(Mark One)

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

For the quarterly period ended ~~September 30, 2017~~

March 31, 2022

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

For the transition period from to

Commission File Number 001-33251

UNIVERSAL INSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________

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

1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309

(Address of principal executive offices)

(Zip Code)

(954) 958-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~“smaller~~

Table of Contents

“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

☒

Accelerated filer

☐

☒

Non-accelerated filer

☐

☐ ~~(Do not check if a smaller reporting company)~~

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~34,443,288~~30,945,861 shares of common stock, par value $0.01 per share, outstanding on ~~November 3, 2017~~.

April 26, 2022.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC.

TABLE OF CONTENTS

~~PART I – FINANCIAL INFORMATION~~

~~Page No.~~

PART I – FINANCIAL INFORMATION

Page No.

Item 1.

Financial Statements:

Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (unaudited)

Condensed Consolidated Statements of Income for thethree ~~and nine-month~~-month periods ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (unaudited)

Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine-month~~-month periods ended ~~September 30, 2017~~ March 31, 2022 and ~~2016~~2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the ~~nine-month~~three-month periods ended ~~September 30, 2017~~ March 31, 2022 and ~~2016~~2021 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative ~~Disclosure~~Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II – OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

~~Item 6.~~

	~~Exhibits~~		47


~~Signatures~~				48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To ~~The~~the Board of Directors and Stockholders of

Universal Insurance Holdings, Inc. ~~and Subsidiaries~~

Fort Lauderdale, Florida

RESULTS OF REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We have reviewed the accompanying condensed consolidated balance sheet of Universal Insurance Holdings, Inc. and its wholly-owned subsidiaries (the “Company”) as of ~~September 30, 2017~~March 31, 2022 and the related condensed consolidated statements of income, comprehensive income, ~~for the three~~stockholders’ equity and ~~nine-month periods ended September 30, 2017 and 2016 and related condensed consolidated statements of~~ cash flows for the ~~nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2022 and ~~2016. These~~2021. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements ~~are~~for them to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company’s management.~~

America.

We ~~conducted our review~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (“PCAOB”), the consolidated balance sheet of Universal Insurance Holdings, Inc. as of December 31, 2021 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 28, 2022. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

BASIS FOR REVIEW RESULTS

These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

~~Based on our review, we~~

We are ~~not aware of any material modifications that should~~a public accounting firm registered with the PCAOB and are required to be ~~made~~independent with respect to the ~~accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.~~

~~We have previously audited,~~Company in accordance with the ~~standards~~U.S. federal securities laws and the applicable rules and regulations of the ~~Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Universal Insurance Holdings, Inc.~~Securities and ~~Subsidiaries as of December 31, 2016~~Exchange Commission and the ~~related consolidated statements~~PCAOB.

/s/ Plante & Moran, PLLC

East Lansing, Michigan

May 2, 2022

Table of income, comprehensive income, stockholders’ equity and cash flows for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 23, 2017. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Contents

~~/s/ Plante & Moran, PLLC~~

~~Chicago, Illinois~~

~~November 9, 2017~~

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except per share data)


	As of
	March 31,		December 31,
	2022		2021
ASSETS
Available-for-sale debt securities, at fair value, net of allowance for credit loss of $572 and $489 (amortized cost: $1,092,438 and $1,061,192)	$	1,014,677	$	1,040,455

Equity securities, at fair value (cost: $72,339 and $51,151)	65,126		47,334

Investment real estate, net	5,845		5,891
Total invested assets	1,085,648		1,093,680

Cash and cash equivalents	165,398		250,508
Restricted cash and cash equivalents	2,635		2,635
Prepaid reinsurance premiums	109,401		240,993
Reinsurance recoverable	104,660		185,589

Premiums receivable, net	61,670		64,923
Property and equipment, net	54,170		53,682
Deferred policy acquisition costs	103,622		108,822
Income taxes recoverable	2,262		16,947
Deferred income tax asset, net	40,072		16,331
Other assets	19,417		22,031
Total assets	$	1,748,955	$	2,056,141
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses	$	244,482	$	346,216
Unearned premiums	839,647		857,769
Advance premium	85,120		53,694

Book overdraft	—		26,759
Reinsurance payable, net	12,723		188,662
Commission payable	23,484		22,315

Other liabilities and accrued expenses	43,774		27,348
Long-term debt, net	103,384		103,676
Total liabilities	1,352,614		1,626,439

Commitments and Contingencies (Note 12)	0		0

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	471		470
Authorized shares - 55,000
Issued shares - 47,063 and 47,018
Outstanding shares - 30,946 and 31,221
Treasury shares, at cost - 16,117 and 15,797	(230,994)		(227,115)
Additional paid-in capital	109,099		108,202
Accumulated other comprehensive income (loss), net of taxes	(58,478)		(15,568)
Retained earnings	576,243		563,713
Total stockholders’ equity	396,341		429,702
Total liabilities and stockholders’ equity	$	1,748,955	$	2,056,141

As of

September 30,

December 31,

2017

2016

ASSETS

Fixed maturities, at fair value
$
609,179

$
584,361

Equity securities, at fair value

26,075

50,803

Short-term investments, at fair value

—

5,002

Investment real estate, net

16,324

11,435

Total invested assets

651,578

651,601

Cash and cash equivalents

366,176

105,730

Restricted cash and cash equivalents

2,635

2,635

Prepaid reinsurance premiums

212,489

124,385

Reinsurance recoverable

412,697

106

Premiums receivable, net

66,687

53,833

Property and equipment, net

32,959

32,162

Deferred policy acquisition costs

75,934

64,912

Income taxes recoverable

19,174

3,262

Deferred income tax asset, net

5,300

10,674

Other assets

11,432

10,707

Total assets
$
1,857,061

$
1,060,007

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

Unpaid losses and loss adjustment expenses
$
440,443

$
58,494

Unearned premiums

556,299

475,756

Advance premium

28,667

17,796

Accounts payable

3,999

3,187

Reinsurance payable, net

341,356

80,891

Dividends payable

4,846

—

Other liabilities and accrued expenses

47,659

37,665

Long-term debt

13,235

15,028

Total liabilities

1,436,504

688,817

Commitments and Contingencies (Note 12)

STOCKHOLDERS' EQUITY:

Cumulative convertible preferred stock, $.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, $.01 par value

455

453

Authorized shares - 55,000

Issued shares - 45,473 and 45,324

Outstanding shares - 34,440 and 35,052

Treasury shares, at cost - 11,033 and 10,272

(104,866
)

(86,982
)
Additional paid-in capital

89,429

82,263

Accumulated other comprehensive income (loss), net of taxes

(2,207
)

(6,408
)
Retained earnings

437,746

381,864

Total stockholders' equity

420,557

371,190

Total liabilities and stockholders' equity
$
1,857,061

$
1,060,007

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,							Three Months Ended March 31,
	2017			2016			2017			2016					2022		2021
PREMIUMS EARNED AND OTHER REVENUES													PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written	$	274,744		$	241,888		$	816,350		$	741,782		Direct premiums written		$	396,481	$	365,314
Change in unearned premium		(19,935	)		(7,388	)		(80,543	)		(59,211	)	Change in unearned premium		18,122		10,292
Direct premium earned		254,809			234,500			735,807			682,571		Direct premium earned		414,603		375,606
Ceded premium earned		(80,292	)		(74,966	)		(230,722	)		(214,128	)	Ceded premium earned		(145,539)		(132,301)
Premiums earned, net		174,517			159,534			505,085			468,443		Premiums earned, net		269,064		243,305
Net investment income (expense)		3,085			2,304			9,012			6,051
Net investment income													Net investment income		4,042		2,986
Net realized gains (losses) on investments		803			101			2,450			1,344		Net realized gains (losses) on investments		58		542
Net change in unrealized gains (losses) of equity securities													Net change in unrealized gains (losses) of equity securities		(3,396)		(494)
Commission revenue		5,304			4,603			14,546			12,927		Commission revenue		11,161		9,126
Policy fees		4,861			4,226			14,594			13,093		Policy fees		4,779		5,387
Other revenue		1,673			1,668			4,917			4,827		Other revenue		1,774		1,905
Total premiums earned and other revenues		190,243			172,436			550,604			506,685		Total premiums earned and other revenues		287,482		262,757
OPERATING COSTS AND EXPENSES													OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses		116,375			73,548			267,129			199,749		Losses and loss adjustment expenses		185,106		143,963
General and administrative expenses		57,269			54,725			171,582			166,780		General and administrative expenses		78,297		82,423
Total operating costs and expenses		173,644			128,273			438,711			366,529		Total operating costs and expenses		263,403		226,386
INCOME BEFORE INCOME TAXES		16,599			44,163			111,893			140,156
Income tax expense		6,635			17,281			41,354			54,400
NET INCOME	$	9,964		$	26,882		$	70,539		$	85,756
Basic earnings per common share	$	0.29		$	0.77		$	2.02		$	2.46

Interest and amortization of debt issuance costs													Interest and amortization of debt issuance costs		1,608		20

INCOME (LOSS) BEFORE INCOME TAXES													INCOME (LOSS) BEFORE INCOME TAXES		22,471		36,351
Income tax expense (benefit)													Income tax expense (benefit)		4,934		9,943
NET INCOME (LOSS)													NET INCOME (LOSS)		$	17,537	$	26,408
Basic earnings (loss) per common share													Basic earnings (loss) per common share		$	0.56	$	0.85
Weighted average common shares outstanding - Basic		34,686			35,042			34,927			34,878		Weighted average common shares outstanding - Basic		31,147		31,208
Diluted earnings per common share	$	0.28		$	0.75		$	1.96		$	2.41
Diluted earnings (loss) per common share													Diluted earnings (loss) per common share		$	0.56	$	0.84
Weighted average common shares outstanding - Diluted		35,615			35,723			35,917			35,594		Weighted average common shares outstanding - Diluted		31,227		31,277
Cash dividend declared per common share	$	0.14		$	0.14		$	0.42		$	0.42		Cash dividend declared per common share		$	0.16	$	0.16

