Universal Insurance Holdings, Inc. Aktie

Good morning, ladies and gentlemen, and welcome to Universal's Second Quarter 2026 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.

Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer.

Before we begin, please note today's discussion may contain statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release and Universal's SEC filings, all of which are available on the Investors section of our website at universalinsuranceholdings.com and on the SEC's website.

A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release and can also be found on Universal's website at universalinsuranceholdings.com.

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

Thanks, Arash. Good morning, everyone. In the quarter, we delivered a very strong 33.2% annualized adjusted return on common equity, driven by solid underwriting and revenue performance. Notably, the net loss ratio improved by 7.5 points year-over-year, driven by favorable claims and litigation trends that we expect to benefit non-catastrophe margins throughout the year. Strong retention and new business generation resulted in 4.1% direct premiums written growth, including growth in Florida and across our multi-state footprint. The favorable claims and litigation trends in our results are a direct product of Florida's legislative reforms.

Thanks to the efforts of the governor, the legislature, and the OIR, the Florida homeowners insurance market has stabilized and now operates much more like the rest of the country. Our litigation inventory is back down to levels that preceded Florida's litigation crisis and the impact of pre-reform claims practices is behind us.

As a result, we believe our aggregate reserves provide a meaningful margin above expected ultimate losses. Combined with more favorable reinsurance rates and our ability to write rate adequate premium throughout our robust, organic new business pipeline, we believe we are well positioned to deliver sustained profitable growth.

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

Thanks, Steve. Good morning. Adjusted diluted earnings per common share was $1.84 compared to an adjusted diluted earnings per common share of $1.23 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from a lower net loss ratio and a higher net premiums earned and net investment income. Core revenue of $419.4 million was up 4.6% year-over-year, with growth primarily stemming from higher net premiums earned and net investment income.

Direct premiums written were $621.3 million, up 4.1% from the prior year quarter. The increase stems from 0.8% growth in Florida and 14.4% growth in other states. Overall, growth mostly reflects higher policies and force across our multistate footprint. Direct premiums earned were $544.8 million, up 4.1% from the prior year quarter, reflecting direct premiums written growth over the last 12 months.

Net premiums earned were $377.3 million, up 4.7% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned in a lower seeded premium ratio. The net combined ratio is 91.6%, down 6.2 points compared to the prior year quarter. The decrease reflects a lower net loss ratio partially offset by a higher net expense ratio. The 64.8% net loss ratio was down 7.5 points compared to the prior year quarter, with the decrease reflecting better current accident year results. The net expense ratio was 26.8%, up 1.3 points compared to the prior year quarter, with the increase primarily driven by higher policy acquisition costs associated with growth outside of Florida, partially offset by a lower seeded premium ratio.

During the second quarter, the company repurchased approximately 122,000 shares at an aggregate cost of $4.5 million. The company's current share repurchase authorization program has approximately $8.6 million remaining. On July 8, 2026, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock payable on August 7, 2026 to shareholders of record as of the close of business on July 31, 2026.

[Operator Instructions] Our first question or comment comes from the line of Paul Newsome from Piper Sandler.

Congratulations on the quarter, folks. Maybe some updated thoughts on the competitive environment today and where you fit into it, both in Florida and outside of Florida. It looks like you're moving a little bit more outside of Florida as well, which is great. Any thoughts would be very appreciated.

Yes, good morning, Paul. Yes, we continue to write new business across our portfolio. We are laser focused on our internal profitability model and how and where we write business. And our goal is to continue to write rate adequate business where possible. So from a competitive perspective, we feel really good about where we sit and really good about our relationships with our agents. And our growth in Florida reflects our positivity on that book of business.

Thoughts on the business outside of Florida, and is that something that you would think about accelerating further?

Yes, I think it's the same response, Paul. I apologize if I didn't hit it in the first pass. But I think we are -- again, we study the profitability models that our actuaries put together in the other states, and we continue to take rate in many of the other states. So, as rate adequacy improves, we open up additional areas and write more business. And again, I think the agents see us as a really good resource in those markets when they need help. So we feel really good about the entire footprint we sit on.

