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DATE

Fri, Oct. 23, 2026

CALL PARTICIPANTS

  • Chief Strategy Officer - Arash Soleimani
  • Chief Executive Officer - Steve Donaghy
  • Chief Financial Officer - Frank Wilcox

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TAKEAWAYS

  • Adjusted Diluted EPS -- $1.93, up from $1.36 in the prior year quarter, reflecting higher underwriting and net investment income.
  • Core Revenue -- $444.3 million, an 11.1% increase year over year, primarily driven by higher net premiums earned and net investment income.
  • Direct Premiums Written -- $608.9 million, representing 2.7% growth compared to the prior year quarter, supported by 18.5% expansion in multistate markets outside of Florida.
  • Florida Direct Premiums Written -- $414.4 million, a 3.3% decrease versus the prior year quarter, partially offsetting growth in other states.
  • Policies in Force -- 953,611, an 8% increase year over year, reflecting solid new business trends across the multistate footprint.
  • Net Premiums Earned -- $403.2 million, growing 12.1% compared to the prior year quarter, due to higher direct premiums earned and a lower ceded premium ratio.
  • Net Combined Ratio -- 91%, a 5.4 percentage point decrease from the prior year quarter, primarily driven by a lower net loss ratio.
  • Net Loss Ratio -- 64.6%, down 5.6 percentage points compared to the prior year quarter, largely reflecting a lower ceded premium ratio.
  • Net Expense Ratio -- 26.4%, a 0.2 percentage point increase year over year, driven by higher policy acquisition costs outside of Florida and increased operating expenses.
  • Net Investment Income -- $21.5 million, up from $18.3 million in the prior year quarter, reflecting higher invested assets and fixed income reinvestment yields.
  • Annualized ROCE -- 32.7%, representing a very strong performance driven by solid underwriting results according to management.
  • Book Value Per Share -- $23.37, a 32.4% increase from $17.65 at the end of the prior year period.
  • Adjusted Book Value Per Share -- $25.90, representing a 38.2% increase compared to $18.74 as of Sept. 30, 2025.
  • Premiums in Force -- $2.2 billion, a 4.4% increase year over year, supported by multistate agency network growth.
  • Total Insured Value -- $429.6 billion, up from $385.0 billion in the prior year quarter, with Florida accounting for $198.4 billion and other states totaling $231.2 billion.
  • Ceded Premium Ratio -- 27.6%, down from 32.7% in the prior year quarter, reflecting the impact of the new reinsurance program effective June 1, 2026.
  • Share Repurchases -- 174,000 shares, executed during the third quarter at an aggregate cost of $7.4 million.
  • Cash and Cash Equivalents -- $569.5 million as of Sept. 30, 2026, compared to $408.9 million at the end of 2025.
  • Unpaid Losses and Loss Adjustment Expenses -- $616.1 million, a decrease from $680.7 million as of Dec. 31, 2025.
  • Dividends -- $0.16 per share, declared by the board of directors on July 8, 2026, and paid on Aug. 7, 2026.

SUMMARY

Universal Insurance Holdings, Inc. (UVE -1.01%) reported third-quarter results characterized by a double-digit increase in core revenue and an improvement in the net combined ratio. Management attributed the performance to expansion in markets outside of Florida and the implementation of a new reinsurance program that reduced ceded premiums. The company experienced growth in policies in force while managing the impact of Hurricane Isaias, which made landfall after the quarter ended. Strategic focus remains on maintaining capital adequacy for insurance entities while returning value to shareholders through dividends and opportunistic share repurchases.

  • CEO Donaghy stated that Hurricane Isaias, which made landfall near Destin, Florida, as a Category 2 storm in October 2026, was manageable based on claims activity to date.
  • Management noted that the 18.5% growth in premiums outside of Florida was driven by finding "various niches of rate adequacy" within those specific markets.
  • The 5.1 percentage point reduction in the ceded premium ratio was primarily attributed to the company's new reinsurance program that incepted on June 1, 2026.
  • CFO Wilcox emphasized that the company's top priority for capital management is to ensure insurance entities are "adequately capitalized for the protection of the policyholders."
  • The company reported having approximately $1.1 million remaining under its current share repurchase authorization program following the third-quarter buybacks.
  • CEO Donaghy indicated that legislative changes in Florida have proven to be a benefit to the entire market, supporting the company's organic growth model.

