Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen, and welcome to Universal’s First Quarter 2023 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. Thank you for joining us today. earnings quarterly our to call. Welcome

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

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

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

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

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

Steve Donaghy

including XX.X% as annualized equity towards factors a on common Thanks are diluted year-on-year. and adjusted return I’m XX.X% optimistic I a Good Arash. everyone. a It adjusted and morning per our business multiple was There look share earnings benefiting growth future. including strong the quarter,

legislature at Florida of meaningful reforms the while our core stability boost investment and productivity higher income the special will believe portfolio. yields rate the improve business, fixed passed session, our improves profitability we of and long-term The which adequacy December

well core Additionally, supported our the terms today, already as historical all our or partners no conditions, parameters. our tower within reinsurance secured, we budget we material reinsurance and states the with XXXX-XXXX have sit catastrophe and our property fully are costs here for period, changes while to

our associates. is have business and of testament strength in We to our pleased are the current progress very a environment, which the made with we model the

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

Frank Wilcox

commission mostly higher share The and morning. up lower expense a good $X.XX, the $X.XX partially from income earned, net ratio net net Adjusted Thanks, premiums increase higher loss prior and from by investment was net year Steve, offset earnings revenue, in diluted per quarter. stems and ratio.

premiums earned, primarily other with prior from in commission and the net were million revenue. net year from up investment written X.X% in X.X% Direct growth stemming $XXX.X including higher of revenue up year-over-year growth states. premiums income, XX.X% quarter, was growth Core million, $XXX.X and Florida X.X%

rate X.X% $XXX.X prior by reflecting written offset the in year earned up rate-driven partially last million, reflects lower growth force. Direct from were direct XX quarter, premiums the Growth increases months. over premiums policies

The Net ratio seeded $XXX.X the expense to to ratio. quarter. higher The prior higher premiums direct X.X% earned a partially were increase primarily up earned, ratio, the increase up net The attributable quarter. offset year was from year compared loss ratio. points prior lower premiums is by million, reflects combined offset by net a X.X XXX%, higher a premium partially net

prior initial The loss year XX.X% primarily prior net earned, up net year earned. of partially quarter, premiums offset with compared premiums development reserve a increase to accident year was to X.X higher lower points loss as higher percentage ratio a net attritional the weather losses a and pick as attributable the of by percentage

distribution X.X net prior primarily partners. lower of rates On compared reflecting commission the May quarterly a XX.X% improved to close quarter, share XX, year payable per ratio to Board record as renewal of XXXX dividend cash declared Directors by business May of paid on expense The the of April of XX, XXXX, points common of stock, shareholders on XXXX. $X.XX the to XX,

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

Operator

Instructions]. [Operator

line will from from Newsome question Piper the Paul come of Our first Sandler.

open. is line Your

Paul Newsome

quarter. on call. Good Thanks morning. Congrats for the the

Just of couple questions. a

that most operation? the that just in say secured. retention been I fair? the good online, When First, in on inter-company And terms conditions, the it's to about the are by companies rate not increase reinsurance some Is hear tower. you and changes the talking that assume tower, is that the no we reinsurance reinsurance including provided of

Steve Donaghy

and Hey Yeah, for Paul, question. good think thanks is that morning I the fair.

have premiums it we to I to we mentioned, very percentage of see we're reinsurance company the very similar as costs fortunate XXXX did earned have a in think we And I will very against partners year-over-year from do ‘XX. fortunate you as And the changes reinsurance well. inter-company the to industry. the that completed have in any to an perspective and don't as retentions see

So, of you all kind there. you. of Thank them hit

Paul Newsome

of around? Did you reinsurance use the state's offer time this

Steve Donaghy

WRAP this use use year. did We the We in to that XXXX. not elected program

that's So, that's the and we below the that level. know, utilizing as FHCF program are you

fortunate of we're is that and part have instrument that very available to equation. to So the us

Paul Newsome

in sort what some is to all, Any thoughts related claim pure Yeah. And changes? in obviously claim seeing then the at businesses saw during on of on could on reform? lawsuits surge sure maybe perspective from turning front of a Tort big perspective leads you [inaudible]. seeing us not really thoughts reform, any any just you in quarter the but impact pure which when in And the the Tort Florida, had we're actually the reform, that on what question. if you're give from early on your Tort if general the to a any

