UVE - Earnings call transcript Q1 2021 | Universal Insurance Holdings, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the UVE First Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Rob Luther, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.

Rob Luther

Thank you, and good morning, everyone. Welcome to our discussion on our first quarter 2021 earnings results, which we reported yesterday.

me Wilcox, Steve Chief with Officer; Chief call Frank and Financial the today Donaghy, is Executive On Officer.

measures. Before discussion we financial may today's contain forward-looking begin, statements and please note non-GAAP

that statements could materially Forward-looking those statements. risks assumptions, and from cause results to involve actual differ uncertainties

which information, our of comparable website, website. and the available more at filings, turn the please A release Investors included to in release. is it press Steve, SEC's non-GAAP measures to see universalinsuranceholdings.com, GAAP and For on financial reconciliation SEC the UVE's press quarterly all over are of measures you. that, of section on the With I'll

Steve Donaghy

Thank Thank you you, everyone. morning, today. and Rob, for joining good us

XX% off to on expansion strong start margin to basis first in XXXX, excess are of quarter of and equity a return line close annualized top a total XXX growth, solid We to XX.X%. points, average with results. Including,

renewal on below bond We reinsurance progress on make our program end low the March oversubscribed and range. in our of continue were initial cat first at to our rates

We the risk our our company in event as UPCIC subsidiaries. finalize program for additional of pieces wind Allstate's the for we'll May of have XXXX completed reinsurance for details season, we first management and now strategies our remaining procurement have insurance

this access property to In passed addition, earlier insurance. enable reliable have we were Florida month Senate the would when to encouraged Bill XX, Floridians which

the compared pressure litigated a of has property For outlier significant property has a country to which put Florida on insurance rest Florida when number of comes claims, years, the significant the it marketplace. to been

sequentially and reduced counts weeks. from should positive first quarter, has said, we forward monitor these market closely policies XXXX new XXX, to House on details and being this And quarter That our strides to we to have in renewals continue make when in XXXX. been bill to quarter aggregate Bill the our policy in differences the not compared in the of companion look during have immune House, Senate next throughout continue reinsurance the We program renewal actively reduced several which and first force the Bill to additional XX.We the dynamics.

let Frank? our that, now over walk results. financial with me to turn through to Frank So it

Frank Wilcox

Thank you, good morning, everyone. and Steve,

a by from operating quarter on portion and operating the non-GAAP from investments for expanded on a as first extraordinary on adjusted from basis in adjusted an today was premiums line premiums driven $XXX. income profit and reminder, Adjusted previously losses losses As XX.X% a EPS quarter EPS discussed, top lower also GAAP the LAE and book unrealized points the interest $X.XX portfolio, impact XXXX.Margins total compared direct of of reinstatement basis. expenses through discussions quarter, to the to are income million, quarter higher when fall-through exclude as realized revenue of partially adjusted commissions. earned. the the ended policies XXXX, the costs on of non-GAAP percentage and for operating and earning as renew and X basis reinsurance increases gains a related the and rate in effects the investment first excludes primary expense. by up XXX and We by driven with unrealized by offset incremental improvement the lower and

direct by up in were written premiums direct underwriting, X.X% premium Florida. the XX.X% growth to of for As quarter, led

efficiencies cash claims plan, average direct The COVID-XX to we our and X year earned approximately and for XX,XXX guidance to expense GAAP The when market assumes adjusting ratio basis benefit from shares compared in quarter weather, basis, loss events weather LAE We improvement compared still at point on XX side, and the first the like to increased reinsurance equity the point as increased expense strengthening on by I'd events a XXXX.In company from weather the of billion XX.X% less of XXXX. yesterday, for the regards maintaining expect With XXXX. assets costs. points capital flat line offset invested the The loss claims the now a operating and as the the are direct reserve pandemic. deployment, open non-GAAP result decreased of a by business, a no March costs the result increased for $X.XX we than by to operator business for market both during between X a of the improved our aggregate first X-point when repurchased $X On volatility $X adjusted to of since Total quarter, current and favorable benefit last ratio cost XX.X%. GAAP year-end prior seen XX% driven a an a from year costs development, XXXX the combined a in quarterly of in on ratio point was share of the improvement for $X.XX shareholders sale close basis exceed return and range quarter resulting partially improved and our our due XXXX.As mentioned majority is ask by a improved to expect portfolio substantially in offset unrealized on April Directors EPS. on the per fourth XX, ratio reinsurance XX, that, of see the XXXX, If during and questions. extraordinary to that which release of adjusting Board net to million portfolio guidance lower position May stock, assumes common record were a third expense the equity also primarily dividend quarter yields $XXX,XXX. quarter, on more May XXXX, and reinvested equity On $X between the the XX%. a investment of in significantly on net to quarters X in XXXX.Unrealized XX, EPS business but securities of gain of of in of declared investment increased to payable net quarter. the impact of of of following a as the than to in was an losses ratio XX.X% portfolio, income the decreased On increase by for the and the our

