk)[73](index=73&type=chunk) **Interest Expense (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Interest and amortization of debt issuance costs | $1,631 | $1,630 | $4,896 | $4,969 | [8. Stockholders' Equity](index=24&type=section&id=8.%20Stockholders'%20Equity) The company completed one share repurchase program and continued another, repurchasing over 1.2 million shares for $18.4 million **Share Repurchase Programs (in thousands, except shares and per share data):** | Program | Date Authorized | Dollar Amount Authorized | Shares Repurchased (9M 2023) | Aggregate Purchase Price (9M 2023) | Average Price Per Share | | :----------------------------------- | :-------------- | :----------------------- | :--------------------------- | :------------------------------- | :---------------------- | | December 2024 Share Repurchase Program | Dec 15, 2022 | $8,000 | 400,691 | $6,154 | $15.36 | | June 2025 Share Repurchase Program | June 12, 2023 | $20,000 | 889,566 | $12,231 | $13.75 | - As of September 30, 2023, the December 2024 Share Repurchase Program was fully utilized, and approximately **$7.8 million** remained authorized under the June 2025 Share Repurchase Program[295](index=295&type=chunk) [9. Income Taxes](index=25&type=section&id=9.%20Income%20Taxes) The effective tax rate increased to 24.9% for the quarter and 25.0% for the nine months, influenced by state income tax and disallowed compensation **Effective Tax Rate (ETR):** | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Effective tax rate | 24.9% | 22.5% | 25.0% | 21.2% | **Factors Affecting ETR (9 Months Ended Sep 30, 2023):** | Factor | Impact | | :----------------------------------- | :----- | | Federal statutory tax rate | 21.0% | | State income tax, net of federal tax benefit | 1.5% | | Disallowed compensation | 2.8% | | Dividend received deduction | (0.5)% | - Management believes deferred tax assets will be realized, and no valuation allowance was deemed necessary as of September 30, 2023[79](index=79&type=chunk) [10. Earnings (Loss) Per Share](index=26&type=section&id=10.%20Earnings%20%28Loss%29%20Per%20Share) Diluted EPS improved significantly to $1.54 for the nine months, reflecting a return to profitability, with anti-dilutive effects in loss periods **Earnings (Loss) Per Share (EPS) (in thousands, except per share data):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $(5,915) | $(72,275) | $46,824 | $(47,368) | | Income (loss) available to common stockholders | $(5,918) | $(72,278) | $46,816 | $(47,376) | | Weighted average common shares outstanding - Basic | 29,617 | 30,604 | 30,087 | 30,858 | | Weighted average diluted common shares outstanding | 29,617 | 30,604 | 30,378 | 30,858 | | Basic earnings (loss) per common share | $(0.20) | $(2.36) | $1.56 | $(1.54) | | Diluted earnings (loss) per common share | $(0.20) | $(2.36) | $1.54 | $(1.54) | - In loss periods, potential common shares from stock options and restricted stock are excluded from diluted EPS calculation due to their anti-dilutive effect[82](index=82&type=chunk) [11. Other Comprehensive Income (Loss)](index=27&type=section&id=11.%20Other%20Comprehensive%20Income%20%28Loss%29) Other comprehensive loss, net of taxes, was $11.3 million for the quarter, primarily due to increased unrealized losses on available-for-sale debt securities **Other Comprehensive Income (Loss), Net of Taxes (in thousands):** | Period | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Other comprehensive income (loss), net of taxes | $(11,258) | $(27,531) | $(3,333) | $(100,097) | - Unrealized losses on available-for-sale debt securities increased during Q3 2023 due to interest rate fluctuations and credit spreads, negatively impacting fair valuations[193](index=193&type=chunk) [12. Commitments and Contingencies](index=28&type=section&id=12.%20Commitments%20and%20Contingencies) The company has multi-year reinsurance commitments and ongoing legal proceedings, with immaterial estimated losses, and successfully settled FHCF commutation agreements - Multi-year reinsurance contract commitments for future years are **$72.7 million** in 2024 and **$52.6 million** in 2025[85](index=85&type=chunk) - The Insurance Entities successfully reached agreements with the FHCF on final commutation payments for the 2017-18 reimbursement contract year during Q3 2023[87](index=87&type=chunk)[289](index=289&type=chunk) - The company estimates that reasonably possible losses for legal matters in excess of accrued liabilities are immaterial[88](index=88&type=chunk)[291](index=291&type=chunk) [13. Fair Value Measurements](index=29&type=section&id=13.%20Fair%20Value%20Measurements) Assets are measured at fair value using a hierarchy of inputs, with debt securities primarily Level 2 and equity securities Level 1 **Fair Value Measurements of Assets (in thousands, as of Sep 30, 2023):** | Item | Level 1 | Level 2 | Level 3 | Total | | :----------------------------------- | :------ | :------ | :------ | :------ | | Available-For-Sale Debt Securities | $0 | $1,031,558 | $0 | $1,031,558 | | Equity Securities (Common stock) | $14,786 | $0 | $0 | $14,786 | | Equity Securities (Mutual funds) | $62,209 | $0 | $0 | $62,209 | | Total assets accounted for at fair value | $76,995 | $1,031,558 | $0 | $1,108,553 | **Fair Value of Financial Instruments Not Carried at Fair Value (in thousands, as of Sep 30, 2023):** | Item | Carrying Value | Estimated Fair Value | | :----------------------------------- | :------------- | :------------------- | | Surplus note | $4,411 | $4,151 | | 5.625% Senior unsecured notes | $100,000 | $91,564 | [14. Variable Interest Entities](index=31&type=section&id=14.