—

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net income
$
9,964

$
26,882

$
70,539

$
85,756

Other comprehensive income (loss), net of taxes

251

(491
)

4,201

5,631

Comprehensive income
$
10,215

$
26,391

$
74,740

$
91,387


	Three Months Ended March 31,
		2022		2021
Net income (loss)		$	17,537	$	26,408
Other comprehensive income (loss), net of taxes		(42,910)		(16,910)
Comprehensive income (loss)		$	(25,373)	$	9,498

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (unaudited)

(in ~~thousands)~~

thousands, except per share data)

Nine Months Ended September 30,

2017

2016

Cash flows from operating activities:

Net cash provided by (used in) operating activities
$
286,195

$
178,637

Cash flows from investing activities:

Proceeds from sale of property and equipment

17

31

Purchases of property and equipment

(3,655
)

(6,041
)
Purchases of equity securities

(47,070
)

(46,414
)
Purchases of fixed maturities

(114,593
)

(278,961
)
Purchases of investment real estate, net

(5,023
)

(4,400
)
Proceeds from sales of equity securities

75,027

46,819

Proceeds from sales of fixed maturities

19,643

78,966

Maturities of fixed maturities

75,770

38,111

Maturities of short-term investments

5,000

25,000

Net cash provided by (used in) investing activities

5,116

(146,889
)
Cash flows from financing activities:

Preferred stock dividend

(8
)

(7
)
Common stock dividend

(9,803
)

(9,828
)
Purchase of treasury stock

(17,884
)

(8,415
)
Sale of treasury stock

—

2,965

Payments related to tax withholding for share-based compensation

(1,367
)

(4,905
)
Excess tax benefits (shortfall) from share-based compensation

—

(1,563
)
Repayment of debt

(1,803
)

(1,768
)
Net cash provided by (used in) financing activities

(30,865
)

(23,521
)
Net increase (decrease) in cash and cash equivalents

260,446

8,227

Cash and cash equivalents at beginning of period

105,730

197,014

Cash and cash equivalents at end of period
$
366,176

$
205,241


	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, 2021	(15,797)		47,018	10	$	470	$	—	$	108,202	$	563,713	$	(15,568)	$	(227,115)	$	429,702


Vesting of performance share units	(9)	(1)	33	—	1		—		(1)		—		—		(104)		(104)
Vesting of restricted stock units	(6)	(1)	27	—	—		—		—		—		—		(105)		(105)

Retirement of treasury shares	15	(1)	(15)	—	—		—		(209)		—		—		209		—
Purchases of treasury stock	(320)		—	—	—		—		—		—		—		(3,879)		(3,879)
Share-based compensation	—		—	—	—		—		1,107		—		—		—		1,107
Net income	—		—	—	—		—		—		17,537		—		—		17,537
Other comprehensive loss, net of taxes	—		—	—	—		—		—		—		(42,910)		—		(42,910)
Declaration of dividends ($0.16 per common share and $0.25 per preferred share)	—		—	—	—		—		—		(5,007)		—		—		(5,007)



















Balance, March 31, 2022	(16,117)		47,063	10	$	471	$	—	$	109,099	$	576,243	$	(58,478)	$	(230,994)	$	396,341


(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.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(in thousands, except per share data)


	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, 2020	(15,680)		46,817	10	$	468	$	—	$	103,445	$	567,512	$	3,343	$	(225,506)	$	449,262


Vesting of performance share units	(16)	(1)	62	—	—		—		—		—		—		(241)		(241)
Vesting of restricted stock units	(17)	(1)	65	—	1		—		(1)		—		—		(254)		(254)

Retirement of treasury shares	33	(1)	(33)	—	—		—		(495)		—		—		495		—
Purchases of treasury stock	(15)		—	—	—		—		—		—		—		(245)		(245)
Share-based compensation	—		—	—	—		—		1,675		—		—		—		1,675
Net income	—		—	—	—		—		—		26,408		—		—		26,408
Other comprehensive loss, net of taxes	—		—	—	—		—		—		—		(16,910)		—		(16,910)

Declaration of dividends ($0.16 per common share and $0.25 per preferred share)	—		—	—	—		—		—		(5,030)		—		—		(5,030)



















Balance, March 31, 2021	(15,695)		46,911	10	$	469	$	—	$	104,624	$	588,890	$	(13,567)	$	(225,751)	$	454,665


(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.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
Cash flows from operating activities:
Net cash provided by operating activities	$	(27,081)	$	61,265
Cash flows from investing activities:
Proceeds from sale of property and equipment	1		16
Purchases of property and equipment	(2,185)		(1,211)
Purchases of equity securities	(29,333)		(8,175)
Purchases of available-for-sale debt securities	(57,163)		(178,828)

Proceeds from sales of equity securities	14,932		1,576
Proceeds from sales of available-for-sale debt securities	12,540		27,455
Proceeds from sales of investment real estate	—		2,591

Maturities of available-for-sale debt securities	12,766		25,178

Net cash provided by (used in) investing activities	(48,442)		(131,398)
Cash flows from financing activities:
Debt issuance costs paid	(100)		—
Preferred stock dividend	(3)		(3)
Common stock dividend	(5,029)		(5,083)

Purchase of treasury stock	(3,879)		(245)
Payments related to tax withholding for share-based compensation	(209)		(495)
Repayment of debt	(367)		(368)
Net cash provided by (used in) financing activities	(9,587)		(6,194)
Cash and cash equivalents and restricted cash and cash equivalents:
Net increase (decrease) during the period	(85,110)		(76,327)
Balance, beginning of period	253,143		179,871
Balance, end of period	$	168,033	$	103,544

The following table summarizes our cash and cash equivalents and restricted cash and cash equivalents within the Condensed Consolidated Balance Sheets (in thousands):


	March 31,		December 31,
	2022		2021
Cash and cash equivalents	$	165,398	$	250,508
Restricted cash and cash equivalents (1)	2,635		2,635
Total cash and cash equivalents and restricted cash and cash equivalents	$	168,033	$	253,143

(1)See “—Note 5 (Insurance Operations)” for a discussion of the nature of the restrictions for restricted cash and cash equivalents.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

Table of Contents

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of Operations and Basis of Presentation

Nature of Operations

Universal Insurance Holdings, Inc. (“UVE”, and together with its wholly-owned subsidiaries, “the Company”) is a Delaware corporation incorporated in 1990. ~~UVE with its wholly-owned subsidiaries (the “Company”)~~The Company is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Through its wholly-owned insurance company subsidiaries, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC”), and together ~~referred to as~~with UPCIC, the “Insurance ~~Entities,”~~Entities”), the Company is principally engaged in the property and casualty insurance business offered primarily through aits network of independent agents. Risk from catastrophic losses is managed through the use of reinsurance agreements. The Company’s primary product is residential homeowners’ insurance ~~currently~~ offered in ~~fifteen~~19 states as of ~~September 30, 2017,~~March 31, 2022, including Florida, which comprises the ~~vast~~ majority of the Company’s ~~in-force policies.~~policies in force. See “—Note 5 (Insurance Operations)” for more information regarding the Company’s insurance operations.

The Company generates revenues primarily from the collection of premiums and ~~invests~~investment returns on funds invested on cash flows in excess of those retained and used for claims-paying obligations and insurance operations. Other significant sources of revenue include brokerage commissions collected from reinsurers on certain reinsurance programs placed byon behalf of the Insurance Entities, policy fees collected from policyholders by ~~our~~the Company’s wholly-owned managing general ~~agency~~agent subsidiary and payment plan fees charged to policyholders who choose to pay their premiums in installments.

The Company’s wholly-owned adjusting company receives claims-handling fees from the Insurance Entities. The Insurance Entities are reimbursed for these fees on claims that are subject to recovery under the Insurance Entities’ respective reinsurance programs. These fees, after expenses, are recorded in the Condensed Consolidated Financial Statements as an adjustment to losses and loss adjustment expense (“LAE”).

Basis of Presentation

The Company has prepared the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the Financial Statements do not include all of the information and footnotes required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) for annual financial statements. Therefore, the Financial Statements should be read in conjunction with the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2021, filed with the SEC on February ~~24, 2017.~~28, 2022. The ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheet at December 31, ~~2016,~~2021 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods do not necessarily indicate the results that may be expected for any other interim period or for the full year.

To conform to the current period presentation, certain amounts in the prior periods’ condensed consolidated financial statements and notes have been reclassified. Such reclassifications were of an immaterial amount and had no effect on net income or stockholders’ equity.

The Financial Statements include the accounts of ~~UVE~~the Company and its wholly-owned ~~subsidiaries.~~subsidiaries, as well as variable interest entities (“VIE”) in which the Company is determined to be the primary beneficiary. All material intercompany balances and transactions have been eliminated in consolidation.

~~Management must~~

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts ~~reported in the Company’s Financial Statements~~of assets and ~~in disclosures~~liabilities and disclosure of contingent assets and ~~liabilities.~~liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s primary use of estimates is in the recognition of liabilities for unpaid losses, loss adjustment expenses, subrogation recoveries and reinsurance recoveries. Actual results could differ from those estimates.

Table of Contents

2. Significant Accounting Policies

The Company reported Significant Accounting Policies in its Annual Report on Form 10-K for the year ended December 31, ~~2016. The following are new or revised disclosures or disclosures required on a quarterly basis.~~

~~Recently Adopted Accounting Pronouncements~~

~~In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies several aspects~~2021.

