Universal Reports Third Quarter 2023 Results

• Loss per common share of $0.20; adjusted* loss per common share of $0.16
• Direct premiums written of $532.0 million, up 6.3% from the prior year quarter
• Net combined ratio of 110.7%, down 28.5 points from the prior year quarter
• Book value per share of $10.33, up 21.0% year-over-year; adjusted book value per share of $14.00, up 13.5% year-over-year
• Repurchased approximately 894 thousand shares for $12.3 million. Total capital returned to shareholders of $17.2 million, including $0.16 per share regular quarterly dividend

Universal Insurance Holdings (NYSE:UVE) ("Universal" or the "Company") reported third quarter 2023 results.

"The third quarter benefited from strong and improving underlying trends and I'm optimistic as I look forward," said Stephen J. Donaghy, Chief Executive Officer. "During the quarter, Hurricane Idalia made Florida landfall, and, as always, we were there immediately to assist our policyholders in their time of need. The storm's severity appears considerably smaller than initially anticipated and is comfortably absorbed within our retention. We continue to enhance our best-in-class claims infrastructure, which together with our reinsurance capabilities, serves to differentiate us from our peers. As we look forward, we are more confident in the Florida market, which is our largest geography, and have started to slowly increase new business in additional territories."

^*Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Net Income and Adjusted Net Income

Net loss available to common stockholders was $5.9 million, compared to a loss of $72.3 million in the prior year quarter, and adjusted net loss available to common stockholders was $4.6 million, compared to a loss of $69.4 million in the prior year quarter. The improvement in adjusted net loss available to common stockholders mostly stems from better underwriting income and net investment income.

Revenues

Revenue was $360.0 million, up 15.1% from the prior year quarter and core revenue was $361.8 million, up 14.2% from the prior year quarter. The increase in core revenue primarily stems from higher net premiums earned and net investment income, partly offset by lower commission revenue.

Direct premiums written were $532.0 million, up 6.3% from the prior year quarter. The increase stems from 4.4% growth in Florida and 14.7% growth in other states. Overall growth reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $474.3 million, up 4.8% from the prior year quarter. The increase stems from rate-driven direct premiums written growth over the past twelve months.

The ceded premium ratio was 30.2%, down from 35.8% in the prior year quarter. The decrease primarily reflects efficiencies associated with the 2023-2024 reinsurance program and direct premiums earned growth associated with primary rate increases, partly offset by higher reinsurance pricing and higher reinsurance costs associated with an increase in home values.

Net premiums earned were $331.0 million, up 13.9% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio, as described above.

Net investment income was $12.8 million, up from $6.1 million in the prior year quarter. The increase primarily stems from higher fixed income reinvestment yields and higher yields on cash.

Commissions, policy fees and other revenue were $18.0 million, down 10.0% from the prior year quarter. The decrease primarily reflects the difference in pricing and structure associated with our reinsurance program when compared to the prior year and a decline in policy fees associated with lower policies in force.

Margins

The GAAP operating loss margin was 1.7%, compared to a GAAP operating loss margin of 29.3% in the prior year quarter and the adjusted operating loss margin was 1.3%, compared to an adjusted operating loss margin of 27.7% in the prior year quarter. The improvement in the adjusted operating loss margin primarily reflects a lower net combined ratio and higher net investment income.

The net loss ratio was 87.0%, down 26.7 points compared to the prior year quarter. The decrease reflects a lower current accident year net loss ratio, primarily stemming from lower weather-related losses.

The net expense ratio was 23.7%, down 1.8 points from 25.5% in the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to distribution partners.

The net combined ratio was 110.7%, down 28.5 points compared to the prior year quarter. The decrease reflects lower net loss and expense ratios, as described above.

Capital Deployment

During the third quarter, the Company repurchased approximately 894 thousand shares at an aggregate cost of $12.3 million. The Company currently has $7.8 million of share repurchase authorization remaining.

On July 20, 2023, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on August 11, 2023, to shareholders of record as of the close of business on August 4, 2023.

Conference Call and Webcast

• Friday, October 27, 2023 at 10:00 a.m. ET
• Investors and other interested parties may listen to the call by accessing the online, real-time webcast at universalinsuranceholdings.com/investors or by registering in advance via teleconference at https://register.vevent.com/register/BIcde2db8d22eb43b9be5e115c575ebeb9. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. An online replay of the call will be available at universalinsuranceholdings.com/investors soon after the investor call concludes.

About Universal

Universal Insurance Holdings, Inc. (NYSE:UVE) is a holding company providing property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We provide insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 19 states (primarily Florida). Learn more at universalinsuranceholdings.com.

Non-GAAP Financial Measures and Key Performance Indicators

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission ("SEC"), including core revenue, adjusted net income available to common stockholders and diluted adjusted earnings (loss) per common share, which exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities. Adjusted operating income and adjusted operating income margin exclude the impact of net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities and interest and amortization of debt issuance costs. Adjusted common stockholders' equity and adjusted book value per share exclude accumulated other comprehensive income (AOCI), net of taxes. Adjusted return on common equity excludes after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the numerator and AOCI, net of taxes, and current period after-tax net realized gains (losses) on investments and net change in unrealized gains (losses) of equity securities from the denominator. A "non-GAAP financial measure" is generally defined as a numerical measure of a company's historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles ("GAAP"). UVE management believes that these non-GAAP financial measures are meaningful, as they allow investors to evaluate underlying revenue and profitability trends and enhance comparability across periods. When considered together with the GAAP financial measures, management believes these metrics provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE's business trends and to understand UVE's operational performance. UVE's management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP. For more information regarding our key performance indicators, please refer to the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators" in our forthcoming Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "will," "plan," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, including those risks and uncertainties described under the heading "Risk Factors" and "Liquidity and Capital Resources" in our 2022 Annual Report on Form 10-K, and supplemented in our subsequent Quarterly Reports on Form 10-Q. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information regarding risk factors that could affect the Company's operations and future results, refer to the Company's reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and the most recent quarterly reports on Form 10-Q.

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