Additionally, we have taken steps to implement law changes in Florida related to claims-handling procedures and timelines. The Florida legislature passed significant property insurance reform bills in a December 2022 special session and subsequently in its 2023 regulation session. Among other things, these law changes are intended to curtail abuses and rising costs resulting from the proliferation of claims-related litigation and assignments of benefits. The Company has analyzed the law changes and has taken steps to implement the reforms. Although the 2022 and 2023 law changes mark the legislature’s most definitive efforts 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 Changes ~~and Cost of Living Adjustments~~

In May 2022, the Company filed and received approval for a rate increase with the FLOIR for an overall 14.9% rate increase for UPCIC on Florida personal residential homeowners’ line of business which became effective June 1, 2022, for new business and November 4, 2022, for renewals.

In addition, in November 2022, UPCIC filed and received approval for a 3.7% rate increase on Florida personal residential homeowners’ line of business, effective February 15, 2023, for new business and April 1, 2023, for renewals.

In April 2023, UPCIC submitted and received approval for a rate 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 reinsurance contract year ending May 31, 2024. Accordingly, the rate decrease that was temporarily implemented in response to the RAP coverage will expire one year from its effective date, on July 15, 2024.

In July 2023, UPCIC filed a 7.5% rate increase on Florida personal residential homeowners’ line of business, effective July 17, 2023, for new business and November 4, 2023, for renewal business. ~~In the second quarter of~~Additionally, in October 2023, UPCIC filed a ~~7.8%~~4.1% rate increase on ~~South Carolina~~Florida personal ~~residential homeowner’s line~~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 ~~approval, and will become~~review with regulators.

For 2024, the following rate changes for UPCIC have been approved by regulators in states other than Florida:

•Georgia: +14.8% effective ~~September 5,~~November 21, 2023, for new business, and ~~October 25, 2023~~January 10, 2024, for renewal ~~business. During the second quarter of 2023, rate increases went into effect~~business

•South Carolina: +7.8% effective January 16, 2024, for new business, and March 6, 2024 for renewal business ~~in Virginia (+7.3%), Minnesota (+8.0%), Alabama (+9.5%),~~

•Alabama: +14.3% effective March 13, 2024, for new business, and ~~Indiana (+6.0%). A~~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 ~~increase of 5.0% filed in the first quarter of 2023 in Pennsylvania was approved in the second quarter,~~filings are pending approval by state regulators:

•Maryland: +13.3% effective January 22, 2024 for new business, and isMarch 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, ~~2023,~~2024, for new business, and July 21, ~~2023,~~2024, for renewal ~~business. On July 3, 2023, a~~business

The pending New York and Maryland rate ~~increase of 6.7%~~filings are use and file rates, but prior approval for forms, so the effect in ~~New Jersey was approved, and will be effective August 21,2023 for new business, and October 10, 2023, for renewal business.~~

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In the second quarter of 2023, the Insurance Entities continued to implement inflation increases to policy insured values across the majority of states in which we conduct business. 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 resulting 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 and 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 conditionstheir cases is ~~important to the Company’s business.~~

~~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 our business and on the economy in general cannot be predicted.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

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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 ~~change~~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 ~~change~~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.

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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 ~~change~~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 ~~inform~~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 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 ~~change~~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.

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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

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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 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”) and receive the RAP coverage provided by the State of Florida.~~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 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

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as satisfying a series of stress test catastrophe loss scenarios based on past historical events. Similarly, the Insurance Entities’ respective 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.

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

UPCIC/APPCIC 2023-2024 All States Reinsurance Program

•First event All States retention of $45 million.

•All States first event tower extends to ~~$2.831~~$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 ~~$2.831~~$2.61 billion tower, the second event exhaustion point would be $912 million.

•Full reinstatement available on $867 million of non-FHCF and non-RAP first event catastrophe coverage for guaranteed second event coverage. For all layers purchased between $45 million and the 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 or have secured a specific second event contract.

•First event layer of 100% of $66 million in excess of $45 million established by Universal in 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.

•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, 2023, both UPCIC and APPCIC have continued the election of the 90% coverage level. ~~We estimate the~~The total mandatory FHCF layer ~~will provide~~provides approximately ~~$1.521~~$1.316 billion of coverage for UPCIC, which ~~insures~~inures to the benefit of the open market coverage secured from private reinsurers and Cosaint Re Pte. Ltd (covers UPCIC only) and ~~we estimate~~ the total mandatory FHCF layer ~~will provide~~provides approximately ~~$25.2~~$22.5 million of coverage for APPCIC, which ~~insures~~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, ~~we estimate~~ the total RAP layer ~~will provide~~provides approximately ~~$219.2~~$202.8 million of coverage for UPCIC and ~~$3.6~~$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 ~~2024~~2023 wind season. UPCIC’s catastrophe bond, secured leading up to the 2021-2022 renewal, Cosaint Re Pte. Ltd, ~~continues~~continued to provide one limit of $150 million ~~in this year’s program and is in its third and final year.~~during the 2023-2024 program. Refer to Note 15 (“Subsequent Events”) for details of the commutation.

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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 2023-2024 ~~all states~~ reinsurance program:

Reinsurer

A.M. Best

S&P

~~Allianz Risk Transfer~~Florida Hurricane Catastrophe Fund (1)

A+

~~Chubb Tempest Reinsurance Ltd.~~

~~A++~~

~~Markel Bermuda Ltd.~~

N/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 2023-2024 all states reinsurance programs for UPCIC and APPCIC is projected to be ~~$624~~$620.6 million, prior to any potential reinstatement premiums due, and represents approximately ~~31.8%~~31.97% of projected direct premium earned for the 12-month treaty period.