Table of the accounting for share-based payment transactions. The new guidance requires excess income tax benefits (windfalls) and deficiencies (shortfalls) to be recognized in the income statement as income tax benefits or charges when the awards vest or are settled. The former guidance required the recognition of excess tax benefits or deficiencies in stockholders’ equity. In addition, all income tax-related cash flows resulting from share-based payments will be reported as operating activities in the statement of cash flows under the new guidance. The guidance also allows us to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting; clarifies that all cash payments for tax withholdings made on an employee’s behalf should be presented as a financing activity on the Company’s statement of cash flows; and provides an accounting policy election to account for forfeitures as they occur. The guidance is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company adopted this guidance effective January 1, 2017.

The adoption of the new standard resulted in the recognition of excess tax benefit of $0.8 million reflected in the Company’s Condensed Consolidated Statements of Income as an income tax benefit for the nine months ended September 30, 2017. Additionally, excess tax benefits on the Company’s Condensed Consolidated Statement of Cash Flows are presented as an operating activity on a prospective basis. The presentation requirement for cash flows related to employee taxes paid for withheld shares did not impact any of the periods presented in the Company’s Condensed Consolidated Statement of Cash Flows since these cash flows have historically been presented as a financing activity. The Company will continue to account for forfeitures as they occur. The standard also modifies the calculation of dilutive earnings per share to no longer use proceeds from tax benefits or deficiencies.

Contents

3. Investments

Available-for-Sale Securities ~~Available for Sale~~

The following table provides the ~~cost or~~ amortized cost and fair value of available-for-sale debt securities ~~available for sale~~ as of the dates presented (in thousands):

	September 30, 2017
	Cost or		Gross		Gross						March 31, 2022
	Amortized		Unrealized		Unrealized						Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Cost		Gains		Losses			Fair Value
Fixed Maturities:
Debt Securities:										Debt Securities:
U.S. government obligations and agencies	$	55,519	$	21	$	(524	)	$	55,016	U.S. government obligations and agencies	$	22,380	$	—	$	—	$	(719)	$	21,661
Corporate bonds		215,455		883		(507	)		215,831	Corporate bonds	722,680		(456)		111		(52,427)		669,908
Mortgage-backed and asset-backed securities		219,321		110		(1,333	)		218,098	Mortgage-backed and asset-backed securities	323,684		—		38		(22,200)		301,522
Municipal bonds		106,926		706		(1,342	)		106,290	Municipal bonds	14,924		—		—		(1,405)		13,519
Redeemable preferred stock		13,336		631		(23	)		13,944	Redeemable preferred stock	8,770		(116)		—		(587)		8,067
Equity Securities:
Common stock		5,992		—		(309	)		5,683
Mutual funds		22,316		143		(2,067	)		20,392
Total	$	638,865	$	2,494	$	(6,105	)	$	635,254	Total	$	1,092,438	$	(572)	$	149	$	(77,338)	$	1,014,677

December 31, 2016

Cost or

Gross

Gross

Amortized

Unrealized

Unrealized

Cost

Gains

Losses

Fair Value

Fixed Maturities:

U.S. government obligations and agencies
$
74,937

$
—

$
(670
)

$
74,267

Corporate bonds

192,328

402

(1,300
)

191,430

Mortgage-backed and asset-backed securities

216,679

135

(2,038
)

214,776

Municipal bonds

94,794

130

(3,727
)

91,197

Redeemable preferred stock

12,723

125

(157
)

12,691

Equity Securities:

Common stock

214

—

(121
)

93

Mutual funds

53,900

407

(3,597
)

50,710

Short-term investments

5,000

2

—

5,002

Total
$
650,575

$
1,201

$
(11,610
)

$
640,166


	December 31, 2021
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt Securities:
U.S. government obligations and agencies	$	27,076	$	—	$	64	$	(334)	$	26,806
Corporate bonds	687,058		(371)		843		(13,725)		673,805
Mortgage-backed and asset-backed securities	322,844		—		194		(6,920)		316,118
Municipal bonds	14,925		(1)		—		(350)		14,574
Redeemable preferred stock	9,289		(117)		28		(48)		9,152
Total	$	1,061,192	$	(489)	$	1,129	$	(21,377)	$	1,040,455

The following table provides the credit quality of ~~investment~~available-for-sale debt securities with contractual maturities ~~or the issuer of such securities~~ as of the dates presented ~~(in~~(dollars in thousands):

	September 30, 2017					December 31, 2016
			% of Total					% of Total				March 31, 2022				December 31, 2021
Comparable Ratings	Fair Value		Fair Value			Fair Value		Fair Value
Average Credit Ratings											Average Credit Ratings	Fair Value		% of Total Fair Value		Fair Value		% of Total Fair Value
AAA	$	130,119		21.4	%	$	131,260		22.3	%	AAA	$	309,960	30.5	%	$	321,975	31.0	%
AA		268,056		44.0	%		275,480		46.7	%	AA	139,554		13.8	%	139,186		13.4	%
A		122,808		20.2	%		107,418		18.2	%	A	330,751		32.6	%	339,500		32.6	%
BBB		79,950		13.1	%		67,263		11.4	%	BBB	227,901		22.5	%	234,358		22.5	%
BB+ and Below		3,738		0.6	%		3,444		0.6	%

No Rating Available		4,508		0.7	%		4,498		0.8	%	No Rating Available	6,511		0.6	%	5,436		0.5	%
Total	$	609,179		100.0	%	$	589,363		100.0	%	Total	$	1,014,677	100.0	%	$	1,040,455	100.0	%

The ~~tables~~table above ~~include comparable~~includes credit quality ratings by Standard and Poor’s Rating Services, Inc. (“S&P”), Moody’s Investors Service, Inc. and Fitch Ratings, Inc.

The Company has presented the highest rating of the three rating agencies for each investment position.

Table of Contents

The following table summarizes the ~~cost or~~ amortized cost and fair value of mortgage-backed and asset-backed securities as of the dates presented (in thousands):

	September 30, 2017				December 31, 2016
	Cost or				Cost or					March 31, 2022				December 31, 2021
	Amortized				Amortized					Amortized Cost		Fair Value		Amortized Cost		Fair Value
	Cost		Fair Value		Cost		Fair Value
Mortgage-backed Securities:
Mortgage-backed securities:									Mortgage-backed securities:
Agency	$	119,469	$	118,387	$	110,724	$	109,022	Agency	$	146,674	$	134,111	$	147,992	$	143,819
Non-agency		15,418		15,334		19,408		19,265	Non-agency	60,719		55,096		59,906		58,263
Asset-backed Securities:
Asset-backed securities:									Asset-backed securities:
Auto loan receivables		36,989		36,959		37,390		37,429	Auto loan receivables	68,485		66,410		67,352		66,877
Credit card receivables		35,869		35,846		38,640		38,568	Credit card receivables	4,711		4,668		4,741		4,719
Other receivables		11,576		11,572		10,517		10,492	Other receivables	43,095		41,237		42,853		42,440
Total	$	219,321	$	218,098	$	216,679	$	214,776	Total	$	323,684	$	301,522	$	322,844	$	316,118

The following table presents ratings from rating agencies and the unsecured amounts due from the ~~Company’s~~ reinsurers whose aggregate balance exceeded 3% of the Company’s stockholders’ equity as of the dates presented (in thousands):

Ratings as of September 30, 2017

Due from as of

Standard

and Poor's

Moody's

AM Best

Rating

Investors

September 30,

December 31,

Reinsurer

Company

Services

Service, Inc.

2017

2016

Allianz Risk Transfer

A+

AA-

n/a

$
186,479

$
—

AXIS Specialty Limited

A+

A+

A2

16,929

—

Everest Reinsurance Company

A+

A+

A1

63,104

—

Florida Hurricane Catastrophe Fund (1)

n/a

n/a

n/a

—

46,364

Renaissance Reinsurance Ltd

A+

AA-

A1

30,604

—

Total (2)

$
297,116

$
46,364

~~(1)~~

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

~~(2)~~

Amounts represent prepaid reinsurance premiums, reinsurance receivables, net recoverables for paid and unpaid losses, including incurred but not reported reserves, loss adjustment expenses, and offsetting reinsurance payables.

Ratings as of March 31, 2022

Due from as of

Reinsurer

AM Best
Company

Standard
and Poor’s
Rating
Services, Inc.

Moody’s
Investors Service, Inc.

March 31, 2022

December 31, 2021

Florida Hurricane Catastrophe Fund (1)

n/a

49,707

136,298

Allianz Risk Transfer

A+

AA-

Aa3

45,579

—

Allianz Risk Transfer (Bermuda) Ltd.

A+

AA-

Aa3

25,724

44,618

Renaissance Reinsurance Ltd.

A+

12,075

20,051

Total (2)

133,085

200,967

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

(2)Amounts represent prepaid reinsurance premiums and net recoverables for paid and unpaid losses, including incurred but not reported reserves, and loss adjustment expenses.

