Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen. And welcome to Universal’s Fourth 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-I 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 website. release available section Investors also on Universal’s information, financial website universalinsuranceholdings.com on Universal’s filings, SEC’s SEC non-I website the and more at reconciliation comparable found be quarterly For is press all to please A the in of see universalinsuranceholdings.com. on included can and press I of are measures our which and release measures the

turn to call over I’ll Steve. that, the With

Steve Donaghy

proud Florida to our circumstances. and committed of despite the Thanks we insurance challenges, state homeowners accomplished and what continue write a Arash. Good morning, I'm It team The everyone. has our home remain was but new faced market to significant business. but tough renewal year,

grateful other for are attorney state officials including of of to and of year, reduce one taking filing to and reforms legislative among special the one benefits, passing session, assignment deadline to citizens, at fees the way recent measures. steps claims elimination We the shortening competitiveness meaningful

reforms It the legislature's actions but the health over to will will of for take we time the term. long restore results, benefit believe the the market

in Florida balance model, dynamic solid uniquely strong succeed reinsurer to and business sheet differentiated our Given the we're positioned landscape. relationships,

financial Frank? I'll turn Frank it through to walk results. over to our

Frank Wilcox

Direct stemming $X.XX income mostly and in lower prior growth quarter, revenue. including ratios you, the loss up of and premiums higher in $XXX.X higher $X.XX, written X.X% of loss net net growth million share common year up commission and up the was primarily Adjusted states. expense growth net quarter, from in from year per a adjusted earnings X.X% was prior increase were X.X% per XX.X% earned, $XXX.X net attributable Core investment from common the Thank investment diluted and share commission premiums other with to with Steve. diluted income of revenue. year-over-year, revenue million Florida in

The increases offset force. by Direct of growth premiums year XX increase up reflecting in reflects XX% rate premiums to over current by net expense earned partially ratio lower earned. lower direct driven the XX.X% combined attributable higher with months. was to year reserve adverse year prior The premiums ratio year-over-year, quarter. growth were reflects prior offset accident to million the attributable were The ceded written from year-over-year, net Overall, X.X% rate the points year a higher lower net decrease loss earned, ratio premiums lower points down $XXX.X XX compared loss Net the prior net million, premiums $XXX.X down development. partially primarily and last is primarily quarter. was and earned direct up policies loss XXX.X%, XX decrease The ratios.

The paid XX.X% points lower partners. by year-over-year, rates reflecting improved renewal commission three expense to primarily net ratio distribution

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

to line ask the to like for questions. operator I'd that, open With the

Operator

[Operator Instructions]

And question our Newsome Paul comes of first from Sandler. Piper

Paul Newsome

much with sort detail pricing? the we a improvement sort of like for CAT Is to loss losses about any weather components could little bit it start Good other Congratulations more call. was in there the ratio. how of in versus way Maybe morning. Thanks the the on and just quarter. of year-over-year think

Frank Wilcox

good Paul, Frank. is This Yes. morning.

during the current that also weather was effect been as coming majority to have analysis. the we've we've year, in range. party it of proactive, winter increasing minor versus the in XXXX, adjustments And you which storms QX of So In than the the QX, that is of representing past. into weather third ahead emerging throughout accident the entries intended know, And as somewhere around actuarial in each what And what it ‘XX, we capture that analysis year was very million included results disclosed $XX period. it. reporting this included above of being the we out proactive rather the quarter, year loss going booked including in done the reserve in plan, pick end call, by

So that range. excluding pick to wanted the year year. look apples, accident booked you XX% up which equate million the close current would we're the the was last through absent to margin weather loss and a to that we apples that QX had in claims, generated third by $XX if handling very to had quarter, But we was that

we're of significant the those including We've quarter. invested fourth when in-house dealing impact teams, that carrying claims such in quarter. as possible these with favorable fourth workforce, the our year our our the efficiently impacted legal business of which claims cost prepared the storms as in we're round, Now, to fully certain as claims with aspects and majority teams, Ian so and model, had comprise a handle

reinsurance can will service handled really color and believed party we've economic performed the there by that associated be And work care partners, those translates than these insurance we that these maintain party. always our we generated on that So bit activities of the said, claims That costs synergies which third was XX% handling these do outside relationships the any other in to groups, teams we benefit that exist little benefit not from claims, theXX-K. and savings a exist also more consolidated and our from between about then these with needed, more business third with important two adjusters with our with mitigate both behalf into of would we're pleased when entities of we group. on our

Frank Wilcox

optimistic Great. the we too far reform. Tort to just anything yet, any results Obviously, early it's or Have impact? the about see seen in you're

Steve Donaghy

think again this Yes, is term remove optimistic. I'll Paul, cautiously Steve. it's I the Hey, optimistic.

signs We early, feel are impact now bit optimistic legislative DeSantis the a reforms, the early we in I the governor future a on, are it legislatures. to so is say thanks good it. positive new of that little and about seeing we of but would

Paul Newsome

up costs one I that maybe you Great. or then by more, the And for ask. have somebody How if about are broadly yourself? everybody. assume it's And and gone see July I I'll for else thinking ask June The then reinsurance critical renewal. guess

maybe could talk may may But you here. not issue the XXXX. it's or about happen for your think and think XXXX you what in reinsurance I costs