Commutations

~~Each insurance company participating in~~During the ~~FHCF is required by Florida regulations and its contract with the FHCF to begin the process~~third quarter of commuting the parties’ respective contractual obligations no later than sixty (60) months after the end of a contract year. The commutation process for the FHCF’s 2017-18 contract year began June 1, 2023. On that date,2023, the Insurance Entities ~~submitted their respective final reports~~entered into commutation agreements with certain of ~~paid losses subject to reimbursement by the FHCF due to Hurricane Irma’s occurrence~~its reinsurers, which resulted in the ~~2017-18 FHCF contract year.~~receipt of cash to settle estimated obligations otherwise recoverable under the reinsurance agreements resulting in no gain or loss. The Insurance Entities ~~also reported~~commuted their respective ~~estimates of outstanding covered losses and covered losses that were incurred but not yet reported (“IBNR,” and together~~2017/18 reimbursement contracts 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~~

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~~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 procedure provides for the insurer and~~ the FHCF to first 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 reviewed and refined 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 resulted 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 have been or 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 are reimbursed.~~

The Insurance Entities commute reinsurance contracts from time to time, including FHCF contracts as and when required by the contracts and related regulations. 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 contracts will involve the commutation 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.

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RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL CONDITION

Highlights for the quarter ended ~~June 30, 2023~~

•The Insurance Entities successfully secured a combined 2023-2024 all states reinsurance program providing a total limit protection of $2.8 billion to the Insurance Entities. The limits include use of the internal captive insurance entity. The estimated cost to the Insurance Entities, as a percentage of estimated direct premium earned for the 12-month treaty period decreased from 37.6% of estimated premiums to 31.8% for the 2023-2024 program, with no accelerated deposit premiums.March 31, 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 ~~has been~~is continuing its efforts to prudently ~~managing~~manage new ~~and renewal~~ business risk selection ~~improving~~and improve risk exposure diversification, ~~and moderating new business growth rates, compared to prior years,~~ while rate increases are taking effect to improve profitability. As a result of management’s efforts to manage exposures and in conjunction with competition from Citizens, the number of total policies in force has been decreasing, partially offsetting increases in written and earned premium driven by rate increases and inflation increases to insured values. Management has ~~recently worked~~revised new business binding guidelines to ~~open up additional~~facilitate increased new business in most Florida territories ~~in Florida~~ as rate increases earn in and the benefits of recent ~~favorable~~ Florida legislation ~~takes affect.~~take effect, resulting in an increase in policies in-force in the quarter.

•~~Net investment income increased as cash and maturing interest earning investments are redeployed into higher interest rates.~~

•~~The losses and LAE, net ratio was 73.8% this quarter compared to 72.3% in the same period last year. The increase~~Declared dividends per common share of ~~1.5 loss ratio points was primarily due to an increase in net prior year development.~~

•~~Other operating expenses and acquisition cost management efforts along with higher premiums from rate increase actions have lowered the expense ratio. Over the past two years, commissions~~$0.16 on February 8, 2024, paid on ~~renewal policies in Florida have been reduced~~March 15, 2024, to ~~8% from 12% two years ago. The rollout to this new lower commission rate was concluded in May 2023. The benefit~~shareholders of ~~lower commission rates is realized over twelve months~~record as ~~policies are renewed under~~of the ~~lower commission rate structure.~~close of business on March 8, 2024.

•The Company ~~continued to return shareholder value with quarterly dividends and~~repurchased 208,010 shares for a total of $4.1 million, or $19.90 per share ~~repurchases. Also, during~~in the first quarter of 2024, completing the ~~Company approved~~2025 repurchase program totaling $20.0 million. On March 12, 2024, the Board of Directors authorized a new share repurchase ~~plan permitting share repurchases not~~program under which the Company may repurchase up to ~~exceed $20~~$20.0 million ~~during the period June 12, 2023 until June 10, 2025.~~of its outstanding shares of common stock through March 11, 2026.

•~~The Company entered into a June 30, 2023 committed, unsecured~~ ~~$40.0 million~~ ~~(previously$37.5 million) revolving credit line with JP Morgan Chase Bank N.A. As of June 30, 2023,~~Costs for reinsurance in Q1 2024 benefited from the ~~Company has not borrowed any amount under this revolving loan.~~no cost reinsurance protection provided by Florida’s RAP program.

•Demotech reaffirmed its A rating for UPCIC ~~filed its initial rate filing in Wisconsin (a new expansion state in 2023), which was subsequently approved.~~

•~~UPCIC filed with its regulators in Hawaii to withdraw from the state. There are approximately 1,459 policies in Hawaii as of June 30, 2023. The withdrawal~~ and ~~nonrenewal of policies in Hawaii are expected to be completed within a year.~~

•In December 2022, the Florida legislature enacted new legislation intended to improve the Florida insurance market 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. In the 2023 regular legislative session, the Florida legislature supplemented these reforms with additional statutory changes that became effective in May 2023. We are optimistic these changes will improve the claims environment in Florida as the changes become effective.

APPCIC on January 22, 2024.

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

Results of Operations — Three Months Ended ~~June 30, 2023~~March 31, 2024 Compared to Three Months Ended ~~June 30, 2022~~March 31, 2023