The Company’s reinsurance arrangements had the following effect on certain items in the Condensed Consolidated Statements of Income for the periods presented (in thousands):

Three Months Ended September 30,

2017

2016

Losses and Loss

Losses and Loss

Premiums

Premiums

Adjustment

Premiums

Premiums

Adjustment

Written

Earned

Expenses

Written

Earned

Expenses

Direct
$
274,744

$
254,809

$
531,268

$
241,888

$
234,500

$
73,487

Ceded

(7,303
)

(80,292
)

(414,893
)

(151,432
)

(74,966
)

61

Net
$
267,441

$
174,517

$
116,375

$
90,456

$
159,534

$
73,548



	Three Months Ended March 31,
	2022						2021
	Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses		Premiums Written		Premiums Earned		Losses and Loss Adjustment Expenses
Direct	$	396,481	$	414,603	$	195,155	$	365,314	$	375,606	$	237,298
Ceded	(13,946)		(145,539)		(10,049)		(16,800)		(132,301)		(93,335)
Net	$	382,535	$	269,064	$	185,106	$	348,514	$	243,305	$	143,963

Nine Months Ended September 30,

2017

2016

Losses and Loss

Losses and Loss

Premiums

Premiums

Adjustment

Premiums

Premiums

Adjustment

Written

Earned

Expenses

Written

Earned

Expenses

Direct
$
816,350

$
735,807

$
687,707

$
741,782

$
682,571

$
198,069

Ceded

(318,827
)

(230,722
)

(420,578
)

(298,365
)

(214,128
)

1,680

Net
$
497,523

$
505,085

$
267,129

$
443,417

$
468,443

$
199,749

The following prepaid reinsurance premiums and reinsurance recoverable ~~(payable) and receivable~~ are reflected in the Condensed Consolidated Balance Sheets as of the dates presented (in thousands):

~~Our annual~~loss. Quota-share reinsurance ~~program, which~~ is ~~segmented into layers~~where the primary insurer and the reinsurer share proportionally or pro-rata in the direct premiums and losses of ~~coverage, as is industry practice, protects us against~~the insurer. Excess-of-loss reinsurance indemnifies the direct insurer or reinsurer for all or a portion of the loss in excess ~~property catastrophe losses. Our 2017-2018~~of an agreed upon amount or retention.

~~Above the first layer, for losses exceeding $90 million, we have purchased a second layer~~•Specific 3rd and 4th event private market catastrophe excess of loss coverage ~~for losses up to $445 million – in other words, for the next $355 million~~ of ~~losses. This coverage has been obtained from two contracts as follows:~~

~~For the three months ended September 30, 2017, general and administrative expenses were $57.3 million, compared to $54.7~~Income tax expense was $4.9 million for the ~~same period in 2016. The increase in general and administrative costs~~quarter ended March 31, 2022 compared to an income tax expense of ~~$2.6~~$9.9 million ~~was~~for the result of increases in acquisition costs of $3.1 million due to increased premium volume. The increases were, offset by decreases in other operating costs of $0.5 million due to a decrease in performance bonuses, consulting fees and a reduction in amounts spent on insurance swap contracts which was offset by an increase in stock-based compensation. Overall, the expense ratio (general and administrative expenses as a percentage of net earned premiums) benefited from economies of scale as general and administrative expenses did not increase at the samequarter ended March 31, 2021. Our effective tax rate ~~as revenues. As a result, the expense ratio as a percentage of net earnings~~(“ETR”) decreased to ~~32.8%~~22.0% for the three months ended ~~September 30, 2017~~March 31, 2022, as compared to ~~34.3% for the same period in 2016.~~

~~Income tax expense decreased by $10.6 million, or 61.6%,~~27.4% for the three months ended ~~September 30, 2017, when compared with the three months ended September 30, 2016.~~March 31, 2021. The ~~decrease in income tax is primarily the~~ETR decreased as a result of a ~~decrease in~~lower ratio of permanent items relative to the amount of income before taxes, principally non-deductible compensation, and a higher level of discrete tax benefits primarily due an increase in the Florida corporate income ~~taxes. The effective~~ tax rate ~~increased slightly to 40.0% for the three months ended September 30, 2017 as compared to 39.1% for the three months ended September 30, 2016.~~

Other comprehensive ~~income,~~loss, net of taxes for the three months ended ~~September 30, 2017~~March 31, 2022, was ~~$0.3~~$42.9 million compared to aother comprehensive loss of ~~$0.5~~$16.9 million for the same period in ~~2016. Other comprehensive income (loss)~~ ~~represents after tax~~2021, reflecting after-tax changes ~~to equity which are not recognized~~ in ~~net income, including changes in the~~ fair value of available-for-sale debt securities ~~available for sale~~ held in our investment portfolio and ~~any~~ reclassifications out of ~~cumulative~~accumulated other comprehensive income for available-for-sale debt securities sold. See “Item ~~1 —~~ 1—Note 11 (Other Comprehensive Income (Loss)).”

~~Results of Operations—Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Net income decreased by $15.2 million, or 17.7%, to $70.5 million for the nine months ended September 30, 2017, compared to $85.7 million for the nine months ended September 30, 2016.~~ The decrease in net income was primarily the result of $37 million of net pre-tax storm losses incurred as a result of Hurricane Irma. Total premiums earned and other revenues increased by $43.9 million or 8.7% over the prior year these revenues were offset by total operating costs and expenses, which increased by $72.2 million, or 19.7% over the prior year. Expenses for the nine months ended September 30, 2017, include losses and LAE of $37 million net for Hurricane Irma and an increase to the Company’s core loss ratio for accident year 2017. Diluted earnings per common share decreased by $0.45 to $1.96 for the nine months ended September 30, 2017, compared to $2.41 for the nine months ended September 30, 2016, as a result of the decrease in net income. A more detailed discussion of this and other factors follows the table below.

(in thousands)

Nine Months Ended

September 30,

Change

2017

2016

$

%

PREMIUMS EARNED AND OTHER REVENUES

Direct premiums written
$
816,350

$
741,782

$
74,568

10.1
%
Change in unearned premium

(80,543
)

(59,211
)

(21,332
)

36.0
%
Direct premium earned

735,807

682,571

53,236

7.8
%
Ceded premium earned

(230,722
)

(214,128
)

(16,594
)

7.7
%
Premiums earned, net

505,085

468,443

36,642

7.8
%
Net investment income (expense)

9,012

6,051

2,961

48.9
%
Net realized gains (losses) on investments

2,450

1,344

1,106

82.3
%
Commission revenue

14,546

12,927

1,619

12.5
%
Policy fees

14,594

13,093

1,501

11.5
%
Other revenue

4,917

4,827

90

1.9
%
Total premiums earned and other revenues

550,604

506,685

43,919

8.7
%
OPERATING COSTS AND EXPENSES

Losses and loss adjustment expenses

267,129

199,749

67,380

33.7
%
General and administrative expenses

171,582

166,780

4,802

2.9
%
Total operating costs and expenses

438,711

366,529

72,182

19.7
%
INCOME BEFORE INCOME TAXES

111,893

140,156

(28,263
)

-20.2
%
Income tax expense

41,354

54,400

(13,046
)

-24.0
%
NET INCOME
$
70,539

$
85,756

$
(15,217
)

-17.7
%
Other comprehensive income, net of taxes

4,201

5,631

(1,430
)

-25.4
%
COMPREHENSIVE INCOME
$
74,740

$
91,387

$
(16,647
)

-18.2
%

~~For the nine months ended September 30, 2017, our growth in written premium in both Florida increased 6.8% to $718.2 million and in states outside Florida increased 41.7% to $98.2 million.~~ Premiums earned, net in the current period reflect premiums written over the past 12 months and any changes in rates or policy count during that time. Premiums earned, net were $505.1 million for the nine months ended September 30, 2017, compared to $468.4 million for the nine months ended September 30, 2016. The increase in net earned premiums of $36.6 million, or 7.8%, includes an increase in direct earned premiums of $53.2 million and an increase in ceded earned premiums of $16.6 million. Direct written premiums increased $74.6 million, or 10.1%, which consisted of an increase in Florida business of $45.7 million, or 6.8% over the prior year, and an increase in other states business of $28.9 million, or 41.7%, over the same period in 2016. In each state the Company writes business, direct premiums increased month over month during 2017 as compared to 2016. At September 30, 2017, direct premium in-force was $1.035 billion versus $945 million at September 30, 2016.

Our reinsurance programs run from June 1 to May 31 of the following year. Ceded premium earned was $230.7 million for the nine months ended September 30, 2017, compared to $214.1 million for the nine months ended September 30, 2016. The net increase in ceded earned premiums of $16.6 million is attributable to increased costs associated with our 2017/2018 reinsurance program. The increase in ceded premiums earned was due to increased ceded exposure from policy growth. In addition, during the third quarter of 2017 the Company recorded ceded written premium of $7.3 million to adjust the Company’s participation in the Florida Hurricane Catastrophe Fund of which $2.4 million was earned during the quarter as compared to an insignificant adjustment in 2016.

~~Net investment income was~~ ~~$9.0~~ million for the nine months ended September 30, 2017, compared to $6.0 million for the same nine months in 2016. The increase in net investment income of $3.0 million is the result of an increase in fixed maturities, favorable market trends and actions taken to increase yield by investing funds along with maturities in higher yielding securities while maintaining high credit quality. Total average investments were $651.7 million with an average credit rating of AA- during the nine months ended September 30, 2017 compared to $576.1 million with an average credit rating of AA- for the same period in 2016.

We sell investment securities from our portfolio of securities available for sale from time to time when opportunities arise or circumstances could result in greater losses if held. We sold investment securities available for sale during the nine months ended September 30, 2017 generating net realized gains of $2.5 million compared to net realized gains of $1.3 million for the nine months ended September 30, 2016.

~~Commission revenue is comprised principally of brokerage commissions we earn from reinsurers~~ ~~on reinsurance placed for the Insurance Entities.~~ For the nine months ended September 30, 2017 commission revenue was $14.5 million, compared to $12.9 million for the nine months ended September 30, 2016. The increase in commission revenue of $1.6 million, or 12.5%, for the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016 was the result of overall changes in the structure of the reinsurance programs in effect, the amount of premiums paid for reinsurance on our growing exposures and the types of reinsurance contracts used in each program.

Policy fees for the nine months ended September 30, 2017, were $14.6 million as compared to $13.1 million for the same period in 2016. The increase of $1.5 million, or 11.5%, was the result of an increase in the number of policies written during the nine months ended September 30, 2017 compared to the same period in 2016.

