Additionally, we have taken steps to implement claim settlement rules associated with the Florida legislation passed in 2019 and subsequently. Following legislation enacted in Florida’s December 2022 special session, we have analyzed the changes and have initiated efforts to implement the new provisions that the legislature intends will curtail abuses in the market. Although the recent law changes mark the legislature’s most definitive effort to find effective solutions to Florida’s market problems, it is too early to evaluate the extent to which the changes will be successful or the time period over which any benefits will materialize.

Summary of Recent Rate ~~Increases and Cost of Living Adjustments~~Changes

In ~~May 2022, the Company filed~~April 2023, UPCIC submitted and received approval for a rate ~~increase~~decrease of 1.4% for Homeowners’, and a rate decrease of 1.6% for Dwelling Fire in the State of Florida, effective July 15, 2023, for new and renewal business. This filing resulted from UPCIC’s statutorily required participation in Florida’s Reinsurance to Assist Policyholders Program (“RAP”). This program is unrelated to the FHCF and allows insurers to access a layer of reinsurance coverage that is below the FHCF industry retention at no cost to the insurer. In exchange the Insurance Entities adopted a corresponding one-year rate reduction. Under current law, the RAP program expires with the ~~FLOIR for an overall 14.9%~~reinsurance contract year ending May 31, 2024. Accordingly, the rate ~~increase for UPCIC~~decrease that was temporarily implemented in response to the RAP coverage will expire one year from its effective date, on ~~Florida personal residential homeowners’ line of business which became effective June 1, 2022, for new business and November 4, 2022, for renewals.~~July 15, 2024.

In ~~addition, in November 2022,~~July 2023, UPCIC filed a ~~3.7%~~7.5% rate increase on Florida personal residential homeowners’ line of business, effective ~~February 15,~~July 17, 2023, for new business and ~~April 1,~~November 4, 2023, for ~~renewals.~~renewal business. Additionally, in October 2023, UPCIC filed a 4.1% rate increase on Florida personal dwelling-fire lines of business, effective January 15, 2024, for both new and renewal business. Both of these rate increases were implemented under use and file rating laws and are pending review with regulators.

~~During 2022 inflation adjustments averaging 11.9%~~For 2024, the following rate changes for UPCIC have been implemented. These are adjustments to policy coverage amounts designed to facilitate the policies’ adherence to insurance-to-value requirements. The coverage adjustments provide a degree of protection insureds have against inflationary pressures while also resultingapproved by regulators in ~~additional premium to the Company to cover the increased claim costs driven by inflation factors.~~

~~Changing Climate Conditions~~

Severe weather events over the last two decades underscore the unpredictability of climate trends, and changing climate conditions have added to the frequency and severity of natural disasters and created additional uncertainty as to future trends and exposures. The insurance industry has experienced increased catastrophe losses due to a number of potential causal factors, including, in addition to weather/climate variability, aging infrastructure; more people living in high-risk areas; population growth in areas with weaker enforcement of building codes; urban expansion; an increase in the number of amenities included in, and average size of, a home; and increased inflation, including as a result of post-pandemic demand surge. Climate studies by government agencies, academic institutions, catastrophe modeling organizations andstates other groups indicate that we are experiencing, and are expected to continue to experience over time, an increase in frequency and/or intensity of hurricanes, heavy precipitation events, flash flooding, sea level rise, droughts, heat waves and wildfires. Developing an awareness of the potential impacts of changing climate conditions is important to the Company’s business.

~~Table of Contents~~

than Florida:

•

~~Impact of COVID-19~~

We have not seen a direct material impact from COVID-19 on our business, our financial position, our liquidity, or our ability to service our policyholders and maintain critical operations. Indirectly, inflationary pressures, in part due to supply chain and labor constraints during the pandemic, have affected and continue to affect claims costs and, to a lesser degree, other expenses. The ultimate impact of the COVID-19 pandemic, or future pandemics, on ourGeorgia: +14.8% effective November 21, 2023, for new business, and onJanuary 10, 2024, for renewal business

•South Carolina: +7.8% effective January 16, 2024, for new business, and March 6, 2024 for renewal business

•Alabama: +14.3% effective March 13, 2024, for new business, and May 2, 2024, for renewal business

•Indiana: +8.0% effective March 22, 2024 for new business, and May 11, 2024, for renewal business

•Minnesota: +14.9% effective April 19, 2024, for new business, and May 20, 2024, for renewal business

•Massachusetts: +11.9% effective April 8, 2024, for new business, and May 28, 2024, for renewal business

The following rate filings are pending approval by state regulators:

•Maryland: +13.3% effective January 22, 2024 for new business, and March 12, 2024, for renewal business

•New York: +14.7% effective March 11, 2024, for new business, and April 30, 2024, for renewal business

•Pennsylvania: +3.0% effective June 1, 2024, for new business, and July 21, 2024, for renewal business

The pending New York and Maryland rate filings are use and file rates, but prior approval for forms, so the ~~economy~~effect in ~~general cannot be predicted.~~their cases is prior approval.

KEY PERFORMANCE INDICATORS

The Company considers the measures and ratios in the following discussion to be key performance indicators for its businesses. Management believes that these indicators are helpful in understanding the underlying trends in the Company’s businesses. Some of these indicators are reported on a quarterly basis and others on an annual basis. Please also refer to “Part II, Item 8—Note 2 (Summary of Significant Accounting Policies)” of our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 for definitions of certain other terms we use when describing our financial results.

These indicators may not be comparable to other performance measures used by the Company’s competitors and should only be evaluated together with our condensed consolidated financial statements and accompanying notes.

In addition to our key performance indicators and other financial measures presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), management also uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that non-GAAP financial measures, which may be defined differently by other companies, help to explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with GAAP. The calculation of these key financial measures including the reconciliation of non-GAAP measures to the nearest GAAP measure are found below under “―Non-GAAP Financial Measures.”

Definitions of Key Performance Indicators and GAAP and Non-GAAP Measures

Adjusted book value per common share ― is a non-GAAP measure that is calculated as adjusted common stockholders’ equity divided by common shares outstanding at the end of the period. Management believes this metric is meaningful, as it allows investors to evaluate underlying book value growth by excluding the impact of unrealized gains and losses due to interest rate volatility.

Adjusted common stockholders' equity ― is a non-GAAP measure that is calculated as GAAP common stockholders' equity less accumulated other comprehensive income (loss). Management believes this metric is meaningful, as it allows investors to

Table of Contents

evaluate underlying growth in stockholders’ equity by excluding the impact of unrealized gains and losses due to interest rate volatility.

Adjusted net income (loss) attributable to common stockholders ― is a non-GAAP measure that is calculated as GAAP net income (loss) attributable to common stockholders, less net realized gains (losses) on investments and net changes in unrealized gains (losses) ~~of equity securities,~~on investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Adjusted operating income (loss) ― is a non-GAAP measure that is calculated as GAAP operating income (loss), less net realized gains (losses) on investments and net changes in unrealized gains (losses) ~~of equity securities.~~on investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Adjusted operating income (loss) margin ― is a non-GAAP measure that is computed as adjusted operating income (loss) divided by core revenue. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Adjusted return on common equity (Adjusted “ROCE”) ― is a non-GAAP measure that is calculated as actual or annualized adjusted net income attributable to common stockholders divided by average adjusted common stockholders' equity, with the denominator excluding current period income statement net realized gains (losses) on investments and net changes in unrealized gains (losses) ~~of equity securities,~~on investments, net of tax. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Book Value Per Common Share ― total stockholders’ equity, adjusted for preferred stock liquidation, divided by the number of common shares outstanding as of a reporting period. Book value per common share is the excess of assets over liabilities at a reporting period attributed to each share of common stock. Changes in book value per common share informs shareholders of retained equity in the Company on a per share basis, which may assist in understanding market value trends for the Company’s stock.

Combined Ratio ― the combined ratio is a measure of underwriting profitability for a reporting period and is calculated by dividing total operating costs and expenses (which is made up of losses and LAE and general and administrative expenses) by premiums earned, net, which is net of ceded premium earned. Changes to the combined ratio over time provide management with

~~Table of Contents~~

an understanding of costs to operate its business in relation to net premiums it is earning and the impact of rate, underwriting and other business management actions on underwriting profitability. A combined ratio below 100% indicates an underwriting profit; a combined ratio above 100% indicates an underwriting loss.

