Market Overview

United Insurance Holdings Corp. Reports Financial Results for Its Third Quarter Ended September 30, 2018

Share:

Company to Host Quarterly Conference Call at 5:00 P.M. ET on
November 1, 2018

United Insurance Holdings Corp. (NASDAQ:UIHC) (UPC Insurance or
the Company), a property and casualty insurance holding company, today
reported its financial results for the third quarter ended September 30,
2018.

($ in thousands, except for per share data)   Three Months Ended     Nine Months Ended  
September 30,     September 30    
2018   2017 Change 2018   2017 Change
Gross premiums written $   295,935 $   267,219 10.7 % $   960,214 $   788,408 21.8 %
Gross premiums earned $ 303,956 $ 268,001 13.4 % $ 872,547 $ 711,650 22.6 %
Net premiums earned $ 171,330 $ 152,494 12.4 % $ 507,536 $ 419,295 21.0 %
Total revenues $ 187,652 $ 171,128 9.7 % $ 542,853 $ 471,834 15.1 %
Earnings before income tax $ (15,870 ) $ (45,487 ) 65.1 % $ 15,177 $ (26,899 ) 156.4 %
Net income (loss) attributable to UIHC $ (11,708 ) $ (28,012 ) 58.2 % $ 11,361 $ (16,856 ) 167.4 %
Net income (loss) available to UIHC common shareholders per diluted
share
$ (0.27 ) $ (0.66 ) 59.1 % $ 0.27 $ (0.47 ) 157.4 %
 
Reconciliation of net income (loss) to core income (loss):
Plus: Merger expenses $ $ 12 (100.0 )% $ $ 6,906 (100.0 )%
Plus: Non-cash amortization of intangible assets $ 1,365 $ 10,363 (86.8 )% $ 12,555 $ 23,552 (46.7 )%
Less: Net realized losses on investment portfolio $ (447 ) $ (71 ) (529.6 )% $ (674 ) $ (554 ) (21.7 )%
Less: Unrealized gains on equity securities $ 6,109 $ 100.0 % $ 5,046 $ 100.0 %
Less: Net tax impact(1) $ (1,074 ) $ 3,656 (129.4 )% $ 2,046 $ 10,854 (81.2 )%
Core income (loss)(2) $ (14,931 ) $ (21,222 ) 29.6 % $ 17,498 $ 3,302 430.0 %
Core income (loss) per diluted share(2) $ (0.35 ) $ (0.50 ) 30.0 % $ 0.41 $ 0.09 355.6 %
 
Book value per share $ 12.33 $ 11.73 5.1 %
(1)   In order to reconcile net income to the core income measure, we
included the tax impact of all adjustments using the effective rate
at the end of each period.

(2)

Core income and core income per diluted share, measures that are
not based on GAAP, are reconciled above to net income and net
income per diluted share, respectively, the most directly
comparable GAAP measures. Additional information regarding
non-GAAP financial measures presented in this press release can be
found in the "Definitions of Non-GAAP Measures"
section, below.

 

"We accomplished a lot during the quarter, including the launch of
Journey, our fifth insurance company, and the first one to have an A.M.
Best Rating," said John Forney, President & CEO of UPC Insurance. "We
grew earned premium by over 13% year-over-year during the quarter, and
saw especially strong growth in New York, where our new product is
beginning to get good traction. While Hurricane Florence hurt our bottom
line results, that blow was softened by the ex-Florida retention buydown
feature in our reinsurance program. All in all, I'm pleased with the
progress we are making and the opportunities we are creating to support
sustained growth and profitability."

Return on Equity and Core Return on Equity

Return on equity is a ratio the Company calculates by dividing
annualized net income for the trailing three months by the average
stockholders' equity for the trailing twelve months. Core return on
equity (see calculation below) is a ratio calculated using non-GAAP
measures. It is calculated by dividing the annualized core income for
the trailing three months by the average stockholders' equity for the
trailing twelve months. Core income is an after-tax non-GAAP measure
that is calculated by excluding from net income the effect of non-cash
amortization of intangible assets, unrealized gains or losses on the
Company's equity security investments and net realized gains or losses
on the Company's investment portfolio. In the opinion of the Company's
management, core income, core income per share and core return on equity
are meaningful indicators to investors of the Company's underwriting and
operating results, since the excluded items are not necessarily
indicative of operating trends. Internally, the Company's management
uses core income, core income per share and core return on equity to
evaluate performance against historical results and establish financial
targets on a consolidated basis. The table above reconciles core income
to net income, the most directly comparable GAAP measure.