Steve Donaghy

I believe end cautiously very terminology at about from statement we I again say XXXX. QX from the that end Paul, to Yeah, of good optimistic, would the feel our as optimistic of we changed

our future feel representations, the business. optimistic of that we We of have litigation, very seen on considerable etc. the about reductions and in impact

I of process get is staff would to from before as some settlements NOI against anything executing say that possible working and such are legislative changes prior our as litigious many a the sessions, trying land also in the even well would as environment.

signs. all-in-all, So I think very favorable

Paul Newsome

do something quite might that over is thoughts results? through – it that it think in it will financial see any have the you quickly you way Do be something loss the Is how or year ratio the we'll work impacts its about time?

Steve Donaghy

to some to going earn it's for legislation in. think I the take time

As you substantive, as new take of many are renew changes and onboard. know, business they'll effect policies so the comes

it future probably a to take earn benefits basis the fully time it'll go-forward of there'll obviously. as on think for I into So in. we some But be some period look

Paul Newsome

I’ll questions. Great! to folks ask help the other as let Well, always. I appreciate some

Steve Donaghy

Yeah, thanks Paul.

Operator

One question. moment you. Thank our for next

Dowling. of question from Iacoviello next Nick Our comes the from line

open. is line Your

Nick Iacoviello

just for the Thanks want my I retention. I'm not sure understanding you’re question. morning. changes make intercompany taking Good to seeing to

Just program? basis last expect a were so on similar you be year's gap basis, as do they retentions the and a staff to

Steve Donaghy

morning, lease that to the as Good good both capital Yeah, our we looked our lot we we do. what on We feel on Nick. market at options the similar incorporate. were of a in net levels and and program well the [inaudible] retentions, about various position ability handle as different offered retention, of we reinsurance

Nick Iacoviello

the And I percentage with the of was details a And as get Is not and in second that last get year wrap of the this limit versus more you amount and this prepaid the it. usual, just comment so, first get that both Got event does we'll year, was a last cost market being layer there if was relates I of terms the year? how guess X-K there but and similar difference coverage. And compare of to reinstatements the secured, I purchased? I'm also thinking program private earned, the meaningful in those?

Steve Donaghy

late across most a board. the we we have press will Yeah. as May, have good but May prior have about detailed likely, feel sometime X-K in Nick, we We'll years. release in question, entire a program very separate, out great and the

to it'll from where we So perspective, be XXXX. close were very ceiling in a

year. is your so last be count bit, a where little As were whatsoever. be think with we and And is you it down, meaningful they'll know, a questions about won't policy TIB consistent coverages down difference but I further others,

within visits So London exit always our separated a Bermuda, relative in and to and good. as to we the and I the went really be goal, in market well some very peers ability ‘XX, for little secure from were think again, we the tall space. stand we reinsurance kind feel is bit of – to that's our The visits of we different

to So we're do. that's trying what

Nick Iacoviello

just could Okay. had go elsewhere. weather know we above I you last mentioned plan. reevaluating view quarter guys if were I of your you guess

quarter. just quarter had wondering Was determination like-for-like plan? I'm a just would with look to this ago anything there at you weather your you above as there if the results and classify So year trying

Frank Wilcox

good Yeah, Frank. is Nick, morning this

the So first quarter us. for weather in cooperated

weather we're were report weather being still old there no So how the we That standard to said, to evaluating under are answer your events. question, forward. going going

So year everything within what the lost was accident contained current for our picks were.

Nick Iacoviello

movement Got any it, And see or in loss thanks. gross estimates is do billion? for Ian your $X you one, last still around it

Steve Donaghy

$X around billion expect and still it's we Yeah, it that pretty move confident to don't Nick north. we're

Nick Iacoviello

all. Thank guys. that's you, Okay,

Steve Donaghy

a Have day! Nick. good Great! Thanks

Operator

further back to over Thank speakers questions the turn you. for remarks. closing I'd not call any showing any to at like time. I'm our this

Steve Donaghy

of you for Universal. of our associates, consumers, all like great and day. a to continued all I'd their our wish I support Yeah, thank stakeholders agents

Operator

Thank participating. call. conference you today's This concludes for

You a may day! have disconnect. now Everyone great

Universal Insurance (UVE) 28 Apr 232023 Q1 Earnings call transcript