Core Loss Ratio ― a common operational metric used in the insurance industry to describe the ratio of current accident year expected losses and LAE, excluding current accident year weather events beyond those expected, to premiums earned. Core loss ratio is an important measure identifying profitability trends of premiums in force. Core losses consists of losses and LAE excluding current accident year weather events beyond those expected and prior years’ reserve development. The financial benefit from the management of claims, including claim fees ceded to reinsurers, is recorded in the condensed consolidated financial statements as a reduction to core losses. The core loss ratio can be measured on a direct basis, using direct earned premiums, or on a net basis, using premiums earned, net (i.e., direct premiums earned less ceded premiums earned).

Core revenue ― is a non-GAAP measure that is calculated as total GAAP revenue, less net realized gains (losses) on investments and net changes in unrealized gains (losses) ~~of equity securities.~~on investments. Management believes this metric is meaningful, as it allows investors to evaluate underlying revenue trends and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Debt-to-Equity Ratio ― long-term debt divided by stockholders’ equity. This ratio helps management measure the amount of financing leverage in place in relation to equity and allows investors to evaluate future leverage capacity.

Debt-to-Total Capital Ratio ― long-term debt divided by the sum of total stockholders’ equity and long-term debt (often referred to as total capital resources). This ratio helps management measure the amount of financing leverage in place (long-term debt) in relation to total capital resources and allows investors to evaluate future leverage capacity.

Diluted adjusted earnings per common share ― is a non-GAAP measure, which is calculated as adjusted net income available to common stockholders divided by weighted average diluted common shares outstanding. Management believes this metric is meaningful, as it allows investors to evaluate underlying profitability and enhances comparability across periods by excluding items that are heavily impacted by investment market fluctuations and other economic factors and are not indicative of operating trends.

Direct Premiums Written (“DPW”) ― reflects the total value of policies issued during a period before considering premiums ceded to reinsurers. Direct premiums written, comprised of renewal premiums, endorsements, and new business, is initially recorded as unearned premium in the balance sheet, which is then earned pro-rata over the next year or remaining policy term. Direct premiums written reflect current trends in the Company’s sale of property and casualty insurance products and amounts that will be recognized as earned premiums in the future.

DPW (Florida) ― includes only DPW in the state of Florida. This measure allows management to analyze growth in our primary market and is also a measure of business concentration risk.

Table of Contents

Expense Ratio (Including Policy Acquisition Cost Ratio and Other Operating Cost Ratio) ― calculated as general and administrative expenses as a percentage of premiums earned, net. General and administrative expenses are comprised of policy acquisition costs and other operating costs, which includes such items as underwriting costs, facilities, and corporate overhead. The expense ratio, including the sub-expense ratios of policy acquisition cost ratio and other operating cost ratio, are indicators to management of the Company’s cost efficiency in acquiring and servicing its business and the impact of expense items to overall profitability.

Losses and Loss Adjustment Expense Ratio or Loss and LAE Ratio ― a measure of the cost of claims and claim settlement expenses incurred in a reporting period as a percentage of premiums earned in that same reporting period. Losses and LAE incurred in a reporting period includes both amounts related to the current accident year and prior accident years, if any, referred to as development. Ultimate losses and LAE are based on actuarial estimates with changes in those estimates recognized in the period the estimates are revised. Losses and LAE consist of claim costs arising from claims occurring and settling in the current period, an estimate of claim costs for reported but unpaid claims, an estimate of unpaid claim costs for incurred-but-not-reported claims and an estimate of claim settlement expenses associated with reported and unreported claims which occurred during the reporting period. The loss and LAE ratio can be measured on a direct basis, which includes losses and LAE divided by direct earned premiums, or on a net basis, which includes losses and LAE divided by premiums earned, net (i.e., direct premium earned less ceded premium earned). The net loss and LAE ratio is a measure of underwriting profitability after giving consideration to the effect of reinsurance. Trends in the net loss and LAE ratio are an indication to management of current and future profitability.

Monthly Weighted Average Renewal Retention Rate ― measures the monthly average of policyholders that renew their policies over the period of a calendar year. This measure allows management to assess customer retention.

Premiums Earned, Net ― the pro-rata portion of current and previously written premiums that the Company recognizes as earned premium during the reporting period, net of ceded premium earned. Ceded premiums are premiums paid or payable by the Company for reinsurance protection. Written premiums are considered earned and are recognized pro-rata over the policy coverage period. Premiums earned, net is a measure that allows management to identify revenue trends.

Policies in Force ― represents the number of active policies with coverage in effect as of the end of the reporting period. The change in the number of policies in force is a growth measure and provides management with an indication of progress toward achieving strategic objectives. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.

Premium in Force ― is the amount of the annual direct written premiums previously recorded by the Company for policies which are still active as of the reporting date. This measure assists management in measuring the level of insured exposure and progress toward meeting revenue goals for the current year, and provides an indication of business available for renewal in the

~~Table of Contents~~

next twelve months. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.

Return on Average Common Equity (“ROCE”) ― calculated as actual net income (loss) attributable to common stockholders divided by average common stockholders' equity. ROCE is a capital profitability measure of how efficiently management creates profits.

Total Insured Value ― represents the amount of insurance limits available on a policy for a single loss based on all policies active as of the reporting date. This measure assists management in measuring the level of insured exposure.

Unearned Premiums ― represents the portion of direct premiums corresponding to the time period remaining on an insurance policy and available for future earning by the Company. Trends in unearned premiums generally indicate expansion, if growing, or contraction, if declining, which are important indicators to management. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.

Weather events ― an estimate of losses and LAE from weather events occurring during the current accident year that exceed initial estimates of expected weather events when establishing the core loss ratio for each accident year. This metric informs management of factors impacting overall current year profitability.

REINSURANCE

Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events. Reinsurance contracts are typically classified as treaty or facultative contracts. Treaty reinsurance provides coverage for all or a portion of a specified group or class of risks ceded by the primary insurer, while facultative reinsurance provides coverage for specific individual risks. Within each classification, reinsurance can be further classified as quota share or excess of loss. Quota-share reinsurance is where the primary insurer and the reinsurer share proportionally or pro-rata in the direct premiums and losses of the insurer. Excess-of-loss reinsurance indemnifies the direct insurer or reinsurer for all or a portion of the loss in excess of an agreed upon amount or retention.

Developing and implementing our reinsurance strategy to adequately protect our balance sheet and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been a key strategic priority for us. In order to limit the Insurance Entities’ potential exposure to catastrophic events, we purchase significant reinsurance from third-party reinsurers and the ~~Florida Hurricane Catastrophe Fund (“FHCF”).~~FHCF. The FLOIR requires the Insurance Entities, like all residential property insurance companies doing business in Florida, to have a certain amount of capital and reinsurance coverage in order to cover losses upon the occurrence of a single catastrophic event and a series of catastrophic events occurring in the same hurricane season. The Insurance Entities’ respective ~~2022-2023~~2023-2024 reinsurance programs meet the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance programs that protect the policyholders of our Insurance Entities as well

Table of Contents

as satisfying a series of stress test catastrophe loss scenarios based on past historical events. Similarly, the Insurance Entities’ respective ~~2022-2023~~2023-2024 reinsurance programs meet the stress test and review requirements of Demotech, Inc., for maintaining Financial Stability Ratings® of ~~“A”~~A (Exceptional) and of Kroll for maintaining insurer financial strength ratings of “A-”.

We believe the Insurance Entities’ retentions under their respective reinsurance programs are appropriate and structured to protect policyholders. We test the sufficiency of the reinsurance programs by subjecting the Insurance Entities’ personal residential exposures to statistical testing using a ~~third-party~~third-party hurricane model, RMS RiskLink v18.1 (Build 1945). This model combines simulations of the natural occurrence patterns and characteristics of hurricanes, tornadoes, earthquakes and other catastrophes with information on property values, construction types and occupancy classes. TheThe model outputs provide information concerning the potential for large losses before they occur, so companies can prepare for their financial impact. Furthermore, as part of our operational excellence i~~nitiatives,~~initiatives, we continually look to enable new technology to refine our data intelligence on catastrophe risk modeling.