($ in thousands)   Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
Net income (loss) attributable to UIHC $   (11,708 ) $   (28,012 ) $   11,361 $   (16,856 )
Return on equity based on GAAP net income (loss) attributable to
UIHC (1)
(8.8 )% (29.3 )% 2.8 % (5.9 )%
 
Core income (loss) $ (14,931 ) $ (21,222 ) $ 17,498 $ 3,302
Core return on equity (1) (11.2 )% (22.2 )% 4.4 % 1.2 %
(1)   Return on equity for the three and nine months ended September 30,
2018 and 2017 is calculated on an annualized basis.
 

Combined Ratio and Underlying Ratio

The calculations of the Company's combined ratio and underlying combined
ratio are shown below.

($ in thousands)   Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017   Change 2018   2017   Change
Loss ratio, net(1)   70.4 %   93.9 %   (23.5 ) pts   56.4 %   70.0 %   (13.6 ) pts
Expense ratio, net(2)   47.0 %   47.7 %   (0.7 ) pts   46.1 %   48.4 %   (2.3 ) pts
Combined ratio (CR)(3) 117.4 % 141.6 % (24.2 ) pts 102.5 % 118.4 % (15.9 ) pts
Effect of current year catastrophe losses on CR 20.2 % 54.2 % (34.0 ) pts 11.5 % 27.4 % (15.9 ) pts
Effect of prior year favorable development on CR (1.6 )% (0.7 )% (0.9 ) pts (0.8 )% (0.7 )% (0.1 ) pts
Effect of ceding commission income on CR (4)   %   6.6 %   (6.6 ) pts   %   7.2 %   (7.2 ) pts
Underlying combined ratio(5) 98.8 % 81.5 % 17.3 pts 91.8 % 84.5 % 7.3 pts
(1)   Loss ratio, net is calculated as losses and loss adjustment expenses
(LAE), net of losses ceded to reinsurers, relative to net premiums
earned.
(2) Expense ratio, net is calculated as the sum of all operating
expenses less interest expense relative to net premiums earned.
(3) Combined ratio is the sum of the loss ratio, net and expense ratio,
net.
(4) For the nine months ended September 30, 2018, the Company presented
$31.7 million of ceding commissions earned as a $7.2 million
decrease to ceded earned premium and a $24.5 million decrease in
policy acquisition costs, which reduced other revenue and removed
the distortive impact to our underlying combined ratio. For the
three months ended September 30, 2018, the Company presented $11.0
million of ceding commissions earned as a $2.7 million decrease to
ceded earned premium and an $8.3 million decrease in policy
acquisition costs.
(5)

Underlying combined ratio, a measure that is not based on GAAP, is
reconciled above to the combined ratio, the most directly
comparable GAAP measure. Additional information regarding non-GAAP
financial measures presented in this press release can be found in
the "Definitions of Non-GAAP Measures" section,
below.

 

Quarterly Financial Results

Net loss attributable to the Company for the third quarter of 2018 was
$11.7 million, or $0.27 per diluted share, compared to a net loss of
$28.0 million, or $0.66 per diluted share, for the third quarter of
2017. The decrease in net loss was primarily due to the increase in
gross premiums earned and the decrease in losses and loss adjustment
expenses during the third quarter of 2018 compared to the third quarter
of 2017.

The Company's total gross written premium increased by $28.7 million, or
10.7%, to $295.9 million for the third quarter of 2018 from $267.2
million for the third quarter of 2017, primarily reflecting organic
growth in new and renewal business generated in all regions. The
breakdown of the quarter-over-quarter changes in both direct written and
assumed premiums by region and gross written premium by line of business
is shown in the table below.