%20Variable%20Interest%20Entities) Isosceles Insurance Ltd., a captive reinsurance arrangement, is consolidated as a VIE, with restricted cash increasing significantly for its obligations - Isosceles Insurance Ltd., a captive reinsurance arrangement, is consolidated as a VIE with UVE as the primary beneficiary[99](index=99&type=chunk) - The VIE entered a new reinsurance arrangement for the 2023-2024 All States Reinsurance Program effective June 1, 2023[100](index=100&type=chunk) **Restricted Cash and Cash Equivalents Held in Reinsurance Trust Account (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | | Restricted cash and cash equivalents | $66,853 | $0 | [15. Subsequent Events](index=32&type=section&id=15.%20Subsequent%20Events) No material subsequent events requiring adjustment or disclosure were identified as of the financial statement issuance date - No material subsequent events requiring adjustment or disclosure were identified as of September 30, 2023[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting improved net income and combined ratio, while addressing Florida market challenges and legislative reforms [Cautionary Note Regarding Forward-Looking Statements](index=33&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to uncertainties and risks, which may cause actual results to differ materially - The report contains forward-looking statements subject to uncertainties, and actual results may differ materially from expectations[105](index=105&type=chunk) - Key risks include catastrophic events, climate change, Florida's regulatory and economic conditions, claims exceeding reserves, inadequate pricing, failure of risk mitigation strategies, and reliance on independent agents[106](index=106&type=chunk) [Overview](index=35&type=section&id=Overview) The company, a vertically integrated insurer, navigates a challenging Florida homeowners' market with legislative reforms and inflationary pressures - The company is a vertically integrated holding company offering property and casualty insurance, primarily residential homeowners' insurance in 19 states, with Florida accounting for **82.3%** of direct premiums written year-to-date[109](index=109&type=chunk) - UPCIC is withdrawing from Hawaii, with nonrenewal of policies expected within the next year[109](index=109&type=chunk)[165](index=165&type=chunk) - The Florida personal lines homeowners' market is characterized as a 'hard market' with escalating rates, reduced coverages, and tightening underwriting standards, leading to increased use of Citizens Property Insurance Corporation[111](index=111&type=chunk) - Florida legislative reforms in December 2022 and May 2023 aim to mitigate rising claims costs by eliminating one-way attorney's fees and prohibiting assignment of post-loss benefits, though the full impact will take time to materialize[111](index=111&type=chunk)[114](index=114&type=chunk) - The company has implemented rate increases, adjusted policy forms, and updated claims-handling procedures to manage adverse trends in the Florida market[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Inflationary pressures, partly due to supply chain and labor constraints from the COVID-19 pandemic, continue to affect claims costs and other expenses[127](index=127&type=chunk) [Key Performance Indicators](index=37&type=section&id=Key%20Performance%20Indicators) The company utilizes various GAAP and non-GAAP measures to assess financial performance and underlying business trends - The company uses various GAAP and non-GAAP measures, such as Adjusted book value per common share, Adjusted net income (loss) attributable to common stockholders, Combined Ratio, Core Loss Ratio, and Direct Premiums Written (DPW), to evaluate financial performance and underlying business trends[130](index=130&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[145](index=145&type=chunk) [Reinsurance](index=39&type=section&id=Reinsurance) The company's 2023-2024 reinsurance program meets regulatory requirements, with a projected cost of $620.6 million, and commutation agreements were concluded - The company's 2023-2024 reinsurance program, effective June 1, 2023, meets FLOIR and Demotech requirements, with a first event All States retention of **$45 million** and a tower extending to **$2.61 billion**[158](index=158&type=chunk)[159](index=159&type=chunk)[162](index=162&type=chunk) - The projected cost of the 2023-2024 reinsurance programs is **$620.6 million**, representing approximately **31.97%** of projected direct premium earned[161](index=161&type=chunk) - During Q3 2023, the Insurance Entities concluded commutation agreements with the FHCF and other