Effective June 1, ~~2022,~~2023, the Insurance Entities entered into multiple reinsurance agreements comprising our ~~2022-2023~~2023-2024 reinsurance program. See “Item 1—Note 4 (Reinsurance).”

~~UPCIC’s 2022-2023~~UPCIC/APPCIC 2023-2024 All States Reinsurance Program

•First event All States retention of $45 million.

•All States first event tower extends to ~~$3.012~~$2.61 billion with no co-participation in any of the layers, no limitation on loss adjustment expenses for the non-catastrophe bond Cosaint Re Pte. Ltd. traditional reinsurance and no accelerated deposit premiums.

•Assuming a first event completely exhausts the ~~$3.012~~$2.61 billion tower, the second event exhaustion point would be ~~$1.183 billion.~~$912 million.

•Full reinstatement available on ~~$1.138 billion~~$867 million of ~~the $1.288 billion of~~ non-FHCF and non-RAP first event catastrophe coverage for guaranteed second event coverage.For all layers purchased between ~~$111~~$45 million and the ~~projected FHCF retention,~~RAP layer, to the extent that all of our coverage or a portion thereof is exhausted in a catastrophic event and reinstatement premium is due, we have purchased enough reinstatement premium protection ("RPP") limit to pay the premium necessary for the reinstatement of these ~~coverages.~~coverages or have secured a specific second event contract.

~~Table of Contents~~

•First event layer of 100% of $66 million in excess of $45 million established by ~~UIH~~Universal in a captive insurance arrangement. While the Company retains the risk that otherwise would be transferred to third-party reinsurers for this layer, the additional risk is substantially offset by the savings in premiums that would otherwise have been paid to third-party reinsurers.

•Specific 2nd event private market excess of loss coverage of $66 million in excess of $45 million sitting behind captive arrangement. Effective January 1, 2023, UPCIC commuted a portion of this coverage to recognize the benefit of a return premium mechanism. Fifty-five percent (55%) of $66 million in excess of $45 million remains available until the natural expiration of the coverage, which is May 31, 2023.

•Specific 3rd and 4th event private market catastrophe excess of loss coverage of $86 million in excess of $25 million provides frequency protection for multiple events during the treaty period including a $20 million reduction in retention for a 3rd and 4th event.

•For the FHCF Reimbursement Contracts effective June 1, ~~2022,~~2023, both UPCIC ~~has~~and APPCIC have continued the election of the 90% coverage level. ~~We estimate the~~The total mandatory FHCF layer ~~will provide~~provides approximately ~~$1.679~~$1.316 billion of coverage for UPCIC, which inures to the benefit of the open market coverage secured from private reinsurers and Cosaint Re Pte. ~~Ltd.~~

•~~To further insulate for future years,~~Ltd (covers UPCIC ~~has secured $383 million of catastrophe capacity with contractually agreed limits that extend coverage to include the 2022~~only) and 2023 wind seasons and $277 million of the $383 million extends through the 2024 wind season and is all capacity which sits below the FHCF. UPCIC’s catastrophe bond, secured leading up to the 2021-2022 renewal, Cosaint Re Pte. Ltd, continues to provide one limit of $150 million in this year’s program and it may also include the 2023 wind season, depending on loss activity in the 2022 wind season.

~~Reinsurers~~

~~The table below provides the A.M. Best and S&P financial strength ratings for each of the largest rated third-party reinsurers in UPCIC’s 2022-2023 reinsurance program:~~

~~Reinsurer~~

~~A.M. Best~~

~~S&P~~

~~Allianz Risk Transfer AG, Bermuda Branch~~

A+

~~AA-~~

~~Chubb Tempest Reinsurance Ltd.~~

~~A++~~

~~Everest Re~~

A+

~~Munich Re~~

A+

~~AA-~~

~~Renaissance Reinsurance Ltd.~~

A+

~~Various Lloyd’s of London Syndicates~~

A+

~~Florida Hurricane Catastrophe Fund (1)~~

~~N/A~~

~~(1)No rating is available, because the fund is not rated.~~

~~APPCIC’s 2022-2023 Reinsurance Program~~

•~~First event All States retention of $3.5 million.~~

•~~All States first event tower of $50.5 million with no co-participation in any of the layers, no limitation on loss adjustment expenses and no accelerated deposit premiums.~~

•Full reinstatement available for all private market first event catastrophe layers for guaranteed second event coverage. For the layer purchased between $3.5 million and the projected FHCF retention, to the extent that all of our coverage or a portion thereof is exhausted in a catastrophic event and reinstatement premium is due, we have purchased enough RPP limit to pay the premium necessary for the reinstatement of this coverage.

•APPCIC also purchases extensive multiple line excess per risk reinsurance with various reinsurers due to the high-value risks it insures in both the personal residential and commercial multiple peril lines of business. Under this multiple line excess per risk contract, APPCIC has coverage of $8.5 million in excess of $0.5 million ultimate net loss for each risk and each property loss, and $1 million in excess of $0.3 million for each casualty loss. A $19.5 million aggregate limit applies to the term of the contract for property-related losses and a $2.0 million aggregate limit applies to the term of the contract for casualty-related losses. This contract also contains a profit-sharing feature if specific performance measures are met.

•~~For the FHCF Reimbursement Contracts effective June 1, 2022, APPCIC has continued the election of the 90% coverage level. We estimate~~ the total mandatory FHCF layer ~~will provide~~provides approximately ~~$24.2~~$22.5 million of coverage for APPCIC, which inures to the benefit of the open market coverage secured from private reinsurers.

•For the participation in the RAP program for the 2023-2024 period, the total RAP layer provides approximately $202.8 million of coverage for UPCIC and $3.5 million of coverage for APPCIC, both of which inure to the benefit of the open market coverage secured from private reinsurers.

•To further insulate future years, UPCIC has secured $277 million of catastrophe capacity below the FHCF, with contractually agreed limits that extend coverage to include the 2023 wind season. UPCIC’s catastrophe bond, secured leading up to the 2021-2022 renewal, Cosaint Re Pte. Ltd, continued to provide one limit of $150 million during the 2023-2024 program. Refer to Note 15 (“Subsequent Events”) for details of the commutation.

Table of Contents

Reinsurers

The table below provides the A.M. Best and S&P financial strength ratings for each of the largest rated third-party reinsurers in UPCIC’s/APPCIC’s ~~2022-2023~~2023-2024 reinsurance program:

Reinsurer

A.M. Best

S&P

~~Chubb Tempest Reinsurance Ltd.~~Florida Hurricane Catastrophe Fund (1)

~~A++~~

~~DaVinci Reinsurance Limited~~

N/A

A+

~~Lancashire Insurance Company Limited~~

N/A

A-

~~Renaissance Reinsurance Ltd.~~

A+

Various Lloyd’s of London Syndicates

A+

~~Florida Hurricane Catastrophe Fund (1)~~Munich Reinsurance America Inc.

A+

AA-

~~N/A~~DaVinci Reinsurance Ltd.

A+

N/Renaissance Reinsurance Ltd.

A+

Chubb Tempest Reinsurance Ltd.

A++

Allianz Risk Transfer AG. Bermuda Branch

A+

Markel Bermuda Ltd.

(1)No rating is available, because the fund is not rated.

The cost of the ~~2022-2023~~2023-2024 all states reinsurance programs for UPCIC and APPCIC is projected to be ~~$696~~$620.6 million, prior to any potential reinstatement premiums due, and represents approximately ~~37.6%~~31.97% of ~~estimated~~projected direct premium earned for the 12-month treaty ~~period for UPCIC and APPCIC.~~period.