 

Three Months Ended

 
($ in thousands)

September 30,

2018   2017 Change $   Change %
Direct Written and Assumed Premium by Region (1)  
Florida $   141,524 $   130,309 $   11,215 8.6 %
Gulf 58,632 58,240 392 0.7
Northeast 50,695 43,652 7,043 16.1
Southeast 27,854   25,431   2,423     9.5  
Total direct written premium by region 278,705 257,632 21,073 8.2 %
Assumed premium (2) 17,230   9,587   7,643     79.7  
Total gross written premium by region $   295,935   $   267,219   $   28,716     10.7 %
 
Gross Written Premium by Line of Business
Personal property $ 240,456 $ 217,970 $ 22,486 10.3 %
Commercial property 55,479   49,249   6,230     12.7  
Total gross written premium by line of business $   295,935   $   267,219   $   28,716     10.7 %
(1)   "Gulf" is comprised of Hawaii, Louisiana and Texas; "Northeast" is
comprised of Connecticut, Massachusetts, New Jersey, New York and
Rhode Island; and "Southeast" is comprised of Georgia, North
Carolina and South Carolina.
(2) Assumed premium written for 2018 is primarily commercial property
business assumed from unaffiliated insurers.
 

Loss and LAE decreased by $22.5 million, or 15.8%, to $120.6 million for
the third quarter of 2018 from $143.1 million for the third quarter of
2017. Loss and LAE expense as a percentage of net earned premiums
decreased 23.5 points to 70.4% for the third quarter of 2018, compared
to 93.9% for the same period last year. Excluding catastrophe losses and
reserve development, the Company's gross underlying loss and LAE ratio
for the third quarter of 2018 would have been 29.2%, an increase of 6.2
points from 23.0% during the third quarter of 2017.

Policy acquisition costs increased by $7.7 million, or 16.4%, to $54.2
million for the third quarter of 2018 from $46.5 million for the third
quarter of 2017. The primary driver of the increase in costs was the
managing general agent commissions related to American Coastal
commercial premiums along with agent commissions which were generally
consistent with the Company's growth in premium production and higher
average market commission rates outside of Florida.

Operating and underwriting expenses increased by $4.1 million, or 59.3%,
to $11.0 million for the third quarter of 2018 from $6.9 million for the
third quarter of 2017, primarily due to increased costs related to
incurred expenses for software tools and agent incentive costs, as well
as assessments from the North Carolina Joint Underwriting Association -
FAIR Plan.

General and administrative expenses decreased by $3.9 million, or 20.5%,
to $15.4 million for the third quarter of 2018 from $19.3 million for
the third quarter of 2017, primarily due to amortization costs related
to the merger with AmCo during the third quarter of 2017 that were fully
expensed at the end of the first quarter of 2018.

Combined Ratio Analysis

The calculations of the Company's loss ratios and underlying loss ratios
are shown below.

($ in thousands)   Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017   Change 2018   2017   Change
Loss and LAE $   120,552 $   143,127 $   (22,575 ) $   286,393 $   293,398 $   (7,005 )
% of Gross earned premiums 39.7 % 53.4 % (13.7 ) pts 32.8 % 41.2 % (8.4 ) pts
% of Net earned premiums 70.4 % 93.9 % (23.5 ) pts 56.4 % 70.0 % (13.6 ) pts
Less:
Current year catastrophe losses $ 34,593 $ 82,615 $ (48,022 ) $ 58,250 $ 115,025 $ (56,775 )
Prior year reserve unfavorable (favorable) development (2,656 ) (1,029 ) (1,627 ) (4,207 ) (2,819 ) (1,388 )
Underlying loss and LAE (1) $ 88,615 $ 61,541 $ 27,074 $ 232,350 $ 181,192 $ 51,158
% of Gross earned premiums 29.2 % 23.0 % 6.2 pts 26.6 % 25.5 % 1.1 pts
% of Net earned premiums 51.7 % 40.4 % 11.3 pts 45.8 % 43.2 % 2.6 pts
(1)   Underlying loss and LAE is a non-GAAP financial measure and is
reconciled above to net loss and LAE, the most directly comparable
GAAP measure. Additional information regarding non-GAAP financial
measures presented in this press release can be found in the
"Definitions of Non-GAAP Measures" section, below.
 

The calculations of the Company's expense ratio and underlying expense
ratios are shown below.