reinsurers, settling estimated obligations without gain or loss[162](index=162&type=chunk)[163](index=163&type=chunk) [Results of Operations and Analysis of Financial Condition](index=42&type=section&id=Results%20of%20Operations%20and%20Analysis%20of%20Financial%20Condition) Net loss improved for the quarter and net income returned for nine months, driven by higher premiums, investment income, and reduced losses, improving the combined ratio [Highlights for the quarter ended September 30, 2023](index=42&type=section&id=Highlights%20for%20the%20quarter%20ended%20September%2030%2C%202023) Key highlights include reinsurance commutations, affirmed ratings, premium increases, higher investment income, reduced loss ratio, and continued shareholder returns - The Insurance Entities concluded a commutation with the FHCF for the 2017/2018 contract year (Hurricane Irma) and other reinsurers[165](index=165&type=chunk) - All three rating agencies (Kroll, Demotech, Egan-Jones) updated and affirmed their previous ratings (A- stable, A rating, A rating respectively)[165](index=165&type=chunk) - Rate filings and inflation adjustments continue to drive increases in written and earned premium[165](index=165&type=chunk) - Net investment income increased due to redeployment into higher interest rate investments[165](index=165&type=chunk) - The net losses and LAE ratio decreased to **87.0%** from **113.7%** YoY, primarily due to lower reported weather events (Hurricane Idalia in 2023 vs Hurricane Ian in 2022)[165](index=165&type=chunk) - The company continued to return shareholder value through quarterly dividends and share repurchases[165](index=165&type=chunk) [Results of Operations — Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022](index=43&type=section&id=Results%20of%20Operations%20%E2%80%94%20Three%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202022) This section analyzes the company's financial performance for the third quarter of 2023 compared to the same period in 2022 **Key Financial Results (3 Months Ended Sep 30, in thousands, except per share data):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Net income (loss) | $(5,915) | $(72,275) | $66,360 | -91.8% | | Direct premiums written | $531,988 | $500,677 | $31,311 | 6.3% | | Premiums earned, net | $331,040 | $290,631 | $40,409 | 13.9% | | Net investment income | $12,755 | $6,074 | $6,681 | 110.0% | | Losses and loss adjustment expenses | $287,972 | $330,444 | $(42,472) | -12.9% | | Combined ratio | 110.7% | 139.2% | -28.5 pts | N/A | | Diluted earnings (loss) per common share | $(0.20) | $(2.36) | $2.16 | -91.5% | [Revenues](index=44&type=section&id=Revenues) Direct premiums written increased by 6.3%, net investment income more than doubled, while commission revenue decreased due to reinsurance changes **Direct Premiums Written by State (3 Months Ended Sep 30, in thousands):** | State | 2023 | % of Total | 2022 | % of Total | Growth ($) | Growth (%) | | :----------------------------------- | :----- | :--------- | :----- | :--------- | :--------- | :--------- | | Florida | $430,946 | 81.0% | $412,588 | 82.4% | $18,358 | 4.4% | | Other states | $101,042 | 19.0% | $88,089 | 17.6% | $12,953 | 14.7% | | Total | $531,988 | 100.0% | $500,677 | 100.0% | $31,311 | 6.3% | - Policies in force declined by **0.3%** to **807,553** at September 30, 2023, due to management's risk selection and competition from Citizens[170](index=170&type=chunk)[171](index=171&type=chunk) - Ceded premium earned decreased by **11.5%** due to mandatory participation in the RAP program and no Hurricane Ian reinstatement premiums[174](index=174&type=chunk) - Net investment income increased by **110.0%** to **$12.8 million**, driven by higher rates on invested cash balances[177](index=177&type=chunk) [Operating Costs and Expenses](index=45&type=section&id=Operating%20Costs%20and%20Expenses) Losses and LAE decreased by 12.9% due to fewer weather events, improving the loss ratio, while general and administrative expenses increased slightly **Losses and Loss Adjustment Expenses (3 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Losses and LAE, net | $287,972 | $330,444 | $(42,472) | -12.9% | | Net losses and LAE ratio | 87.0% | 113.7% | -26.7 pts | N/A | | Hurricane Ian net losses and LAE | $45,000 | $111,000 | $(66,000) | -59.5% | | Prior year development | $17,706 | $2,715 | $14,991 | 552.1% | **General and Administrative Expenses (3 Months Ended Sep 30, in thousands):** | Item | 2023 | Ratio | 2022 | Ratio | Change ($) | Change (%) | | :----------------------------------- | :----- | :---- | :----- | :---- | :--------- | :--------- | | Policy acquisition costs | $53,180 | 16.1% | $54,609 | 18.8% | $(1,429) | -2.6% | | Other operating costs | $25,142 | 7.6% | $19,364 | 6.7% | $5,778 | 29.8% | | Total general and administrative expenses | $78,322 | 23.7% | $73,973 | 25.5% | $4,349 | 5.9% | - The decrease in policy acquisition costs was due to a two-percentage-point reduction in Florida renewal commission rates[192](index=192&type=chunk) [Income Tax Expense/(Benefit)](index=46&type=section&id=Income%20Tax%20Expense%2F%28Benefit%29) Income tax benefit