Sign in
UI

UNIVERSAL INSURANCE HOLDINGS, INC. (UVE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean beat versus Wall Street: diluted EPS of $1.44 vs $1.12 consensus*, and revenue of $394.9M vs $355.0M consensus*, driven by lower weather losses, higher net investment income, and stronger commission revenue .
  • Underwriting improved: net loss ratio fell 1.4 pts YoY to 70.5% and the combined ratio improved to 95.0%, while the expense ratio rose 0.9 pts due to growth outside Florida .
  • Reinsurance program was completed early and as expected; capacity and pricing were favorable, with $352M of multi‑year cover added and the tower top raised to $2.526B—an incremental +$110M vs 2024‑2025—supporting risk appetite into hurricane season .
  • Capital returns and capital planning remain supportive: regular dividend maintained at $0.16 per share and a new $20M share repurchase authorization through May 1, 2027 .

What Went Well and What Went Wrong

What Went Well

  • Underwriting and investment tailwinds drove adjusted EPS to $1.44 (vs $1.07 prior year), with core revenue up 8.2% YoY on higher net premiums earned, net investment income, and commissions .
  • Management secured reinsurance early with favorable terms: “fully supported and secured well before the June 1 inception date,” and added $352M of multi‑year coverage through 2026‑2027; CEO cited positive market dynamics post‑Florida reforms .
  • Geographic diversification: direct premiums written grew 34.7% in other states (Florida down 3.0%), reflecting policy growth, rate actions, and inflation adjustments .

What Went Wrong

  • Expense ratio increased 0.9 pts YoY to 24.5%, reflecting higher policy acquisition costs tied to non‑Florida growth and other operating costs .
  • Florida direct premiums written declined 3.0% YoY, offset by strong growth in other states; management remains “laser‑focused” on profitability over broad expansion .
  • Continued sensitivity to weather events in preceding quarters underscores volatility: Q4 2024 combined ratio was 107.9% (Milton second‑event retention), and Q3 2024 was 116.9% (Helene) .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$387.554 $384.809 $394.867
Diluted EPS (GAAP) ($USD)$(0.57) $0.21 $1.44
Adjusted Diluted EPS ($USD)$(0.73) $0.25 $1.44
Operating Income Margin (%)(4.3)% 2.3% 14.5%
Net Loss Ratio (%)91.7% 82.3% 70.5%
Net Expense Ratio (%)25.2% 25.6% 24.5%
Combined Ratio (%)116.9% 107.9% 95.0%
Net Premiums Earned ($USD Millions)$345.736 $348.354 $355.721

Estimates vs Actual (Q1 2025)

MetricConsensus*ActualOutcome
Primary EPS Consensus Mean$1.12*$1.44 Beat*
Revenue Consensus Mean ($USD)$354.972M*$394.867M Beat*
Primary EPS – # of Estimates1*——
Revenue – # of Estimates1*——

Values marked with * retrieved from S&P Global.

Segment/Geographic Mix and Exposure

MetricQ3 2024Q4 2024Q1 2025
Direct Premiums Written – Florida ($USD Millions)$440.018 $342.565 $344.044
Direct Premiums Written – Other States ($USD Millions)$134.333 $128.330 $123.034
Direct Premiums Written – Total ($USD Millions)$574.351 $470.895 $467.078
Policies in Force – Florida (#)570,432 567,307 562,845
Policies in Force – Other States (#)274,107 288,219 301,972
Policies in Force – Total (#)844,539 855,526 864,817

KPIs

KPIQ3 2024Q4 2024Q1 2025
Book Value/Share (End of Period) ($USD)$14.15 $13.28 $14.98
Adjusted Book Value/Share (End of Period) ($USD)$15.76 $15.53 $16.79
Annualized ROCE (%)(16.3)% 6.2% 41.7%
Net Investment Income ($USD Millions)$15.406 $15.559 $16.060
Commission Revenue ($USD Millions)$12.959 $16.121 $16.275

