Universal Insurance Posts 69% Profit Gain as Underwriting Improves
Second-quarter revenue rose 6.7% to $427.0 million as growth accelerated from the first quarter.
Universal Insurance Holdings (UVE), the property-and-casualty insurer, reported a 68.7% increase in second-quarter net income available to common stockholders as underwriting results improved from a year earlier. Net income reached $59.2 million, up sequentially from $54.3 million.
The quarter extended the insurer’s earnings momentum while showing a mixed sequential picture. Diluted GAAP earnings rose 68.6% to $2.04 a share from a year earlier and increased from $1.88 in the first quarter. Adjusted earnings climbed 49.6% to $1.84 a share but declined from $2.00 sequentially.
Core revenue increased 4.6% to $419.4 million, accelerating from 0.8% growth in the first quarter and 4.4% in the fourth quarter of 2024. Net premiums earned rose 4.7% to $377.3 million as direct-premium growth combined with a lower share of premiums ceded to reinsurers.
Underwriting drove much of the year-over-year improvement. The net loss ratio fell 7.5 percentage points to 64.8%, and the combined ratio improved 6.2 points to 91.6%. Both ratios worsened from the first quarter, when the loss ratio was 63.9% and the combined ratio was 89.7%, as higher acquisition costs tied to expansion outside Florida helped lift the expense ratio to 26.8%.
That expansion continued to reshape the book even as new premium growth slowed. Policies in force increased 7.1% to 934,371, accelerating from 5.8% growth in the first quarter. Premiums in force outside Florida rose 18.3% to $630.0 million, while the Florida total slipped 0.4% to $1.575 billion. Direct premiums written grew 4.1%, down from 8.5% in the prior quarter.
The ceded-premium ratio declined to 30.8% from 31.2% a year earlier and 32.8% in the first quarter, reflecting the reinsurance program that began June 1. Investment income also increased to $20.2 million from $17.3 million as fixed-income reinvestment yields and invested assets rose.
Universal repurchased about 122,000 shares for $4.5 million during the quarter, down from $7.4 million a year earlier, leaving $8.6 million under its authorization. Book value increased 39.7% to $22.89 a share and rose 9.3% from the first quarter.
The company's litigation inventory had returned to pre-crisis levels and the effects of pre-reform claims were behind it. Aggregate reserves carried a meaningful margin above expected ultimate losses, adding a cushion as growth continued to shift beyond Florida.