Great. It sounds like there may be some changes in -- potentially in the citizen situation. Any thoughts on that or even the regulatory environment in Florida?

I apologize, Paul. What was it you said? Which situation or...

Citizens. I've heard rumblings of potential changes with citizen situation, but also just regulatory environment thoughts in Florida, which obviously have been very favorable, so now they would. But any updated thoughts there?

I think from a citizen's perspective, Paul, you know, they have reduced substantially and are almost at a low that we've not seen in many, many years. So they're not a competitive threat whatsoever to us any longer. And I think they've done some good things relative to ensuring they don't take on new business that they don't want. I think from a regulatory perspective, the state of Florida has been very steady. And I think Michael and the department have been very -- they really have done admirable work relative to ensuring and encouraging people to come into the state. So I think the market reflects the positivity across the board right now.

I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Steve Donaghy, Chief Executive Officer, for any closing remarks.

Thank you. I'd like to thank our associates, consumers, agents, and our stakeholders for their continued support of Universal. Have a nice day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by.

Good morning, ladies and gentlemen, and welcome to Universal's First Quarter 2026 Earnings Conference Call. As a reminder, this conference call is being recorded. I'll now turn the conference over to Arash Soleimani, Chief Strategy Officer.

Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements.

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

Thanks, Arash. Good morning, everyone. We had a fantastic start to the year with a 38.5% annualized adjusted return on common equity. Our top line results were strong with growth across our multistate footprint, including in Florida. On a separate note, I'm pleased to announce the completion of our 2026-2027 reinsurance renewal for our insurance entities as our program is now fully supported and secured. During the renewal process in 2026, we also secured $352 million of additional multiyear coverage, taking us through the 2027-2028 treaty period. I'll turn it over to Frank to walk through our financial results. Frank?

Thank you, Steve, and good morning. Adjusted diluted earnings per common share was $2 compared to an adjusted diluted earnings per common share of $1.44 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from a lower net loss ratio and higher net investment income. Core revenue of $398.2 million was up 0.8% year-over-year with growth primarily stemming from higher net investment income and net premiums earned.

Direct premiums written were $506.5 million, up 8.5% from the prior year quarter. The increase stems from 4.9% growth in Florida and 18.3% growth in other states. Overall growth mostly reflects higher policies in force and inflation adjustments across our multistate footprint. Direct premiums earned were $531.4 million, up 3.5% from the prior year quarter, reflecting direct premiums written growth over the last 12 months. Net premiums earned were $356.9 million, up 0.3% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, partially offset by a higher ceded premium ratio.

The net combined ratio was 89.7%, down 5.3 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, partially offset by a higher net expense ratio. The 63.9% net loss ratio was down 6.6 points compared to the prior year quarter, with the decrease reflecting better current accident year results. The net expense ratio was 25.8%, up 1.3 points compared to the prior year quarter, with the increase primarily driven by a higher ceded premium ratio and higher policy acquisition costs associated with growth outside of Florida.

During the first quarter, the company repurchased approximately 210,000 shares at an aggregate cost of $7.1 million. The company's current share repurchase authorization program has approximately $13.1 million remaining. On April 10, 2026, the Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock payable on May 15, 2026, to shareholders of record as of the close of business on May 8, 2026. With that, I'd like to ask the operator to open up the line for questions.

[Operator Instructions] And our first question comes from the line of Paul Newsome of Piper Sandler.

Congratulations on the quarter. Maybe we could just start off with some thoughts or color on the competitive environment, both in Florida and outside of Florida. It gets lots of investor questions about whether or not we're seeing a change in the number of folks who are competing in those markets and maybe the speed at which obviously, the ROEs that you and others are reporting are so huge, whether or not that will attract a lot of new competitors.

