UVE - Earnings call transcript Q1 2022 | Universal Insurance Holdings, Inc.

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Operator

Good morning, ladies and gentlemen. And welcome to the Universal’s First Quarter 2022 Earnings Conference Call.

As a reminder, this conference call is being recorded. I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer.

Arash Soleimani

Good morning. us joining for you today. Thank quarterly Welcome call.. to our earnings

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

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

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

of at the financial website. GAAP can the release available be at non-GAAP section comparable Investors to quarterly press on Universal’s will found information, universalinsuranceholdings.com on filings, website SEC’s Steve. SEC website the in to and more reconciliation For press all please A is the included of see over I measures measures Universal’s the that, and release also of are universalinsuranceholdings.com. call turn our and With which on

Steve Donaghy

Good our a to Thank written Direct increases equity, in rate which morning, return on external reported X.X% meaningful a of the testament were force is benefited quarter, X.X% a the everyone. policies decline, volumes. resilience annualized business. We despite as and premium prior XX.X% challenging year environment, from significantly premiums outpacing up strength you, the Arash.

are We on profitability, growth. underwriting we combined focused ratio topline over improving prioritize improvement as laser

across exposure rates with tighten raising our to we’ve partners and and reduced agency our addition In criteria, renegotiated footprint, management. expense to broader geographies, profitable rates less Florida underwriting commission exercise prudent

results income to Lastly, a investment moving are and should continue rising forward. our benefiting yields serve as tailwind

current and improve differentiate of profitability increasingly out business results, in as stand the the we take seasons we believe favorably position, capital among our strong our the we continue steps Given to to market. reinsures

to reinsurance desired around meeting all global work We reinsurance for our the over X, capacity capacity the tower. released XXXX order face-to-face been the market globe, hard with last catastrophe the Our terms reinsurance for our firm at several our first team recently needed June states the renewal. for event securing months partners our has

Fund have We locked states catastrophe including various Hurricane in our bond XXXX. continue all of via reinsurance multiyear deals XX% the catastrophe capacity will Catastrophe secured. already into XXXX, over Florida event that tower in the the already first core With issued we

We made, to our current Frank? over through we’ve financial it progress the with are especially turn I’ll Frank walk environment. results. to pleased the given

Frank Wilcox

benefits up net current commission lower Steve. EPS force and $X.XX, the prior year-over-year, from attritional X.X stemming expense increase million by quarter. X.X rate. mentioned to main quarter, reflecting year-over-year, Total driver prior by higher The higher from $XXX.X that X.X% The remarks. of revenues The XX.X%, Thanks, combined ratio unrealized in net a Florida partially in $X.XX with ratio. quarter, net X.X was a lower growth, ratio, compensation, of $XXX.X net the of mostly partially was net earned, down combined and from up up Good effective securities. million by the lower and Adjusted in by were $XXX.X earned X.X% states. reflects growth XX.X% and net given prior ratio, net X.X% his was points loss Florida and XX.X% the year decline in attributable primarily year initial income, offset the morning. Direct loss policies higher revenues the was environment. of year-over-year, investment decline partially Rate offset in offset a higher equity premiums commission year expense Steve growth with rates, up other up higher accident including were XX.X% X.X% associated Direct ratio year a lower loss premiums claims to written improved pick The direct economies scale. was year-over-year. ratio mostly higher losses particularly million to premiums points revenue premium with on increase compared the of employee the tax attributable renewal with points growth

XXX,XXX XXXX, XX, aggregate stock business the May an dividend $XX.X April on of of repurchased close and the of November Directors of repurchase March through XXXX first On XX, quarter, million company quarterly the May share Board approximately share program cost remaining shares XX, per a record of as declared XXXX. XX, The of the During as authorization XXXX, has $X.XX on at of shareholders common cash company’s payable X, of runs $X.X current XXXX. million. to

market GAAP to for costs. we benefit also and exceed the questions. open equity and like to a average see The range guidance If in claims a line $X.XX, in the XXXX. to adjusting flat our mentioned for expect our ask weather our XX.X% maintaining extraordinary assumes plan, release XXXX, $X.XX return business adjusted earnings guidance loss from With a we of I’d of for yesterday, on events no weather EPS. equity It assumes As non-GAAP were that, EPS including a to and XX%. GAAP to events Operator increased both

Operator

Thank the ahead. you. Please Instructions] have [Operator a from of Piper Newsome Paul question Sandler. go with We line

Paul Newsome

jump more in about morning. the guess, I your genuinely of are actually think future? about the just might state potential get call potential how some and that Good sort seems Reform and meaningful thoughts confident of less back, legislator that of Tort I all to the of do in be talking and you Florida that to have coming or on you get off wanted I emerging Apologize we there to sort this about But something here was announcement about earlier.