($ in thousands)   Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017   Change 2018   2017   Change
Policy acquisition costs $   54,200 $   46,546 $   7,654 $   153,716 $   125,302 $   28,414
Operating and underwriting 10,976 6,891 4,085 28,976 19,020 9,956
General and administrative 15,358   19,316   (3,958 ) 51,326   58,825   (7,499 )
Total Operating Expenses $ 80,534 $ 72,753 $ 7,781 $ 234,018 $ 203,147 $ 30,871
% of Gross earned premiums 26.5 % 27.1 % (0.6 ) pts 26.8 % 28.5 % (1.7 ) pts
% of Net earned premiums 47.0 % 47.7 % (0.7 ) pts 46.1 % 48.4 % (2.3 ) pts
Less:
Ceding commission income (1) $     $   10,091   $   (10,091 ) $     $   30,185   $   (30,185 )
Underlying expense (2) $ 80,534 $ 62,662 $ 17,872 $ 234,018 $ 172,962 $ 61,056
% of Gross earned premiums 26.5 % 23.4 % 3.1 pts 26.8 % 24.3 % 2.5 pts
% of Net earned premiums 47.0 % 41.1 % 5.9 pts 46.1 % 41.3 % 4.8 pts
(1)   For the nine months ended September 30, 2018, the Company presented
$31.7 million of ceding commissions earned as a $7.2 million
decrease to ceded earned premium and a $24.5 million decrease in
policy acquisition costs, which reduced other revenue and removed
the distortive impact to our underlying expense ratio. For the three
months ended September 30, 2018, the Company presented $11.0 million
of ceding commissions earned as a $2.7 million decrease to ceded
earned premium and an $8.3 million decrease in policy acquisition
costs.

(2)

Underlying expense is a non-GAAP financial measure and is
reconciled above to total operating expenses, the most directly
comparable GAAP measure. Additional information regarding non-GAAP
financial measures presented in this press release can be found in
the "Definitions of Non-GAAP Measures" section, below.

 

Reinsurance Costs as a Percentage of Earned Premium

Excluding the Company's business for which it cedes 100% of the risk of
loss, reinsurance costs in the third quarter of 2018 were 42.0% of gross
premiums earned, compared to 41.3% of gross premiums earned for the
third quarter of 2017. The increase in this ratio was driven primarily
by the increased coverage purchased for our 2018-19 combined catastrophe
reinsurance program.

Investment Portfolio Highlights

The Company's cash and investment holdings increased to $1.2 billion at
September 30, 2018 compared to $1.1 billion at December 31, 2017. UPC
Insurance's cash and investment holdings consist of investments in U.S.
government and agency securities, corporate debt and 100% investment
grade money market instruments. Fixed maturities represented
approximately 89.2% of total investments at September 30, 2018 compared
to 89.3% at December 31, 2017. At September 30, 2018 the modified
duration was 3.67 years compared to 3.9 years at December 31, 2017.

Book Value Analysis

Book value per share decreased (1.9)% from $12.56 at December 31, 2017
to $12.33 at September 30, 2018, and underlying book value per share
increased 2.4% from $12.35 at December 31, 2017 to $12.64 at
September 30, 2018. A decrease in the Company's accumulated other
comprehensive income drove the decrease in our book value per share. The
decrease results from the adoption of Accounting Standards Update
2016-01 which requires unrealized gains or losses on equity securities
to be reflected on the income statement, rather than in other
comprehensive income. Removing the effect of the decrease in accumulated
other comprehensive income, our book value per share increased, as shown
in the table below.

($ in thousands, except for share and per share data)   September 30,   December 31,
2018 2017
Book Value per Share
Numerator:
Common stockholders' equity attributable to UIHC $   528,877   $  

537,125

 

Denominator:
Total Shares Outstanding 42,910,579   42,753,054  
Book Value Per Common Share $   12.33   $   12.56  
 
Book Value per Share, Excluding the Impact of Accumulated Other
Comprehensive Income (AOCI)
Numerator:
Common stockholders' equity attributable to UIHC $   528,877 $   537,125
Accumulated other comprehensive (loss) income (13,702 ) 9,221  
Stockholders' Equity, excluding AOCI $   542,579   $   527,904  
Denominator:
Total Shares Outstanding 42,910,579   42,753,054  
Underlying Book Value Per Common Share(1) $   12.64   $   12.35  
(1)  

Underlying book value per common share is a non-GAAP financial
measure and is reconciled above to book value per common share,
the most directly comparable GAAP measure. Additional information
regarding non-GAAP financial measures presented in this press
release can be found in the "Definitions of Non-GAAP Measures"
section, below.