Operator

have [Operator question Instructions] on Mr. Sandler. Shimp line the Piper Tom from a with We

Tom Shimp

litigation guys bills about of some more on bills your most thoughts you bring How benefit give favorable state contemplated. insurers me the the to the if the got Can to you So do aspects the of legislature? potential your trends? think being

Steve Donaghy

seen notice find litigation; And a currently. pursuing was favorable. language in lot fees, we I those good question House the There quite think by trying as policy and that's the is supplemental closes the session in weighing XX topics. was that with a now, throughout issues to good that a there's adequate. limitation And occurring. tomorrow. prior Bill of as of topics House the really rate which the citizens was along bill, catastrophe, to can X-year XX prior additional days claims House attorney passed there imagine, burning policyholders, And those contemplating is Tom, in within there. is the of where currently, symptom illness ourselves currently The you tremendous becoming the on assist was change written reported is -- on state Senate on

to as and trying several and to items the also House published Floridians say has represent So of Senate. department feel with the job that I the they've that the done I balanced industry would to though a

legislation will Florida the we'll So helping are that There is there. out I get hopefully, The There's insurance favorable carriers Floridians information There's think residents. sides. begin improve is the a X information tomorrow, and business. flowing. in And strong enable to and lawyers. writing

Tom Shimp

on Do update regulators. Staying Last we that, ongoing we year, between have an the the fees on still that board or that the were can affiliates. there were the regulators some discussions, examining and typical just view corporate of discussions? as insurers the just insurance headlines

Steve Donaghy

of misnomer to intimately I is are they fees how our as not Yes. with feel the least relate Insurance and Department to Tom, that subsidiaries a charged, the think relationship of though at Universal between market. aware, parent, the it's

are least if subsidiaries with parents; have have do we changes. they good us, the they agreements understanding do a sometimes the do like to So but file they it, the job don't we that And relationship. any -- they changes sounds -- the and to at between of very

And want to they is House those. the that there in a should bill between the relationships language has department lot them, that. intimate the continues So know available to resources of

department there those. relative the So to is them from the regarding been we been sit, we've some where language, with an Q&A but with relationship solid has book open and

Frank Wilcox

we've not to Yes. I to they do pointed review they evaluate anything and multiple them their to have within from there Steve the examine And dissatisfaction. on are structure would just fees. out, to instances object that, and as and agreements, where the fee those opportunity but as every heard add

Tom Shimp

just went down, to some a And also about of out hoping was PIF Florida, you then too. in just and understand of Florida that in little was that moving But comes the to struggles costly I trying those talk could PIF, outside shed Florida policies. bit of I more. that down

your thoughts how outside on about So can updated you just give thinking growth of me you're Florida?

Steve Donaghy

the in. out of becoming outside Well, years measures reduction relative numerous in recently very more past see in some of we because take we upside competitors Florida, in this -- quite a growth several we've seen state well not the the we adequate. lot -- nominal we've at point. And to rate in future taken do rate of states The very, is is some

of bit rate our a been paramount might we're a little we but ahead is market, And adequacy good So desire growth. the have position. to for in sitting

versa. have profits we and than rather vice growth So slow

that levels feel our important And at. So we equation we the in we that it's you're do about you partners, say we expect at we're with they of right XXXX. reinsurance you to to communicated we and line perform a piece important also share going for submit to good it's as to like feel what us that's And where market. what the we're very with And that we them. feel data do,

Tom Shimp

talk was some was net what a It unfavorable parts? direct like the I on on And color looked just development. Can a we that? a development, moving on more favorable it then could there have just were about reserve but reserves, development. And was we basis hoping basis,

Frank Wilcox

Yes.