decreased to $2.0 million, with the effective tax rate increasing to 24.9% for the quarter **Income Tax Expense (Benefit) (3 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Income tax expense (benefit) | $(1,962) | $(20,962) | $19,000 | -90.6% | | Effective tax rate | 24.9% | 22.5% | +2.4 pts | N/A | [Other Comprehensive Income (Loss)](index=47&type=section&id=Other%20Comprehensive%20Income%20%28Loss%29) Other comprehensive loss, net of taxes, improved to $11.3 million, reflecting changes in available-for-sale debt securities' fair value **Other Comprehensive Income (Loss) (3 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Other comprehensive income (loss), net of taxes | $(11,258) | $(27,531) | $16,273 | -59.1% | - Unrealized losses increased during Q3 2023 due to interest fluctuations and credit spreads decreasing valuations of available-for-sale debt securities[193](index=193&type=chunk) [Non-GAAP](index=47&type=section&id=Non-GAAP) Adjusted operating loss and adjusted net loss significantly improved for the quarter, reflecting better financial performance **Adjusted Non-GAAP Measures (3 Months Ended Sep 30, in thousands, except per share data):** | Item | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Adjusted operating income (loss) | $(4,530) | $(87,749) | | Adjusted operating income (loss) margin | -1.3% | -27.7% | | Adjusted net income (loss) available to common stockholders | $(4,624) | $(69,369) | | Diluted adjusted earnings (loss) per common share | $(0.16) | $(2.27) | [Results of Operations — Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022](index=48&type=section&id=Results%20of%20Operations%20%E2%80%94%20Nine%20Months%20Ended%20September%2030%2C%202023%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202022) This section analyzes the company's financial performance for the first nine months of 2023 compared to the same period in 2022 **Key Financial Results (9 Months Ended Sep 30, in thousands, except per share data):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Net income (loss) | $46,824 | $(47,368) | $94,192 | NM | | Direct premiums written | $1,489,216 | $1,429,685 | $59,531 | 4.2% | | Premiums earned, net | $916,538 | $836,756 | $79,782 | 9.5% | | Net investment income | $34,735 | $15,337 | $19,398 | 126.5% | | Losses and loss adjustment expenses | $717,853 | $715,854 | $1,999 | 0.3% | | Combined ratio | 103.5% | 113.2% | -9.7 pts | N/A | | Diluted earnings (loss) per common share | $1.54 | $(1.54) | $3.08 | NM | [Revenues](index=49&type=section&id=Revenues) Direct premiums written increased by 4.2%, net investment income surged by 126.5%, and commission revenue grew by 22.6% for the nine months **Direct Premiums Written by State (9 Months Ended Sep 30, in thousands):** | State | 2023 | % of Total | 2022 | % of Total | Growth ($) | Growth (%) | | :----------------------------------- | :----- | :--------- | :----- | :--------- | :--------- | :--------- | | Florida | $1,225,295 | 82.3% | $1,200,193 | 83.9% | $25,102 | 2.1% | | Other states | $263,921 | 17.7% | $229,492 | 16.1% | $34,429 | 15.0% | | Total | $1,489,216 | 100.0% | $1,429,685 | 100.0% | $59,531 | 4.2% | - Policies in force decreased by **4.9%** to **807,553** at September 30, 2023, due to management's risk management and competition from Citizens[203](index=203&type=chunk) - Net investment income increased by **126.5%** to **$34.7 million**, driven by higher rates on invested cash balances[208](index=208&type=chunk) - Commission revenue increased by **22.6%** to **$43.1 million**, primarily due to additional commissions from Hurricane Ian reinstatement premiums and increased commissions from third-party reinsurers[209](index=209&type=chunk) [Operating Costs and Expenses](index=50&type=section&id=Operating%20Costs%20and%20Expenses) Losses and LAE remained flat, but the loss ratio improved, while general and administrative expenses slightly decreased for the nine months **Losses and Loss Adjustment Expenses (9 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Losses and LAE, net | $717,853 | $715,854 | $1,999 | 0.3% | | Net losses and LAE ratio | 78.3% | 85.5% | -7.2 pts | N/A | | Hurricane Ian net losses and LAE | $45,000 | $111,000 | $(66,000) | -59.5% | | Prior year development | $34,849 | $7,080 | $27,769 | 392.2% | **General and Administrative Expenses (9 Months Ended Sep 30, in thousands):** | Item | 2023 | Ratio | 2022 | Ratio | Change ($) | Change (%) | | :----------------------------------- | :----- | :---- | :----- | :---- | :--------- | :--------- | | Policy acquisition costs | $156,877 | 17.1% | $163,432 | 19.5% | $(6,555) | -4.0% | | Other operating costs | $74,047 | 8.1% | $68,129 | 8.2% | $5,918 | 8.7% | | Total general and administrative expenses | $230,924 | 25.2% | $231,561 | 27.7% | $(637) | -0.3% | - The decrease in policy acquisition costs was due to a two-percentage-point reduction in Florida renewal commission rates[223](index=223&type=chunk) [Income Tax Expense/(Benefit)](index=51&type=section&id=Income%20Tax%20Expense%2F%28Benefit%29) Income tax expense was $15.6 million for the nine months, a significant change from a prior-year benefit, with