Press Release

United Insurance Holdings Corp. Reports Financial Results for Its Third Quarter Ended September 30, 2019

Company Release - 10/30/2019 4:10 PM ET

Company to Host Quarterly Conference Call at 9:00 A.M. ET on October 31, 2019

The information in this press release should be read in conjunction with an investor presentation that is available on our website at investors.upcinsurance.com/Presentations.

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--

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, 2019.

($ in thousands, except for per share data)

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Gross premiums written

$

317,184

 

 

$

295,935

 

 

7.2

%

 

$

1,085,505

 

 

$

960,214

 

 

13.0

%

Gross premiums earned

$

344,683

 

 

$

303,956

 

 

13.4

%

 

$

986,521

 

 

$

872,547

 

 

13.1

%

Net premiums earned

$

192,920

 

 

$

171,330

 

 

12.6

%

 

$

564,046

 

 

$

507,536

 

 

11.1

%

Total revenues

$

207,598

 

 

$

187,652

 

 

10.6

%

 

$

614,695

 

 

$

542,853

 

 

13.2

%

Earnings before income tax

$

(36,074

)

 

$

(15,870

)

 

(127.3

)%

 

$

(27,346

)

 

$

15,177

 

 

(280.2

)%

Net income (loss) attributable to UIHC

$

(28,280

)

 

$

(11,708

)

 

(141.5

)%

 

$

(21,714

)

 

$

11,361

 

 

(291.1

)%

Net income (loss) available to UIHC common stockholders per diluted share

$

(0.66

)

 

$

(0.27

)

 

(144.4

)%

 

$

(0.51

)

 

$

0.27

 

 

(288.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income (loss) to core income (loss):

 

 

 

 

 

 

 

 

 

 

 

Plus: Non-cash amortization of intangible assets

$

1,326

 

 

$

1,365

 

 

(2.9

)%

 

$

4,030

 

 

$

12,555

 

 

(67.9

)%

Less: Net realized gains (losses) on investment portfolio

$

18

 

 

$

(447

)

 

104.0

%

 

$

186

 

 

$

(674

)

 

127.6

%

Less: Unrealized gains on equity securities

$

2,609

 

 

$

6,109

 

 

(57.3

)%

 

$

15,519

 

 

$

5,046

 

 

207.6

%

Less: Net tax impact(1)

$

(359

)

 

$

(1,074

)

 

66.6

%

 

$

(3,220

)

 

$

2,046

 

 

(257.4

)%

Core income (loss)(2)

$

(29,222

)

 

$

(14,931

)

 

(95.7

)%

 

$

(30,169

)

 

$

17,498

 

 

(272.4

)%

Core income (loss) per diluted share(2)

$

(0.68

)

 

$

(0.35

)

 

(94.3

)%

 

$

(0.71

)

 

$

0.41

 

 

(273.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

 

 

 

 

 

$

11.93

 

 

$

12.33

 

 

(3.2

)%

(1) In order to reconcile net income (loss) to the core income (loss) measure, we included the tax impact of all adjustments using the effective rate at the end of each period.

(2) Core income (loss) and core income (loss) per diluted share, measures that are not based on GAAP, are reconciled above to net income (loss) and net income (loss) 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 recorded solid improvements in our underlying loss and combined ratios during the quarter, while continuing to grow our book at an annualized rate of over 10%," said John Forney, President & CEO of UPC Insurance. "However, we booked over $1.00 per share in after-tax CAT losses from a combination of current and prior year events, which explains our poor results. We're still in strong financial shape and I'm confident that the rate and underwriting actions working their way through our book will enable us to finish strong this year and into 2020."

Return on Equity and Core Return on Equity

The calculations of the Company's return on equity and core return on equity are shown below.

($ in thousands)

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

2019

 

2018

 

2019

 

2018

Net income (loss) attributable to UIHC

$

(28,280

)

 

$

(11,708

)

 

$

(21,714

)

 

$

11,361

 

Return on equity based on GAAP net income (loss) attributable to UIHC (1)

(21.3

)%

 

(8.8

)%

 

(5.5

)%

 

2.8

%

 

 

 

 

 

 

 

 

Core income (loss)

$

(29,222

)

 

$

(14,931

)

 

$

(30,169

)

 

$

17,498

 

Core return on equity (1)(2)

(22.0

)%

 

(11.2

)%

 

(7.6

)%

 

4.4

%

(1) Return on equity for the three and nine months ended September 30, 2019 and 2018 is calculated on an annualized basis by dividing the net income (loss) or core net income (loss) for the period by the average stockholders' equity for the trailing twelve months.