Paul, thank you. I think from a competitive perspective, we analyze our rates and are chasing rate adequacy more than we are chasing business. So from a competitive perspective, we feel good about where we stand. And obviously, from the quarter, we can bring on business when we want to and we see the markets profitably. So that's probably the answer I would give you. There is competition everywhere, but we feel good about our position and our relationship with our agents has never been stronger. So, yes.

Should we expect further price adjustments and rate adjustments for you folks in the future?

We haven't kicked off our rate analysis at this point. So as we get ready to do that, we will analyze the past 12 months and see how that impacts. And I think as we continue to benefit from the legislative environment and our business, we will do the right thing by our shareholders and our partners. So we'll take that all into account and continue to do the right thing.

Maybe some thoughts on capital management. Obviously, given where the returns are accumulating some excess capital. How do you balance the various uses of that capital today? And should we expect further purchases as a focus or not? Or just maybe you could just kind of prioritize how you think about that.

Paul, this is Frank. I think we're going to stay the course. Our #1 priority with capital has always been to support the insurance entities, ensuring that they are adequately capitalized so that we can continue to produce the business that benefits the entire holding company system. That, combined with continuing to return shareholder value.

Our next question comes from the line of Nicolas Iacoviello of Dowling & Partners.

Congrats on the quarter. Could we just start -- I was wondering if there's any additional details or commentary you could provide around the outcome of your reinsurance renewal?

Nick, thanks. I appreciate the comments. I think from the reinsurance perspective, we are very excited to be done and have it fully secured for 2026, '27. We were quite happy that we also extended our multiyear agreements. From a pricing perspective, we're going to sit on that until we get to May and release all the details as normal. We think it'd be premature for us to kind of make public comments relative to how we did, but we were very pleased with the market and very pleased with our partners for many, many years and how they treated us relative to this year.

Got it. I know we'll see more details in May. But I mean, is there anything you could comment on how we should think about the retention? Is it fair to assume it would be similar on a GAAP basis versus prior year, and it would include some captive usage. I get, obviously, you'll have the opportunity to maybe buy down. But as it stands today, is that a fair assumption?

Yes. The retentions will remain the same for the insurance entities, $45 million. We plan to continue to use the captive in the same manner for the $66 million layer above $45 million for the first event. So structurally identical to last year.

I'm showing no further questions at this time. I'll now turn it back to Steve Donaghy, Chief Executive Officer, for closing remarks.

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

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to Universal's Fourth Quarter 2025 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.

Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements.

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

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

Thanks, Arash. Good morning, everyone. We had an outstanding quarter with an adjusted return on common equity of over 46% and results were solid across the board. I'm deeply proud of the progress we made in 2025. We're continuing to see the benefits of Florida's legislative reforms, which have visibly stabilized the market, benefiting all stakeholders.

Our capital position is robust, and I believe our reserves are the strongest they've been in our history. We are already well underway in negotiating and placing our 2026 reinsurance program with a substantial portion of our first event catastrophe tower already placed as we stand here today, along with meaningful additional multiyear capacity secured for the 2027 hurricane season.

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

Thank you, Steve, and good morning. Adjusted diluted earnings per common share was $2.17, up from adjusted diluted earnings per common share of $0.25 in the prior year quarter. The increase mostly stems from a lower net loss ratio and higher net premiums earned and net investment income. Core revenue of $403.6 million was up 4.4% year-over-year, with growth primarily stemming from higher net premiums earned and net investment income. Direct premiums written were $483.7 million, up 2.7% from the prior year quarter. The increase stems from an 18.2% growth in other states, partially offset by a 3.1% decrease in Florida.

Overall growth mostly reflects higher policies in force and inflation adjustments across our multistate footprint. Direct premiums earned of $538 million were up 3.6% year-over-year, reflecting direct premiums written growth over the past 12 months. Net premiums earned were $363.4 million, up 4.3% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio. The net combined ratio was 87.5%, down 20.4 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, slightly offset by a higher net expense ratio. The net loss ratio was 61.3%, down 21 points compared to the prior year quarter.