the effective tax rate increasing **Income Tax Expense (Benefit) (9 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Income tax expense (benefit) | $15,629 | $(12,718) | $28,347 | NM | | Effective tax rate | 25.0% | 21.2% | +3.8 pts | N/A | [Other Comprehensive Income (Loss)](index=52&type=section&id=Other%20Comprehensive%20Income%20%28Loss%29) Other comprehensive loss, net of taxes, significantly improved to $3.3 million, reflecting changes in available-for-sale debt securities' fair value **Other Comprehensive Income (Loss) (9 Months Ended Sep 30, in thousands):** | Item | 2023 | 2022 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Other comprehensive income (loss), net of taxes | $(3,333) | $(100,097) | $96,764 | -96.7% | - Unrealized losses increased during 2023 due to interest rate fluctuations and credit spreads decreasing valuations of available-for-sale debt securities[224](index=224&type=chunk) [Non-GAAP](index=52&type=section&id=Non-GAAP) Adjusted operating income and adjusted net income significantly improved for the nine months, indicating a strong return to profitability **Adjusted Non-GAAP Measures (9 Months Ended Sep 30, in thousands, except per share data):** | Item | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Adjusted operating income (loss) | $66,283 | $(38,312) | | Adjusted operating income (loss) margin | 6.5% | -4.2% | | Adjusted net income (loss) available to common stockholders | $46,012 | $(34,705) | | Diluted adjusted earnings (loss) per common share | $1.51 | $(1.12) | [Analysis of Financial Condition—As of September 30, 2023 Compared to December 31, 2022](index=53&type=section&id=Analysis%20of%20Financial%20Condition%E2%80%94As%20of%20September%2030%2C%202023%20Compared%20to%20December%2031%2C%202022) Total assets decreased due to lower reinsurance recoverable and unpaid losses, while restricted cash and unearned premiums increased **Key Balance Sheet Changes (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Total assets | $2,558,855 | $2,890,154 | $(331,299) | -11.5% | | Cash and cash equivalents | $343,532 | $388,706 | $(45,174) | -11.6% | | Restricted cash and cash equivalents | $69,488 | $2,635 | $66,853 | 2537.1% | | Reinsurance recoverable | $322,986 | $808,850 | $(485,864) | -60.1% | | Unpaid losses and LAE | $551,007 | $1,038,790 | $(487,783) | -47.0% | | Unearned premiums | $1,040,067 | $943,854 | $96,213 | 10.2% | | Advance premium | $76,030 | $54,964 | $21,066 | 38.3% | - The decrease in reinsurance recoverable and unpaid losses and LAE is primarily due to the settlement and collection of Hurricane Ian claims and other ceded events[233](index=233&type=chunk)[238](index=238&type=chunk) - Book overdraft increased to **$12.2 million** from zero, reflecting lower cash balances available for offset[241](index=241&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity and increased capital resources, supported by operating cash flows, a conservative investment portfolio, and ongoing share repurchases [Liquidity](index=54&type=section&id=Liquidity) Operating cash flows provide sufficient liquidity, though cash decreased due to Hurricane Ian settlements, while restricted cash increased for a reinsurance captive - Cash flows from operations are expected to be sufficient to meet working capital requirements for at least the next twelve months[244](index=244&type=chunk) - Cash and cash equivalents decreased by **$45.2 million**, largely due to Hurricane Ian claim settlements[231](index=231&type=chunk)[245](index=245&type=chunk) - Restricted cash and cash equivalents increased by **$66.9 million**, primarily due to collateral for a reinsurance captive arrangement[232](index=232&type=chunk)[245](index=245&type=chunk) - The company maintains a conservative, well-diversified investment portfolio with an average credit rating of A+ to ensure capital preservation and liquidity[250](index=250&type=chunk)[265](index=265&type=chunk) [Capital Resources](index=55&type=section&id=Capital%20Resources) Total capital resources increased by $13.0 million, improving debt ratios and adjusted book value per share, driven by net income and share-based compensation **Capital Resources (in thousands):** | Item | Sep 30, 2023 | Dec 31, 2022 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :--------- | :--------- | | Stockholders' equity | $301,502 | $287,896 | $13,606 | 4.7% | | Long-term debt, net | $102,196 | $102,769 | $(573) | -0.6% | | Total capital resources | $403,698 | $390,665 | $13,033 | 3.3% | | Debt-to-total capital ratio | 25.3% | 26.3% | -1.0 pts | N/A | | Debt-to-equity ratio | 33.9% | 35.7% | -1.8 pts | N/A | | Book Value per common share | $10.33 | $9.47 | $0.86 | 9.1% | | ROCE (Annualized) | 21.2% | -6.2% | +27.4 pts | N/A | **Adjusted Non-GAAP Capital Measures:** | Item | Sep 30, 2023 | Sep 30, 2022 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | :----------- | | Adjusted common stockholders' equity (in thousands) | $408,517 | $376,202 | $391,578 | | Adjusted book value per common share | $14.00 | $12.33 | $12.89 | | Adjusted ROCE (Annualized) | 15.4% | -11.1% | -3.0% | - The reduction in long-term debt was primarily