United Insurance(ACIC) - 2022 Q2 - Quarterly Report

Financial Performance - Gross premiums written for Q2 2022 were $360.146 million, down 15.5% from$ 426.424 million in Q2 2021[153]. - Net premiums earned for Q2 2022 were $111.405 million, a decrease of 23.4% compared to$ 145.460 million in Q2 2021[153]. - Total revenues for Q2 2022 were $115.793 million, down 25.5% from$ 155.454 million in Q2 2021[153]. - Consolidated net loss attributable to the company for Q2 2022 was $(69.029) million, compared to$ (23.510) million in Q2 2021[153]. - The combined ratio for Q2 2022 was 131.6%, an increase from 127.9% in Q2 2021[1]. - The underlying combined ratio, excluding current year catastrophe losses, was 106.2% for Q2 2022, compared to 100.5% in Q2 2021[1]. - Total expenses for Q2 2022 were $148.969 million, down from$ 188.242 million in Q2 2021[1]. - The return on equity based on GAAP net loss was (72.2)% for the six months ended June 30, 2022[1]. - Net losses attributable to United Insurance Holdings Corp. for Q2 2022 increased by $45,519,000, or 193.6%, resulting in a net loss of$ 69,029,000 compared to a net loss of $23,510,000 in Q2 2021[192]. - Net losses attributable to the company for the six months ended June 30, 2022 increased by$ 60,920,000, or 147.6%, to a net loss of $102,201,000 from$ 41,281,000 for the same period in 2021[228]. Premiums and Policies - Policies in-force decreased by 39.4% from 568,732 at June 30, 2021, to 344,522 at June 30, 2022[148]. - Gross written premiums decreased by $66,278,000, or 15.5%, to$ 360,146,000 in Q2 2022 from $426,424,000 in Q2 2021, primarily due to the transition of the Northeast business to HCPCI[193]. - Direct written premiums in Florida increased by$ 7,823,000, while the Gulf region saw a decrease of $10,551,000 and the Northeast region experienced a significant decline of$ 52,897,000[194]. - New and renewal policies written in Q2 2022 totaled 85,947, a decrease of 63,622 from 149,569 in Q2 2021[196]. - Total new and renewal homeowner and dwelling fire policies decreased by 63,394, or 43.0%, to 83,976 for the three months ended June 30, 2022, compared to 147,370 for the same period in 2021[207]. - New and renewal policies written in Florida decreased by 32,546 to 80,849 for the six months ended June 30, 2022 compared to 113,395 for the same period in 2021[231]. Expenses and Costs - Total expenses for Q2 2022 decreased by $39,273,000, or 20.9%, to$ 148,969,000 from $188,242,000 in Q2 2021, mainly due to a reduction in loss and LAE expenses[197]. - Loss and LAE expenses decreased by$ 27,990,000, or 23.7%, to $90,074,000 in Q2 2022, with the loss ratio as a percentage of net earned premiums decreasing to 80.9% from 81.2% in Q2 2021[200]. - Policy acquisition costs decreased by$ 12,339,000, or 29.9%, to $28,988,000 in Q2 2022, primarily due to reductions in agent commissions and premium taxes[201]. - General and administrative expenses increased by$ 1,382,000, or 10.5%, to $14,494,000 in Q2 2022, driven by higher external fees for legal and audit services[202]. - Total operating expenses for the personal lines segment decreased by$ 14,785,000, or 31.3%, to $32,436,000 for the second quarter of 2022, from$ 47,221,000 for the same period in 2021[212]. - Total expenses for the personal lines segment decreased by $71,459,000, or 24.1%, to$ 225,311,000 for the six months ended June 30, 2022[244]. Investments and Cash Flow - Cash, cash equivalents, restricted cash, and investment portfolio totaled $898.379 million at June 30, 2022, compared to$ 964.844 million at December 31, 2021[1]. - Total investments increased from $581,233 million to$ 719,566 million, representing a growth of 23.8%[166]. - Cash inflows from operating activities were $8,286,000 for the six months ended June 30, 2022, compared to cash outflows of$ 28,261,000 for the same period in 2021[267]. - Net sales of investments totaled $83,661,000 for the six months ended June 30, 2022, compared to$ 54,649,000 for the same period in 2021[268]. - Cash used in financing activities increased by $15,443,000 to$ 21,685,000 for the six months ended June 30, 2022, from $6,242,000 for the same period in 2021[269]. Reinsurance and Catastrophe Losses - The company entered into a quota share reinsurance agreement ceding 100% of policies in Georgia, North Carolina, and South Carolina effective June 1, 2022[143]. - Catastrophe excess of loss reinsurance protection was purchased up to an exhaustion point of approximately$ 2,500,000,000 for the 2022 hurricane season[170]. - The company’s reinsurance program is designed to address exposure to catastrophe losses, with a defined loss threshold of $25,000,000 for ISO catastrophes[169]. - The combined ratio impact for personal lines from current period catastrophe losses incurred was 38.6% for the three months ended June 30, 2022, compared to 36.8% for the same period in 2021[182]. - The company reported a total of 16 catastrophe loss events for the three months ended June 30, 2022, with incurred losses of$ 20,553,000, resulting in a combined ratio impact of 18.4%[181]. Market Conditions and Economic Impact - The company did not experience a material impact from COVID-19 on its operations or financial position during the six months ended June 30, 2022[150]. - Inflation in the U.S. reached 8.6% during the first half of 2022, impacting premium rates and resulting in higher loss and LAE expenses[189].