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Universal Insurance Holdings Reports First Quarter 2021 Results

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Universal Insurance Holdings (NYSE: UVE) announced a strong start to 2021 with a diluted EPS of $0.84 and total revenue of $262.8 million, marking an 11.7% increase year-over-year. The company experienced margin expansion exceeding 200 basis points and an annualized return on average equity of 23.2%. CEO Stephen J. Donaghy highlighted progress on their reinsurance program and noted the passage of Florida Senate Bill 76, aimed at improving property insurance access. However, the firm has actively reduced policy counts due to market pressures.

Positive
  • 2021 Q1 diluted EPS of $0.84 on a GAAP and non-GAAP adjusted basis.
  • Total revenue increased by 11.7% to $262.8 million.
  • Margins expanded by over 200 basis points.
  • Annualized return on average equity of 23.2%.
  • Oversubscribed on first CAT bond at better-than-expected rates.
Negative
  • Reduced policies in force and new/renewal policy counts compared to Q1 2020.
  • Florida's property insurance market remains under pressure due to litigated claims.

Insights

Analyzing...

Universal Insurance Holdings (NYSE: UVE) (the “Company”) reported 2021 first quarter diluted EPS of $0.84 on a GAAP and non-GAAP1 adjusted basis. Total revenue was up 11.7% from the year ago quarter to $262.8 million. Margins expanded in excess of 200 basis points, with an annualized return on average equity of 23.2%.

1 Excludes net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions (“non-GAAP adjusted EPS”). Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

“We are off to a strong start to 2021 with solid first quarter results, including close to 12% top line growth, margin expansion in excess of 200 basis points, and a total annualized return on average equity of 23.2%,” said Stephen J. Donaghy, Chief Executive Officer. “We continue to make progress on our reinsurance program renewal, and were oversubscribed on our first CAT bond in March at rates below the low end of our initial range. We have now completed procurement of our All States first event reinsurance program for UPCIC for the 2021 wind season and will have additional details in May as we finalize the remainder. In addition, we were encouraged earlier this month when the Florida Senate passed Bill 76, which would enable Floridians to have reliable access to property insurance. For a number of years Florida has been a significant outlier compared to the rest of the country when it comes to litigated property claims, which has put significant pressure on the Florida property insurance marketplace. We have not been immune to these market dynamics and during the first quarter we actively reduced our policies in force sequentially and reduced new and renewal policy counts in aggregate this quarter when compared to the first quarter of 2020. That being said, we continue to monitor closely the companion bill in the House (House Bill 305), which has differences from Senate Bill 76.”

Summary Financial Results

($thousands, except per share data)

Three Months Ended March 31,

 

2021

 

2020

 

Change

(GAAP comparison)

 

 

 

 

 

Total revenue

$

262,757

 

 

$

235,275

 

 

11.7

%

Income (loss) before income taxes

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FAQ

What were Universal Insurance Holdings' Q1 2021 earnings per share?

Universal Insurance Holdings reported a diluted EPS of $0.84 for Q1 2021.

How much did UVE's total revenue increase in Q1 2021?

The total revenue for UVE increased by 11.7% to $262.8 million in Q1 2021.

What is the return on equity for Universal Insurance in Q1 2021?

The annualized return on average equity for Universal Insurance in Q1 2021 was 23.2%.

What challenges did UVE face in the insurance market?

Universal Insurance faced challenges including reduced policy counts and ongoing pressure in the Florida property insurance market.

What legislative change could impact UVE's business?

The passage of Florida Senate Bill 76 could improve access to property insurance, benefiting UVE.
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