Commutations

~~Each insurance company participating~~During the third quarter of 2023, the Insurance Entities entered into commutation agreements with certain of its reinsurers, which resulted in the ~~FHCF is required by Florida regulations and its contract with~~receipt of cash to settle estimated obligations otherwise recoverable under the ~~FHCF to begin the process of commuting the parties’ respective contractual obligations~~reinsurance agreements resulting in no ~~later than sixty (60) months after the end of a contract year. The commutation process for the FHCF’s 2017-18 contract year must begin by June 1, 2023.~~gain or loss. The Insurance Entities ~~have had, and continue to have, covered losses subject to~~commuted their respective 2017/18 reimbursement bycontracts with the FHCF due to Hurricane Irma’s occurring in the 2017-18 FHCF contract year. The Insurance Entities also expect to have outstanding covered losses and covered losses that are incurred but not yet reported (“IBNR,” and together with paid and outstanding losses the “Ultimate Incurred Loss”) as of June 1, 2023. The commutation process will result in a final evaluation and estimate of the Ultimate Incurred Loss, leading to the Insurance Entities’ and the FHCF’s settlement and release of obligations arising from the 2017-18 FHCF contract.

The FHCF’s commutation process includes an insurer’s submitting a final proof of loss by June 1, 2023, verifying the amount of its paid losses previously reimbursed or to be reimbursed by the FHCF. The insurer also must submit an estimate of its covered losses on then-outstanding claims and an estimate of its covered IBNR losses. The FHCF’s procedure provides for the insurer and the FHCF to then discuss the estimates and seek to agree on the present value of the expected outstanding losses and IBNR. If these discussions do not result in an agreement, the determination will be made by a three-member panel of actuaries in accordance with a ~~procedure set forth in~~contractual requirement for commutation to commence no later than five years following the ~~FHCF contract.~~

~~The amount~~end of the ~~Insurance Entities Ultimate Incurred Loss attributable to 2017-18 FHCF~~relevant reimbursement contract ~~year is not fully known~~year. The other commutations were mutually agreed upon and is subject to uncertainties. The Insurance Entities have long maintained and periodically update claims and data procedures for reporting covered losses to the FHCF. In anticipation of submitting their final proofs of loss as of June 1, 2023, the Insurance Entities continue to review and refine these procedures and the resulting data in accordanceentered into with FHCF requirements, including areas identified by the FHCF to participating insurers as common reporting errors observed in its examinations (which, according to FHCF reports, includes more than 80 examinations of participating insurers’ Hurricane Irma loss reports). This review has resulted and will continue to result in adjustments to the Insurance Entities’ procedures and data. Additionally, the Insurance Entities’ estimates of Ultimate Incurred Loss depend on factors that are inherently difficult to quantify, including considerations unique to Hurricane Irma and the Florida property insurance market that have caused and might continue to cause losses attributable to the 2017-18 contract year to differ from historical patterns, experience in other states, and experience in prior private market or FHCF commutations. There is no assurance that the Insurance Entities will be able to accurately estimate the Ultimate Incurred Loss, thatthird-party reinsurers when the Insurance Entities and reinsurers deemed the ~~FHCF will agree~~commutations to be in their respective best interests, with the most recent commutation becoming effective on January 1, 2024. Whether as a contractual obligation (in the ~~present value~~case of the ~~Ultimate Incurred Loss,~~FHCF) or ~~that~~through mutual agreement (in the ~~Ultimate Incurred Loss will develop in an~~case of third-party reinsurers), commutation is a process by which a ceding insurer and assuming reinsurer evaluate and agree upon, or otherwise determine, a final payment amount ~~equal to or less than the amount for which the Insurance Entities is reimbursed.~~

The Insurance Entities commute FHCF contracts as and when required by their FHCF contracts and related regulations. The Insurance Entities also from time to time commute private market reinsurance contracts, such as the commutation as of January 1, 2023, summarized above in the description of UPCIC’s reinsurance program. The Insurance Entities currently do not anticipate having covered losses from Hurricane Michael exceeding their applicable FHCF attachment points and therefore do not currently expect that commutation of their respective 2018-19 FHCF contract will involve the processes described abovedue to the same extent. Although the Insurance Entities also do not currently have paid losses from Hurricane Ian exceeding their respective FHCF attachment points in their 2022-23 FHCF contracts, UPCIC has projected that its Ultimate Incurred Loss will exceed its FHCF attachment point. Accordingly, assuming its paid losses ultimately exceed its FHCF attachment point, and subject to any intervening changes in FHCF regulations or procedures, UPCIC will commute its 2022-23 FHCFceding insurer under a reinsurance/reimbursement contract in exchange for a ~~process similar~~release of the assuming reinsurer from all future obligations to ~~that described above beginning not later than June 1, 2028.~~pay ceded losses under the commuted contract.

4042

Table of Contents

RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL CONDITION

Highlights for the quarter ended March 31, ~~2023~~2024

•Rate filings and automatic policy inflation adjustments to policy insured values are increasing written and earned premium as the new rates and property insured values take effect on policy renewals and new business, and earn prospectively over the policy period.

•Management is continuing its efforts to prudently manage new ~~and renewal~~ business risk selection and improve risk exposure diversification, ~~and moderate new business growth rates, compared to prior years,~~ while rate increases are taking effect to improve profitability. ~~As a result of management’s efforts~~Management has revised new business binding guidelines to ~~manage exposures and declining retention rates, the number of total policies~~facilitate increased new business in ~~force is decreasing partially offsetting increases in written and earned premium driven by~~most Florida territories as rate increases earn in and ~~inflation increases to insured values.~~the benefits of recent Florida legislation take effect, resulting in an increase in policies in-force in the quarter.

•~~Net investment income increased~~Declared dividends per common share of $0.16 on February 8, 2024, paid on March 15, 2024, to shareholders of record as ~~maturing capital is redeployed into higher interest rates.~~

•~~The losses and LAE, net ratio was higher this quarter compared to~~of the ~~same period last year primarily due to increases in management’s estimated losses and LAE for the current accident year in the first quarter in addition to the higher cost~~close of ~~reinsurance.~~

•~~Other operating expenses and acquisition cost management efforts have lowered the expense ratio. In April 2021, the commission rate~~business on policy renewals was reduced two percentage points and further reduced on May 1, 2022 by another two percentage points, in response to premium rate increases during the past year. The benefit of lower commission rates is realized over the next year as policies are renewed under the lower commission rate structure.March 8, 2024.

•The Company ~~continued~~repurchased 208,010 shares for a total of $4.1 million, or $19.90 per share in the first quarter of 2024, completing the 2025 repurchase program totaling $20.0 million. On March 12, 2024, the Board of Directors authorized a new share repurchase program under which the Company may repurchase up to ~~return shareholder value with quarterly dividends.~~$20.0 million of its outstanding shares of common stock through March 11, 2026.

•~~In December 2022,~~Costs for reinsurance in Q1 2024 benefited from the ~~Florida legislature enacted new legislation intended to improve the Florida insurance market~~no cost reinsurance protection provided by making changes to the property insurance claims process, including the repeal of policyholders’ statutory one-way right to attorneys’ fees in property insurance claims and the elimination of the assignment of benefits, which have been driving up claims costs and loss adjustment expenses over the past several years. We are optimistic these changes will improve the claims environment in Florida as the changes become effective.Florida’s RAP program.

•Demotech reaffirmed its A rating for UPCIC and APPCIC on January 22, 2024.

4143

Table of Contents

First quarter of fiscal ~~2023~~2024 results of operations comparisons are to first quarter of fiscal ~~2022~~2023 (unless otherwise specified).