Net income was $33.7 million for the three months ended ~~June 30, 2023 was $28.6 million~~March 31, 2024, compared to ~~$7.4~~net income of $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, realized and~~ unrealized gains during the second quarter of 2023 compared to realized and unrealized losses in the same period of the prior year, an increase in other revenue and a reduction in general and administrative expenses offset by a decrease in policy fees,on investments, and an increase in ~~losses~~policy fees, partially offset by an increase in operating costs and ~~LAE.~~expenses, and a decrease in commission revenue. Direct premium earned and premiums earned, net were up ~~8.1%~~5.9% and ~~9.5%~~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 73.8%~~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 ~~June 30, 2023, compared~~March 31, 2024, the loss ratio declined to ~~72.3%~~71.9% from 73.1% for the same period in ~~2022 reflecting~~2023 primarily due to an increase in premiums earned, net, a decrease in adverse prior year reserve development, partially offset by a higher ~~net prior years’ reserve development.~~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 ~~June 30, 2023~~March 31, 2024 was ~~99.1%~~95.5% compared to ~~100.9%~~100.0% for the three months ended ~~June 30, 2022. Also see the discussion above under~~ ~~“Overview—~~March 31, 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
June 30, Change
2023 2022 $ %
REVENUES
Direct premiums written $ 547,126 $ 532,527 $ 14,599 2.7 %
Change in unearned premium (83,802) (103,722) 19,920 (19.2) %
Direct premium earned 463,324 428,805 34,519 8.1 %
Ceded premium earned (160,050) (151,744) (8,306) 5.5 %
Premiums earned, net 303,274 277,061 26,213 9.5 %
Net investment income 11,282 5,221 6,061 116.1 %
Net realized gains (losses) on investments 882 (725) 1,607 NM
Net change in unrealized gains (losses) of equity securities 1,731 (8,884) 10,615 NM
Commission revenue 14,986 11,404 3,582 31.4 %
Policy fees 5,384 5,940 (556) (9.4) %
Other revenue 2,031 1,989 42 2.1 %
Total revenues 339,570 292,006 47,564 16.3 %
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses 223,727 200,304 23,423 11.7 %
General and administrative expenses 76,675 79,291 (2,616) (3.3) %
Total operating costs and expenses 300,402 279,595 20,807 7.4 %
Interest and amortization of debt issuance costs 1,629 1,731 (102) (5.9) %
INCOME (LOSS) BEFORE INCOME TAXES 37,539 10,680 26,859 251.5 %
Income tax expense (benefit) 8,973 3,310 5,663 171.1 %
NET INCOME (LOSS) $ 28,566 $ 7,370 $ 21,196 287.6 %
Other comprehensive income (loss), net of taxes (5,866) (29,656) 23,790 (80.2) %
COMPREHENSIVE INCOME (LOSS) $ 22,700 $ (22,286) $ 44,986 NM
DILUTED EARNINGS (LOSS) PER SHARE DATA:
Diluted earnings (loss) per common share $ 0.93 $ 0.24 $ 0.69 287.5 %
Weighted average diluted common shares outstanding 30,659 30,883 (224) (0.7) %
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

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Revenues

Direct premiums written increased by ~~$14.6~~$36.1 million, or ~~2.7%~~8.8%, for the quarter ended ~~June 30, 2023,~~March 31, 2024, driven by premium growth within our Florida business of ~~$3.8~~$17.5 million, or ~~0.8%~~5.2%, and premium growth in our other states business of ~~$10.8~~$18.6 million, or ~~13.6%~~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 ~~the second quarter of 2023 compared~~addition to ~~prior quarters reflects management’s intent to effectively manage new and renewal business as well as the competitive advantage of Citizens, where rates are frequently lower than those available~~an increase in ~~the admitted market.~~policies in force in 12 other states. In total, policies in force ~~declined 39,171,~~increased 10,146, or ~~4.6%~~1.3%, from ~~848,856~~809,932 at December 31, ~~2022~~2023 to ~~809,685~~820,078 at ~~June 30, 2023.~~March 31, 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~~underwriting rules are reviewed and updated as needed in the ~~impact of selected policy non-renewals, as well as the effect of Citizens’ statutory rate caps in suppressing its rates below those of the admitted market, 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 18,296, or 2.2%,~~2024 from ~~827,981~~809,932 at December 31, 2023 to 820,078 at March 31, ~~2023 to 809,685 at June 30, 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 ~~a decrease~~ in ~~total insured value and~~the aggregate, but an increase in premium in ~~force.~~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~~the first quarter of ~~the second quarters of 2023 and 2022.~~2024. In addition, we are authorized to do business in Tennessee and Wisconsin. In 2023, UPCIC filed with ~~plans to submit product filings~~its regulators in ~~that state, and have submitted an initial rate filing in Wisconsin which was subsequently approved. UPCIC has filed~~Hawaii to withdraw ~~its authority~~from the state, with the withdrawal and nonrenewal of policies expected to ~~write policies in Hawaii, and has commenced a plan~~be completed by the end of 2024. Compared to ~~non-renew all of its policies in Hawaii (1,459 policies as of June 30, 2023). At June 30,~~March 31, 2023, at March 31, 2024, policies in force decreased ~~84,933~~by 7,903 policies, or ~~9.5%~~1.0%; premium in force increased ~~$112.5~~$101.1 million, or ~~6.4%~~5.4%; and total insured value ~~decreased $2.6~~increased $8.5 billion, or ~~0.8%~~2.6%, ~~compared to June 30, 2022.~~

~~The following table provides direct premiums written for Florida and Other States for the three months ended June 30, 2023 and 2022 (dollars in thousands):~~

For the Three Months Ended
June 30, 2023 June 30, 2022 Growth
year over year
State Direct
Premiums Written % Direct
Premiums
Written % $ %
Florida $ 456,984 83.5 % $ 453,168 85.1 % $ 3,816 0.8 %
Other states 90,142 16.5 % 79,359 14.9 % 10,783 13.6 %
Total $ 547,126 100.0 % $ 532,527 100.0 % $ 14,599 2.7 %

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 ~~$34.5~~$26.7 million, or ~~8.1%~~5.9%, for the quarter ended ~~June 30, 2023,~~March 31, 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. ~~The~~ 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 was earned from September 28, 2022 through May 31, 2023, increasing ceded premium earned for the second quarter of 2023 by $6.0 million. In total, ceded premium earned ~~increased $8.3~~decreased $25.1 million, or ~~5.5%~~14.5%, for the quarter ended ~~June 30, 2023,~~March 31, 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 of exposures we insure; increased pricing~~RAP program for the ~~2022-2023~~2023/2024 reinsurance program, which ~~expired on~~allowed 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 1.4% one-year rate reduction. Also benefiting reinsurance costs in Q1 2024 was the absence of reinstatement premiums, In September 2022, reinstatement premiums totaling $24.6 million were written, and were earned prospectively through May 31, 2023, ~~when compared 2021-2022 reinsurance program which expired on May 31, 2022, and differences in the structure and design of the respective programs partially offset by lower~~increasing reinsurance costs in ~~June 2023 with~~ the ~~commencement~~same quarter of the ~~2023-2024 contract period.~~prior year. Reinsurance costs, as a percentage of direct premium earned, decreased from ~~35.4% for~~38.0% in the ~~three~~

~~Table~~first quarter of ~~Contents~~

~~months ended June 30, 2022~~2023 to ~~34.5% for~~30.7% during the ~~three months ended June 30, 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’ 2023-2024 reinsurance programs and “Item 1—Note 4 (Reinsurance).”