Other revenue for the nine months ended September 30, 2017 was $4.9 million and for the same period in 2016 was $4.8 million. Other revenue represents revenue from premium financing and other miscellaneous income. The increase of $90 thousand, or 1.9%, was the result of an increase in the number of financed policies.

~~Losses and LAE, net of reinsurance were $267.1 million for the nine months ended September 30, 2017, compared to $199.7 million during the same period in 2016 as follows (dollars in thousands):~~

Nine Months Ended September 30, 2017

Direct

Loss Ratio

Ceded

Loss Ratio

Net

Loss Ratio

Premiums earned
$
735,807

$
230,722

$
505,085

Loss and loss adjustment expenses:

Hurricane Irma losses and loss adjustment
expenses
$
452,000

61.4
%

$
415,000

179.9
%

$
37,000

7.3
%
All other losses and loss adjustment
expenses

235,707

32.0
%

5,578

2.4
%

230,129

45.6
%
Total losses and loss adjustment expenses
$
687,707

93.4
%

$
420,578

182.3
%

$
267,129

52.9
%

Nine Months Ended September 30, 2016

Direct

Loss Ratio

Ceded

Loss Ratio

Net

Loss Ratio

Premiums earned
$
682,571

$
214,128

$
468,443

Total losses and loss adjustment expenses
$
198,069

29.0
%

$
(1,680
)

(0.8
%)

$
199,749

42.6
%

~~See “Item 1 — Note 6 (Liability for Unpaid Losses and Loss Adjustment Expenses)~~” for ~~change in liability for unpaid losses and LAE.~~

~~During~~additional information about the nine months ended September 30, 2017 the Company recorded gross losses and LAE of $452.0 million resulting from Hurricane Irma. The Company’s reinsurance program limited losses from Hurricane Irma to $37 million adding 7.3 percentage points to the net losses and LAE ratio for the nine-month period ended September 30, 2017. Under the Company’s reinsurance program UPCIC cedes losses and LAE greater than $35 million in all states up to a maximum of $2.71 billion and APPCIC cedes all losses and LAE greater than $2 million up to a maximum amount of $27.6 million. The Company’s reinsurance protection performed as expected by reducing the net loss and LAE exposure to the maximum retained limits, as stated above, and will provide full reinsurance capacity of $2.71 billion for UPCIC and $27.6 million for APPCIC for the remainder of the 2017/2018 hurricane season. See ~~UPCIC’s and APPCIC’s 2017-2018 Reinsurance Program~~ ~~for a discussion of the Company’s reinsurance program.~~

~~All~~amounts comprising other net losses and LAE, net was $230.1 million for the nine months ended September 30, 2017, compared to $199.7 million during the same period in 2016. The increase reflects general growth and an increase in the underlying losses and LAE ratio of 3.0 percentage points.

The trend in the Company’s underlying losses and LAE ratio presented in the table above reflects continued geographic expansion into states outside of Florida where non-catastrophe loss ratios are generally higher than in Florida and the marketplace dynamics inside of Florida including challenges faced by insurers when policyholders assign benefits underlying their policies to third parties.

~~General and administrative expenses were $171.6 million for the nine months ended September 30, 2017, compared to $166.8 million during the same period in 2016 as follows (dollars in thousands):~~

Nine Months Ended

September 30,

Change

2017

2016

$

%

$

Ratio

$

Ratio

Premiums earned, net
$
505,085

$
468,443

$
36,642

7.8
%
General and administrative expenses:

Policy acquisition costs

100,754

20.0
%

92,455

19.7
%

8,299

9.0
%
Other operating costs

70,828

14.0
%

74,325

15.9
%

(3,497
)

(4.7
%)
Total general and administrative expenses
$
171,582

34.0
%

$
166,780

35.6
%

$
4,802

2.9
%

For the nine months ended September 30, 2017, general and administrative expenses were $171.6 million, compared to $166.8 million for the same period in 2016. The net increase in total general and administrative expenses of $4.8 million was the result of increases in acquisition costs of $8.3 million, due to increased premium volume, offset by a net decrease in other operating costs of $3.5 million, due to a reduction in stock-based compensation, a reduction in amounts spent on insurance swap contracts and lower consulting and legal fees, partially offset by increases in advertising to promote growth within and outside Florida. Overall, the expense ratio (general and administrative expenses as a percentage of net earned premiums) benefited from economies of scale as general and administrative expenses did not increase at the same rate as revenues. As a result, the expense ratio as a percentage of net earnings decreased to 34.0% for the nine months ended September 30, 2017 compared to 35.6% for the same period in 2016.

~~Income tax expense for the nine months ended September 30, 2017 decreased by $13.0 million, or 24.0%, when compared to the nine months ended September 30, 2017, primarily as a result of a decrease in~~comprehensive income ~~before income taxes, offset by the benefit derived from two discrete items.~~ The first was a credit to income tax expense of $0.8 million for excess tax benefits resulting from stock-based awards that vested and/or were exercised during the nine months ended September 30, 2017. This credit to income tax expense represents the application of a new accounting pronouncement. Prior to 2017, excess benefits were recorded in stockholders’ equity. The other discrete item is a credit to income tax expense of $1.2 million resulting from anticipated recoveries of income taxes paid for the 2014-2015 tax years. Collectively, these discrete items, lowered our effective tax rate to ~~37.0%~~ ~~for the nine months ended September 30, 2017~~ ~~as compared to 38.8% for the nine months ended nine months ended September 30, 2016.~~

~~Other comprehensive income,~~(loss), net of taxes for ~~the nine months ended September 30, 2017 was $4.2 million compared to $5.6 million for the same period in 2016. Other comprehensive income (loss)~~ ~~represents after tax changes to equity which are not recognized in net income, including changes in the fair value~~these periods.

Other liabilities and accrued expenses increased ~~$10.0~~by $16.4 million to $43.8 million as of March 31, 2022, primarily driven from an increase in unearned revenue and other liabilities due to the timing of payments.

The Insurance Entities are responsible for losses related to catastrophic events in excess of coverage provided by the Insurance Entities’ reinsurance programs and retentions before our reinsurance protection commences. Also, the Insurance Entities are responsible for all other losses that otherwise may not be covered by the reinsurance ~~programs.~~programs and any amounts arising in the event of a reinsurer default. Losses or a default by reinsurers may have a material adverse effect on either of the Insurance Entities, oron our business, financial condition, results of operations and liquidity.

The following table represents our ~~contractual obligations~~material cash requirements for which cash flows are fixed or determinable as of ~~September 30, 2017~~March 31, 2022 (in thousands):

Less than

Over

Total

1 year

1-3 years

3-5 years

5 years

Unpaid losses and LAE, direct (1)
$
440,443

$
281,884

$
127,288

$
22,903

$
8,368

Long-term debt

14,624

1,322

5,100

3,233

4,969

Total contractual obligations
$
455,067

$
283,206

$
132,388

$
26,136

$
13,337

~~(1)~~

There are generally no notional or stated amounts related to unpaid losses and LAE. Both the amounts and timing of future loss and LAE payments are estimates and subject to the inherent variability of legal and market conditions affecting the obligations and making the timing of cash outflows uncertain. The ultimate amount and timing of unpaid losses and LAE could differ materially from the amounts in the table above. Further, the unpaid losses and LAE do not represent all the obligations that will arise under the contracts, but rather only the estimated liability incurred through September 30, 2017.


	Total		Next 12 Months		Beyond 12 Months
Reinsurance payable and multi-year commitments (1)	$	303,658	$	92,893	$	210,765
Unpaid losses and LAE, direct (2)	244,482		137,888		106,594
Long-term debt (3)	134,981		7,188		127,793
Total material cash requirements	$	683,121	$	237,969	$	445,152

~~Critical Accounting Policies~~

(1)Amount represents the payment of reinsurance premiums payable under multi-year commitments. See “Item 1—Note 12 (Commitments and ~~Estimates~~

~~Other~~Contingencies).”

(2)There are generally no notional or stated amounts related to unpaid losses and LAE. Both the amounts and timing of future loss and LAE payments are estimates and subject to the inherent variability of legal and market conditions affecting the obligations and make the timing of cash outflows uncertain. The ultimate amount and timing of unpaid losses and LAE could differ materially from the amounts in the table above. Further, the unpaid losses and LAE do not represent all the obligations that will arise under the contracts, but rather only the estimated liability incurred through March 31, 2022. Unpaid losses and LAE are net of estimated subrogation recoveries. In addition, these balances exclude amounts recoverable from the Company’s reinsurance program. See “Item 1—Note 4 (Reinsurance).”

(3)Long-term debt consists of a Surplus note and 5.625% Senior unsecured notes. See “Item 1—Note 7 (Long-term debt).”

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in accordance with U.S. GAAP, which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. Our primary assets are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of the general levels of inflation. Interest rates do not necessarily move in the same direction or with the same magnitude as ~~disclosed~~the cost of paying losses and LAE.

Insurance premiums are established before we know the amount of loss and LAE and the extent to which inflation may affect such expenses. Consequently, we attempt to anticipate the future impact of inflation when establishing rate levels. While we attempt to charge adequate rates, we may be limited in raising premium levels for competitive and regulatory reasons. Inflation also affects the market value of our investment portfolio and the investment rate of return. Any future economic changes which result in prolonged and increasing levels of inflation could cause increases in the dollar amount of incurred loss and LAE and thereby materially adversely affect future liability requirements.

Arrangements with Variable Interest Entities

We entered into a reinsurance captive arrangement with a VIE in the normal course of business, and consolidated the VIE since we are the primary beneficiary.