(2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income (loss), which is reconciled on the first page of this press release to net income (loss), 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.

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,

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Loss ratio, net(1)

76.8

%

 

70.4

%

 

6.4

pts

 

65.4

%

 

56.4

%

 

9.0

pts

Expense ratio, net(2)

48.3

%

 

47.0

%

 

1.3

pts

 

47.1

%

 

46.1

%

 

1.0

pts

Combined ratio (CR)(3)

125.1

%

 

117.4

%

 

7.7

pts

 

112.5

%

 

102.5

%

 

10.0

pts

Effect of current year catastrophe losses on CR

26.0

%

 

20.2

%

 

5.8

pts

 

13.8

%

 

11.5

%

 

2.3

pts

Effect of prior year unfavorable (favorable) development on CR

6.3

%

 

(1.6

)%

 

7.9

pts

 

5.9

%

 

(0.8

)%

 

6.7

pts

Underlying combined ratio(4)

92.8

%

 

98.8

%

 

(6.0

) pts

 

92.8

%

 

91.8

%

 

1.0

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) 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 2019 was $28.3 million, or $0.66 per diluted share, compared to $11.7 million, or $0.27 per diluted share, for the third quarter of 2018. The increase in net loss was primarily due to an increase in loss and loss adjustment expenses (LAE) during the third quarter of 2019 compared to the third quarter of 2018.

The Company's total gross written premium increased by $21.3 million, or 7.2%, to $317.2 million for the third quarter of 2019, from $295.9 million for the third quarter of 2018, 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 are shown in the table below.

($ in thousands)

 

Three Months Ended September 30,

 

 

 

 

 

 

2019

 

2018

 

Change $

 

Change %

Direct Written and Assumed Premium by Region (1)

 

 

 

 

 

 

 

 

Florida

 

$

157,278

 

 

$

141,524

 

 

$

15,754

 

 

11.1

%

Gulf

 

62,970

 

 

58,632

 

 

4,338

 

 

7.4

 

Northeast

 

55,665

 

 

50,695

 

 

4,970

 

 

9.8

 

Southeast

 

32,047

 

 

27,854

 

 

4,193

 

 

15.1

 

Total direct written premium by region

 

307,960

 

 

278,705

 

 

29,255

 

 

10.5

%

Assumed premium (2)

 

9,224

 

 

17,230

 

 

(8,006

)

 

(46.5

)

Total gross written premium by region

 

$

317,184

 

 

$

295,935

 

 

$

21,249

 

 

7.2

%

 

 

 

 

 

 

 

 

 

Gross Written Premium by Line of Business

 

 

 

 

 

 

 

 

Personal property

 

$

259,187

 

 

$

240,456

 

 

$

18,731

 

 

7.8

%

Commercial property

 

57,997

 

 

55,479

 

 

2,518

 

 

4.5

 

Total gross written premium by line of business

 

$

317,184

 

 

$

295,935

 

 

$

21,249

 

 

7.2

%

(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 2019 and 2018 primarily included commercial property business assumed from unaffiliated insurers.

Loss and LAE increased by $27.5 million, or 22.8%, to $148.1 million for the third quarter of 2019, from $120.6 million for the third quarter of 2018. Loss and LAE expense as a percentage of net earned premiums increased 6.4 points to 76.8% for the third quarter of 2019, compared to 70.4% for the third quarter of 2018. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the third quarter of 2019 would have been 24.9%, a decrease of 4.3 points from 29.2% during the third quarter of 2018.

Policy acquisition costs increased by $7.6 million, or 14.0%, to $61.8 million for the third quarter of 2019, from $54.2 million for the third quarter of 2018. The primary driver of the increase in costs was an increase in 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 $1.2 million, or 10.9%, to $12.2 million for the third quarter of 2019, from $11.0 million for the third quarter of 2018, primarily due to increased investments in technology.

General and administrative expenses increased by $3.7 million, or 24.0%, to $19.1 million for the third quarter of 2019, from $15.4 million for the third quarter of 2018, primarily due to an increase in salaries and related benefits as the number of personnel has increased and an increase in amortization expense related to our capitalized software.

