Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen and welcome to Universal Second Quarter 2023 Earnings Call.

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

Arash Soleimani

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

today Donaghy, Chief Chief the Otter. 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 website. release available section Investors also on Universal’s information, financial website universalinsuranceholdings.com on Universal’s filings, SEC’s SEC non-GAAP 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 on press GAAP of are measures our which and release measures the

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

Steve Donaghy

adjusted per common diluted return XX.X% adjusted Thanks, growth share and on solid, Arash. Good morning, annualized Results equity earnings everyone. were year-over-year. XX.X% including a

early While we’re to a and litigation look as favorable trends emerge claims of we are by give recent and encouraged as beginning legislative and reforms beyond. to optimism result it’s that still us XXXX days, forward

We treaty from put footprint. spread geographic growth risk premium of of benefit XXXX, rate-driven and our improving very the XXXX reinsurance for an program across together proud the we year. I’m to continue

consistent with reduced programs terms, conditions ceded prior and coverage consolidated year, but Our we retention ratio. the are our premium our and

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

Frank Wilcox

earned, with mostly income stemming quarter. income increase per up Core higher was investment and year-over-year, growth up $X.XX, revenue. of revenue. The in from income, earnings investment prior premiums share, from Adjusted million common revenue Steve. commission diluted year morning. primarily was commission net Thanks, Good from $X.XX higher XX.X% net and the $XXX net stems underwriting

Growth the the is The over quarter, earned million, premiums lower million, in from Net earned rate written were in written higher from reflects reflecting quarter. force. policies direct premiums up to premiums X.X% up X.X% states. ceded Direct up increases, XX.X% quarter, attributable growth the X.X% Direct growth $XXX.X prior in last offset were rate-driven lower were partially ratio. increase prior XX $XXX.X other year primarily by premiums from a growth premium year Florida year X.X% and earned prior including premiums $XXX.X and direct million, months. the

year XX.X%, The to points net with the up loss commission a prior development, accident compared lower XX.X% The increase X.X X.X prior year combined points reflecting rates to quarter, distribution primarily The the ratio by ratio ratio, to paid quarter. offset lower prior lower net X.X by year prior improved ratio renewal current primarily reflects unfavorable partners. loss year to partially offset by attributable loss XX.X% a net net compared to was compared a higher down consolidated quarter, partially the decrease net reserve expense net higher ratio. points the ratio. was year The expense

second $X.X XXXX, repurchased stock, payable common On quarterly August the company million the shareholders record cost of of on of approximately of XXXX. on X, at as business company share of remaining. $X.XX of XXX,XXX the shares the per Directors XXXX, aggregate a quarter, July declared XX, $XX.X has dividend August share million. During The of cash to authorization XX, currently Board repurchase an of close

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

Operator

comes Instructions] Paul Piper you. from Newsome Thank first with question Our [Operator Sandler.

open. Your line is

Paul Newsome

bit generated in that better the maybe understand by back more the Universal how more maybe around fantastic – the or development in sources in us that tort broadly surge reform? what’s be reserve around about a call. and little details what are that we and to for more And of you just and Thanks would more more morning. Could Florida going it saw broadly claims, obviously, just how interest detail lot a specific Florida – the factors? to good lawsuits on Hi, give

Steve Donaghy

is this us. in two your break Yes, I’ll ways. with question in down for Thanks Donaghy. Paul, checking Steve

First – in business, in with and normal all, commutations of development, multiple state of regarding the the the on partners the working Florida. quarter prior our reinsurance course been we the year have FHCF of through

So XX.X a number. majority that of drove the

So the explanation that’s there.

really And AOB, the Regarding favorability from legislation considerably. the two And got team increase that particular litigation in was are our continue notice don’t optimistic intent. is things an down people our area. lot ‘XX, we’ve numbers. of fortunately, more to passed seen cautiously of and in due July talk see quarter AOB to we great down tune that changed we even attacking the a is in we’ve our scale, that a in we ago, Litigation that or one from greatly. of about optimistic is of to a

us it of actors take bad keep the so So at say. gives insured an and close to claims, opportunity care our to bay,

and are increase of in department. to through you’d I’m that on we’ve we seen upset an eliminating areas benefit expand any area, other So, not litigation that particular glad that with like.