Results of Operations — Three Months Ended March 31, ~~2023~~2024 Compared to Three Months Ended March 31, ~~2022~~2023

Net income was $33.7 million for the three months ended March 31, ~~2023 was $24.2 million~~2024, compared to net income of ~~$17.5~~$24.2 million for the same period in ~~2022.~~2023. Benefiting the quarter were increases in premiums earned, net, an increase in net investment income, an increase in ~~commission revenue,~~unrealized gains on investments, and an increase in ~~unrealized gains during the first quarter of 2023 compared to unrealized losses in the prior year, an increase in other revenue and a reduction in general and administrative expenses~~policy fees, partially offset by an increase in ~~realized losses during the first quarter of 2023 compared to modest realized gains in the prior year,~~operating costs and expenses, and a decrease in ~~policy fees, and an increase in losses and LAE.~~commission revenue. Direct premium earned and premiums earned, net were up ~~9.8%~~5.9% and ~~4.9%~~18.4%, respectively compared to direct premium earned and premiums earned in the first quarter of 2023, due to premium in force growth in ~~the majority of~~16 states in which we are licensed and writing during the past 12 months ~~mostly~~ as a result of rate increases implemented during ~~2022 and 2023. The~~past years, in addition to an increase in policies in force in 12 states. Premiums earned, net, ~~loss and LAE ratio was 73.1%~~were also favorably impacted by a decrease in reinsurance expenses for the ~~three months~~2023-2024 contract year primarily due to the Insurance Entities’ mandatory participation in Florida’s RAP program, which allowed insurers to access a layer of reinsurance coverage below the FHCF industry retention at no cost to the insurers. The lower reinsurance costs, effective June 1 2023, have a favorable effect on financial ratios which are based on net earned premium. For the quarter ended March 31, ~~2023, compared~~2024, the loss ratio declined to ~~68.8%~~71.9% from 73.1% for the same period in ~~2022 reflecting higher core losses and~~2023 primarily due to an increase in premiums earned, net, a decrease in adverse prior ~~years’~~year reserve development, partially offset by ~~lower weather events.~~a higher direct loss ratio for the current accident year. See 2024 Reinsurance Ratio Benefit noted below. As a result of the above and as further explained below, the combined ratio for the three months ended March 31, ~~2023~~2024 was ~~100.0%~~95.5% compared to ~~97.9%~~100.0% for the three months ended March 31, ~~2022. Also see the discussion above under~~2023. See “Overview—Trends and Geographical Distribution—Florida Trends” regarding our response to the Florida market.

A detailed discussion of our results of operations follows the table below (in thousands, except per share data).

Three Months Ended
March 31, Change
2023 2022 $ %
REVENUES
Direct premiums written $ 410,102 $ 396,481 $ 13,621 3.4 %
Change in unearned premium 45,266 18,122 27,144 149.8 %
Direct premium earned 455,368 414,603 40,765 9.8 %
Ceded premium earned (173,144) (145,539) (27,605) 19.0 %
Premiums earned, net 282,224 269,064 13,160 4.9 %
Net investment income 10,698 4,042 6,656 164.7 %
Net realized gains (losses) on investments (788) 58 (846) NM
Net change in unrealized gains (losses) of equity securities 957 (3,396) 4,353 NM
Commission revenue 17,282 11,161 6,121 54.8 %
Policy fees 4,167 4,779 (612) (12.8) %
Other revenue 1,968 1,774 194 10.9 %
Total revenues 316,508 287,482 29,026 10.1 %
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses 206,154 185,106 21,048 11.4 %
General and administrative expenses 75,927 78,297 (2,370) (3.0) %
Total operating costs and expenses 282,081 263,403 18,678 7.1 %
Interest and amortization of debt issuance costs 1,636 1,608 28 1.7 %
INCOME (LOSS) BEFORE INCOME TAXES 32,791 22,471 10,320 45.9 %
Income tax expense (benefit) 8,618 4,934 3,684 74.7 %
NET INCOME (LOSS) $ 24,173 $ 17,537 $ 6,636 37.8 %
Other comprehensive income (loss), net of taxes 13,791 (42,910) 56,701 NM
COMPREHENSIVE INCOME (LOSS) $ 37,964 $ (25,373) $ 63,337 NM
DILUTED EARNINGS (LOSS) PER SHARE DATA:
Diluted earnings (loss) per common share $ 0.79 $ 0.56 $ 0.23 41.1 %
Weighted average diluted common shares outstanding 30,626 31,227 (601) (1.9) %
NM – Not Meaningful


	Three Months Ended March 31,				Change
	2024		2023		$		%
REVENUES
Direct premiums written	$	446,179	$	410,102	$	36,077	8.8	%
Change in unearned premium	35,893		45,266		(9,373)		(20.7)	%
Direct premium earned	482,072		455,368		26,704		5.9	%
Ceded premium earned	(148,047)		(173,144)		25,097		(14.5)	%
Premiums earned, net	334,025		282,224		51,801		18.4	%
Net investment income	13,523		10,698		2,825		26.4	%
Net realized gains (losses) on investments	(77)		(788)		711		(90.2)	%
Net change in unrealized gains (losses) on investments	3,106		957		2,149		224.6	%
Commission revenue	11,033		17,282		(6,249)		(36.2)	%
Policy fees	4,405		4,167		238		5.7	%
Other revenue	1,944		1,968		(24)		(1.2)	%
Total revenues	367,959		316,508		51,451		16.3	%
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses	240,187		206,154		34,033		16.5	%
General and administrative expenses	78,666		75,927		2,739		3.6	%
Total operating costs and expenses	318,853		282,081		36,772		13.0	%
Interest and amortization of debt issuance costs	1,622		1,636		(14)		(0.9)	%

INCOME (LOSS) BEFORE INCOME TAXES	47,484		32,791		14,693		44.8	%
Income tax expense (benefit)	13,827		8,618		5,209		60.4	%
NET INCOME (LOSS)	$	33,657	$	24,173	$	9,484	39.2	%
Other comprehensive income (loss), net of taxes	(2,542)		13,791		(16,333)		NM
COMPREHENSIVE INCOME (LOSS)	$	31,115	$	37,964	$	(6,849)	(18.0)	%
DILUTED EARNINGS (LOSS) PER SHARE DATA:
Diluted earnings (loss) per common share	$	1.14	$	0.79	$	0.35	44.3	%
Weighted average diluted common shares outstanding	29,404		30,626		(1,222)		(4.0)	%

NM – Not Meaningful

4244

Table of Contents

Revenues

Direct premiums written increased by ~~$13.6~~$36.1 million, or ~~3.4%~~8.8%, for the quarter ended March 31, ~~2023,~~2024, driven by premium growth within our Florida business of ~~$2.9~~$17.5 million, or ~~0.9%~~5.2%, and premium growth in our other states business of ~~$10.7~~$18.6 million, or ~~17.2%~~25.6%, as compared to ~~the same period during~~ the prior year. Rate increases approved in ~~2022~~2023 and ~~2023~~2024 for Florida and for certain other states and policy inflation adjustments were the principal driver of higher written ~~premiums. The slower rate of growth~~premiums in ~~Q1 2023 compared~~addition to prior quarters reflects management’s intent to effectively manage new and renewal business as well as the competitive effects of Citizens’ premium levels being lower than those of the admitted market.an increase in policies in force in 12 other states. In total, policies in force ~~declined 20,875,~~increased 10,146, or ~~2.5%~~1.3%, from ~~848,856~~809,932 at December 31, ~~2022~~2023 to ~~827,981~~820,078 at March 31, ~~2023.~~2024. A summary of the recent rate increases which are driving increases in written premium ~~the Florida marketplace and competition from lower cost policies offered by Citizens~~ is discussed above under ~~“—Overview—~~“Overview—Trends and Geographical Distribution—Florida Trends.”

Rate changes are applied on new business submissions and renewals from the effective date of their renewal, and then are earned subsequently over the policy period. The recent rate and inflation increases in Florida are in response to rising claim costs in recent years driven by higher costs of material and labor associated with claims, the cost of weather events, the rising cost of catastrophe and other reinsurance protecting policyholders and, more importantly, the prevalence of represented and litigated claims in Florida. Due to the time associated with analyzing data, preparing, and submitting rate filings, implementing new rate levels and earning the corresponding premiums, the Insurance Entities’ rate adjustments typically lag behind their experience by months or even years. In addition, the Insurance Entities’ policies provide for coverage limits to be adjusted at renewal which adjust insured value coverage limits for the impact of changes in inflation occurring since the prior renewal. This is based on third-party industry data sources that monitor inflation factors such as changes in costs for residential building materials and labor.