~~Premiums~~2023 Reinsurance Ratio Benefit

Costs for reinsurance in the first quarter of 2024 were lower than those in the same period in 2023 because of Florida’s RAP program in the 2023-2024 reinsurance program. This is a one time, no cost reinsurance benefit to the Insurance Entities which in exchange provided a rate decrease to policyholders of approximately 1.4%. The lower reinsurance costs, effective June 1 2023, have a favorable effect on financial ratios which are based on net earned ~~net of ceded premium earned, grew by 9.5%, or $26.2 million, to $303.3~~premium.

Investment Results

Net investment income was $13.5 million for the three months ended ~~June 30, 2023, reflecting an increase in direct premium earned partially offset by increased costs for reinsurance.~~

~~Net investment income was $11.3 million for the three months ended June 30, 2023,~~March 31, 2024, compared to ~~$5.2~~$10.7 million for the same period in ~~2022,~~2023, an increase of ~~$6.1~~$2.8 million, or ~~116.1%~~26.4%. Invested cash balances, along with liquidity generated by our investment portfolio from ~~new deposits and~~ maturities, principal repayments, and interest payments received, ~~throughout 2022 and into 2023 was~~were invested atin higher rates, resulting in an increase in investment returns on our portfolio and cash balances.

We look to optimize our investment portfolio on a rolling basis, which, from time-to-time, results in portfolio ~~restructuring~~shaping opportunities. During the three months ended ~~June 30, 2023,~~March 31, 2024, sales of available-for-sale debt securities ~~resulted in net realized losses of $21 thousand~~ and sales of equity securities resulted in net realized gains of $0.9 million, in total generating net realized gains of $0.9 million during the second quarter of 2023. During the three months ended June 30, 2022, sales of available-for-sale debt securities resulted in net realized losses of ~~$0.9 million and sales~~$77.0 thousand.

Table of ~~equity securities resulted in net realized gains of $0.2 million, in total generating net realized losses of $0.7 million during the second quarter of 2022. See “Item 1—Note 3 (Investments).”~~Contents

There was a ~~$1.7~~$3.1 million net unrealized gain ~~in equity securities~~on investments during the three months ended ~~June 30, 2023,~~March 31, 2024, largely driven by our portfolio optimization efforts in the public equity markets, coupled with the overall domestic equity market appreciation tailwind during 2024, compared to a ~~$8.9~~$1.0 million net unrealized ~~loss in equity securities~~gain on investments during the three months ended ~~June 30, 2022.~~March 31, 2023.

Total invested assets were $1.20 billion as of March 31, 2024 compared to $1.16 billion as of December 31, 2023. The increase is primarily attributable to unrealized gains on our equity portfolio, and increases in net investment income, partially offset by pricing weakness in our Fixed Income portfolio as inflation uncertainty continues. Cash and cash equivalents were $396.3 million at March 31, 2024 compared to $397.3 million at December 31, 2023, a decrease of 0.2%. See below “—Analysis of Financial Condition” for more information. Cash and cash equivalents are invested short-term until needed to settle loss and LAE payments, reinsurance premium payments, and operating cash needs, or until they are deployed by our investment advisors.

Commissions, Policy Fees and Other Revenue

Commission revenue is comprised principally of brokerage commissions we earn from traditional open market third-party reinsurers, which excludes reinsurance provided by the State of Florida ~~and reinsurance provided by Cosaint Re (catastrophe bond).~~as well as catastrophe bond participants. Commission revenue is earned pro-rata over the reinsurance policy period which runs from June 1st to May 31st of the following year. Reinstatement premiums for Hurricane Ian resulted in $13.1 million of additional brokerage commissions which was earned from September 28, 2022 through May 31, 2023, increasing brokerage commission revenue earned by $3.2 million for the second quarter of 2023. For the three months ended ~~June 30, 2023,~~March 31, 2024, commission revenue was ~~$15.0~~$11.0 million, compared to ~~$11.4~~$17.3 million for the three months ended ~~June 30, 2022.~~March 31, 2023. The ~~increase~~decrease in commission revenue of ~~$3.6~~$6.2 million, or ~~31.4%~~36.2%, for the three months ended ~~June 30, 2023~~March 31, 2024 was primarily due to ~~additional~~ commissions ~~from~~on reinstatement premiums attributable to Hurricane Ian ~~reinstatement premiums and to~~which were earned through May 31, 2023, which increased ~~commissions from third-party reinsurers earned on increased reinsurance premiums which is attributable to growth~~commission revenue in ~~our insured values, as well as the difference in pricing and structure associated with our reinsurance program when~~Q1 2023 compared to ~~the prior year.~~Q1 2024 where there were no reinstatement premiums.

Policy fees for the three months ended ~~June 30, 2023~~March 31, 2024 were ~~$5.4~~$4.4 million compared to ~~$5.9~~$4.2 million for the same period in ~~2022.~~2023. The decrease of ~~$0.5~~$0.2 million, or ~~9.4%~~5.7%, was the result of ~~a decrease~~an increase in the combined total number of ~~new and renewal~~ policies written during the three months ended ~~June 30, 2023~~March 31, 2024 compared to the same period in ~~2022~~2023 in states ~~where~~in which we are permitted to charge this fee.

Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was ~~relatively flat~~$1.9 million for the three months ended ~~June 30, 2023~~March 31, 2024 compared to $2.0 million for the same period in ~~2022.~~2023.

Non-GAAP

Core revenue, representing total GAAP revenue, excluding net realized gains (losses) on investments and net changes in unrealized gains (losses) ~~of equity securities,~~on investments, was ~~$337.0~~$364.9 million for the three months ended ~~June 30, 2023~~March 31, 2024 compared to ~~$301.6~~$316.3 million for the same period in ~~2022. The increase in core revenue primarily stems from higher net premiums earned, net investment income and commission revenue.~~2023.

Operating Costs and Expenses

Losses and Loss Adjustment Expenses

Losses and LAE experience over the past several years including both 2024 and 2023, reflects an adverse litigation environment as well as other market conditions in Florida that the Florida Legislature has attempted to address through the passage of legislation spanning several years, with the most significant changes made during a special session held in December 2022. See “Overview—Trends and Geographical Distribution—Florida Trends.”