Paul Newsome

of if Florida I that litigation a but seeing Curious broadly, – if a don’t about is is nature? that also an you having know of area there in it’s news you’re your seeing lot impact funding. are of factor

Steve Donaghy

who driving there. was to candidly. the prior behavior out a is certainly some seen us I We’ve some to the it to Florida in at the And Florida, it’s talked And folks funding for speak end more into and I of it We think legislation moving it there market, passed at out markets side litigation it, than from point. the again, least probably year. coming of this at plaintiffs P&C last is think

Paul Newsome

And Or mean, in How the could couple ratio? you has little do does combined that getting And in else raise to see reform, – included running obviously, generate claim think who if more within underlying I you is of trying cost outside step that folks to then the rates do what the bit. rates takes relative that a like tort we we the at? that next think rapidly. quarters everybody terms back time? process finally, of of you could maybe gone

Steve Donaghy

it’s XX, legislation entire the Again, book. XX another take to months to going our for affect

that the driven and how numbers. legislation by is Our impact we’re seeing optimism our

from So expect even that prior benefit. ultimately decreased see year. And has Florida we take normal that throughout us a state to appropriately as rate-making. basis months. state of rate, think asked to we also future to and to know, the this QX year. the rate increases XX prior experienced both the very legislation on continues leads or trend our the to has through allowed you QX, to then driven us of This impacts the And That litigation inbound the decrease, the reinsurance contemplate in was numbers year, I the by is to and

know, you the a has So seen been insurance going our to good And third I and then for We’ve TIV always in cost come under numbers steady. the indicator – some think of inflation. And rate of is XXXX. impact less Floridians that’s piece inflation as duress of forward.

we So hopefully, there benefit to fees. see as commerce is all

Paul Newsome

Thanks. Appreciate the help.

Steve Donaghy

Paul. Thanks, your weekend. Yes. Enjoy

Operator

[Operator have a Dowling Nic Instructions] We you. with question Iacoviello & from Thank Partners.

Your line is open.

Nic Iacoviello

Hi, guys.

would above disclosure? the Just there prior been under in current the quarter plan off, first any weather have

Steve Donaghy

above our there loss Hey, Nic. of plan no outside QX weather pick. is good No, in morning,

we’re So – no.

Nic Iacoviello

gross guess, we can guess, talk I what partners? much year or related was that I on any the of probably to the terms coverage multiple capacity would know what assuming it, you helped further comment I’m in And commutations of forward. probably been with guys just gross don’t you and how development also I Was about there gross some the think just Thanks. can prior attach the I’m but that trying doing. commuting that reserves number? think year – reinsurance prior didn’t of it trade to have

Steve Donaghy

didn’t it strength as appreciated forward well Yes. it with also distribute in that what computation, of I We just looking on is into ensuring more do responsibility, are forward. we And adequately our reinsurance reinsurers’ from performance, being our – it’s really and think basis, again, we responsibilities partners to the a prior don’t speaks the what are how well. and our what as affect overall move at is going the the reserves focus that the go-forward years, quarter,

Nic Iacoviello

of a This wondering, have ties I’m any reform, in right? thinking, the with it. we’ve because from year the of removed development. – you seen the new under But I years, reopened looking just guess, the from I’m couple maybe claims Got just be we’re prior of prior wouldn’t trend accident right, months context the the covered attorneys that reforms? in in at change older claims

Steve Donaghy

not to The what trends adverse we’ve No. past. are in the seen

our is impact again, And book rolls having and So the that we of new of receive more the renewal, under legislation legislation as benefit. more desired. the

And really we claims somewhat is others. with the the they up. a our to handling, and – see looking of past and there maybe insured was a ‘XX find and try handled or expeditiously as but with living the something I of of they get early ‘XX, are I end we can, policies reopens when or at information make and the the a best contract a driver a to should run-up fortunately. somebody compared claim shows think elsewhere, in a And lot in reopened people of think don’t our

normal a course it’s of So business.

Nic Iacoviello

That’s you. thank it. all, Got

Steve Donaghy

it. Thanks, I appreciate

Operator

are I’d Donaghy Steve there closing no And turn for like the questions in queue. the other to call you. back Thank comments. to

Steve Donaghy

we agents, markets consumers, it. have the assistance particular, their continued for past And Thanks I’d we to X much, in continued or we their Florida and Insurance Universal in Appreciate great our Catherine. associates, up our X a and have everyone in additional of our particular, to Holdings. appreciate to their continue agents all – and thank stakeholders. Thanks, of as and months, day. open in like support continued in support support very appreciate

Operator

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

Everyone, day. disconnect. have great now may a You

Universal Insurance (UVE) 28 Jul 232023 Q2 Earnings call transcript