Universal Insurance Holdings(US:UVE)2019-10-31 16:56Financial Data and Key Metrics Changes - The company reported non-GAAP adjusted EPS of $0.61, with revenue growth of 11.4% compared to the same quarter last year [6] - Year-to-date total revenue increased by 15.2% to $699.9 million [6] - Year-to-date EPS was $2.82 on a GAAP basis and $2.67 on a non-GAAP adjusted basis [7] - The annualized return on average equity was 23.9%, and book value per share grew by 12.7% [7][13] Business Line Data and Key Metrics Changes - Direct premiums written increased by 7.4% year-to-date, with strong growth outside of Florida and rate increases within Florida [7][15] - Premiums in force grew to approximately $1.3 billion, an increase of 8.5% from the prior year [14] - Total services revenue increased by 17.7% to $14.9 million for the quarter, driven by commission revenue from reinsurance intermediary Blue Atlantic [23] Market Data and Key Metrics Changes - Direct premium written growth was 27.6% in states outside of Florida for the quarter [14] - The net loss and loss adjustment expense ratio increased by 18.8 points for the quarter to 64.3% [20] Company Strategy and Development Direction - The company launched a multi-raider quote platform on Clovered, allowing consumers to receive up to five side-by-side quotes online [8] - The company is focused on geographic diversification and building relationships with agents to drive growth outside of Florida [72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the impact of AOB legislation on claims handling and operational efficiency [64] - The company is monitoring reinsurance market dynamics closely, especially in light of global weather events [56][40] Other Important Information - The effective tax rate for the third quarter was 29%, an increase of 2.5 points over the prior year's quarter [27] - The company repurchased approximately 964,000 shares at an aggregate cost of $25.7 million during the third quarter [29] Q&A Session Summary Question: How should the large amount of repurchases this quarter be viewed? - Management indicated that the repurchases were based on perceived undervaluation and should not be seen as a run rate going forward [45][46] Question: How much excess capital does the company estimate it has right now? - Management refrained from disclosing specific figures, stating that a clearer picture would be available at year-end [47] Question: What are the drivers behind the increase in commission revenues? - The increase is attributed to higher exposures and a larger percentage of reinsurance purchased from third parties [48] Question: Is the mid-30s expense ratio where the company should be modeling going forward? - Management confirmed that the expense ratio is within the expected range but is influenced by various factors [50][53] Question: How independent are Florida renewals from other markets? - Management stated that Florida renewals are independent and can move in different directions compared to other markets [59] Question: What is the status of the Irma loss and how is it being managed? - Management noted that the majority of the increased losses from Irma are covered by the Florida Hurricane Cat Fund [62] Question: Are there any operational metrics showing improvement from AOB reform? - Management expressed cautious optimism about AOB legislation benefits and highlighted their unique claims handling process [64][65]