Losses and LAE, net of reinsurance recoveries was ~~$223.7~~$240.2 million for the three months ended ~~June 30, 2023,~~March 31, 2024, resulting in a net loss ratio of 71.9%, compared to ~~$200.3~~$206.2 million, and 73.1%, respectively, for the three months ended ~~June 30, 2022. The~~March 31, 2023. For the three months ended March 31, 2024, the decline in net ~~losses and LAE ratio was 73.8% this quarter compared to 72.3% in the same period last year. The increase of 1.5~~ loss ratio ~~points~~ was primarily due to an increase is direct earned premium driven by rate increases and reduced reinsurance costs which has resulted in ~~net prior year development as net claim development exceeded amounts previously estimated particularly for Hurricanes Irma and Sally, partly offset by a lower current accident year~~improvements to the net loss ratio. See ~~“— Item 1—Note~~Reinsurance Ratio Benefit noted above.

When compared to the prior year quarter, in Q1 2024 management increased the gross loss pick by 4 ~~(Reinsurance)”~~loss ratio points at UPCIC to align with full year loss trends for ~~additional details.~~2023. The quarter ended March 31, 2024, also benefited from the absence of prior year development during Q1 2024 compared to the prior year quarter.

~~Losses and LAE experience in~~In recent years, ~~including~~we have strengthened reserves and increased our ratio for estimated losses as a result of adverse development due to Florida homeowners’, tenants’, and condominium owners’ coverages arising from non-weather and weather events. Similar to other carriers operating in the ~~second quarter~~Florida homeowner’s marketplace, we have experienced deterioration in water and hurricane claims due to an unfavorable claims environment characterized by increases in policyholder demands related to roof repairs and significant attorney representation. In 2023, adverse development was due to represented and litigated claims, and Florida weather claims for accident years 2017 and later. One of management’s objectives is to strengthen reserves on those prior period claims, when needed, which do not benefit from the new legislation signed in late 2022 that eliminated the one-way attorneys’ fee statute and assignments of benefits, established a one-year reporting period for claims, and made other reforms intended to improve the Florida market. During the three months ended March 31, 2024, management did not find the need to strengthen prior year net reserves resulting in zero prior year net development, compared to $3.3 million for the same period in 2023, ~~reflects~~or 1.2 net loss ratio points. We continue to see favorable claim trends on Florida losses that occurred subsequent to the ~~financial impacts~~effective date of ~~rising claim costs under prior Florida law and other market conditions~~recent legislation (December 16, 2022) enacted in Florida, which was intended to curtail the impact of certain abusive claims practices. However, prior years' claims not covered by the new legislation have greater uncertainty, and as such those claims in the aggregate have the potential to experience adverse development, as claims have settled above previously estimated amounts.

We believe the legislation passed in late 2022 represents a positive step towards reducing claim costs in Florida ~~Legislature has been attempting~~and management is optimistic about its eventual benefits. However, the full transition to ~~address with~~these new laws will take many years. Many of the passage of legislation spanning several years. The most recent and significant statutory changes were made during a special legislative session held in December 2022. Also see the discussion above under ~~“Overview—Trends”~~ ~~regarding our response to the Florida market.~~

reforms

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~~Prior~~apply only prospectively and provide only marginal benefit for claims filed prior to the new laws’ effective date. The transition to the new laws therefore involves first renewing policies during the year ~~development was $13.8 million in~~following the ~~second quarter ended June 30, 2023 compared~~effective date, such that the policies, and subsequent claims under those policies, are governed by the new requirements. As for prior policy periods, insurers must continue to ~~$3.7 million in~~adjust claims under the ~~second quarter~~prior laws that were subject to abuse while awaiting the expiration of ~~2022. The~~claim reporting periods and statute of limitations periods applicable to those policies. Therefore, it will be several years until the abusive claim practices permitted under the prior laws, including those resulting from requiring insurance companies to pay claimants’ litigation costs, are fully extinguished and the full benefit of the new legislation can be realized.

All other losses and LAE-net, excluding prior year increase in loss and LAE estimates reflects differences in the settlement of prior gross and ceded claims compared to previous estimates particularly related to non-CAT weather events and Hurricanes Irma and Sally, which predate the most significant reform legislation and have not benefited significantly from the statutory changes.

~~Losses and LAE, net~~development, for the current accident year~~was $209.9~~ are estimated to be $240.2 million or ~~69.2~~71.9% net loss ratio points for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$196.6~~$202.8 million, or ~~71.0~~71.9 net loss ratio points for the ~~three months ended June 30, 2022. Management increased its estimate of expected losses for~~same period in 2023. See the ~~2023 accident year in the second quarter by 2.5 loss~~2024 ratio ~~points relating to business written by UPCIC.~~benefit noted above. This increase is before the financial benefit generated from claims service operations as discussed below. This increase took into consideration several factors including historical and recent losses and LAE experience, including claims payment patterns, trends in LAE and weather trends in the current accident year. Also see the discussion above under ~~“Overview—Trends”~~ ~~regarding our response to the Florida market.~~

~~Current accident year losses and LAE~~category also ~~reflect a financial benefit~~reflects savings from activities performed by ~~the claims affiliate~~affiliates within our holding company system on behalf of our Insurance Entities and our reinsurers when losses and LAE are ceded under our reinsurance contracts. ~~The~~When claims are adjusted by our claims team and files handled by our legal group in this litigious environment in Florida, there are synergies achieved by having these two functions within the same consolidated group that could not be achieved through third parties. This synergistic relationship results in more efficient handling and coordination of claims including represented claims handled by our legal group of close to 500 employees. By choosing not to outsource these activities, we also save money for the consolidated group by generating a potential financial benefit ~~is reflected as a reduction~~outside of the Insurance Entities that serves to ~~the current accident year~~reduce LAE at the consolidated ~~level.~~level (contra LAE), particularly following catastrophes. During ~~the three months ended June 30, 2023,~~2024 these ~~claims related~~claims-related activities generated a financial ~~benefit~~charge of ~~$25.0~~$0.3 million compared to a financial ~~loss~~benefit of ~~$0.2~~$5.8 million during the three months ended ~~June 30, 2022.~~

Historically, our net losses and LAE experience, including from Hurricane Irma, has been largely mitigated by ceding losses from hurricanes to reinsurers including the FHCF. See discussion in “—REINSURANCE” section above for a discussion about the pending commutation with the FHCF for the 2017-2018 treaty period. As of June 1, 2023, we began the FHCF commutation process which ultimately will result in a final determination of and payment for known and unknown or unreported claims from Hurricane Irma, effective as of the commutation date, with a potential in the future for gain or loss as final claim settlements vary from amounts used in the determination of the commutation amount. The Florida litigation environment under prior laws has made it difficult to determine an estimate for the value of the ultimate liability on Irma claims. As a result, the amount agreed upon or determined in commutation may not be sufficient to absorb the financial impact of final claim settlements on all Hurricane Irma claims, as those claims settle in the future.March 31, 2023.