 

Definitions of Non-GAAP Measures

We believe that investors' understanding of UPC Insurance's performance
is enhanced by our disclosure of the following non-GAAP measures. Our
methods for calculating these measures may differ from those used by
other companies and therefore comparability may be limited.

Combined ratio excluding the effects of current year catastrophe
losses, prior year reserve development and ceding commission income
earned (underlying combined ratio)
is a non-GAAP ratio, which is
computed by subtracting the effect of current year catastrophe losses,
prior year development, and ceding commission income earned related to
the Company's quota share reinsurance agreement from the combined ratio.
The Company believes that this ratio is useful to investors and it is
used by management to reveal the trends in the Company's business that
may be obscured by current year catastrophe losses, losses from lines in
run-off, prior year development, and ceding commission income earned.
Current year catastrophe losses cause the Company's loss trends to vary
significantly between periods as a result of their incidence of
occurrence and magnitude, and can have a significant impact on the
combined ratio. Prior year development is caused by unexpected loss
development on historical reserves. Ceding commission income compensates
the Company for expenses it incurs in generating the premium ceded under
the Company's quota share reinsurance agreement. The Company believes it
is useful for investors to evaluate these components separately and in
the aggregate when reviewing the Company's performance. The most direct
comparable GAAP measure is the combined ratio. The underlying combined
ratio should not be considered as a substitute for the combined ratio
and does not reflect the overall profitability of the Company's business.

Net loss and LAE excluding the effects of current year catastrophe
losses and prior year reserve development (underlying loss and LAE)

is a non-GAAP measure which is computed by subtracting the effect of
current year catastrophe losses and prior year reserve development from
net loss and LAE. The Company uses underlying loss and LAE figures to
analyze the Company's loss trends that may be impacted by current year
catastrophe losses and prior year development on the Company's reserves.
As discussed previously, these two items can have a significant impact
on the Company's loss trends in a given period. The Company believes it
is useful for investors to evaluate these components separately and in
the aggregate when reviewing the Company's performance. The most direct
comparable GAAP measure is net loss and LAE. The underlying loss and LAE
measure should not be considered a substitute for net loss and LAE and
does not reflect the overall profitability of the Company's business.

Operating expenses excluding the effects of ceding commission income
earned, merger expenses, and amortization of intangible assets
(underlying expense)
is a non-GAAP measure which is computed by
subtracting ceding income earned related to the Company's quota share
reinsurance agreement, merger expenses and amortization of intangibles.
Ceding commission income compensates the Company for expenses it incurs
in generating the premium ceded under the Company's quota share
reinsurance agreement. Merger expenses are directly related to past
mergers and are not reflective of current period operating performance.
Similarly, amortization expense is related to the amortization of
intangible assets acquired through mergers and therefore the expense
does not arise through normal operations. The Company believes it is
useful for investors to evaluate these components separately and in the
aggregate when reviewing the Company's performance. The most direct
comparable GAAP measure is operating expenses. The underlying expense
measure should not be considered a substitute for the expense ratio and
does not reflect the overall profitability of the Company's business.

Net income excluding the effects of merger expenses, non-cash
amortization of intangible assets, realized gains (losses) and
unrealized gains (losses) on equity securities, net of tax (core income)

is a non-GAAP measure which is computed by adding merger expenses and
non-cash amortization, net of tax, to net income and subtracting
realized gains (losses) on our investment portfolio, net of tax, and
unrealized gains (losses) on our equity securities, net of tax, from net
income. Merger expenses relate to professional fees associated with the
AmCo merger in the second quarter of 2017. Amortization expense is
related to the amortization of intangible assets acquired through merger
and therefore the expense does not arise through normal operations.
Investment portfolio gains (losses) and unrealized equity security gains
(losses) vary independent of our operations. We believe it is useful for
investors to evaluate these components separately and in the aggregate
when reviewing our performance. The most direct comparable GAAP measure
is net income. The core income measure should not be considered a
substitute for net income and does not reflect the overall profitability
of our business.