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,

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Loss and LAE

$

148,125

 

 

$

120,552

 

 

$

27,573

 

 

$

368,924

 

 

$

286,393

 

 

$

82,531

 

% of Gross earned premiums

43.0

%

 

39.7

%

 

3.3

pts

 

37.4

%

 

32.8

%

 

4.6

pts

% of Net earned premiums

76.8

%

 

70.4

%

 

6.4

pts

 

65.4

%

 

56.4

%

 

9.0

pts

Less:

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

$

50,168

 

 

$

34,593

 

 

$

15,575

 

 

$

77,627

 

 

$

58,250

 

 

$

19,377

 

Prior year reserve unfavorable (favorable) development

12,249

 

 

(2,656

)

 

14,905

 

 

33,216

 

 

(4,207

)

 

37,423

 

Underlying loss and LAE (1)

$

85,708

 

 

$

88,615

 

 

$

(2,907

)

 

$

258,081

 

 

$

232,350

 

 

$

25,731

 

% of Gross earned premiums

24.9

%

 

29.2

%

 

(4.3

) pts

 

26.2

%

 

26.6

%

 

(0.4

) pts

% of Net earned premiums

44.4

%

 

51.7

%

 

(7.3

) pts

 

45.8

%

 

45.8

%

 

pts

(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to 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 ratios are shown below.

($ in thousands)

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Policy acquisition costs

$

61,849

 

 

$

54,200

 

 

$

7,649

 

 

$

178,717

 

 

$

153,716

 

 

$

25,001

 

Operating and underwriting

12,167

 

 

10,976

 

 

1,191

 

 

33,577

 

 

28,976

 

 

4,601

 

General and administrative

19,105

 

 

15,358

 

 

3,747

 

 

53,488

 

 

51,326

 

 

2,162

 

Total Operating Expenses

$

93,121

 

 

$

80,534

 

 

$

12,587

 

 

$

265,782

 

 

$

234,018

 

 

$

31,764

 

% of Gross earned premiums

27.0

%

 

26.5

%

 

0.5

pts

 

26.9

%

 

26.8

%

 

0.1

pts

% of Net earned premiums

48.3

%

 

47.0

%

 

1.3

pts

 

47.1

%

 

46.1

%

 

1.0

pts

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 2019 were 42.3% of gross premiums earned, compared to 42.0% of gross premiums earned for the third quarter of 2018. The increase in this ratio was driven by the Company's quota share agreement that was renewed on June 1, 2019. The Company modified the terms of its quota share agreement in 2019 to include its subsidiary, Family Security Insurance Company, Inc. in addition to its subsidiary United Property & Casualty Insurance Company. Also, the ceding percentage increased from 20.0% in 2018 to 22.5% in 2019.

Investment Portfolio Highlights

The Company's cash, restricted cash and investment holdings increased 21.6% to $1.4 billion at September 30, 2019 from $1.1 billion at December 31, 2018. 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 88.9% of total investments at September 30, 2019, compared to 90.6% at December 31, 2018. At September 30, 2019 our fixed maturity investments had a modified duration of 3.4 years, compared to 3.5 years at December 31, 2018.

Book Value Analysis

Book value per share decreased 1.4% from $12.10 at December 31, 2018, to $11.93 at September 30, 2019. Underlying book value per share decreased 5.7% from $12.31 at December 31, 2018 to $11.61 at September 30, 2019. A decrease in the Company's retained earnings as the result of a net loss in 2019 drove the decrease in our book value per share. This was partially offset by an increase in accumulated other comprehensive income (AOCI). As shown in the table below, removing the effect of AOCI further decreases our book value per share.