due to principal payments on the surplus note[254](index=254&type=chunk) [Common Stock Repurchases](index=57&type=section&id=Common%20Stock%20Repurchases) The company repurchased 893,886 shares for $12.2 million in Q3, fully utilizing one program and continuing another with $7.8 million remaining **Common Stock Repurchases (3 Months Ended Sep 30, 2023):** | Period | Total Shares Purchased | Average Price Paid per Share | | :----------------------------------- | :--------------------- | :--------------------------- | | July 1 - July 31, 2023 | 0 | $0 | | Aug 1 - Aug 31, 2023 | 663,918 | $14.29 | | Sep 1 - Sep 30, 2023 | 229,968 | $12.10 | | Total | 893,886 | $13.72 | - As of September 30, 2023, the December 2024 Share Repurchase Program was fully utilized, and **$7.8 million** remained authorized under the June 2025 Share Repurchase Program[295](index=295&type=chunk) [Off-Balance Sheet Arrangements](index=57&type=section&id=Off-Balance%20Sheet%20Arrangements) No material off-balance sheet arrangements exist, apart from multi-year reinsurance contract commitments - No material off-balance sheet arrangements exist, except for multi-year reinsurance contract commitments for future years[267](index=267&type=chunk) [Cash Dividends](index=57&type=section&id=Cash%20Dividends) A cash dividend of $0.16 per common share was declared and paid for each of the first three quarters of 2023 **Cash Dividends Declared Per Common Share (2023):** | Quarter | Dividend Per Common Share Amount | | :----------------------------------- | :------------------------------- | | First Quarter | $0.16 | | Second Quarter | $0.16 | | Third Quarter | $0.16 | [Material Cash Requirements](index=57&type=section&id=Material%20Cash%20Requirements) Total material cash requirements were $1.19 billion, with $748.2 million due within 12 months, covering reinsurance, losses, and debt **Material Cash Requirements (in thousands, as of Sep 30, 2023):** | Item | Total | Next 12 Months | Beyond 12 Months | | :----------------------------------- | :------ | :------------- | :--------------- | | Reinsurance payable and multi-year commitments | $513,641 | $424,645 | $88,996 | | Unpaid losses and LAE, direct | $551,007 | $316,278 | $234,729 | | Long-term debt | $124,376 | $7,244 | $117,132 | | Total material cash requirements | $1,189,024 | $748,167 | $440,857 | [Impact of Inflation and Changing Prices](index=57&type=section&id=Impact%20of%20Inflation%20and%20Changing%20Prices) Interest rates significantly impact performance more than general inflation, and the company attempts to anticipate future inflation in premium rates - Interest rates have a more significant impact on the company's performance than general inflation levels, as primary assets are monetary[270](index=270&type=chunk) - The company attempts to anticipate future inflation when setting premium rates, but competitive and regulatory limitations may hinder rate adjustments[271](index=271&type=chunk) [Arrangements with Variable Interest Entities](index=58&type=section&id=Arrangements%20with%20Variable%20Interest%20Entities) The company consolidates a reinsurance captive arrangement (Isosceles Insurance Ltd.) as a Variable Interest Entity (VIE) due to being the primary beneficiary - The company consolidates a reinsurance captive arrangement (Isosceles Insurance Ltd.) as a Variable Interest Entity (VIE) because it is the primary beneficiary[272](index=272&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes to Critical Accounting Policies and Estimates were reported during the period covered by this Quarterly Report on Form 10-Q - No material changes to Critical Accounting Policies and Estimates were reported during the period covered by this Quarterly Report on Form 10-Q[272](index=272&type=chunk) [Non-GAAP Financial Measures](index=59&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial measures are used to evaluate performance and underlying business trends by excluding items impacted by investment market fluctuations - Non-GAAP financial measures are used to evaluate financial performance and underlying business trends, providing a more complete understanding by excluding items impacted by investment market fluctuations[273](index=273&type=chunk) **Reconciliation of GAAP Revenue to Core Revenue (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP revenue | $360,048 | $312,810 | $1,016,126 | $892,298 | | Core revenue | $361,764 | $316,668 | $1,015,060 | $909,103 | **Reconciliation of GAAP Operating Income (Loss) to Adjusted Operating Income (Loss) (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP operating income (loss) | $(6,246) | $(91,607) | $67,349 | $(55,117) | | Adjusted operating income (loss) | $(4,530) | $(87,749) | $66,283 | $(38,312) | **Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Net Income (Loss) Available to Common Stockholders (in thousands):** | Item | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP net income (loss) available to common stockholders | $(5,918) | $(72,278) | $46,816 | $(47,376) | | Adjusted net income (loss) available to common stockholders | $(4,624) | $(69,369) | $46,012 | $(34,705) | | Diluted adjusted