For a further discussion of our involvement with the VIE, see “Item ~~1 —~~ 1—Note ~~2 (Significant Accounting Policies),~~14 (Variable Interest Entities).” ~~there~~

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to Critical Accounting Policies and Estimates previously disclosed in ~~Part~~“Part II, Item ~~7, “Management’s~~7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~Recent Accounting Pronouncements Not Yet Adopted~~

In March 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to amend the amortization period for certain purchased callable debt securities held at a premium. Current GAAP excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. Thus, the exercise of a call on a callable debt security held at a premium can result in the unamortized premium recorded at a loss in earnings. The guidance shortens the amortization period of certain purchased callable debt securities to the earliest call date. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Under the current guidance, you could consider the call dates and estimate if you had a large number of similar securities and you were basing your judgment on actual experience. Our service provider (who processes the accounting for our investment transactions) has many similar securities on their system and can make that type of determination. As a result, we currently account for the amortization under the proposed guidance and there will be no impact to our results of operations, financial position or liquidity.

In November 2016, the FASB issued guidance intended to reduce diversity in the classification and presentation of changes in restricted cash in the statement of cash flows. The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The balance of restricted cash is currently not material and is not expected to be material and we will comply with the new guidance requirements at the time of adoption. The adoption of this guidance will result in a change in the presentation only in the statement of cash flows and will impact our results of operations, financial position or liquidity.

In August 2016, the FASB issued guidance intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new guidance will apply to: 1) debt prepayment or debt extinguishment costs, 2) settlement of zero-coupon debt instruments, 3) contingent consideration payments made after business combination, 4) proceeds from the settlement of insurance claims, 5) proceeds from the settlement of corporate-owned life insurance policies, 6) distributions received from equity method investments, 7) beneficial interests in securitization transactions, and 8) separately identifiable cash flows and application of the predominance principle. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Historically, the items outlined above have not been applicable to the Company. Should they occur in the future, we will address them in accordance with the new guidance upon and subsequent to adoption.

In June 2016, the FASB issued guidance that introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance will apply to: 1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, 2) loan commitments and certain other off-balance sheet credit exposures, 3) debt securities and other financial assets measured at fair value through other comprehensive income, and 4) beneficial interests in securitized financial assets. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In January 2016, the FASB issued guidance on recognition and measurement of financial instruments. The new guidance requires certain equity investments to be measured at fair value with changes in fair value reported in earnings and requires changes in instrument-specific credit risk for financial liabilities recorded at fair value under the fair value option to be reported in other comprehensive income (“OCI”). The new guidance is effective for fiscal years beginning after December 15, 2017, with early adoption permitted for the provisions related to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in OCI. The adoption of this guidance will impact how we account for unrealized gains and losses for equity investments and may result in a change of presentation in the statement of cash flows and is expected to impact our results of operations.

2021.

I~~tem~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential for economic losses due to adverse changes in fair market value of ~~fixed maturities,~~available-for-sale debt securities, equity securities ~~and short-term investments~~ (“Financial Instruments”) and investment real estate. We carry all of our Financial Instruments at fair market value and investment real estate at net book value in our statement of financial condition. Our investment portfolio as of ~~September 30, 2017~~March

Table of Contents

31, 2022 is comprised of ~~fixed maturities~~available-for-sale debt securities and ~~equities,~~equity securities, carried at fair market value, which ~~thereby~~ expose us to ~~changes in~~changing market conditions, specifically interest rates and equity ~~prices.~~

price changes.

The primary objectives of the investment portfolio are the preservation of capital and providing adequate liquidity for ~~claims~~potential claim payments and other cash needs. The portfolio’s secondary investment objective is to provide a total rate of return with an emphasis on investment income. None of our investments in risk-sensitive Financial Instruments were entered into for trading purposes.

See “Item ~~1 –~~ 1—Note 3 (Investments)” for more information about our Financial Instruments.

Interest Rate Risk

Interest rate risk is the sensitivity of the fair market value of a ~~fixed-rate~~fixed rate Financial Instrument to changes in interest rates. ~~When~~Generally, when interest rates rise, the fair value of our ~~fixed-rate~~fixed rate Financial Instruments declines.

The following ~~table provides~~tables provide information about our fixed income Financial Instruments as of March 31, 2022 compared to December 31, 2021, which are sensitive to changes in interest rates. The ~~table presents~~tables present the expected cash flows of ~~principal amounts and related weighted average interest rates by expected maturity dates for fixed income~~ Financial Instruments ~~available for sale as of~~based on years to effective maturity using amortized cost compared to fair market value and the ~~dates presented (in~~related book yield compared to coupon yield (dollars in thousands):

September 30, 2017

Amortized Cost

Fair Value

2017

2018

2019

2020

2021

Thereafter

Other (1)

Total

Total

Fixed income Financial
    Instruments
$
5,063

$
45,502

$
84,654

$
57,499

$
59,236

$
125,946

$
232,657

$
610,557

$
609,179

Weighted average
    interest rate

2.10
%

2.36
%

1.95
%

2.16
%

2.19
%

4.16
%

3.06
%

2.90
%

2.90
%

December 31, 2016

Amortized Cost

Fair Value

2017

2018

2019

2020

2021

Thereafter

Other (1)

Total

Total

Fixed income Financial
    Instruments
$
48,919

$
46,183

$
84,855

$
41,500

$
57,071

$
88,861

$
229,072

$
596,461

$
589,363

Weighted average
    interest rate

2.03
%

2.41
%

1.87
%

2.15
%

2.26
%

4.53
%

2.96
%

2.79
%

2.78
%


	March 31, 2022
	2022			2023			2024			2025			2026			Thereafter			Other			Total
Amortized cost	$	53,698		$	108,807		$	76,740		$	161,321		$	157,207		$	532,773		$	1,892		$	1,092,438
Fair market value	$	53,176		$	105,853		$	73,191		$	150,461		$	145,919		$	484,364		$	1,713		$	1,014,677
Coupon rate	1.53		%	1.76		%	2.82		%	2.36		%	2.44		%	2.72		%	3.51		%	2.47		%
Book yield	0.58		%	0.76		%	1.03		%	1.17		%	1.43		%	1.84		%	3.52		%	1.46		%
* Years to effective maturity - 5.4 years

~~(1)~~

~~Comprised of mortgage-backed and asset-backed securities that have multiple maturity dates, and perpetual maturity securities, and are presented separately for~~
December 31, 2021
2022 2023 2024 2025 2026 Thereafter Other Total
Amortized cost $ 30,183 $ 97,826 $ 99,528 $ 152,982 $ 180,558 $ 499,417 $ 698 $ 1,061,192
Fair market value $ 30,163 $ 97,433 $ 98,751 $ 150,046 $ 176,711 $ 486,657 $ 694 $ 1,040,455
Coupon rate 1.34 % 1.82 % 2.23 % 2.62 % 2.65 % 2.59 % 3.53 % 2.46 %
Book yield 0.50 % 0.71 % 0.87 % 1.10 % 1.28 % 1.70 % 3.54 % 1.34 %
* Years to effective maturity - 5.4 years

All securities, except those with perpetual maturities, were categorized in the ~~purposes of this table.~~

~~The~~ tables above ~~represent average contract rates~~utilizing years to effective maturity. Effective maturity takes into consideration all forms of potential prepayment, such as call features or prepayment schedules, that ~~differ from~~shorten the ~~book yield~~lifespan of the fixed maturities. The fixed income Financial Instruments in our available for sale portfolio are comprised of United States government and agency securities, corporate bonds, redeemable preferred stock, mortgage-backed and asset-backed securities, municipal securities and certificates of deposit. Duration is a measure of interest rate sensitivity expressed as a number of years. The weighted average duration of the fixedcontractual maturity ~~Financial Instruments in our available for sale portfolio at September 30, 2017 was~~ ~~2.9~~ ~~years~~.

To a lesser extent, we also have exposure to interest on our debt obligation which is in the form of a surplus note. The surplus note accrues interest at an adjustable rate based on the 10-year Constant Maturity Treasury rate.

dates.

The following table provides information about the Financial Instruments in our ~~available for sale~~investment portfolio subject to price risk as of the dates presented (in thousands):


	March 31, 2022
	Less Than 12 Months					12 Months or Longer
	Number of Issues	Fair Value		Unrealized Losses		Number of Issues	Fair Value		Unrealized Losses
Debt Securities:
U.S. government obligations and agencies	2	$	11,549	$	(63)	5	$	10,112	$	(656)
Corporate bonds	188	253,022		(16,821)		95	118,710		(12,044)
Mortgage-backed and asset-backed securities	118	156,773		(7,653)		70	138,894		(14,547)
Municipal bonds	9	9,988		(932)		1	3,531		(473)
Redeemable preferred stock	4	1,270		(122)		—	—		—
Total	321	$	432,602	$	(25,591)	171	$	271,247	$	(27,720)

	September 30, 2017
	Cost or					March 31, 2022
	Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due in one year or less	$	42,233	$	42,233	Due in one year or less	$	53,698	$	53,176
Due after one year through five years		229,841		229,898	Due after one year through five years	504,075		475,424
Due after five years through ten years		47,716		47,879	Due after five years through ten years	501,063		455,448
Due after ten years		58,110		57,127	Due after ten years	31,710		28,916
Mortgage-backed and asset-backed securities		219,321		218,098
Perpetual maturity securities		13,336		13,944	Perpetual maturity securities	1,892		1,713
Total	$	610,557	$	609,179	Total	$	1,092,438	$	1,014,677