($ in thousands, except for share and per share data)

 

September 30,

 

December 31,

 

 

2019

 

2018

Book Value per Share

 

 

 

 

Numerator:

 

 

 

 

Common stockholders' equity attributable to UIHC

 

$

515,842

 

 

$

520,230

 

Denominator:

 

 

 

 

Total Shares Outstanding

 

43,234,488

 

 

42,984,578

 

Book Value Per Common Share

 

$

11.93

 

 

$

12.10

 

 

 

 

 

 

Book Value per Share, Excluding the Impact of Accumulated Other Comprehensive Income (AOCI)

 

 

 

 

Numerator:

 

 

 

 

Common stockholders' equity attributable to UIHC

 

$

515,842

 

 

$

520,230

 

Less: Accumulated other comprehensive income (loss)

 

13,714

 

 

(9,030

)

Stockholders' Equity, excluding AOCI

 

$

502,128

 

 

$

529,260

 

Denominator:

 

 

 

 

Total Shares Outstanding

 

43,234,488

 

 

42,984,578

 

Underlying Book Value Per Common Share(1)

 

$

11.61

 

 

$

12.31

 

(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.

Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). 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 most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.

Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, which is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. 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. 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 directly 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 directly 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.

Net income excluding the effects of 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 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. Amortization expense is related to the amortization of intangible assets acquired through mergers 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 directly 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:

 

October 31, 2019 - 9:00 A.M. ET

 

 

 

Participant Dial-In:

 

(United States):   877-407-8829

 

 

(International):     201-493-6724

 

 

 

Webcast:

 

To listen to the live webcast, please go to investors.upcinsurance.com (News & Market Data - Event Calendar) and click on the conference call link, or go to: https://78449.themediaframe.com/dataconf/productusers/unin/mediaframe/33028/indexl.html.

 

 

 An archive of the webcast will be available for a limited period of time thereafter.

 

 

 

Presentation:

 

The information in this press release should be read in conjunction with an investor presentation that is available on our website at investors.upcinsurance.com/Presentations.

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 and one majority owned insurance subsidiary 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, Florida, 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 (Loss)

In thousands, except share and per share amounts

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

REVENUE:

 

 

 

 

 

 

 

 

Gross premiums written

 

$

317,184

 

 

$

295,935

 

 

$

1,085,505

 

 

$

960,214

 

Change in gross unearned premiums

 

27,499

 

 

8,021

 

 

(98,984

)

 

(87,667

)

Gross premiums earned

 

344,683

 

 

303,956

 

 

986,521

 

 

872,547

 

Ceded premiums earned

 

(151,763

)

 

(132,626

)

 

(422,475

)

 

(365,011

)

Net premiums earned

 

192,920

 

 

171,330

 

 

564,046

 

 

507,536

 

Net investment income

 

7,803

 

 

6,888

 

 

22,668

 

 

19,665

 

Net realized investment gains (losses)

 

18

 

 

(447

)

 

186

 

 

(674

)

Net unrealized gains on equity securities

 

2,609

 

 

6,109

 

 

15,519

 

 

5,046

 

Other revenue

 

4,248

 

 

3,772

 

 

12,276

 

 

11,280

 

Total revenues

 

$

207,598

 

 

$

187,652

 

 

$

614,695

 

 

$

542,853

 

EXPENSES:

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

148,125

 

 

120,552

 

 

368,924

 

 

286,393

 

Policy acquisition costs

 

61,849

 

 

54,200

 

 

178,717

 

 

153,716

 

Operating expenses

 

12,167

 

 

10,976

 

 

33,577

 

 

28,976

 

General and administrative expenses

 

19,105

 

 

15,358

 

 

53,488

 

 

51,326

 

Interest expense

 

2,443

 

 

2,455

 

 

7,379

 

 

7,371

 

Total expenses

 

243,689

 

 

203,541

 

 

642,085

 

 

527,782

 

Income (loss) before other income

 

(36,091

)

 

(15,889

)

 

(27,390

)

 

15,071

 

Other income

 

17

 

 

19

 

 

44

 

 

106

 

Income (loss) before income taxes

 

(36,074

)

 

(15,870

)

 

(27,346

)

 

15,177

 

Provision (benefit) for income taxes

 

(7,859

)

 

(4,163

)

 

(5,912

)

 

3,815

 

Net income (loss)

 

$

(28,215

)

 

$

(11,707

)

 

$

(21,434

)

 

$

11,362

 

Less: Net income attributable to noncontrolling interests

 

65

 

 

1

 

 

280

 

 

1

 

Net income (loss) attributable to UIHC

 

$

(28,280

)

 

$

(11,708

)

 

$

(21,714

)

 

$

11,361

 

OTHER COMPREHENSIVE INCOME:

 

 

 

 

 

 

 

 

Change in net unrealized gains (losses) on investments

 

5,606

 

 

