Universal Insurance Holdings(UVE) - 2024 Q3 - Quarterly Report

Premiums and Revenue - Universal Insurance Holdings, Inc. reported that Florida represented 76.6% of direct premiums written for the three months ended September 30, 2024[143]. - The company experienced significant increases in personal residential insurance premiums due to rising costs from losses, loss adjustment expenses, and reinsurance[146]. - Direct premiums written increased by $42.4 million, or 8.0%, for the three months ended September 30, 2024, driven by premium growth in Florida of$ 9.1 million, or 2.1%, and in other states of $33.3 million, or 32.9%[210]. - Direct premium earned increased by 7.0% to$ 507.7 million for the three months ended September 30, 2024, compared to $474.3 million in the same period in 2023[209]. - Premiums earned, net, rose to$ 1,024.7 million for the nine months ended September 30, 2024, an increase of 11.8% compared to the same period in 2023[240]. - Direct premiums written increased by $109.6 million, or 7.4%, for the nine months ended September 30, 2024, driven by growth in Florida and other states[241]. Rate Changes and Regulatory Environment - In April 2023, UPCIC received approval for a rate decrease of 1.4% for Homeowners' and 1.6% for Dwelling Fire in Florida, effective July 15, 2023[154]. - The Florida Legislature enacted substantial law changes in December 2022 aimed at mitigating rising claims costs and enhancing service standards for policyholders[147]. - The reforms have led many insurers, including the company, to submit rate filings in 2024 reflecting overall average rates equal to or slightly lower than the previous year's rates[149]. - UPCIC filed a 7.5% rate increase for Florida personal residential homeowners effective July 17, 2023, and a 4.1% increase for dwelling-fire lines effective January 15, 2024[155]. - Rate changes approved for 2024 include a 14.8% increase in Georgia, 7.8% in South Carolina, and 14.3% in Alabama, among others[156]. Claims and Losses - The estimated retained losses from Hurricane Milton, which made landfall on October 9, 2023, are expected to be$ 45.0 million for the quarter ended December 31, 2024[204]. - The company incurred estimated net losses from Hurricane Helene of $111.0 million, with reinsurance recoveries of$ 66.0 million[220]. - Net losses and LAE were $317.0 million with a 91.7% net loss ratio for the three months ended September 30, 2024, up from$ 288.0 million and 87.0% in the prior year[219]. - Net losses and loss adjustment expenses (LAE) were $800.7 million with a 78.1% net loss ratio for the nine months ended September 30, 2024, compared to$ 717.9 million and a 78.3% net loss ratio for the same period in 2023[247]. Financial Performance - The combined ratio is a key performance indicator, with a ratio below 100% indicating underwriting profit[169]. - The net combined ratio for the three months ended September 30, 2024, was 116.9%, an increase of 6.2 points compared to the same period in 2023[202]. - The combined ratio improved to 102.8% for the nine months ended September 30, 2024, from 103.5% for the same period in 2023[255]. - Adjusted net income attributable to common stockholders is calculated by excluding net realized and unrealized gains and losses on investments[163]. - Adjusted operating loss for Q3 2024 was $22.7 million, compared to a loss of$ 4.5 million in Q3 2023, indicating a deterioration in operating performance[233]. - Adjusted net loss attributable to common stockholders was $20.8 million for Q3 2024, compared to a loss of$ 4.6 million in Q3 2023[235]. Investment and Capital Management - Net investment income rose to $15.4 million, a 20.8% increase compared to$ 12.8 million for the same period in 2023[201]. - Total invested assets increased to $1.37 billion as of September 30, 2024, from$ 1.16 billion as of December 31, 2023, primarily due to investment of excess cash and unrealized gains[265]. - The investment portfolio as of September 30, 2024, included available-for-sale debt securities and equity securities, with a total fair market value of $1,276,732[318]. - The company’s investment strategy does not include trading in risk-sensitive financial instruments[316]. - The company has a total material cash requirement of$ 1,252.471 million as of September 30, 2024, with $723.474 million due in the next 12 months[301]. Shareholder and Equity Information - The company repurchased 226,498 shares at an average price of$ 19.39, totaling $4.4 million, with$ 10.3 million remaining under the repurchase program[203]. - Stockholders' equity increased to $400.245 million as of September 30, 2024, from$ 341.297 million as of December 31, 2023, reflecting a net increase of $58.4 million[286]. - The adjusted book value per common share as of September 30, 2024, was$ 15.76, up from $14.00 as of September 30, 2023, reflecting an increase of 12.6%[311]. - Cash dividends declared for the first three quarters of 2024 were consistently$ 0.16 per common share[300]. Operational Efficiency and Initiatives - The company has adopted initiatives to expedite the claims process and improve efficiency, including the use of technology for property damage reviews[152]. - The company has cautiously increased its appetite for new business following the reforms and operational initiatives taken in recent years[153]. - General and administrative expenses increased by $8.8 million, or 11.2%, for the three months ended September 30, 2024, driven by higher policy acquisition costs and other operating costs[225]. - The company relies on independent insurance agents, and the loss of these relationships could adversely impact its business[132].