General and Administrative Expenses

For the three months ended ~~June 30, 2023,~~March 31, 2024, general and administrative expenses were ~~$76.7~~$78.7 million compared to ~~$79.3~~$75.9 million during the same period in ~~2022,~~2023, as follows (dollars in thousands):


		Three Months Ended													Three Months Ended
		June 30,								Change					March 31,												Change
		2023				2022				$		%			2024						2023								$			%
		$		Ratio		$		Ratio							$			Ratio				$					Ratio
Premiums earned, net	Premiums earned, net	$	303,274			$	277,061			$	26,213	9.5	%	Premiums earned, net	$	334,025								$	282,224								$	51,801		18.4		18.4	%
General and administrative expenses:	General and administrative expenses:													General and administrative expenses:
Policy acquisition costs	Policy acquisition costs	52,006		17.2	%	54,100		19.5	%	(2,094)		(3.9)	%	Policy acquisition costs	54,821		16.4		16.4	%			51,691			18.3		18.3		%	3,130				6.1		6.1	%
Other operating costs	Other operating costs	24,669		8.1	%	25,191		9.1	%	(522)		(2.1)	%	Other operating costs	23,845		7.2		7.2	%			24,236			8.6		8.6		%	(391)				(1.6)		(1.6)	%
Total general and administrative expenses	Total general and administrative expenses	$	76,675	25.3	%	$	79,291	28.6	%	$	(2,616)	(3.3)	%	Total general and administrative expenses	$	78,666	23.6		23.6	%			$	75,927		26.9		26.9		%	$	2,739			3.6		3.6	%


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 ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 (unaudited)	4
	Condensed Consolidated Statements of Income for the three ~~and six~~-month periods ended ~~June 30, 2023~~March 31, 2024 and ~~2022~~2023 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~-month periods ended ~~June 30, 2023~~March 31, 2024 and ~~2022~~2023 (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~-month periods ended ~~June 30, 2023~~March 31, 2024 and ~~2022~~2023 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the ~~six~~three-month periods ended ~~June 30, 2023~~March 31, 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	6158
Item 4.	Controls and Procedures	6259
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	6259
Item 1A.	Risk Factors	6359
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
~~Item 5.~~	~~Other Information~~	6360
Item 6.	Exhibits	6461
Signatures		6562


	As of
	June 30,		December 31,
	2023		2022
ASSETS
Available-for-sale debt securities, at fair value, net of allowance for credit loss of $758 and $920 (amortized cost: $1,179,059 and $1,152,852)	$	1,051,508	$	1,014,626

Equity securities, at fair value (cost: $89,846 and $102,431)	75,571		85,469

Investment real estate, net	5,618		5,711
Total invested assets	1,132,697		1,105,806

Cash and cash equivalents	291,681		388,706
Restricted cash and cash equivalents	68,636		2,635
Prepaid reinsurance premiums	525,489		282,427
Reinsurance recoverable	590,409		808,850

Premiums receivable, net	79,503		69,574
Property and equipment, net	49,538		51,404
Deferred policy acquisition costs	107,047		103,654
Income taxes recoverable	5,572		1,528
Deferred income tax asset, net	37,543		57,258
Other assets	29,895		18,312
Total assets	$	2,918,010	$	2,890,154
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses	$	663,019	$	1,038,790
Unearned premiums	982,390		943,854
Advance premium	91,011		54,964

Book overdraft	53,839		—
Reinsurance payable, net	607,552		384,504
Commission payable	24,415		18,541

Other liabilities and accrued expenses	58,725		58,836
Long-term debt, net	102,387		102,769
Total liabilities	2,583,338		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	473		472
Authorized shares - 55,000
Issued shares - 47,266 and 47,179
Outstanding shares - 30,080 and 30,389
Treasury shares, at cost - 17,186 and 16,790	(244,846)		(238,758)
Additional paid-in capital	114,685		112,509
Accumulated other comprehensive income (loss), net of taxes	(95,857)		(103,782)
Retained earnings	560,217		517,455
Total stockholders’ equity	334,672		287,896
Total liabilities and stockholders’ equity	$	2,918,010	$	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


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
REVENUES
REVENUES
REVENUES	REVENUES
Direct premiums written	Direct premiums written	$	547,126��	$	532,527	$	957,228	$	929,008
Direct premiums written
Direct premiums written
Change in unearned premium
Change in unearned premium
Change in unearned premium	Change in unearned premium	(83,802)		(103,722)		(38,536)		(85,600)
Direct premium earned	Direct premium earned	463,324		428,805		918,692		843,408
Direct premium earned
Direct premium earned
Ceded premium earned
Ceded premium earned
Ceded premium earned	Ceded premium earned	(160,050)		(151,744)		(333,194)		(297,283)
Premiums earned, net	Premiums earned, net	303,274		277,061		585,498		546,125
Premiums earned, net
Premiums earned, net
Net investment income
Net investment income
Net investment income	Net investment income	11,282		5,221		21,980		9,263
Net realized gains (losses) on investments	Net realized gains (losses) on investments	882		(725)		94		(667)
Net change in unrealized gains (losses) of equity securities		1,731		(8,884)		2,688		(12,280)
Net realized gains (losses) on investments
Net realized gains (losses) on investments
Net change in unrealized gains (losses) on investments
Net change in unrealized gains (losses) on investments
Net change in unrealized gains (losses) on investments
Commission revenue
Commission revenue
Commission revenue	Commission revenue	14,986		11,404		32,268		22,565
Policy fees	Policy fees	5,384		5,940		9,551		10,719
Policy fees
Policy fees
Other revenue
Other revenue
Other revenue	Other revenue	2,031		1,989		3,999		3,763
Total revenues	Total revenues	339,570		292,006		656,078		579,488
Total revenues
Total revenues
OPERATING COSTS AND EXPENSES
OPERATING COSTS AND EXPENSES
OPERATING COSTS AND EXPENSES	OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses	Losses and loss adjustment expenses	223,727		200,304		429,881		385,410
Losses and loss adjustment expenses
Losses and loss adjustment expenses
General and administrative expenses	General and administrative expenses	76,675		79,291		152,602		157,588
General and administrative expenses
General and administrative expenses
Total operating costs and expenses
Total operating costs and expenses
Total operating costs and expenses	Total operating costs and expenses	300,402		279,595		582,483		542,998