								March 31,		December 31,
	September 30, 2017			December 31, 2016				2022		2021
Income Producing:							Income Producing:
Investment real estate	$	6,918		$	6,918		Investment real estate	$	7,091	$	7,091
Less: Accumulated depreciation		(415	)		(281	)	Less: Accumulated depreciation	(1,246)		(1,200)
Investment real estate, net							Investment real estate, net	$	5,845	$	5,891
		6,503			6,637
Non-Income Producing:
Properties under development		9,821			4,798
Investment real estate, net	$	16,324		$	11,435

	Three Months Ended						Nine Months Ended
	September 30,						September 30,							Three Months Ended March 31,
	2017			2016			2017			2016					2022		2021
DPAC, beginning of period	$	73,591		$	67,190		$	64,912		$	60,019		DPAC, beginning of period		$	108,822	$	110,614
Capitalized Costs		36,999			33,227			110,653			100,444		Capitalized Costs		49,199		54,722
Amortization of DPAC		(34,656	)		(32,117	)		(99,631	)		(92,163	)	Amortization of DPAC		(54,399)		(54,143)
DPAC, end of period	$	75,934		$	68,300		$	75,934		$	68,300		DPAC, end of period		$	103,622	$	111,193

	September 30,		December 31,
	2017		2016				March 31, 2022				December 31, 2021
Statutory capital and surplus					Statutory capital and surplus
UPCIC (1) (2)					UPCIC (1) (2)		$	389,248			$	378,750
APPCIC(3)					$	18,539			$	16,104
Ten percent of total liabilities					Ten percent of total liabilities
UPCIC	$	82,923	$	57,560	UPCIC		$	114,748			$	122,292
APPCIC(3)	$	655	$	464
Statutory capital and surplus
UPCIC	$	319,304	$	313,753
APPCIC	$	16,389	$	17,280	APPCIC		$	1,191			$	649

	Nine Months Ended September 30,
	2017			2016
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	286,195		$	178,637
Cash flows from investing activities:
Proceeds from sale of property and equipment		17			31
Purchases of property and equipment		(3,655	)		(6,041	)
Purchases of equity securities		(47,070	)		(46,414	)
Purchases of fixed maturities		(114,593	)		(278,961	)
Purchases of investment real estate, net		(5,023	)		(4,400	)
Proceeds from sales of equity securities		75,027			46,819
Proceeds from sales of fixed maturities		19,643			78,966
Maturities of fixed maturities		75,770			38,111
Maturities of short-term investments		5,000			25,000
Net cash provided by (used in) investing activities		5,116			(146,889	)
Cash flows from financing activities:
Preferred stock dividend		(8	)		(7	)
Common stock dividend		(9,803	)		(9,828	)
Purchase of treasury stock		(17,884	)		(8,415	)
Sale of treasury stock		—			2,965
Payments related to tax withholding for share-based compensation		(1,367	)		(4,905	)
Excess tax benefits (shortfall) from share-based compensation		—			(1,563	)
Repayment of debt		(1,803	)		(1,768	)
Net cash provided by (used in) financing activities		(30,865	)		(23,521	)
Net increase (decrease) in cash and cash equivalents		260,446			8,227
Cash and cash equivalents at beginning of period		105,730			197,014
Cash and cash equivalents at end of period	$	366,176		$	205,241


	Corporate Bonds		Municipal Bonds		Redeemable Preferred Stock		Total
Balance, December 31, 2020	$	148	$	—	$	38	$	186

Provision for (or reversal of) credit loss expense	223		1		79		303
Balance, December 31, 2021	371		1		117		489
Provision for (or reversal of) credit loss expense	85		(1)		(1)		83
Balance, March 31, 2022	$	456	$	—	$	116	$	572


(1)						During the first quarter of 2021, the Company completed the sale of a non-income producing investment real estate property. The Company received net cash proceeds of approximately $2.6 million and recognized a pre-tax gain of approximately $0.4 million that is included in net realized gains (losses) on investments in the Condensed Consolidated Statements of Income for the three months ended March 31, 2021.

~~(1)~~
(1)						Includes interest earned on ~~cash and cash equivalents and~~ restricted cash and cash equivalents. ~~Also includes~~
(2)						Includes investment income earned on real estate investments.

	Three Months Ended September 30,
	2017									2016
							Losses and Loss									Losses and Loss
	Premiums			Premiums			Adjustment			Premiums			Premiums			Adjustment
	Written			Earned			Expenses			Written			Earned			Expenses
Direct	$	274,744		$	254,809		$	531,268		$	241,888		$	234,500		$	73,487
Ceded		(7,303	)		(80,292	)		(414,893	)		(151,432	)		(74,966	)		61
Net	$	267,441		$	174,517		$	116,375		$	90,456		$	159,534		$	73,548


(1)			At March 31, 2022, statutory capital and surplus for UPCIC included a $20 million Subordinated Surplus Debenture (“Surplus Debenture”) funded in March 2022 by UVE through PSI, the Insurance Entities’ parent company, which is a component of surplus under statutory accounting principles and a liability under U.S. GAAP. The carrying amount of the Surplus Debenture included in the statutory capital and surplus of UPCIC is $130 million as of March 31, 2022.

(2)			At December 31, 2021, statutory capital and surplus for UPCIC included a $20 million Surplus Debenture funded in October 2021 by UVE through PSI, the Insurance Entities’ parent company, which is a component of surplus under statutory accounting principles and a liability under U.S. GAAP. In addition, capital and surplus included a contribution of $90 million Surplus Debenture funded in February 2022 which was not recognized on a U.S. GAAP basis as of December 31, 2021. The carrying amount of the Surplus Debenture included in the statutory capital and surplus of UPCIC is $110 million as of December 31, 2021.

(3)			At March 31, 2022, statutory capital and surplus for APPCIC included a $3 million Surplus Debenture funded in March 2022 by UVE through PSI, the Insurance Entities’ parent company, which is a component of surplus under statutory accounting principles and a liability under U.S. GAAP. The carrying amount of the Surplus Debenture included in the statutory capital and surplus of APPCIC is $3 million as of March 31, 2022.

	Issued			Treasury			Outstanding
	Shares			Shares			Shares
Balance, as of December 31, 2016		45,324			(10,272	)		35,052
Shares repurchased		—			(761	)		(761	)
Vesting of performance share units		115			—			115
Stock option exercises		71			—			71
Common stock issued		26			—			26
Shares acquired through cashless exercise (1)		—			(63	)		(63	)
Shares cancelled		(63	)		63			—
Balance, as of September 30, 2017		45,473			(11,033	)		34,440



				Total Number of Shares				Average
				Repurchased During the		Aggregate		Price Per
		Dollar Amount		Three Months Ended March 31,		Purchase		Share
Date Authorized	Expiration Date	Authorized		2022	2021	Price		Repurchased		Plan Completed
November 3, 2020	November 3, 2022	$	20,000	320,528	—	$	3,879	$	12.10
November 3, 2020	November 3, 2022	$	20,000	—	15,444	$	245	$	15.87

~~(1)~~
(1)						Represents the dilutive effect of unexercised stock options, unvested ~~Restricted Stock,~~performance share units, unvested ~~Performance Share Units~~restricted stock units and ~~unexercised Stock Options.~~ unvested restricted stock.

	Amounts Reclassified from Accumulated
	Other Comprehensive Income (Loss)
Details about Accumulated Other	Three Months Ended September 30,						Nine Months Ended September 30,						Affected Line Item in the Statement
Comprehensive Income (Loss) Components	2017			2016			2017			2016			Where Net Income is Presented
Unrealized gains (losses) on investments available for sale
	$	803		$	101		$	2,450		$	1,344		Net realized gains (losses) on investments
		(308	)		(39	)		(938	)		(513	)	Income taxes
	$	495		$	62		$	1,512		$	831		Net of tax


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,
		2022		2021
Unrealized gains (losses) on available-for-sale debt securities
		$	(264)	$	(202)	Net realized gains (losses) on sale of securities
		65		48		Income taxes
Total reclassification for the period		$	(199)	$	(154)	Net of tax

	Fair Value Measurements
	September 30, 2017									Fair Value Measurements
	Level 1		Level 2		Level 3		Total			March 31, 2022
Fixed Maturities:
										Level 1		Level 2		Level 3		Total
Available-For-Sale Debt Securities:									Available-For-Sale Debt Securities:
U.S. government obligations and agencies	$	—	$	55,016	$	—	$	55,016	U.S. government obligations and agencies	$	—	$	21,661	$	—	$	21,661
Corporate bonds		—		215,831		—		215,831	Corporate bonds	—		669,908		—		669,908
Mortgage-backed and asset-backed securities		—		218,098		—		218,098	Mortgage-backed and asset-backed securities	—		301,522		—		301,522
Municipal bonds		—		106,290		—		106,290	Municipal bonds	—		13,519		—		13,519
Redeemable preferred stock		—		13,944		—		13,944	Redeemable preferred stock	—		8,067		—		8,067
Equity Securities:									Equity Securities:
Common stock		5,683		—		—		5,683	Common stock	4,617		—		—		4,617
Mutual funds		20,392		—		—		20,392	Mutual funds	60,509		—		—		60,509
Total assets accounted for at fair value	$	26,075	$	609,179	$	—	$	635,254	Total assets accounted for at fair value	$	65,126	$	1,014,677	$	—	$	1,079,803

	September 30, 2017				December 31, 2016
			(Level 3)				(Level 3)
			Estimated Fair				Estimated Fair
	Carrying Value		Value		Carrying Value		Value
Liabilities (debt):
Surplus note	$	13,235	$	11,949	$	14,338	$	13,282
Promissory note	$	—	$	—	$	690	$	690

	For the Three Months Ended
	September 30, 2017					September 30, 2016					Growth year over year
State	Direct Written Premium		%			Direct Written Premium		%			$		%
Florida	$	238,309		86.7	%	$	215,634		89.1	%	$	22,675		10.5	%
Other states		36,435		13.3	%		26,254		10.9	%		10,181		38.8	%
Total	$	274,744		100.0	%	$	241,888		100.0	%	$	32,856		13.6	%