Book value per common share, excluding the impact of accumulated
other comprehensive income (underlying book value per common share),
is
a non-GAAP measure which is computed by dividing common stockholders'
equity after excluding accumulated other comprehensive income, by total
common shares outstanding plus dilutive potential common shares
outstanding. We use the trend in book value per common share, excluding
the impact of accumulated other comprehensive income, in conjunction
with book value per common share to identify and analyze the change in
net worth attributable to management efforts between periods. We believe
the non-GAAP measure is useful to investors because it eliminates the
effect of interest rates that can fluctuate significantly from period to
period and are generally driven by economic and financial factors which
are not influenced by management. Book value per common share is the
most directly comparable GAAP measure. Book value per common share,
excluding the impact of accumulated other comprehensive income, should
not be considered a substitute for book value per common share, and does
not reflect the recorded net worth of our business.

Conference Call Details

 

Date and Time:

  November 1, 2018 - 5:00 P.M. ET
 

Participant Dial-In:

(United States): 877-407-8829
(International): 201-493-6724
 

Webcast:

To listen to the live webcast, please go to www.upcinsurance.com
(Investor Relations - News & Market Data - Event Calendar) and
click on the conference call link, or go to: http://78449.themediaframe.com/dataconf/productusers/unin/mediaframe/26968/indexl.html.
An archive of the webcast will be available for a limited period
of time thereafter.

 

About UPC Insurance

Founded in 1999, UPC Insurance is an insurance holding company that
sources, writes and services personal and commercial residential
property and casualty insurance policies using a group of wholly owned
insurance subsidiaries through a variety of distribution channels. The
Company currently writes policies in Connecticut, Florida, Georgia,
Hawaii, Louisiana, Massachusetts, New Jersey, New York, North Carolina,
Rhode Island, South Carolina and Texas, and is licensed to write in
Alabama, Delaware, Maryland, Mississippi, New Hampshire and Virginia.
From its headquarters in St. Petersburg, UPC Insurance's team of
dedicated professionals manages a completely integrated insurance
company, including sales, underwriting, customer service and claims. UPC
Insurance is a company committed to financial stability and solvency.

Forward-Looking Statements

Statements made in this press release, or on the conference call
identified above, and otherwise, that are not historical facts are
"forward-looking statements" that anticipate results based on our
estimates, assumptions and plans and are subject to uncertainty.
These
statements are made subject to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements do not relate strictly to historical or current facts and may
be identified by their use of words such as "may," "will," "expect,"
"endeavor," "project," "believe," "anticipate," "intend," "could,"
"would," "estimate" or "continue" or the negative variations thereof or
comparable terminology.
We believe these statements are based on
reasonable estimates, assumptions and plans. However, if the estimates,
assumptions or plans underlying the forward-looking statements prove
inaccurate or if other risks or uncertainties arise, actual results
could differ materially from those communicated in these forward-looking
statements. Factors that could cause actual results to differ materially
from those expressed in, or implied by, the forward-looking statements
may be found in our filings with the U.S. Securities and Exchange
Commission, including the "Risk Factors" section in our most recent
Annual Report on Form 10-K and subsequent Quarterly Reports on Form
10-Q. Forward-looking statements speak only as of the date on which they
are made, and, except as required by applicable law, we undertake no
obligation to update or revise any forward-looking statement.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