Interest and amortization of debt issuance costs	Interest and amortization of debt issuance costs	1,629		1,731		3,265		3,339

Interest and amortization of debt issuance costs

Interest and amortization of debt issuance costs

INCOME (LOSS) BEFORE INCOME TAXES

INCOME (LOSS) BEFORE INCOME TAXES

INCOME (LOSS) BEFORE INCOME TAXES	INCOME (LOSS) BEFORE INCOME TAXES	37,539		10,680		70,330		33,151
Income tax expense (benefit)	Income tax expense (benefit)	8,973		3,310		17,591		8,244
Income tax expense (benefit)
Income tax expense (benefit)
NET INCOME (LOSS)
NET INCOME (LOSS)
NET INCOME (LOSS)	NET INCOME (LOSS)	$	28,566	$	7,370	$	52,739	$	24,907
Basic earnings (loss) per common share	Basic earnings (loss) per common share	$	0.94	$	0.24	$	1.74	$	0.80
Basic earnings (loss) per common share
Basic earnings (loss) per common share
Weighted average common shares outstanding - Basic
Weighted average common shares outstanding - Basic
Weighted average common shares outstanding - Basic	Weighted average common shares outstanding - Basic	30,265		30,829		30,323		30,987
Diluted earnings (loss) per common share	Diluted earnings (loss) per common share	$	0.93	$	0.24	$	1.72	$	0.80
Diluted earnings (loss) per common share
Diluted earnings (loss) per common share
Weighted average common shares outstanding - Diluted
Weighted average common shares outstanding - Diluted
Weighted average common shares outstanding - Diluted	Weighted average common shares outstanding - Diluted	30,659		30,883		30,633		31,060
Cash dividend declared per common share	Cash dividend declared per common share	$	0.16	$	0.16	$	0.32	$	0.32
Cash dividend declared per common share
Cash dividend declared per common share


	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 income (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
Grants of restricted stock awards	—		36	—	1		—		(1)		—		—		—		—


Purchases of treasury stock	(396)		—	—	—		—		—		—		—		(6,088)		(6,088)
Share-based compensation	—		—	—	—		—		1,261		—		—		—		1,261
Net income (loss)	—		—	—	—		—		—		28,566		—		—		28,566
Other comprehensive income (loss), net of taxes	—		—	—	—		—		—		—		(5,866)		—		(5,866)
Declaration of dividends ($0.16 per common share and $0.25 per preferred share)	—		—	—	—		—		—		(5,007)		—		—		(5,007)










Balance, June 30, 2023	(17,186)		47,266	10	$	473	$	—	$	114,685	$	560,217	$	(95,857)	$	(244,846)	$	334,672


(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.


	Six Months Ended
	June 30,
	2023		2022
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	1,400	$	225,424
Cash flows from investing activities:
Proceeds from sale of property and equipment	24		1
Purchases of property and equipment	(1,862)		(3,793)
Purchases of equity securities	(24,820)		(55,273)
Purchases of available-for-sale debt securities	(72,698)		(134,899)

Proceeds from sales of equity securities	37,233		17,692
Proceeds from sales of available-for-sale debt securities	3,695		19,534


Maturities of available-for-sale debt securities	43,032		33,683

Net cash provided by (used in) investing activities	(15,396)		(123,055)
Cash flows from financing activities:
Debt issuance costs paid	—		(131)
Preferred stock dividend	(5)		(5)
Common stock dividend	(9,885)		(9,974)

Purchase of treasury stock	(6,088)		(7,381)
Payments related to tax withholding for share-based compensation	(314)		(209)
Repayment of debt	(736)		(735)
Net cash provided by (used in) financing activities	(17,028)		(18,435)
Cash and cash equivalents and restricted cash and cash equivalents:
Net increase (decrease) during the period	(31,024)		83,934
Balance, beginning of period	391,341		253,143
Balance, end of period	$	360,317	$	337,077


		June 30, 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	$	26,815	$	—	$	2	$	(1,000)	$	25,817
Corporate bonds	Corporate bonds	791,001		(609)		121		(84,529)		705,984
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	333,246		—		258		(37,642)		295,862
Municipal bonds	Municipal bonds	17,137		(5)		1		(2,246)		14,887
Redeemable preferred stock	Redeemable preferred stock	10,860		(144)		—		(1,758)		8,958
Total	Total	$	1,179,059	$	(758)	$	382	$	(127,175)	$	1,051,508


	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


	June 30, 2023				December 31, 2022
Average Credit Ratings	Fair Value		% of Total Fair Value		Fair Value		% of Total Fair Value
AAA	$	327,640	31.2	%	$	297,475	29.3	%
AA	159,546		15.2	%	154,975		15.3	%
A	337,819		32.1	%	327,427		32.3	%
BBB	225,573		21.4	%	232,316		22.9	%

No Rating Available	930		0.1	%	2,433		0.2	%
Total	$	1,051,508	100.0	%	$	1,014,626	100.0	%


		June 30, 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	4				$	9,744	$	(231)	6	$	11,831	$	(769)
Corporate bonds	Corporate bonds	35				20,399		(457)		256	317,257		(41,497)
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	38				47,334		(1,211)		177	222,783		(36,431)
Municipal bonds	Municipal bonds	2				1,113		(10)		3	6,832		(1,247)
Redeemable preferred stock	Redeemable preferred stock	2				765		(93)		2	212		(62)
Total	Total	81				$	79,355	$	(2,002)	444	$	558,915	$	(80,006)