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
First Event Retention (All States incl. FL)2025–2026 Treaty$45M (unchanged) $45M Maintained
Captive Layer Usage (First Event)2025–2026 Treaty$66M xs $45M structure continued $66M xs $45M; second event layer covered by third party Maintained
Top of Reinsurance Tower (Single All States Event)2025–2026 Treaty2024–2025 baseline; +$110M increase implied $2.526B Raised (+$110M vs 2024–2025)
Multi‑Year Catastrophe CapacityThrough 2026–2027Not previously extended to 2026–2027 Added $352M multi‑year capacity ($277M below FHCF; $75M above FHCF) Raised
Quarterly Dividend per ShareQ1 2025$0.16 (Q4 2024) $0.16 Maintained
Share Repurchase AuthorizationAnnounced 05/01/2025$2.6M remaining (Q4 2024) New $20M through May 1, 2027 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Reinsurance pricing/capacityExpect smaller weather impact in Q4; strong reinsurance relationships; Wisconsin entry 92% of first tower placed; multiyear capacity secured for 2026 Program completed early; favorable rates; +$352M multi‑year cover Improving access/cost
Florida legislative reformsPositive impact; improving non‑cat underwriting Filed modest rate decrease in Florida tied to reforms “Reforms are working… stability to market” Structural tailwind
Weather losses/hurricanesHelene drove high net loss ratio; combined ratio 116.9% Milton was second‑event $45M retention; combined ratio 107.9% Lower weather losses; loss ratio down 1.4 pts YoY Normalizing
Growth outside FloridaOther states DPW +32.9% YoY Other states DPW +38.4% YoY Other states DPW +34.7% YoY; Florida −3.0% Diversification accelerating
Reserve developmentFavorable ~$2.2M prior‑year cats Prior year development down vs 2023 No prior‑year development; conservative stance Stable/conservative
Regulatory/legal——State review on Irma claims formally dismissed; no financial impact Overhang removed

Management Commentary

  • “We continue to see signs that the 2022 Florida legislative reforms are working… In the quarter, we experienced lower weather losses, benefiting the loss and LAE ratio.” — CEO Stephen Donaghy .
  • “Our program was fully supported and secured well before the June 1 inception date… We’ve also secured $352 million of additional multi‑year coverage… The program costs and coverage were consistent with our expectations.” — CEO Stephen Donaghy .
  • “Adjusted diluted earnings per common share was $1.44… Core revenue of $394.9 million was up 8.2% year‑over‑year… Direct premiums written were $467.1 million, up 4.7%.” — CFO Frank Wilcox .
  • “We don’t really let competition drive our pricing… we want to grow where we know we will grow profitably.” — CEO Stephen Donaghy (Q&A) .
  • “Rates [were] favorable… even flat or a little bit of a reduction is very acceptable to us for this year’s renewal.” — CEO Stephen Donaghy (Q&A) .

Q&A Highlights

  • Growth and competitive landscape: Management reiterated focus on profitability and rate adequacy rather than competitor pricing, with selective market openings driving non‑Florida growth .
  • Reinsurance renewal pricing: Management characterized rates as favorable despite multiple 2024 hurricanes; details provided in late May after placement completion .
  • Reserves: No prior‑year development in Q1; conservative reserving continued; non‑cat weather was lighter versus prior periods .
  • Retention structure: Company plans to use captive as in prior year—$66M xs $45M first event; second event’s $66M layer covered by third‑party—translating to ~$111M pretax net for first event .

Estimates Context

  • Q1 2025 results beat consensus on EPS ($1.44 vs $1.12*) and revenue ($394.9M vs $355.0M*), albeit on a single estimate for each line item, which may limit breadth of coverage* .
  • The beat reflects lower weather losses, higher investment yields and assets, and reinsurance brokerage commissions (RAP layer replacement and cat bond → traditional coverage), suggesting upward bias to near‑term estimate revisions for underwriting margin and commission revenue .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Underwriting recovery and diversification are visible: combined ratio improved to 95.0% with mix shifting toward non‑Florida markets; monitor expense ratio as growth scales outside Florida .
  • Reinsurance capacity/pricing are supportive: multi‑year capacity added and tower increased to $2.526B, with first‑event retention steady at $45M—risk transfer remains robust into 2025 hurricane season .
  • Earnings power benefitted from higher reinvestment yields and invested assets; sustained tailwinds could support margin resilience barring outsized cat events .
  • Commission uplift from program adjustments (RAP layer replacement; traditional coverage) is additive to revenue; watch persistence as program evolves year‑over‑year .
  • Capital returns continue: dividend maintained and $20M buyback authorized; buybacks can smooth volatility and signal confidence in underwriting and capital position .
  • Florida reforms appear durable; management tone remains constructive, aligning with modest rate reductions and a healthier competitive environment .
  • Tactical lens: Near term, the stock may react positively to the clean beat, constructive reinsurance update, and capital return cadence; medium term, trajectory hinges on weather normalization and continued execution in diversified geographies .

Source Documents

  • Q1 2025 press release and 8‑K: financials, underwriting, dividend .
  • Q1 2025 earnings call transcript: strategy, reinsurance, reserves .
  • Q4 2024 results and call: Milton impact, reinsurance progress .
  • Q3 2024 results and call: Helene impact, non‑cat trends, Wisconsin entry .
  • Reinsurance program completion (May 29, 2025) .
  • Dividend (Apr 14, 2025) and share repurchase authorization (May 1, 2025) .
  • Regulatory update on Irma claims review (Apr 1, 2025) .