Universal Insurance Holdings, Inc. Q3 FY2025 earnings call

• Solid quarter with 30.6% adjusted return on common equity. - Commenced annual actuarial review process earlier, reserving process more conservative. - 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. - Core revenue up 4.9% year-over-year. - Repurchased approximately 347,000 shares at an aggregate cost of $8.1 million, with ~$7.1 million remaining in share repurchase authorization. - Board declared a quarterly cash dividend of $0.16 per share payable in August 2025.

Core revenue was $400 million, up 4.9% year-over-year. Direct premiums written were $592.8 million, up 3.2% from the prior year quarter, with 22.2% growth in other states partially offset by a 2.6% decrease in Florida. Direct premiums earned were $534.1 million, up 5.2% from the prior year quarter. Net premiums earned were $359.7 million, up 4% from the prior year quarter. The net combined ratio was 96.4%, down 20.5 points compared to the prior year quarter. The net loss ratio was 70.2%, down 21.5 points, and the net expense ratio was 26.2%, up 1 point.

• Steve mentioned looking to get through 2025 before making substantial adjustments to reserving, retaining conservative approach. - Frank Wilcox noted there was approximately $3.9 million related to prior year cats booked as prior year development in the current quarter following the annual actuarial review.

• Forward-looking statements involve assumptions, risks, and uncertainties that could cause actual results to differ materially. - Florida market is ever-changing. - Competitive environment, including rate decreases in Florida and competition outside Florida.

Q: Could you follow on a 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?

A: Yes, we feel we've come through a very fraudulent time in the Florida market, file count and claims count reduced, claims folks getting claims faster. Will look at seriously as we get into the beginning of '26 and close out 2025 while retaining conservative approach.

Q: Any thoughts on the competitive environment, talks about rate decreases in Florida?

A: Outside Florida, highly competitive with big names. Within Florida, many new players, we don't chase premium, stick to rate adequacy and service. Agents prefer established providers. Different carriers view Florida geographic areas differently, but we continue to write new business.

Q: Capital management, with ROE well above growth rate, what are priorities? Should we expect substantial repurchase activity?

A: Consistently view shares as positive in capital management, will work with investment committee to establish and change guidelines, feel confident in acquiring shares at appropriate times.

Q: Was there any net prior year development booked in the current quarter following the annual actuarial review?

A: Yes, about $3.9 million related to prior year cats.