In thousands, except share and per share amounts

 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2018   2017 2018   2017
REVENUE:
Gross premiums written $   295,935 $   267,219 $   960,214 $   788,408
Change in gross unearned premiums 8,021   782   (87,667 ) (76,758 )
Gross premiums earned 303,956 268,001 872,547 711,650
Ceded premiums earned (132,626 ) (115,507 ) (365,011 ) (292,355 )
Net premiums earned 171,330 152,494 507,536 419,295
Investment income 6,888 4,901 19,665 12,489
Net realized investment losses (447 ) (71 ) (674 ) (554 )
Net unrealized gains on equity securities 6,109 5,046
Other revenue 3,772   13,804   11,280   40,604  
Total revenues $ 187,652 $ 171,128 $ 542,853 $ 471,834
EXPENSES:
Losses and loss adjustment expenses 120,552 143,127 286,393 293,398
Policy acquisition costs 54,200 46,546 153,716 125,302
Operating expenses 10,976 6,891 28,976 19,020
General and administrative expenses 15,358 19,316 51,326 58,825
Interest expense 2,455   771   7,371   2,282  
Total expenses 203,541 216,651 527,782 498,827
Income before other income (loss) (15,889 ) (45,523 ) 15,071 (26,993 )
Other income 19   36   106   94  
Income (loss) before income taxes (15,870 ) (45,487 ) 15,177 (26,899 )
Provision (benefit) for income taxes (4,163 ) (17,475 ) 3,815   (10,043 )
Net income (loss) $   (11,707 ) $   (28,012 ) $   11,362   $   (16,856 )
Less: Net income attributable to noncontrolling interests 1     1    
Net income (loss) attributable to UIHC (11,708 ) (28,012 ) 11,361   (16,856 )
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gains (losses) on investments (3,354 ) 2,672 (30,706 ) 10,509
Reclassification adjustment for net realized investment losses 447 71 674 554
Income tax benefit (expense) related to items of other comprehensive
income
699   (1,050 ) 7,110   (4,207 )
Total comprehensive income (loss) $   (13,915 ) $   (26,319 ) $   (11,560 ) $   (10,000 )
Less: Comprehensive income attributable to noncontrolling interests 1     1    
Comprehensive income (loss) attributable to UIHC (13,916 ) (26,319 ) (11,561 ) (10,000 )
 
Weighted average shares outstanding
Basic 42,677,893   42,524,400   42,636,515   35,341,994  
Diluted 42,833,716   42,741,004   42,791,208   35,563,032  
 
Earnings available to UIHC common shareholders per share
Basic $   (0.27 ) $   (0.66 ) $   0.27   $   (0.48 )
Diluted $   (0.27 ) $   (0.66 ) $   0.27   $   (0.47 )
 
Dividends declared per share $   0.06   $   0.06   $   0.18   $   0.18  
 

Condensed Consolidated Balance Sheets

(unaudited)

In thousands, except share amounts

 
  September 30, 2018   December 31, 2017
ASSETS
Investments, at fair value:
Fixed maturities, available-for-sale $  

836,390

$   762,855
Equity securities 93,092 63,295
Other investments 8,330 8,381
Portfolio loans   20,000  
Total investments $   937,812   $   854,531  
Cash and cash equivalents 240,950 229,186
Restricted cash 65,131 47,089
Accrued investment income 5,771 5,577
Property and equipment, net 16,583 17,291
Premiums receivable, net 78,417 75,275
Reinsurance recoverable on paid and unpaid losses 433,554 395,774
Prepaid reinsurance premiums 319,916 201,904
Goodwill 73,045 73,045
Deferred policy acquisition costs 105,764 103,882
Intangible assets 32,716 45,271
Other assets 12,570   11,096  
Total Assets $   2,322,229   $   2,059,921  
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses $ 528,842 $ 482,232
Unearned premiums 643,540 555,873
Reinsurance payable 297,173 149,117
Payments outstanding 50,789 41,786
Accounts payable and accrued expenses 52,100 46,594
Other liabilities 40,199 85,830
Notes payable 160,708   161,364  
Total Liabilities $   1,773,351   $   1,522,796  
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.0001 par value; 1,000,000 authorized; none
issued or outstanding
Common stock, $0.0001 par value; 50,000,000 shares authorized;
43,034,270 and 42,965,137 issued, respectively; 42,910,579 and
42,753,054 outstanding, respectively
4 4
Additional paid-in capital 388,820 387,145
Treasury shares, at cost; 212,083 shares (431 ) (431 )
Accumulated other comprehensive income (13,702 ) 9,221
Retained earnings 154,186   141,186  
Total shareholders' equity attributable to UIHC shareholders $   528,877   $   537,125  
Noncontrolling interests $   20,001   $    
Total Stockholders' Equity $   548,878   $   537,125  
Total Liabilities and Stockholders' Equity $   2,322,229   $   2,059,921  

View Comments and Join the Discussion!