earnings (loss) per common share | $(0.16) | $(2.27) | $1.51 | $(1.12) | **Reconciliation of GAAP Stockholders' Equity to Adjusted Stockholders' Equity and Book Value per Common Share to Adjusted Book Value per Common Share (in thousands):** | Item | Sep 30, 2023 | Sep 30, 2022 | Dec 31, 2022 | | :----------------------------------- | :----------- | :----------- | :----------- | | Common stockholders' equity | $301,402 | $260,537 | $287,796 | | Adjusted common stockholders' equity | $408,517 | $376,202 | $391,578 | | Book value per common share | $10.33 | $8.54 | $9.47 | | Adjusted book value per common share | $14.00 | $12.33 | $12.89 | **Reconciliation of GAAP ROCE to Adjusted ROCE (in thousands):** | Item | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | | ROCE (Annualized) | 21.2% | -18.3% | | Adjusted ROCE (Annualized) | 15.4% | -11.1% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company discloses its exposure to market risk from interest rate and equity price changes, detailing the sensitivity of its investment portfolio [Interest Rate Risk](index=62&type=section&id=Interest%20Rate%20Risk) Fixed-income financial instruments are exposed to interest rate risk, with a total fair value of $1.03 billion and an average book yield of 2.24% - Interest rate risk is the sensitivity of fixed-rate financial instruments to changes in interest rates; generally, rising rates decrease fair value[282](index=282&type=chunk) **Fixed Income Financial Instruments (in thousands, as of Sep 30, 2023):** | Item | Amortized Cost | Fair Market Value | Coupon Rate | Book Yield | | :----------------------------------- | :------------- | :---------------- | :---------- | :--------- | | Total | $1,173,967 | $1,031,558 | 2.90% | 2.24% | | Years to effective maturity | N/A | N/A | N/A | 4.6 years | [Equity Price Risk](index=62&type=section&id=Equity%20Price%20Risk) Equity securities, totaling $77.0 million, are subject to price risk, with a hypothetical 20% decrease resulting in a $15.4 million fair value reduction - Equity price risk is the potential for loss in fair value of common stock and mutual funds due to adverse price changes[284](index=284&type=chunk) **Equity Securities Subject to Price Risk (in thousands):** | Item | Sep 30, 2023 (Fair Value) | Dec 31, 2022 (Fair Value) | | :----------------------------------- | :------------------------ | :------------------------ | | Common stock | $14,786 | $15,313 | | Mutual funds and other | $62,209 | $70,156 | | Total equity securities | $76,995 | $85,469 | - A hypothetical **20%** decrease in market prices of equity securities would result in a **$15.4 million** decrease in fair value as of September 30, 2023[284](index=284&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the period - Disclosure controls and procedures were effective as of September 30, 2023[285](index=285&type=chunk) - No material changes in internal control over financial reporting occurred during the reporting period[286](index=286&type=chunk) [PART II – OTHER INFORMATION](index=62&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, equity sales, other disclosures, and exhibits [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings with immaterial estimated losses and successfully concluded FHCF commutation agreements - The company is subject to pending or threatened lawsuits and legal matters, including claims under policies[287](index=287&type=chunk)[288](index=288&type=chunk) - Management estimates that reasonably possible losses for legal matters in excess of accrued liabilities are immaterial[291](index=291&type=chunk) - The Insurance Entities successfully reached agreements with the FHCF on final commutation payments for the 2017-18 reimbursement contract year during Q3 2023[289](index=289&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive discussion of potential risks, refer to the Annual Report on Form 10-K for the year ended December 31, 2022 - Refer to the Annual Report on Form 10-K for the year ended December 31, 2022, for a detailed discussion of risk factors[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 893,886 shares for $12.2 million in Q3, fully utilizing one program and continuing another with $7.8 million remaining **Common Stock Repurchases (3 Months Ended Sep 30, 2023):** | Period | Total Shares Purchased | Average Price Paid per Share | | :----------------------------------- | :--------------------- | :--------------------------- | | July 1 - July 31, 2023 | 0 | $0 | | Aug 1 - Aug 31, 2023 | 663,918 | $14.29 | | Sep 1 - Sep 30, 2023 | 229,968 | $12.10 | | Total | 893,886 | $13.72 | - As of September 30, 2023, the December 2024 Share Repurchase Program was fully utilized, and **$7.8 million** remained authorized under the June 2025 Share Repurchase Program[295](index=295&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers in Q3 2023 - No Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or Section 16 officers during Q3 2023[294](index=294&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, SOX certifications, and iXBRL financial statements - Exhibits include corporate governance documents, Sarbanes-Oxley Act certifications, and iXBRL formatted financial statements[296](index=296&type=chunk) [Signatures](index=66&type=section&id=Signatures) The report was signed by the Chief Executive Officer and Principal Accounting Officer on October 30, 2023 - The report was signed by Stephen J. Donaghy, Chief Executive Officer, and Gary Lloyd Ropiecki, Principal Accounting Officer, on October 30, 2023[301](index=301&type=chunk)

