Universal Insurance Q3 2025 Earnings Report

Universal Insurance EPS Results

• Actual EPS: $1.36
• Consensus EPS: $1.10
• Beat/Miss: Beat by +$0.26
• One Year Ago EPS: N/A

Universal Insurance Revenue Results

• Actual Revenue: $400.03 million
• Expected Revenue: $366.36 million
• Beat/Miss: Beat by +$33.67 million
• YoY Revenue Growth: N/A

Universal Insurance Announcement Details

• Quarter: Q3 2025
• Date: 10/23/2025
• Time: After Market Closes
• Conference Call Date: Friday, October 24, 2025
• Conference Call Time: 10:00AM ET

Universal Insurance (NYSE:UVE) Holdings, Inc. (NYSE: UVE) is a property and casualty insurance holding company headquartered in Jacksonville, Florida. The company underwrites homeowners and other residential property insurance products to protect against natural catastrophes such as hurricanes, windstorms and fires. It distributes policies primarily through a network of independent agents and brokers, offering coverage for primary residences, secondary homes, condominiums, vacant dwellings and rental properties across its service territory.

In addition to personal lines, Universal provides commercial property and casualty insurance tailored to small businesses and institutional clients. Its commercial offerings include premises liability, dwelling fire, commercial residential and umbrella liability protection. The company employs a risk-management approach that combines participation in the Florida Hurricane Catastrophe Fund with a layered reinsurance program to mitigate exposure to severe weather events.

Since its founding, Universal Insurance Holdings has pursued growth through both organic underwriting expansion and strategic acquisitions of smaller carriers. The company’s headquarters in Jacksonville supports a network of regional offices and service centers throughout Florida, enabling local claims handling, customer service and policy administration. Its leadership team brings deep experience in property and casualty underwriting, distribution channel management and catastrophe risk assessment, positioning the company to navigate the complex regulatory and environmental landscape of coastal insurance markets.

Universal Insurance Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong profitability: Management reported a 30.6% adjusted return on common equity and adjusted diluted EPS of $1.36 versus a prior-year loss, with core revenue of $400M up 4.9% year-over-year.
• Positive Sentiment: Underwriting performance improved materially as the net combined ratio fell to 96.4% (down 20.5 points) and the net loss ratio declined to 70.2%, helped by the absence of hurricane losses this quarter.
• Neutral Sentiment: Reserving posture and actuarial review: An earlier-than-usual annual actuarial review was encouraging and the company retains a conservative reserving approach, though it recorded about $3.9M of prior-year CAT development this quarter.
• Positive Sentiment: Top-line growth continues with direct premiums written of $592.8M (up 3.2%); growth was driven by a 22.2% increase in other states, partially offset by a 2.6% decline in Florida.
• Positive Sentiment: Capital return actions remain active: the company repurchased ~347,000 shares for $8.1M (about $7.1M authorization remaining) and declared a $0.16 quarterly dividend, with management open to opportunistic buybacks.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to Universal's third quarter 2025 earnings conference call. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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, Chief Strategy Officer at Universal Insurance Holdings]

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.

[Steve Donaghy, CEO at Universal Insurance Holdings]

Thanks, Arash. Good morning, everyone. It was a solid quarter with a 30.6% adjusted return on common equity. Our unique organic business model allows us to consistently generate deep double-digit ROEs, making us particularly well-positioned to succeed in the much-improved Florida market. Additionally, we commenced our annual actuarial review process considerably earlier this year, and our findings are very encouraging. As we've discussed in recent periods, our reserving process has become more conservative with a focus on protecting and increasing the resilience of our balance sheet. When we look at our current and prior accident year reserves in the aggregate, we believe we're in a very strong position, further increasing our optimism as we turn a new chapter in the revamped Florida market. I'll turn it over to Frank to walk through our financial results. Frank.

[Frank Wilcox, CFO at Universal Insurance Holdings]

Thanks, Steve, and good morning. Adjusted diluted earnings per common share was $1.36 compared to an adjusted loss per common share of $0.73 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from a lower net loss ratio, higher net premiums earned, net investment income, and commission revenue. Core revenue of $400 million was up 4.9% year over year, with growth primarily stemming from higher net premiums earned, net investment income, and commission revenue. Direct premiums written were $592.8 million, up 3.2% from the prior year quarter. The increase stems from 22.2% growth in other states, partially offset by a 2.6% decrease in Florida. Overall growth mostly reflects higher policies in force, higher rates, and inflation adjustments across our multi-state footprint. Direct premiums earned were $534.1 million, up 5.2% from the prior year quarter, reflecting direct premiums written growth over the last 12 months.

[Frank Wilcox, CFO at Universal Insurance Holdings]

Net premiums earned were $359.7 million, up 4% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, partially offset by a higher ceded premium ratio. The net combined ratio was 96.4%, down 20.5 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, partially offset by a higher net expense ratio. The 70.2% net loss ratio was down 21.5 points compared to the prior year quarter, with a decrease reflecting the inclusion of hurricanes Debbie and Helene in the prior year quarter and the lack of hurricane activity in the current year quarter. The net expense ratio was 26.2%, up one point compared to the prior year quarter, with the increase primarily driven by a higher ceded premium ratio and higher policy acquisition costs associated with growth outside Florida.