~~During 2023, management continued efforts~~Management continues to ~~prudently~~ manage policy counts and exposures intended to ~~slow~~control the growth of ~~certain~~ exposures relating to new ~~business compared~~business. Rate increases continue to ~~prior years while filed rate increases are taking effect. Reduced~~take effect, and new business ~~writings, declines~~underwriting rules are reviewed and updated as needed in ~~renewal retentions during 2023 and~~ the ~~impact of selected policy non-renewals have resulted in a decline~~states we underwrite in. This quarter we saw an increase in policies in force of 10,146, or 1.3% during ~~the quarter of 20,875, or 2.46%,~~2024 from ~~848,856~~809,932 at December 31, ~~2022~~2023 to ~~827,981~~820,078 at March 31, ~~2023.~~2024. Direct premiums written continue to increase across the majority of states in which we conduct ~~business due to rate increases.~~business. As a result of our business strategy, rate changes and disciplined underwriting initiatives, year over year we have seen aan overall decrease in policies in force in the aggregate, but an increase in premium in force, and an increase in total insured value in a majority of states for the past two years. We ~~were authorized to write~~actively wrote policies in 1918 states during ~~both of~~ the first ~~quarters~~quarter of ~~2023 and 2022.~~2024. In addition, we are authorized to do business in Tennessee and ~~Wisconsin~~Wisconsin. In 2023, UPCIC filed with its regulators in Hawaii to withdraw from the state, with the withdrawal and ~~are proceeding with product filings in those states. At~~nonrenewal of policies expected to be completed by the end of 2024. Compared to March 31, 2023, at March 31, 2024, policies in force decreased ~~88,764~~by 7,903 policies, or ~~9.7%~~1.0%; premium in force increased ~~$159.6~~$101.1 million, or ~~9.4%~~5.4%; and total insured value increased ~~$1.6~~$8.5 billion, or ~~0.5%~~2.6%, ~~compared to March 31, 2022.~~

~~The following table provides direct premiums written for Florida and Other States for the three months ended March 31, 2023 and 2022 (dollars in thousands):~~

For the Three Months Ended
March 31, 2023 March 31, 2022 Growth
year over year
State Direct
Premiums Written % Direct
Premiums
Written % $ %
Florida $ 337,365 82.3 % $ 334,437 84.4 % $ 2,928 0.9 %
Other states 72,737 17.7 % 62,044 15.6 % 10,693 17.2 %
Total $ 410,102 100.0 % $ 396,481 100.0 % $ 13,621 3.4 %

We seek to prudently grow and generate long-term rate adequate premium in each state where we offer policies. Our diversification strategy seeks to increase business outside of Florida and to improve geographical distribution within Florida.

Direct premium earned increased by ~~$40.8~~$26.7 million, or ~~9.8%~~5.9%, for the quarter ended March 31, ~~2023,~~2024, reflecting the earning of premiums written over the past 12 months, including the benefit of rate changes due to primary rate filings, filings to cover increased reinsurance costs as well as policy premium adjustments due to increases in insured values caused by inflation.

Reinsurance

Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events and other covered events. Ceded premium represents premiums paid to reinsurers for this protection and is a cost which reduces net written and net earned premiums. Hurricane Ian triggered reinstatement premiums, increasing ceded premium written by $24.6 million which is earned from September 28, 2022 through May 31, 2023, increasing ceded premium earned for the first quarter of 2023 by $9.1 million. In total, ceded premium earned ~~increased $27.6~~decreased $25.1 million, or ~~19.0%~~14.5%, for the quarter ended March 31, ~~2023,~~2024 as compared to the same period of the prior year. The ~~increase~~decrease in reinsurance costs reflects several factors, including the ~~reinstatement premium for Hurricane Ian and an increase~~Insurance Entities’ mandatory participation in the ~~value~~RAP program for the 2023/2024 reinsurance program, which allowed insurers to access a layer of ~~exposures we insure; increased pricing when compared~~reinsurance coverage that is below the FHCF industry retention at no cost to the ~~expired~~insurer. In exchange, the Insurance Entities adopted a 1.4% one-year rate reduction. Also benefiting reinsurance ~~program~~costs in Q1 2024 was the absence of reinstatement premiums, In September 2022, reinstatement premiums totaling $24.6 million were written, and ~~differences~~were earned prospectively through May 31, 2023, increasing reinsurance costs in the ~~structure and design~~same quarter of the ~~respective programs.~~prior year. Reinsurance costs, as a percentage of direct premium earned, ~~increased~~decreased from ~~35.1% for~~38.0% in the ~~three months ended March 31, 2022~~first quarter of 2023 to ~~38.0% for~~30.7% during the ~~three months ended March 31, 2023.~~current quarter. Reinsurance costs associated with each year’s reinsurance program are earned over the annual policy period which typically runs from June 1st to May 31st. See the discussion above for the Insurance Entities’ ~~2022-2023~~2023-2024 reinsurance programs and “Item 1—Note 4 (Reinsurance).”

2023 Reinsurance Ratio Benefit


Delaware						65-0231984
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	UVE	New York Stock Exchange


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


PART I – FINANCIAL INFORMATION
		Page No.
Item 1.	Financial Statements:	4
	Condensed Consolidated Balance Sheets as of March 31, ~~2023~~2024 and December 31, ~~2022~~2023 (unaudited)	4
	Condensed Consolidated Statements of Income for the three-month periods ended March 31, ~~2023~~2024 and ~~2022~~2023 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, ~~2023~~2024 and ~~2022~~2023 (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three-month periods ended March 31, ~~2023~~2024 and ~~2022~~2023 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, ~~2023~~2024 and ~~2022~~2023 (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3234
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5658
Item 4.	Controls and Procedures	5759
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	5759
Item 1A.	Risk Factors	5859
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5860
Item 6.	Exhibits	5961
Signatures		6062


	As of
	March 31,		December 31,
	2023		2022
ASSETS
Available-for-sale debt securities, at fair value, net of allowance for credit loss of $811 and $920 (amortized cost: $1,146,378 and $1,152,852)	$	1,026,555	$	1,014,626

Equity securities, at fair value (cost: $108,911 and $102,431)	92,906		85,469

Investment real estate, net	5,665		5,711
Total invested assets	1,125,126		1,105,806

Cash and cash equivalents	330,155		388,706
Restricted cash and cash equivalents	2,635		2,635
Prepaid reinsurance premiums	124,308		282,427
Reinsurance recoverable	678,094		808,850

Premiums receivable, net	64,844		69,574
Property and equipment, net	50,193		51,404
Deferred policy acquisition costs	97,893		103,654
Income taxes recoverable	—		1,528
Deferred income tax asset, net	58,804		57,258
Other assets	18,968		18,312
Total assets	$	2,551,020	$	2,890,154
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses	$	870,407	$	1,038,790
Unearned premiums	898,588		943,854
Advance premium	92,235		54,964

Book overdraft	77,661		—
Reinsurance payable, net	91,932		384,504
Commission payable	19,644		18,541
Income taxes payable	13,138		—
Other liabilities and accrued expenses	63,031		58,836
Long-term debt, net	102,578		102,769
Total liabilities	2,229,214		2,602,258

Commitments and Contingencies (Note 12)

STOCKHOLDERS’ EQUITY:
Cumulative convertible preferred stock, $0.01 par value	—		—
Authorized shares - 1,000
Issued shares - 10 and 10
Outstanding shares - 10 and 10
Minimum liquidation preference, $9.99 and $9.99 per share
Common stock, $0.01 par value	472		472
Authorized shares - 55,000
Issued shares - 47,230 and 47,179
Outstanding shares - 30,440 and 30,389
Treasury shares, at cost - 16,790 and 16,790	(238,758)		(238,758)
Additional paid-in capital	113,425		112,509
Accumulated other comprehensive income (loss), net of taxes	(89,991)		(103,782)
Retained earnings	536,658		517,455
Total stockholders’ equity	321,806		287,896
Total liabilities and stockholders’ equity	$	2,551,020	$	2,890,154


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Treasury Shares		Common Shares Issued	Preferred Shares Issued	Common Stock Amount		Preferred Stock Amount		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Shares, at Cost		Total Stockholders’ Equity
Balance, December 31, 2022	(16,790)		47,179	10	$	472	$	—	$	112,509	$	517,455	$	(103,782)	$	(238,758)	$	287,896


Vesting of performance share units	(6)	(1)	16	—	—		—		—		—		—		(64)		(64)
Vesting of restricted stock units	(16)	(1)	48	—	—		—		—		—		—		(160)		(160)
Stock option exercises	(54)	(1)	63	—	—		—		928		—		—		(90)		838
Retirement of treasury shares	76	(1)	(76)	—	—		—		(1,242)		—		—		314		(928)

Share-based compensation	—		—	—	—		—		1,230		—		—		—		1,230
Net income (loss)	—		—	—	—		—		—		24,173		—		—		24,173
Other comprehensive gain (loss), net of taxes	—		—	—	—		—		—		—		13,791		—		13,791
Declaration of dividends ($0.16 per common share and $0.25 per preferred share)	—		—	—	—		—		—		(4,970)		—		—		(4,970)



















Balance, March 31, 2023	(16,790)		47,230	10	$	472	$	—	$	113,425	$	536,658	$	(89,991)	$	(238,758)	$	321,806


(1)			~~All shares acquired represent shares tendered~~The Other line within Paid-in Capital includes $511 thousand related to ~~cover the strike price for options and tax withholdings on the intrinsic value~~cash settlement of ~~options exercised,~~certain restricted ~~stock vested, performance~~ share ~~units vested, or restricted stock units vested. These shares have been cancelled by the Company.~~units.