Steve Donaghy

the definitely question, of multiyear day. just our and portions of the our approximately on tower time do estimated now XXXX certain program, we a place like catastrophe deferred year, our with big a on how to ‘XX, Working enter partners and participation basis. of XX reserve reinsurance with and first with season, we both as place we this doing Yes, is combination know, which we year, already Paul, RAP as But something in buying you companies reinsurance. reinsurance we're our every team a it's analyses, months sit the fund here acquire XX% And desired from in we with coverage, insurance Florida event CAT hurricane secured. CAT ‘XX our best

that have financial things will the feel we stand many as we past. reputation. reinsurers the reinsurers the as safety with in will the our are for though of reflect and been hoping in market above we majority strength to of due look to deal So forced crowd partners, And

anticipated like reforms be we're going forward. results leverage do results the past and some anticipated So our there's really best feel to from the legislature we from our going going to to impact and their

has so going in to percentage started, there's on feel be have the small work that to lot already way that well Paul. we balance We of so So acquire good only I really to a else. work needed and to we're it. event, do, securing first good the feel about our a

Operator

from Nicholas next Iacoviello Dowling. of comes Our question

Nick Iacoviello

my Good for morning, question. taking guys. And thanks

year then what for loss your was in also, is current gross the what prior estimate And development first, Just the Ian? quarter? estimated gross

Steve Donaghy

the $X Ian feel confident ultimate that's billion. at We remains Well, that adequate.

of As we're to in reduction I far front as tell be down in that don't you that drive obviously, me, we year-over-year gross know continue very we're down. but those have to but numbers expect it and development. development, driven I We not perfect, our can with net pleased we reserve

Nick Iacoviello

assuming plan I Thank it, then it. guess Got And on touched figure above now? we going actually should is think planned be think incorporated Like, I so you about what just just, but how in that forward? do we you. weather

Frank Wilcox

going Obviously, reevaluating among we're our total line. some and remains change, in how just the numbers present some categorization, that. Yes, won't of benchmark that see be and of a but different us. we forward do We other insurers sort to want type against discussion that of view we

picks So have to or our for plan, I'm more come not so year that. weather, weather I done what proactive figure been on loss think we for above sure has I adjust that a but to more emerging we've this

Steve Donaghy

Nick, is Yes, I too. This add, would Steve.

contemplating the And we our between QX weather impacts around proactive entire weather amount. certain staff that become information the in something get we'll through more our have regarding teams a a we're think actuarial point. as if basis disclosing probably on analysis, dollar it potentially we've various company, and I more are to and reserve exceeds as

Nick Iacoviello

claims was this quantify guys internal you Can it. the Got operations net from quarter? adjusting benefit the what

Frank Wilcox

exact our be details sure, Yes, XX-K we some Nick. the don't for disclose figures. in There'll

in of what from people there but I don't benefit and be and when same think and reinsurers that those cetera? too and the protected a do to own files, your as prepping attorney, gable dollar the of own an a folks or this number of of think lot tremendous is legal tremendous discuss an up the say. the impact impact you claims, and et Universal, roof our to desk much, consistent home? this we We our assistant claims section I examiner The to as they enables cabinets adjuster of you to it over of one best to having hands against Universal message if internal legal And to had from the better frivolous as And between real processing more they something at our by mean the adjusted in we again, take reinsurance than eventually enables on just lawsuits, information. which, goal that more see in helps of preparation they're would as we've ask and we've for adjusters a continued not it's benefit, conversation, Nick, a circle, and job of a commercial. eliminates savings the well more constantly, do that partners. being can and have all opportunity just by so ourselves small pick your impact a for so phone an our adjusting what the the of looking to paralegal we the to be their communication payroll mean it from seen a in the the to that files continue leverage staff everybody I'll and but and of enterprise, do bathroom, things execute

Nick Iacoviello

Last one me. Got from it.

fully levels capital Just exhausted the the be this on you funded participates your Can in If it in from it there? Ian? about again? And captive. program? ‘XX to will Was need talk

Frank Wilcox

terms captive our the to fully exhausted capacity In yes. so that And with was it our is retention. above answer vehicle Yes, the forward. fill It going $XX structuring we what seen Ian, to of program forward. in be and in layer intend the going used to was to remains your question million use of

Steve Donaghy

Yes. too, also your prior legal would the our I revenue Nick, question gets adjusting submit expertise that to and about serve.

doing storm would We parties pay same work have in that replenish the the we third to capital by the after field. a ability

I kind that and matter, makes of Florida. an country, So for to position especially stand think of out the it's our that in kind across offset model capital

Nick Iacoviello

I guess, the but utilized, million Okay. capital guess ‘XX already was I there program? in $XX the prior to, fully the was captive

Steve Donaghy

Yes, been collateralized. That's yes. correct, fully it had

for Donaghy, Thank would closing the conference like to turn back you. remarks. Steve CEO, now I to

Steve Donaghy

and very consumers, force, much. a our Cheers. wish their like associates, and stakeholders Universal all our support of to great all continued you thank Thank our of for agency I'd day. you

Operator

conference today's call. now concludes And for Thank you you This disconnect. participating. may

Universal Insurance (UVE) 24 Feb 232022 Q4 Earnings call transcript