Universal Insurance Holdings, Inc. (NYSE:UVE) Q3 2023 Earnings Conference Call October 27, 2023 10:00 AM ET Company Participants Arash Soleimani - Chief Strategy Officer Steve Donaghy - Chief Executive Officer Frank Wilcox - Chief Financial Otter Conference Call Participants Nic Iacoviello - Dowling & Partners Paul Newsome - Piper Sandler Operator Good morning, ladies and gentlemen, and welcome to Universal's Third Quarter 2023 Earnings Conference Call. As a reminder this conference call is being recorded. ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 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 0 ...

Universal Insurance Holdings, Inc. (NYSE:UVE) Q2 2023 Earnings Conference Call July 28, 2023 10:00 AM ET Company Participants Arash Soleimani - Chief Strategy Officer Steve Donaghy - Chief Executive Officer Frank Wilcox - Chief Financial Otter Conference Call Participants Paul Newsome - Piper Sandler Nic Iacoviello - Dowling & Partners Operator Good morning, ladies and gentlemen and welcome to Universal Second Quarter 2023 Earnings Call. As a reminder, this conference is being recorded. I would now like to ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________________________ FORM 10-Q ________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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 ...

Financial Data and Key Metrics Changes - The company reported a 23.9% annualized adjusted return on common equity and a 23.4% growth in adjusted diluted earnings per share year-on-year [3] - Adjusted diluted earnings per share increased to $0.79 from $0.64 in the prior year quarter, driven by higher net premiums earned, net investment income, and commission revenue [5] - Core revenue reached $316.3 million, up 8.8% year-over-year, primarily due to higher net premiums earned and net investment income [6] - The net combined ratio was 100%, reflecting a 2.1-point increase compared to the prior year quarter, attributed to a higher net loss ratio [6][7] Business Line Data and Key Metrics Changes - Direct premiums written were $410.1 million, up 3.4% from the prior year quarter, with 0.9% growth in Florida and 17.2% growth in other states [6] - Direct premiums earned increased to $455.4 million, up 9.8% from the prior year quarter, reflecting rate-driven growth [6] - Net premiums earned rose to $282.2 million, up 4.9% from the prior year quarter, primarily due to higher direct premiums earned [6] Market Data and Key Metrics Changes - The company noted a higher attritional initial accident year loss pick and higher prior year reserve development as a percentage of net premiums earned, contributing to the increase in the net loss ratio [7] - The net loss ratio was 73.1%, up 4.3 points compared to the prior year quarter, while the net expense ratio improved to 26.9%, down 2.2 points [7] Company Strategy and Development Direction - The company is optimistic about future stability and profitability due to recent legislative reforms in Florida, which are expected to improve rate adequacy and investment portfolio productivity [3] - The core all states property catastrophe reinsurance tower for the 2023-2024 period has been fully secured with no material changes to historical partners or terms [3] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the impact of tort reform on litigation and claims, noting a reduction in litigation and favorable signs for the future [10] - It was indicated that the benefits from legislative changes will take time to fully materialize as policies renew and new business comes onboard [11] Other Important Information - The Board of Directors declared a quarterly cash dividend of $0.16 per share, payable on May 19, 2023 [7] Q&A Session Summary Question: Changes in reinsurance terms and conditions - Management confirmed no changes in terms and conditions, with similar reinsurance costs expected as a percentage of premiums earned compared to the previous year [8] Question: Use of state's reinsurance offer - The company did not use the WRAP program in 2022 but elected to utilize it in 2023, which is below the FHCF level [9] Question: Impact of tort reform on claims - Management noted considerable reductions in litigation and expressed optimism about the future impact of tort reform on the business [10] Question: Movement in gross loss estimates for Hurricane Ian - Management confirmed that gross loss estimates for Hurricane Ian remain around $1 billion and do not expect it to increase [18]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________________________________ FORM 10-K ________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or Common Stock, $0.01 Par Value UVE New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a w ...