The decrease reflects better current accident year results and the inclusion of Hurricane Milton in the prior year quarter. The net expense ratio was 26.2%, up 0.6 points from 25.6% in the prior year quarter. The increase was primarily driven by higher other operating costs. During the fourth quarter, the company repurchased approximately 210,000 shares at an aggregate cost of $6.9 million.

On January 7, 2026, the company announced a new share repurchase program under which the company may repurchase up to $20 million of its outstanding shares of common stock through January 8, 2028. On February 4, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.16 per common share payable on March 13, 2026, to shareholders of record as of the close of business on March 6, 2026.

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

[Operator Instructions] Our first question comes from the line of Paul Newsome from Piper Sandler.

Congratulations on the quarter. I was hoping you could give us a little bit more thoughts on the competitive advantage -- competitive environment today. We hear just a ton about price declines and increased folks in the market. How do you see it from your perspective?

Paul, thank you. This is Steve. We see the competitive environment very favorable to Universal at this point. Our relationship with our agency force, the rates that we've implemented are favorable. And I think we're just seeing a whole lot of positive uptick in markets that we've opened due to analyzing our internal profitability model. So we're open in more markets. We have more business coming in across those markets, and I feel good about the business. So as you know, it's always a constant analyzation of markets that are favorable versus nonfavorable, closing certain markets, opening certain markets, but we feel good about the business in Florida in particular, and have seen very positive things as a result.

Do you have any thoughts on sort of the regulatory environment? And we hear a lot about the issues with affordability and whether or not the insurance industry will be asked to essentially kind of give back profits or something like that. Any exposure or thoughts on that probably?

I would add that without the actions taken by the state of Florida and Governor DeSantis, we would not be in the position -- the industry would not be in the position we're in today, not just Universal. So without action, monies would continue to be going to third parties that weren't impacted by a claim, and that wasn't good for anyone. I think as we continue, and you've seen we've had modest declines in '24 and '25, we kick off our actuarial study on rate for '26 at the end of March, and we'll continue to do the right thing. And a decrease in rate does not always result in a decrease in earnings as a result of the favorable legislation and the less severity and frequency that we're seeing and you compile that with potential reductions in reinsurance and expenses, it's a very favorable environment right now. And we look forward to continuing to return funds to insurers as a result of that. And I would also add, too, our retention, Paul, has never been better. So we're in a very good place.

At this time, I would now like to turn the conference back over to Steve Donaghy, Chief Executive Officer, for closing remarks.

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

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

Good morning, ladies and gentlemen, and welcome to Universal's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer.

Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release on Universal's SEC filings all of which are available on the Investors section of our website at universalinsuranceholdings.com and on the SEC's website. A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release and can also be found on Universal's website at universalinsuranceholdings.com.

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

Thanks, Arash. Good morning, everyone. It was a solid quarter with a 30.6% adjusted return on common equity. Our unique organic business model allows us to consistently generate deep double-digit ROEs, making us particularly well positioned to succeed in the much improved Florida market. Additionally, we commenced our annual actuarial review process considerably earlier this year and our findings are very encouraging. As we've discussed in recent periods, our reserving process has become more conservative with a focus on protecting and increasing the resilience of our balance sheet. When we look at our current and prior accident year reserves in the aggregate, we believe we're in a very strong position, further increasing our optimism as we turn a new chapter in the revamped Florida market.

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

Thanks, Steve, and good morning. Adjusted diluted earnings per common share was $1.36 compared to an adjusted loss per common share of $0.73 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from a lower net loss ratio and higher net premiums earned, net investment income and commission revenue. Core revenue of $400 million was up 4.9% year-over-year, with growth primarily stemming from higher net premiums earned, net investment income and commission revenue. Direct premiums written were $592.8 million, up 3.2% from the prior year quarter. The increase stems from 22.2% growth in other states partially offset by a 2.6% decrease in Florida.