Steve Donaghy

take that new special and it Governor the being on opportunity and a the bubbled hopeful And the up a I for ideas spotlight seriously morning. Paul. think action calling the the and commend we’re issues are in And from month. Good facing Floridians coverage Hey, This currently. puts perspective. We that legislators is that this Steve. the session late cost covered topics last session the to discuss, were taking

that But some get the as actions. their relief we of feel and the ball. though crystal their they are constituents of a in a some have result future don’t we recognize So hopeful as issues

Paul Newsome

We’ll keep our fingers crossed.

that the questions what particular, the So market of take general of way can Universal every is of in one relative more citizenship rate they’re Florida because and you’ll to do relatively to -- between your that you on citizens the if enough rate this quite competitors, periods of sort you and able underpriced big big them in when when some that got have and be has -- yet what need a is a you year need really above attractive do concern relatively where I’ve Obviously, well picture the accelerates. -- basis some get places including environment of sort folks what would environment? be an would sort still going extremely But more have How great pricing to the in not get competitively sort industry perspective? of everyone. from eventually, react met do with is that in by can you need inflation

Steve Donaghy

Yeah. perspective our from our Paul, really rate on insurance perspective, and profitability we an on focused underwriting adequacy carrier. the from are

to should tried has we’ve less we spite generate unique and thing adequacy, in been question knitting for profitability and looked strive We rate sustainable to a there at and adequate become But of are for ensure rates look a being from the and soft, bode events understand and have insurer is The for Floridians competitive They the many and right stick were them, rates issues of our the our for where place marketplace to priced, it As forward. last we as going have perspective. citizens’ to expensive. does what’s we one. resort market been from they that originally a competitively carriers at years some cost market. taking our nature the really do the occur

think in session the the to citizens more things some legislature I had. did last than to rate and -- assist they traditionally take So

XX% got be they’ve It years. to over that’ll increased a to XX% several to at rates. the So next and be used increase runway locked

So -- talked because to because session, have might that’s with now. be and the meaningful that they careful right special in in growth it’s be too, citizens, about the something

Paul Newsome

appreciate some the let help. I’ll Thanks. questions, ask but other folks always Great.

Steve Donaghy

a Have Thanks, Yeah. day. Paul. great

Operator

you. Thank

Your comes Dowling ahead. Partners. Nick go & Iacoviello next from question with Please

Nick Iacoviello

Hi. Good morning, guys.

Frank Wilcox

morning. Good

Steve Donaghy

Good morning, Nick.

Nick Iacoviello

you thoughts not updated And talk you how that. seeing you don’t past anything Thanks. guys just to seeing what interested on you’re are tangible if helpful? be maybe most session, sure from legislative but I further session, know and want much SBXX wanted your to maybe the in special the on I’m on upcoming would

Steve Donaghy

eliminates Yeah. Thanks, SBXX, that three there instead Nick. hurricanes years. The and for continues. two optimism window were that the pillars years for Clearly, various to some that events legislation of our within cautious

you in believe closure commented, file something’s have plaintiff right. litigate. the that’ll file session, I to possible case a -- intent seen We’ve are process. in a order XX% rules think has use that the and to plaintiff business what think a to of generate that NOI X% the side the we state, to and And notice to litigated suit is, that, impact little they X% side and that seen Governor the glide on same the now bit it, following an process I in forward. where or some when And the details clearly, country to in the and to to suits goes slow to some benefits Relative a have needs opportunity right of claim respond P&C from the of or we’ve was you files team as have I I not but as we people better. special dedicated pursue think on it of that

and we’re that, that they’re would know get intention. it’s to we of lot And focus. But fees aside best can. be a them about calling trying right me not things. area, the talking they’re primary they way the But But structured the to suggest much now. have as as legal really from So, would important I help I the

they it. that comes see focus hopefully, the of have points what on out So, and they we’ll

Nick Iacoviello

quarter, just management viewing level it Great. to $X a this time the given million you’re Thanks. close how on forward? of maybe relates and repurchases just you take going growth us to capital some as of update Then

Frank Wilcox

as Yeah. I mean, have that majority million it through $XXX We capital. proceeds vast to the still raised relates note we’re of pretty the we the strong issuance.

insurance some monitor is primary the the now objective a provide holding have to capitalized capital That continue Share the are the great their to at ensure that in now system. and adequately that to think insurance continue and opportunities right needs. to opportunity. not is We hard to we to are look infused into companies the right company buybacks order entire it’s entities

take So to believe of we advantage we have we that. the excess, some that extent that

Nick Iacoviello

question Thanks. This Okay. just on is ratio. a the expense last

you XX% this quarter? seeing that some the had below permanent or you to Are expense back maybe more discussed thinking in You be coming to post-COVID? guys efficiencies Two, up previously XX% things about more to that that still are some look ratio range, range? still

Frank Wilcox

Yeah.

that there little prior fourth berth our a ourselves being was into we to rate of reaching decision bit unknowns plus, quarter on kind to a ought wide inflation, of So, we to still commission a thought and about lot the renewals. the That of there. that going give the reduce

think of this the I quarter gave more for that guidance year fourth the we indicative what the probably you’re call. at is the versus rest seeing quarter

Nick Iacoviello

have. I all That’s Thanks. Great.

Steve Donaghy

Thanks, the Nick. All right. Appreciate call.

Operator

I’m you. Stephen showing not Donaghy the queue. turn in for And any the final call his further to I questions Thank remarks. back will

Steve Donaghy

for to and our Thanks thank and Carmel. agents have Universal. continued associates, our a support would attendance stakeholders of like Thanks, great your consumers, day. for I their

Operator

participating. the conclude And that, we with gentlemen, program. for Thank and you ladies

now may You disconnect.

Universal Insurance (UVE) 29 Apr 222022 Q1 Earnings call transcript