	For the Nine Months Ended
	September 30, 2017					September 30, 2016					Growth year over year
State	Direct Written Premium		%			Direct Written Premium		%			$		%
Florida	$	718,177		88.0	%	$	672,477		90.7	%	$	45,700		6.8	%
Other states		98,173		12.0	%		69,305		9.3	%		28,868		41.7	%
Total	$	816,350		100.0	%	$	741,782		100.0	%	$	74,568		10.1	%


	Three Months Ended March 31,				Change
	2022		2021		$		%
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written	$	396,481	$	365,314	$	31,167	8.5	%
Change in unearned premium	18,122		10,292		7,830		76.1	%
Direct premium earned	414,603		375,606		38,997		10.4	%
Ceded premium earned	(145,539)		(132,301)		(13,238)		10.0	%
Premiums earned, net	269,064		243,305		25,759		10.6	%
Net investment income	4,042		2,986		1,056		35.4	%
Net realized gains (losses) on investments	58		542		(484)		(89.3)	%
Net change in unrealized gains (losses) of equity securities	(3,396)		(494)		(2,902)		587.4	%
Commission revenue	11,161		9,126		2,035		22.3	%
Policy fees	4,779		5,387		(608)		(11.3)	%
Other revenue	1,774		1,905		(131)		(6.9)	%
Total premiums earned and other revenues	287,482		262,757		24,725		9.4	%
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses	185,106		143,963		41,143		28.6	%
General and administrative expenses	78,297		82,423		(4,126)		(5.0)	%
Total operating costs and expenses	263,403		226,386		37,017		16.4	%
Interest and amortization of debt issuance costs	1,608		20		1,588		7,940.0	%

INCOME (LOSS) BEFORE INCOME TAXES	22,471		36,351		(13,880)		(38.2)	%
Income tax expense (benefit)	4,934		9,943		(5,009)		(50.4)	%
NET INCOME (LOSS)	$	17,537	$	26,408	$	(8,871)	(33.6)	%
Other comprehensive income (loss), net of taxes	(42,910)		(16,910)		(26,000)		153.8	%
COMPREHENSIVE INCOME (LOSS)	$	(25,373)	$	9,498	$	(34,871)	NM
DILUTED EARNINGS (LOSS) PER SHARE DATA:
Diluted earnings (loss) per common share	$	0.56	$	0.84	$	(0.28)	(33.3)	%
Weighted average diluted common shares outstanding	31,227		31,277		(50)		(0.2)	%

NM – Not Meaningful


	For the Three Months Ended
	March 31, 2022				March 31, 2021				Growth year over year
State	Direct Premiums Written		%		Direct Premiums Written		%		$		%
Florida	$	334,437	84.4	%	$	307,011	84.0	%	$	27,426	8.9	%
Other states	62,044		15.6	%	58,303		16.0	%	3,741		6.4	%
Total	$	396,481	100.0	%	$	365,314	100.0	%	$	31,167	8.5	%

	Three Months Ended September 30, 2017
	Direct		Loss Ratio			Ceded			Loss Ratio			Net		Loss Ratio
Premiums earned	$	254,809				$	80,292					$	174,517

Loss and loss adjustment expenses:
Hurricane Irma losses and loss adjustment expenses	$	452,000		177.4	%	$	415,000			516.8	%	$	37,000		21.2	%
All other losses and loss adjustment expenses		79,268		31.1	%		(107	)		(0.1	%)		79,375		45.5	%
Total losses and loss adjustment expenses	$	531,268		208.5	%	$	414,893			516.7	%	$	116,375		66.7	%


	Three Months Ended September 30, 2016																	Three Months Ended March 31, 2022
	Direct		Loss Ratio			Ceded			Loss Ratio			Net		Loss Ratio				Direct		Loss Ratio		Ceded		Loss Ratio		Net		Loss Ratio
Premiums earned	$	234,500				$	74,966					$	159,534				Premiums earned	$	414,603			$	145,539			$	269,064

Loss and loss adjustment expenses:																	Loss and loss adjustment expenses:
Core losses																	Core losses	$	179,950	43.4	%	$	44	—	%	$	179,906	66.9	%
Weather events*																	Weather events*	4,545		1.1	%	—		—	%	4,545		1.7	%
Prior years’ reserve development																	Prior years’ reserve development	10,660		2.6	%	10,005		6.9	%	655		0.2	%
Total losses and loss adjustment expenses	$	73,487		31.3	%	$	(61	)		(0.1	%)	$	73,548		46.1	%	Total losses and loss adjustment expenses	$	195,155	47.1	%	$	10,049	6.9	%	$	185,106	68.8	%

*Includes only current year weather events beyond those expected.																	*Includes only current year weather events beyond those expected.


	Three Months Ended March 31, 2021
	Direct		Loss Ratio		Ceded		Loss Ratio		Net		Loss Ratio
Premiums earned	$	375,606			$	132,301			$	243,305

Loss and loss adjustment expenses:
Core losses	$	145,228	38.7	%	$	28	—	%	$	145,200	59.7	%
Weather events*	—		—		—		—		—		—
Prior years’ reserve development	92,070		24.5	%	93,307		70.5	%	(1,237)		(0.5)	%
Total losses and loss adjustment expenses	$	237,298	63.2	%	$	93,335	70.5	%	$	143,963	59.2	%

*Includes only current year weather events beyond those expected.

	Nine Months Ended September 30, 2017
	Direct		Loss Ratio			Ceded		Loss Ratio			Net		Loss Ratio
Premiums earned	$	735,807				$	230,722				$	505,085

Loss and loss adjustment expenses:
Hurricane Irma losses and loss adjustment expenses	$	452,000		61.4	%	$	415,000		179.9	%	$	37,000		7.3	%
All other losses and loss adjustment expenses		235,707		32.0	%		5,578		2.4	%		230,129		45.6	%
Total losses and loss adjustment expenses	$	687,707		93.4	%	$	420,578		182.3	%	$	267,129		52.9	%

	Nine Months Ended September 30, 2016
	Direct		Loss Ratio			Ceded			Loss Ratio			Net		Loss Ratio
Premiums earned	$	682,571				$	214,128					$	468,443

Total losses and loss adjustment expenses	$	198,069		29.0	%	$	(1,680	)		(0.8	%)	$	199,749		42.6	%

			Less than						Over
	Total		1 year		1-3 years		3-5 years		5 years
Unpaid losses and LAE, direct (1)	$	440,443	$	281,884	$	127,288	$	22,903	$	8,368
Long-term debt		14,624		1,322		5,100		3,233		4,969
Total contractual obligations	$	455,067	$	283,206	$	132,388	$	26,136	$	13,337

					Total Number of		Maximum Number
					Shares Purchased		of Shares That
					As Part of		May Yet be
					Publicly		Purchased Under
	Total Number of		Average Price		Announced		the Plans or
	Shares Purchased		Paid per Share (1)		Plans or Programs		Programs (2)
7/1/17 - 7/31/17		—	$	—		—		—
8/1/17 - 8/31/17		306,091	$	22.91		306,091		—
9/1/17 - 9/30/17		100,175	$	19.32		100,175		873,082
Total		406,266	$	22.03		406,266		873,082

~~Exhibit No.~~	~~Exhibit~~
Exhibit No.		Exhibit
~~3.1~~
3.1		Amended and Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the Company’s Annual Report on Form 10‑K filed on February 24, 2017 and incorporated herein by reference)

3.2		Amended and Restated Bylaws of Universal Insurance Holdings, Inc. ~~(1)~~ (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on June 19, 2017 and incorporated herein by reference)

~~15.1~~ 10.1		Employment Agreement, dated January 25, 2022, between Frank C. Wilcox and the Company (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 31, 2022 and incorporated herein by reference) †

10.2		Employment Agreement, dated January 25, 2022, between Kimberly Cooper Campos and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 31, 2022 and incorporated herein by reference) †

10.3		Amend e d and Restated Employment Agreement, dated April 7 , 202 2 , between Stephen J. Donaghy and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 8, 2022 and incorporated herein by reference) †

10.4		Form of Notice of Grant of Non-Qualified Stock Option and Terms and Conditions of Non-Qualified S tock Option under the 2021 Omnibus Incentive Plan †





15.1		Accountants’ Acknowledgment

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

31.2		Certification of ~~Chief Financial~~Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certifications of Chief Executive Officer and ~~Chief Financial~~ Pri nci pal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101.INS-XBRL~~ 101.1		~~Instance Document~~ The following materials from Universal Insurance Holdings, Inc. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Statement of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL (included in Exhibit 101)
~~101.SCH-XBRL~~			~~Taxonomy Extension Schema Document~~
			† Indicates management contract or compensatory plan or agreement.
~~101.CAL-XBRL~~


~~101.DEF-XBRL~~		~~Taxonomy Extension Definition Linkbase Document~~

~~101.LAB-XBRL~~	~~Taxonomy Extension Label Linkbase Document~~

~~101.PRE-XBRL~~	~~Taxonomy Extension Presentation Linkbase Document~~


	UNIVERSAL INSURANCE HOLDINGS, INC.

Date: ~~November 9, 2017~~ May 2, 2022		/s/ ~~Sean P. Downes~~ Stephen J. Donaghy
		~~Sean P. Downes,~~Stephen J. Donaghy, Chief Executive Officer and Principal Executive Officer

Date: ~~November 9, 2017~~ May 2, 2022		/s/ ~~Frank C. Wilcox~~ Gary Lloyd Ropiecki
		~~Frank C. Wilcox, Chief Financial Officer and~~Gary Lloyd Ropiecki, Principal Accounting Officer