		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	(120)		3		(45)		(162)
Balance, June 30, 2023		$	609	$	5	$	144	$	758
Provision for (or reversal of) credit loss expense
Balance, December 31, 2023
Provision for (or reversal of) credit loss expense
Balance, March 31, 2024


	June 30, 2023
	Amortized Cost		Fair Value
Due in one year or less	$	101,298	$	99,287
Due after one year through five years	599,340		547,492
Due after five years through ten years	296,330		249,578
Due after ten years	178,289		152,021
Perpetual maturity securities	3,802		3,130
Total	$	1,179,059	$	1,051,508


(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 June 30,
	2023						2022
	Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses		Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses
Direct	$	547,126	$	463,324	$	253,079	$	532,527	$	428,805	$	260,230
Ceded	(561,480)		(160,050)		(29,352)		(632,437)		(151,744)		(59,926)
Net	$	(14,354)	$	303,274	$	223,727	$	(99,910)	$	277,061	$	200,304


		Six Months Ended June 30,
		2023						2022
		Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses		Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses
	Three Months Ended March 31,																		Three Months Ended March 31,
	2024															2024				2023
	Premiums Written													Premiums Written	Premiums Earned		Losses and Loss Adjustment Expenses	Premiums Written			Premiums Earned	Losses and Loss Adjustment Expenses
Direct	Direct	$	957,228	$	918,692	$	461,301	$	929,008	$	843,408	$	455,385
Ceded	Ceded	(576,256)		(333,194)		(31,420)		(646,383)		(297,283)		(69,975)
Net	Net	$	380,972	$	585,498	$	429,881	$	282,625	$	546,125	$	385,410


	June 30, 2023		December 31, 2022
Statutory capital and surplus
UPCIC	$	362,828	$	400,866
APPCIC	$	24,531	$	22,786
Ten percent of total liabilities
UPCIC	$	152,552	$	151,190
APPCIC	$	2,463	$	2,023



					Total Number of Shares				Average
					Repurchased During the		Aggregate		Price Per		Plan
			Dollar Amount		Six Months Ended June 30,		Purchase		Share		Completed or
Date Authorized		Expiration Date	Authorized		2023	2022	Price		Repurchased		Expired
June 12, 2023		June 10, 2025	$	20,000	—	—	$	—	$	—
December 15, 2022	(1)	December 15, 2024	$	7,997	396,371	—	$	6,088	$	15.36
November 3, 2020	(1)	November 3, 2022	$	20,000	—	603,080	$	7,381	$	12.24	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 June 30,				Six Months Ended June 30,
			2023		2022		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		$	(21)	$	(949)	$	(722)	$	(1,213)	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		4		233		177		298		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		$	(17)	$	(716)	$	(545)	$	(915)	Net of tax	Total reclassification for the period		$	(52)		$		$	(528)			Net of tax		Net of tax


		Fair Value Measurements
		As of June 30, 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	$	—	$	25,817	$	—	$	25,817
Corporate bonds	Corporate bonds	—		705,984		—		705,984
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	—		295,862		—		295,862
Municipal bonds	Municipal bonds	—		14,887		—		14,887
Redeemable preferred stock	Redeemable preferred stock	—		8,958		—		8,958
Equity Securities:	Equity Securities:
Common stock	Common stock	12,273		—		—		12,273
Common stock
Common stock
Mutual funds	Mutual funds	63,298		—		—		63,298
Investment in Private Equity Limited Partnership
Total assets accounted for at fair value	Total assets accounted for at fair value	$	75,571	$	1,051,508	$	—	$	1,127,079


		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 June 30, 2023				As of December 31, 2022
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Liabilities (debt):
Surplus note (1)	$	4,779	$	4,497	$	5,515	$	5,126
5.625% Senior unsecured notes (2)	100,000		97,365		100,000		100,350
Total debt	$	104,779	$	101,862	$	105,515	$	105,476


	~~As of~~
	~~June 30, 2023~~		~~December 31, 2022~~

~~Restricted cash and cash equivalents~~	$	~~66,000~~	$	—


	For the Three Months Ended
	June 30, 2023				June 30, 2022				Growth year over year
State	Direct Premiums Written		%		Direct Premiums Written		%		$		%
Florida	$	456,984	83.5	%	$	453,168	85.1	%	$	3,816	0.8	%
Other states	90,142		16.5	%	79,359		14.9	%	10,783		13.6	%
Total	$	547,126	100.0	%	$	532,527	100.0	%	$	14,599	2.7	%


	For the Six Months Ended
	June 30, 2023				June 30, 2022				Growth year over year
State	Direct Premiums Written		%		Direct Premiums Written		%		$		%
Florida	$	794,349	83.0	%	$	787,605	84.8	%	$	6,744	0.9	%
Other states	162,879		17.0	%	141,403		15.2	%	21,476		15.2	%
Total	$	957,228	100.0	%	$	929,008	100.0	%	$	28,220	3.0	%


		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)	$	732,899	$	607,552	$	125,347
Unpaid losses and LAE, direct (2)	Unpaid losses and LAE, direct (2)	663,019		380,573		282,446
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)	124,764		7,246		117,518
Total material cash requirements	Total material cash requirements	$	1,520,682	$	995,371	$	525,311
Total material cash requirements
Total material cash requirements


		Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
		2023			2022			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	$	114,256		$	29,472		$	105,468		$	49,804		$	(22,267)
Average common stockholders' equity	Average common stockholders' equity	328,139			381,346			311,184			398,027			358,699
ROCE *		34.8		%	7.7		%	33.9		%	12.5		%	(6.2)		%
ROCE																	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	$	106,376		$	58,592		$	101,272		$	69,422		$	(12,618)
Actual or adjusted average common stockholders' equity**		420,078			458,292			409,955			454,782			423,199
Adjusted ROCE *		25.3		%	12.8		%	24.7		%	15.3		%	(3.0)		%
Actual or adjusted average common stockholders' equity (1)
Adjusted ROCE																	Adjusted ROCE	29.4	%		23.9	%			14.7	%




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