$XX other the exceeds the Sally. that net losses. completely of just reinsurance And Tom. extent what gross of and realized a a have coordinate to have -- Frank, But that $XX the a the by retention So program we and million developed our that's other on would we separate for a states and states, for basis this then Sally program as program we our operate reduce to million basis. back on is way our for reminder, that, states that programs on a come because

development So despite net favorable had the gross of million, of we million. a of Sally $XX development $X

Tom Shimp

Sally? besides storms other any from development other any there Was

Steve Donaghy

no on basis. was development There a other Yes. gross

that losses And $X.X be I'm the the on net there's cat we cat to With the arrangements funds. That's to subject a that million, the million favorable. they to Irma, million be under are and the would that estimates, re-estimated and your $X.X fund, would we see $X was sorry. the amounts offsetting adjustment contractual ceded

Tom Shimp

or saw see thinking of anything tell headlines then a line that of there about of this And it the you it. I regards and I material, that? much earlier you're too in the where make losses a of there Panhandle Is did think headlines. severe at the was storms quarter, from the had to the second rest in there us I can Is weekend month, how start Florida the

Steve Donaghy

event track have got in, each claims we was right We've were called under one. now. we that identified open a and PCS XXX Tom, XXX was for There under that that.

in we've weather each plan So quarter. well we as you that our hand. know, as And feel got have fairly we for room some in though

fortunately, kind So, is we're any to any point, claims able reason with handle majority internal all but tracking don't see we it The at claims it. of this And over those we alarms, a closely. associates. to of were pull team

to So in to outer benefit regard. parent continues that provide adjusting the

Tom Shimp

then viewing And a picks. your hoping just you're update in general, high-level on loss get how we could just I was

of have as the your Any in years there? late? made been and them the has any X Any you past update or You've have increasing trends been picks? past quarter there changes that loss few rethink

Steve Donaghy

QX, the we up end -- as at saw the we we need, put course. last QX QX, monies Tom, company and of benefited when year we of go the controls the that year throughout XXXX, implemented

the rate book controls at the saw went Frank benefiting other QX of benefit our increases and are those our and of actuaries, states. we through this with that the year in we As pick Florida end flowing the loss through from

is a for XX% the for The reserves. compared in XX% to So amount higher up the our money dynamically XX% loss in put in pick XXXX XXXX XXXX. of

we and of weather end but ball, So at don't the the we very that we if a good cooperated, of continues, QX, the crystal feel we trend about have year. rest see it, feel the good

Tom Shimp

I lastly, just some could then -- And could strategic was updates. us give guys hoping you we

and You've the if hoping the just announced update was direct focusing I strategic their other have and initiatives is get for partnerships there's XXXX. with business is an And that on and how into you Verisk on any management management potential, we Clovered. in viewing their team can progress

Steve Donaghy

state can subsidiaries Clovered, of non-home Tom, not take we have low track subsidiaries. parent is capital in and on market. as and they the the continue the it's just the agency the rest ensuring for that to the with business open. feed of on Florida, write the a of that in position our pretty in done care force really a to Citizens Yes. and carrier few and job is are we They're reason. ensure as Frank others, the because fashion right team easy a insurance our a management. like focus like of good their preferred understand focused capital we -- commission not that the of levers his XXXX they're carriers one that our growing

a So ourselves quite we bit. cross-selling find

a more benefit writing agency. a The more more So We're lot we're behaving is writing they're true to auto. umbrellas. Clovered like and

that. So, we premium. about good $XX written approaching feel million They're in

more a deeply it track of to that point a So level at P&L and able and we're segregate type we to business be may getting things. where

to continue to and yourself business, we others. that in show invest good feel and then So it. can But we that we about

how will to Universal we I states for think which of been American insurance products score unique somewhat on future. us either And approach states, Platinum. perspective, additional at is kind other from growth we in and continue focusing enter a the we've or

the So things company. are that positive I at occurring think of very there's a lot

Our underwriting that that roofs to looking books. machines back things stuff. closely. go agency has light business their implemented currently. That's we've there's on team part highly at the we focused retention, going necessary strategy since through the more and which are the of -- as force at book in, good ton flowing additional business the coming business and in our the and well of the we on is company more the at And a and our very feel There's of less gone job, back doing. about increases as and business looking closely best our looking tools can are the Tom, on. We're about that on new ensure I the we're is working on

Tom Shimp

quarter. I appreciate the first then And the on answers. first congrats strong

Steve Donaghy

Thanks, Tom. Appreciate your time.

Frank Wilcox

Thank you.

Operator

over showing no now remarks. management will I questions. call to the am Instructions] for closing [Operator further I back turn the

Steve Donaghy

associates, our thank great to Universal. day. agents of like for support I'd a closing, continued Have consumers, their our and In stakeholders

Operator

conference today's concludes Thank participation. this call. your gentlemen, and Ladies you for

disconnect. may You now

Universal Insurance (UVE) 29 Apr 212021 Q1 Earnings call transcript