UNIVERSAL INSURANCE HOLDINGS, INC. Q3 FY2024 earnings call

• Acknowledged impact of recent hurricanes (Debbie, Helene, Milton) and highlighted reinsurance protection and financial resilience. - Non-catastrophe underwriting trends are improving. - Opened business in Wisconsin, the 19th state, expanding market reach. - Repurchased 226,000 shares at an aggregate cost of $4.4 million, with approximately $10.3 million remaining in share repurchase authorization. - Declared a quarterly cash dividend of $0.16 per share.

Core revenue was $381.4 million, up 5.4% year-over-year. Direct premiums written were $574.4 million, up 8% from the prior year quarter, with 2.1% growth in Florida and 32.9% growth in other states. Adjusted loss per common share was $0.73 compared to $0.16 in the prior year quarter. The net combined ratio was 116.9%, up 6.2 points. The net loss ratio was 91.7%, up 4.7 points due to higher weather losses (mostly Hurricane Helene) partially offset by favorable prior year reserve development. The net expense ratio was 25.2%, up 1.5 points due to higher policy acquisition costs and operating costs.

• Expect a smaller financial impact from weather in the fourth quarter, inclusive of Hurricane Milton. - Recovery of storm impacts, including from Milton, is expected in the fourth quarter, with some tail into 2025.

• Weather-related risks, including high frequency and high severity storms posing potential financial impacts. - Uncertainty around reinstatement premiums and the timing of claim recovery, particularly with regard to storm impacts.

Q: Can we talk about the reserve development to start with, just give us some ideas about what the sources of the development was?

A: Frank Wilcox said there was favorable development this quarter of just around $2.2 million from prior year cats.

Q: Can we be considering any additional reinstatement premiums that flow through following Milton?

A: Frank Wilcox said many layers are covered by reinstatement premium protection, but depending on tower depth, possibility exists; Stephen Donaghy added no reinstatement premiums expected in Q4 due to claim pace.