(1)			All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.


	Three Months Ended
	March 31,
	2023		2022
Cash flows from operating activities:
Net cash used in operating activities	$	(50,257)	$	(27,081)
Cash flows from investing activities:
Proceeds from sale of property and equipment	9		1
Purchases of property and equipment	(690)		(2,185)
Purchases of equity securities	(9,356)		(29,333)
Purchases of available-for-sale debt securities	(26,236)		(57,163)

Proceeds from sales of equity securities	2,789		14,932
Proceeds from sales of available-for-sale debt securities	3,301		12,540


Maturities of available-for-sale debt securities	27,554		12,766

Net cash provided by (used in) investing activities	(2,629)		(48,442)
Cash flows from financing activities:
Debt issuance costs paid	—		(100)
Preferred stock dividend	(3)		(3)
Common stock dividend	(4,980)		(5,029)

Purchase of treasury stock	—		(3,879)
Payments related to tax withholding for share-based compensation	(314)		(209)
Repayment of debt	(368)		(367)
Net cash provided by (used in) financing activities	(5,665)		(9,587)
Cash and cash equivalents and restricted cash and cash equivalents:
Net increase (decrease) during the period	(58,551)		(85,110)
Balance, beginning of period	391,341		253,143
Balance, end of period	$	332,790	$	168,033


		March 31, 2023
		Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	March 31, 2024														March 31, 2024
	Amortized Cost											Amortized Cost	Allowance for Expected Credit Losses	Gross Unrealized Gains		Gross Unrealized Losses	Fair Value
Debt Securities:	Debt Securities:
U.S. government obligations and agencies
U.S. government obligations and agencies
U.S. government obligations and agencies	U.S. government obligations and agencies	$	16,840	$	—	$	100	$	(763)	$	16,177
Corporate bonds	Corporate bonds	782,613		(622)		366		(79,506)		702,851
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	319,916		—		200		(35,669)		284,447
Municipal bonds	Municipal bonds	16,149		(2)		15		(2,082)		14,080
Redeemable preferred stock	Redeemable preferred stock	10,860		(187)		—		(1,673)		9,000
Total	Total	$	1,146,378	$	(811)	$	681	$	(119,693)	$	1,026,555


	December 31, 2022
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt Securities:
U.S. government obligations and agencies	$	12,602	$	—	$	—	$	(938)	$	11,664
Corporate bonds	788,737		(729)		130		(93,077)		695,061
Mortgage-backed and asset-backed securities	327,166		—		148		(39,707)		287,607
Municipal bonds	14,924		(2)		—		(2,551)		12,371
Redeemable preferred stock	9,423		(189)		—		(1,311)		7,923
Total	$	1,152,852	$	(920)	$	278	$	(137,584)	$	1,014,626


	December 31, 2023
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt Securities:
U.S. government obligations and agencies	$	23,886	$	—	$	49	$	(677)	$	23,258
Corporate bonds	779,177		(469)		1,097		(64,091)		715,714
Mortgage-backed and asset-backed securities	334,460		—		969		(32,283)		303,146
Municipal bonds	15,916		(4)		—		(1,873)		14,039
Redeemable preferred stock	9,480		(93)		—		(1,214)		8,173
Total	$	1,162,919	$	(566)	$	2,115	$	(100,138)	$	1,064,330


	March 31, 2023				December 31, 2022
Average Credit Ratings	Fair Value		% of Total Fair Value		Fair Value		% of Total Fair Value
AAA	$	304,913	29.7	%	$	297,475	29.3	%
AA	158,404		15.4	%	154,975		15.3	%
A	334,519		32.6	%	327,427		32.3	%
BBB	227,056		22.1	%	232,316		22.9	%

No Rating Available	1,663		0.2	%	2,433		0.2	%
Total	$	1,026,555	100.0	%	$	1,014,626	100.0	%


		March 31, 2023
		Less Than 12 Months								12 Months or Longer
		Number of Issues				Fair Value		Unrealized Losses		Number of Issues	Fair Value		Unrealized Losses
				March 31, 2024
				March 31, 2024
				March 31, 2024
			Less Than 12 Months													Less Than 12 Months		12 Months or Longer
					Fair Value										Fair Value		Unrealized Losses		Fair Value	Unrealized Losses
Debt Securities:	Debt Securities:
U.S. government obligations and agencies
U.S. government obligations and agencies
U.S. government obligations and agencies	U.S. government obligations and agencies	2				$	523	$	(1)	6	$	11,816	$	(762)
Corporate bonds	Corporate bonds	22				20,332		(421)		258	319,002		(39,830)
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	36				39,815		(1,073)		172	227,174		(34,596)
Municipal bonds	Municipal bonds	—				—		—		3	6,900		(1,179)
Redeemable preferred stock	Redeemable preferred stock	1				489		(69)		1	101		(45)
Total	Total	61				$	61,159	$	(1,564)	440	$	564,993	$	(76,412)


		Corporate Bonds		Municipal Bonds		Redeemable Preferred Stock		Total
Balance, December 31, 2021		$	371	$	1	$	117	$	489
		Corporate Bonds
		Corporate Bonds
		Corporate Bonds								Municipal Bonds	Redeemable Preferred Stock	Total
Balance, December 31, 2022

Provision for (or reversal of) credit loss expense	Provision for (or reversal of) credit loss expense	358		1		72		431
Balance, December 31, 2022		729		2		189		920
Provision for (or reversal of) credit loss expense	Provision for (or reversal of) credit loss expense	(107)		—		(2)		(109)
Balance, March 31, 2023		$	622	$	2	$	187	$	811
Provision for (or reversal of) credit loss expense
Balance, December 31, 2023
Provision for (or reversal of) credit loss expense
Balance, March 31, 2024


	March 31, 2023
	Amortized Cost		Fair Value
Due in one year or less	$	102,455	$	100,102
Due after one year through five years	558,902		512,244
Due after five years through ten years	457,242		391,643
Due after ten years	23,977		19,370
Perpetual maturity securities	3,802		3,196
Total	$	1,146,378	$	1,026,555


(1)						Includes interest earned on restricted cash and cash equivalents.
(2)						Includes investment income earned on real estate investments.
(3)						Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.


	Three Months Ended March 31,
	2023						2022
	Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses		Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses
Direct	$	410,102	$	455,368	$	208,222	$	396,481	$	414,603	$	195,155
Ceded	(14,776)		(173,144)		(2,068)		(13,946)		(145,539)		(10,049)
Net	$	395,326	$	282,224	$	206,154	$	382,535	$	269,064	$	185,106


	March 31, 2023		December 31, 2022
Statutory capital and surplus
UPCIC	$	401,061	$	400,866
APPCIC	$	23,800	$	22,786
Ten percent of total liabilities
UPCIC	$	136,807	$	151,190
APPCIC	$	2,190	$	2,023



				Total Number of Shares				Average
				Repurchased During the		Aggregate		Price Per		Plan
		Dollar Amount		Three Months Ended March 31,		Purchase		Share		Completed or
Date Authorized	Expiration Date	Authorized (1)		2023	2022	Price		Repurchased		Expired
December 15, 2022	December 15, 2024	$	7,997	—	—	$	—	$	—
November 3, 2020	November 3, 2022	$	20,000	—	320,528	$	3,879	$	12.10	November 2022


(1)						Represents the dilutive effect of common shares issuable upon the exercise of stock options, non-vested performance share units, non-vested restricted stock units and non-vested restricted stock.