Overall growth mostly reflects higher policies in force, higher rates and inflation adjustments across our multistate footprint. Direct premiums earned were $534.1 million, up 5.2% from the prior year quarter, reflecting direct premiums written growth over the last 12 months. Net premiums earned were $359.7 million, up 4% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned partially offset by higher ceded premium ratio. The net combined ratio was 96.4%, down 20.5 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, partially offset by a higher net expense ratio. The 70.2% net loss ratio was down 21.5 points compared to the prior year quarter, with the decrease reflecting the inclusion of Hurricanes Debby and Helene in the prior year quarter and the lack of hurricane activity in the current year quarter. The net expense ratio was 26.2%, up 1 point compared to the prior year quarter, with the increase primarily driven by a higher ceded premium ratio and higher policy acquisition costs associated with growth outside Florida.

During the quarter, the company repurchased approximately 347,000 shares at an aggregate cost of $8.1 million. The company's current share repurchase authorization program has approximately $7.1 million remaining. On July 9, 2025, the Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock payable on August 9, 2025, to shareholders of record as of the close of business on August 1, 2025.

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

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

And was -- maybe you could follow on a little bit more on your reserving comments. Does this foreshadow any change in how you think about profit margins prospectively and the exit year loss ratio or any change in how you think about loss picks?

Yes. Paul, thanks for the question. We feel as though we have come through a very fraudulent time within the Florida market. And we have seen all the all the things in the past go through the book. There's still things to deal with in the future, as you know, Florida is an ever-changing market. However, we've never had as many dollars up in the aggregate as we do right now. And our file count or claims count is dramatically reduced, and our claims folks are getting the claims much faster as a result of the market that we're in. So we've seen considerably positive effects on the book and on our reserving philosophy, so to say.

As we look to the future, we want to get through the year before we make any substantial adjustments and retain our conservative approach but that will be something we will look at seriously as we get into the beginning of '26 and close out 2025.

A different follow-up question. Any thoughts on the competitive environment. We hear all sort of talks about rate decreases in the Florida market in particular. But could you give us some general thoughts about what you're seeing both in and out of the Florida markets from a competitive perspective?

Yes. I think, again, just to address outside of the Florida market, we're more of a niche provider, and we have our markets that we like and our rates are adequate in certain spots. And it's very -- it's highly competitive outside of Florida, and you have all the big names there as well. Within Florida, there are a lot of new players showing up. There's a lot of new players that maybe don't understand what we've understood for 25 or 26 years now. So we see a lot of various behaviors. We do not chase premium. We are sticking to rate adequacy and trying to drive a high level of service to our insurers and profitability to our shareholders.

So it is competitive. There are a lot of markets. I think the agents continue to prefer to write with established providers when competitive. And so I think -- and I would say unlike other times, that's now consistent across the state. It's not just in specific markets in Florida. And I think there's different carriers that look at different geographic areas in Florida very differently. So we do -- but we continue to write new business and new policies as you've seen from last quarter. So we feel good about our position and our relationship with our agency force.

The last big question and then I'll let other folks ask. Capital management, you made some comments this quarter. But you now have a high-class problem here in the sense that your ROE is well above the growth rate of the company. What's your priorities there? Should we expect substantial or at least some repurchase activity prospectively as part of your sort of ongoing business given where the returns are now?

I don't know about new purchase activity, Paul, but we consistently view our shares as a positive within our capital management. So as we look to the future and we have access to capital. We'll continue to work with the investment committee and establish guidelines and change those guidelines as we go. But we feel very confident in any acquisition of our shares that we can do at the appropriate times.

Our next question comes from Nicolas Iacoviello with Dowling Partners.

I just had one. Was there any net prior year development booked in the current quarter following the annual actuarial review?

Yes, there was. It's about $3.9 million related to prior year cats.

All right. And I'm assuming there was nothing on the claims handling side from last year's storms, correct?

That's correct. Yes.

I'm showing no further questions at this time. I would now like to turn it back to Steve Donaghy for closing remarks.

I'd like to thank our associates, consumers, our agency force and stakeholders for their continued support of Universal and wish all a nice weekend.

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