INDUSTRY GLOSSARY

  • Ceded Premium Ratio: The percentage of direct premiums written that is paid to reinsurance companies to cover a portion of the risk.
  • Combined Ratio: A measure of underwriting profitability calculated by dividing the sum of incurred losses and expenses by earned premium; a ratio below 100% indicates an underwriting profit.
  • Direct Premiums Written: The total amount of premiums for all policies an insurance company has issued during a specific period before deducting reinsurance costs.
  • Net Premiums Earned: The portion of the net premiums written that applies to the expired portion of the policy period.
  • Policies in Force: The total number of insurance policies that are active and providing coverage as of a specific date.
  • Total Insured Value: The sum of the limits of liability for all properties or risks covered in an insurance portfolio.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen, and welcome to Universal's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer.

Arash Soleimani: Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release on Universal's SEC filings, all of which are available on the Investor section of our website at universalinsuranceholdings.com and on the SEC's website.

A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release and can also be found on Universal's website at universalinsuranceholdings.com. With that, I'll turn the call over to Steve.

Stephen Donaghy: Thanks, Arash. Good morning, everyone. In the quarter, we delivered a very strong 32.7% annualized return on common equity, driven by solid underwriting and revenue performance. Our net loss ratio continues to improve, and new business trends are solid, including 8% growth in policies in-force. Subsequent to quarter end, Hurricane Isaias made landfall near Destin in the western Florida Panhandle as a Category 2 hurricane and quickly weakened as it moved inland. Our claims team was deployed immediately with field adjusters on the ground in the affected areas. And we have been in direct contact with policyholders to expedite inspections and payments.

Our focus is on helping our customers recover as quickly as possible, and we view the storm as manageable based on claims activity to date. I'll turn it over to Frank to walk through our financial results. Frank.

Frank Wilcox: Thanks, Steve, and good morning. Adjusted diluted earnings per common share was $1.93 compared to an adjusted diluted earnings per common share of $1.36 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from higher underwriting and net investment income. Core revenue of $444.3 million was up 11.1% year-over-year, with growth primarily stemming from higher net premiums earned and net investment income. Direct premiums written were $608.9 million, up 2.7% from the prior year quarter. The increase stems from 18.5% growth in other states, partially offset by a 3.3% decrease in Florida. Overall growth mostly reflects higher policies in-force across our multi-state footprint.

Direct premiums earned were $556.7 million, up 4.2% from the prior year quarter, reflecting the direct written premiums growth over the last 12 months. Net premiums earned were $403.2 million, up 12.1% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio. The net combined ratio was 91%, down 5.4 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, partially offset by a higher net expense ratio. The 64.6% net loss ratio was down 5.6 points compared to the prior year quarter, with the decrease reflecting a lower ceded premium ratio.

The net expense ratio was 26.4%, up 0.2 points compared to the prior year quarter, with the increase driven by higher policy acquisition costs associated with growth outside of Florida and higher other operating costs and expenses, partly offset by a lower ceded premium ratio. During the third quarter, the company repurchased approximately 174,000 shares at an aggregate cost of $7.4 million. The company's current share repurchase authorization program has approximately 1.1 million remaining. On July 8th, 2026, the Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock payable on August 7, 2026, to shareholders of record as of the close of business on July 31, 2026.

With that, I'd like to ask the operator to open up the line for questions.

Operator: [Operator Instructions] Our first question comes from Paul Newsome with Piper Sandler.

Jon Paul Newsome: Congratulations on the quarter. Maybe some thoughts on the competitive environment, both in Florida and outside of Florida, and how you see the prospects for Universal's growth in the various markets here.

Stephen Donaghy: Good morning, Paul, and thank you. We continue to write business at a very good clip, as you saw in our release, and we feel very confident about our organic growth model across all the states that we currently serve. The legislation in Florida has proven to be a benefit to the entire market, and our relationships with our agency force continues to serve us extremely well. So we continue to write business at a very good clip. Outside of Florida, we find various niches of rate adequacy and we feel really good about the business we're bringing on due to the rate adequacy. So we don't chase the business.

We want to write the business where we feel good about it and it continues to serve us well.

Jon Paul Newsome: Given the very high ROEs this year, any updated thoughts on capital management, where you want to allocate the capital you're accumulating?

Frank Wilcox: Well, I think that we're going to continue on the path that we have in terms of returning value to shareholders through dividends. As you know, that repurchase plan has only got 1.1 million. We'll go to the board and have a discussion around that and the appetite for it. Number one priority has always been and will continue to be to ensure that the insurance entities are adequately capitalized for the protection of the policyholders in addition to their ability to continue to generate the premium that offers opportunities for the entire organization.

Operator: This concludes the question and answer session. I would now like to turn it back to Steve Donaghy, Chief Executive Officer, for closing remarks.

Stephen Donaghy: I'd like to thank all of our associates, consumers, agents, and our stakeholders for their continued support of Universal. Have a nice day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.