[Frank Wilcox, CFO at Universal Insurance Holdings]

During the quarter, the company repurchased approximately 347,000 shares at an aggregate cost of $8.1 million. The company's current share repurchase authorization program has approximately $7.1 million remaining. On July 9, 2025, the board of directors declared a quarterly cash dividend of $0.16 per share of common stock payable on August 9, 2025, to shareholders of record as of the close of business on August 1, 2025. With that, I'd like to ask the operator to open the line for questions.

[Operator]

As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Paul Newsome with Piper Sandler. Your line is open.

[Paul Newsome, Managing Director and Senior Research Analyst at Piper Sandler]

Good morning. Thanks for the call. Maybe you could follow on a little bit more on your reserving comment. Does this foreshadow any change in how you think about profit margins perspectively and the exit year loss ratio or any change in how you think about setting loss picks?

[Steve Donaghy, CEO at Universal Insurance Holdings]

Good morning, Paul. Thanks for the question. We feel as though we have come through a very fraudulent time within the Florida market, and we have seen all the things in the past go through the book. There's still things to deal with in the future, as you know, and Florida is an ever-changing market. However, we've never had as many dollars up in the aggregate as we do right now. Our file count, our claims count is dramatically reduced, and our claims folks are getting to claims much faster as a result of the market that we're in. We've seen considerably positive effects on the book and on our reserving philosophy, so to say. As we look to the future, we want to get through the year before we make any substantial adjustments and retain our conservative approach.

[Steve Donaghy, CEO at Universal Insurance Holdings]

That'll be something we will look at seriously as we get into the beginning of 2026 and close out 2025.

[Paul Newsome, Managing Director and Senior Research Analyst at Piper Sandler]

A different follow-up question. Any thoughts on the competitive environment? We hear all sorts of talks about rate decreases in the Florida market in particular, but could you give us some general thoughts about what you're seeing both in and out of the Florida markets from a competitive perspective?

[Steve Donaghy, CEO at Universal Insurance Holdings]

Yeah. I think, you know, just to address outside of the Florida market, we're more of a niche provider, and we have our markets that we like, and our rates are adequate in certain spots. It's highly competitive outside of Florida, and you have all the big names there as well. Within Florida, there are a lot of new players showing up. There are a lot of new players that maybe don't understand what we've understood for 25 or 26 years now. We see a lot of various behaviors. We do not chase premium. We are sticking to rate adequacy and trying to drive a high level of service to our insureds and profitability to our shareholders. It is competitive. There are a lot of markets. I think the agents continue to prefer to write with established providers when competitive.

[Steve Donaghy, CEO at Universal Insurance Holdings]

I would say, unlike other times, that's now consistent across the state. It's not just in specific markets in Florida. I think there's different carriers that look at different geographic areas in Florida very differently. We do, but we continue to write new business and new policies, as you've seen from last quarter. We feel good about our position and our relationship with our agency force.

[Paul Newsome, Managing Director and Senior Research Analyst at Piper Sandler]

The last big question that I'll let other folks ask. Capital management, you made some comments this quarter, but you now have a high class problem here in the sense that your ROE is well above the growth rate of the company. What's your priority there? Should we expect substantial or at least some repurchase activity perspectively as part of your sort of ongoing business given where the returns are?

[Steve Donaghy, CEO at Universal Insurance Holdings]

I don't know about new purchase activity, Paul, but we consistently view our shares as a positive within our capital management. As we look to the future and we have access to capital, we'll continue to work with the investment committee and establish guidelines and change those guidelines as we go. We feel very confident in any acquisition of our shares that we can do at the appropriate times.

[Paul Newsome, Managing Director and Senior Research Analyst at Piper Sandler]

Great. I appreciate the help. Thank you very much.

[Steve Donaghy, CEO at Universal Insurance Holdings]

Thanks, Paul. Have a good weekend.

[Operator]

Thank you. Our next question comes from Nicolas Iacoviello with Dowling & Partners Securities. Your line is open.

[Nicolas Iacoviello, Equity Research Analyst at Dowling & Partners Securities]

Thanks. I just had one. Was there any net prior year catastrophe development booked in the current quarter following the annual actuarial review?

[Frank Wilcox, CFO at Universal Insurance Holdings]

Yeah. Good morning, Nick. Yes, there was. It's about $3.9 million related to prior year catastrophe development.

[Nicolas Iacoviello, Equity Research Analyst at Dowling & Partners Securities]

All right. Thank you. I'm assuming there was nothing on the claims handling side from last year's storms, correct?

[Frank Wilcox, CFO at Universal Insurance Holdings]

That's correct.

[Nicolas Iacoviello, Equity Research Analyst at Dowling & Partners Securities]

Yeah. None. Okay. That's all I had. Thanks, guys.

[Steve Donaghy, CEO at Universal Insurance Holdings]

Thanks, Nick.

[Frank Wilcox, CFO at Universal Insurance Holdings]

Thank you.

[Operator]

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Steve Donaghy for closing remarks.

[Steve Donaghy, CEO at Universal Insurance Holdings]

I'd like to thank our associates, consumers, our agency force, and stakeholders for their continued support of Universal and wish you all a nice weekend. Cheers.

[Operator]

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

Participants

Executives

• Arash Soleimani, Chief Strategy Officer
• Steve Donaghy, CEO
• Frank Wilcox, CFO

Analysts

• Nicolas Iacoviello, Equity Research Analyst at Dowling & Partners Securities
• Paul Newsome, Managing Director and Senior Research Analyst at Piper Sandler