Details about Accumulated Other Comprehensive Income (Loss) Components	Details about Accumulated Other Comprehensive Income (Loss) Components		Amount Reclassified from Accumulated Other Comprehensive Income (Loss)				Affected Line Item in the Statement Where Net Income is Presented
			Three Months Ended March 31,
			2023		2022			Details about Accumulated Other Comprehensive Income (Loss) Components			Amount Reclassified from Accumulated Other Comprehensive Income (Loss)											Affected Line Item in the Statement Where Net Income is Presented
	Three Months Ended March 31,
		2024
		2024
		2024
Unrealized gains (losses) on available-for-sale debt securities
Unrealized gains (losses) on available-for-sale debt securities
Unrealized gains (losses) on available-for-sale debt securities	Unrealized gains (losses) on available-for-sale debt securities		$	(701)	$	(264)			Net realized gains (losses) on sale on investments				$	(69)			$			$	(701)			Net realized gains (losses) on sale on investments			Net realized gains (losses) on sale on investments
Related tax (expense) benefit	Related tax (expense) benefit		173		65				Income tax expense (benefit)	Related tax (expense) benefit					17			173				173			Income tax expense (benefit)			Income tax expense (benefit)
Total reclassification for the period	Total reclassification for the period		$	(528)	$	(199)		Net of tax	Total reclassification for the period			$	(52)			$			$	(528)			Net of tax			Net of tax


		Fair Value Measurements
		As of March 31, 2023
	Fair Value Measurements													Fair Value Measurements
	As of March 31, 2024													As of March 31, 2024
		Level 1		Level 2		Level 3		Total			Level 1	Level 2	Level 3		Total
Available-For-Sale Debt Securities:	Available-For-Sale Debt Securities:									Available-For-Sale Debt Securities:
U.S. government obligations and agencies	U.S. government obligations and agencies	$	—	$	16,177	$	—	$	16,177
Corporate bonds	Corporate bonds	—		702,851		—		702,851
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	—		284,447		—		284,447
Municipal bonds	Municipal bonds	—		14,080		—		14,080
Redeemable preferred stock	Redeemable preferred stock	—		9,000		—		9,000
Equity Securities:	Equity Securities:
Common stock	Common stock	16,524		—		—		16,524
Common stock
Common stock
Mutual funds	Mutual funds	76,382		—		—		76,382
Investment in Private Equity Limited Partnership
Total assets accounted for at fair value	Total assets accounted for at fair value	$	92,906	$	1,026,555	$	—	$	1,119,461


		Fair Value Measurements
		As of December 31, 2022
		Level 1		Level 2		Level 3		Total
	Fair Value Measurements											Fair Value Measurements
	As of December 31, 2023											As of December 31, 2023
	Level 1									Level 1	Level 2	Level 3	Total
Available-For-Sale Debt Securities:	Available-For-Sale Debt Securities:
U.S. government obligations and agencies
U.S. government obligations and agencies
U.S. government obligations and agencies	U.S. government obligations and agencies	$	—	$	11,664	$	—	$	11,664
Corporate bonds	Corporate bonds	—		695,061		—		695,061
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	—		287,607		—		287,607
Municipal bonds	Municipal bonds	—		12,371		—		12,371
Redeemable preferred stock	Redeemable preferred stock	—		7,923		—		7,923
Equity Securities:	Equity Securities:
Common stock	Common stock	15,313		—		—		15,313
Common stock
Common stock
Mutual funds	Mutual funds	70,156		—		—		70,156
Investment in Private Equity Limited Partnership

Total assets accounted for at fair value	Total assets accounted for at fair value	$	85,469	$	1,014,626	$	—	$	1,100,095
Total assets accounted for at fair value
Total assets accounted for at fair value


	As of March 31, 2023				As of December 31, 2022
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Liabilities (debt):
Surplus note (1)	$	5,147	$	4,799	$	5,515	$	5,126
5.625% Senior unsecured notes (2)	100,000		100,176		100,000		100,350
Total debt	$	105,147	$	104,975	$	105,515	$	105,476


	For the Three Months Ended
	March 31, 2023				March 31, 2022				Growth year over year
State	Direct Premiums Written		%		Direct Premiums Written		%		$		%
Florida	$	337,365	82.3	%	$	334,437	84.4	%	$	2,928	0.9	%
Other states	72,737		17.7	%	62,044		15.6	%	10,693		17.2	%
Total	$	410,102	100.0	%	$	396,481	100.0	%	$	13,621	3.4	%


		Total		Next 12 Months		Beyond 12 Months
		Total
		Total
		Total
Reinsurance payable and multi-year commitments (1)
Reinsurance payable and multi-year commitments (1)
Reinsurance payable and multi-year commitments (1)	Reinsurance payable and multi-year commitments (1)	$	406,848	$	183,069	$	223,779
Unpaid losses and LAE, direct (2)	Unpaid losses and LAE, direct (2)	870,407		499,614		370,793
Unpaid losses and LAE, direct (2)
Unpaid losses and LAE, direct (2)
Long-term debt (3)
Long-term debt (3)
Long-term debt (3)	Long-term debt (3)	128,017		7,272		120,745
Total material cash requirements	Total material cash requirements	$	1,405,272	$	689,955	$	715,317
Total material cash requirements
Total material cash requirements


		Three Months Ended March 31,						Year Ended December 31,
		2023			2022				2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,																	Year Ended December 31,
	2024														2024			2023				2023
Actual or annualized net income (loss) available to common stockholders	Actual or annualized net income (loss) available to common stockholders	$	96,680		$	70,136			$	(22,267)
Average common stockholders' equity	Average common stockholders' equity	304,751			412,922				358,699
ROCE	ROCE	31.7		%	17.0		%		(6.2)		%	ROCE	38.1	%		31.7	%			21.2	%
Actual or annualized adjusted net income (loss) available to common stockholders	Actual or annualized adjusted net income (loss) available to common stockholders	$	96,172		$	80,196			$	(12,618)
Actual or adjusted average common stockholders' equity*		401,574			451,202				423,199
Actual or adjusted average common stockholders' equity (1)
Adjusted ROCE	Adjusted ROCE	23.9		%	17.8		%		(3.0)		%	Adjusted ROCE	29.4	%		23.9	%			14.7	%





*(1)			Adjusted average common stockholders’ equity excludes current period after-tax net realized gains (losses) on
			investments and net changes in unrealized gains (losses) ~~of equity securities.~~on investments.


				Total Number of	Maximum Number
				Shares Purchased	of Shares That
				As Part of	May Yet be
				Publicly	Purchased Under
	Total Number of	Average Price		Announced	the Plans or
	Shares Purchased	Paid per Share (1)		Plans or Programs	Programs (2)
1/1/2024 - 1/31/2024	—	$	—	—	—
2/1/2024 - 2/29/2024	—	$	—	—	—
3/1/2024 - 3/31/2024	208,010	$	19.88	208,010	983,962
Total	208,010	$	19.88	208,010	983,962


Exhibit No.						Exhibit

3.1						Amended and Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the Company’s Annual Report on Form 10‑K filed on February 24, 2017 and incorporated herein by reference)

3.2						Amended and Restated Bylaws of Universal Insurance Holdings, Inc. (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on June 19, 2017 and incorporated herein by reference)

~~10.1~~						~~Form of Notice of~~ ~~Grant of Restricted Stock Units~~ ~~Pursuant to~~ ~~the 2021 Omnibus Incentive Plan~~ †












15.1						Accountants’ Acknowledgment

31.1						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of ~~Chie~~fChief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32						Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.1						The following materials from Universal Insurance Holdings, Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, ~~2023,~~2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Statement of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements.
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2023,~~2024, formatted in Inline XBRL (included in Exhibit 101)


† Indicates management contract or compensatory plan or arrangement.


						UNIVERSAL INSURANCE HOLDINGS, INC.

Date: ~~May 2, 2023~~April 30, 2024						/s/ Stephen J. Donaghy
						Stephen J. Donaghy, Chief Executive Officer

Date: ~~May 2, 2023~~April 30, 2024						/s/ Gary Lloyd Ropiecki
						Gary Lloyd Ropiecki, Principal Accounting Officer