(3,354

)

 

30,561

 

 

(30,706

)

Reclassification adjustment for net realized investment losses (gains)

 

(18

)

 

447

 

 

(186

)

 

674

 

Income tax benefit (expense) related to items of other comprehensive income

 

(1,486

)

 

699

 

 

(7,374

)

 

7,110

 

Total comprehensive income (loss)

 

$

(24,113

)

 

$

(13,915

)

 

$

1,567

 

 

$

(11,560

)

Less: Comprehensive income attributable to noncontrolling interests

 

101

 

 

1

 

 

537

 

 

1

 

Comprehensive income (loss) attributable to UIHC

 

$

(24,214

)

 

$

(13,916

)

 

$

1,030

 

 

$

(11,561

)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

42,795,414

 

 

42,677,893

 

 

42,750,710

 

 

42,636,515

 

Diluted

 

42,795,414

 

 

42,677,893

 

 

42,750,710

 

 

42,791,208

 

 

 

 

 

 

 

 

 

 

Earnings available to UIHC common stockholders per share

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.66

)

 

$

(0.27

)

 

$

(0.51

)

 

$

0.27

 

Diluted

 

$

(0.66

)

 

$

(0.27

)

 

$

(0.51

)

 

$

0.27

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.06

 

 

$

0.06

 

 

$

0.18

 

 

$

0.18

 

 

Condensed Consolidated Balance Sheets

In thousands, except share amounts

 

 

September 30, 2019

 

December 31, 2018

ASSETS

 

 

 

 

Investments, at fair value:

 

 

 

 

Fixed maturities, available-for-sale

 

$

921,212

 

 

$

862,345

 

Equity securities

 

104,629

 

 

80,978

 

Other investments

 

10,024

 

 

8,513

 

Total investments

 

$

1,035,865

 

 

$

951,836

 

Cash and cash equivalents

 

270,563

 

 

112,679

 

Restricted cash

 

74,849

 

 

71,441

 

Accrued investment income

 

6,037

 

 

6,017

 

Property and equipment, net

 

28,874

 

 

17,137

 

Premiums receivable, net

 

86,365

 

 

95,816

 

Reinsurance recoverable on paid and unpaid losses

 

648,372

 

 

625,998

 

Ceded unearned premiums

 

367,550

 

 

217,885

 

Goodwill

 

73,045

 

 

73,045

 

Deferred policy acquisition costs

 

115,158

 

 

105,582

 

Intangible assets

 

27,403

 

 

31,351

 

Other assets

 

20,590

 

 

12,641

 

Total Assets

 

$

2,754,671

 

 

$

2,321,428

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

824,147

 

 

$

661,203

 

Unearned premiums

 

726,297

 

 

627,313

 

Reinsurance payable

 

321,994

 

 

175,272

 

Payments outstanding

 

56,761

 

 

56,534

 

Accounts payable and accrued expenses

 

79,201

 

 

71,048

 

Lease liability

 

356

 

 

 

Other liabilities

 

49,874

 

 

29,571

 

Notes payable

 

159,523

 

 

160,118

 

Total Liabilities

 

$

2,218,153

 

 

$

1,781,059

 

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; 43,056,310 and 43,029,845 issued, respectively; 43,234,488 and 42,984,578 outstanding, respectively

 

 

4

 

 

4

 

Additional paid-in capital

 

391,433

 

 

389,141

 

Treasury shares, at cost; 212,083 shares

 

(431

)

 

(431

)

Accumulated other comprehensive income (loss)

 

13,714

 

 

(9,030

)

Retained earnings

 

111,122

 

 

140,546

 

Total stockholders' equity attributable to UIHC stockholders

 

$

515,842

 

 

$

520,230

 

Noncontrolling interests

 

20,676

 

 

20,139

 

Total Stockholders' Equity

 

$

536,518

 

 

$

540,369

 

Total Liabilities and Stockholders' Equity

 

$

2,754,671

 

 

$

2,321,428

 

 

United Insurance Holdings Corp.
Jessica Strathman
Director of Financial Reporting
(727) 895-7737 / jstrathman@upcinsurance.com
OR
INVESTOR RELATIONS:
The Equity Group
Adam Prior
Senior Vice-President
(212) 836-9606 / aprior@equityny.com

Source: United Insurance Holdings Corp.