Second Quarter 2018 Highlights
Organic Growth Continues – Direct premiums written grew 15.7% in the second quarter, with 13.0% growth in Florida and 36.5% growth in Other States, as Universal DirectSM contributed to growth in all geographies. We began writing in New Hampshire in April and currently write in 17 states with licenses in 3 other states.
Strong Underwriting Profitability – The second quarter net combined ratio was 77.2% compared to 81.3% in the prior years quarter, with improvement in both the loss and LAE ratio and the G&A expense ratio. Second quarter results include $5.0 million (2.6 points) of weather events beyond plan and $2.3 million (1.2 points) of unfavorable prior year reserve development, primarily related to Hurricane Matthew. The quarter also includes $8.4 million (4.4 points) of estimated pretax profit from additional income generated by UAC following Hurricane Irma. Additionally, second quarter results included a benefit of $6.5 million (3.4 points) related to a settlement of prior year premium tax audits. Our underlying underwriting results reflect increased loss trends resulting from the impact of continued geographic expansion, an increased level of catastrophic activity in recent years, and marketplace dynamics within Florida, including Assignment of Benefits (AOB) related claims.
Solid Balance Sheet – Book value per share grew 6.2% from March 31, 2018 (16.7% from June 30, 2017) to $14.11. Our investment portfolio is conservatively positioned, we have minimal debt or goodwill, we believe our loss reserves are appropriately set at current levels, and we are protected by a comprehensive reinsurance program, which was further enhanced during the second quarter to provide greater balance sheet protection.
Focused on Shareholder Returns – Annualized Return on Average Common Equity (ROE) was 37.8% for the second quarter of 2018. We paid dividends of $0.14 per share in the second quarter, and announced that we have increased the quarterly dividend to $0.16 per share beginning in the third quarter. During the second quarter, we repurchased 250,000 shares for $8.4 million ($33.48 per share) and $8.7 million remains on our current share repurchase authorization.
Universal Insurance Holdings, Inc. Reports Second Quarter 2018 Results | PR Newswire: press release distribution, targeting, monitoring and marketing
