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UNIVERSAL INSURANCE HOLDINGS, INC. (UVE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 printed modest profitability amid elevated weather: Diluted EPS $0.21 and adjusted EPS $0.25 as underwriting income fell but investment income and commissions offset partially; combined ratio rose to 107.9% on Hurricane Milton and higher expenses .
  • Topline was resilient: total revenues $384.8M (+2.5% YoY), net premiums earned $348.4M (+3.9% YoY), and direct premiums written $470.9M (+8.8% YoY), with strong growth outside Florida (+38.4% YoY) .
  • Capital actions remain supportive: $7.7M of buybacks in Q4; regular $0.16 dividend declared Feb 6, 2025; plus a $0.13 special dividend paid in December 2024, totaling $16.2M returned in Q4 .
  • Reinsurance visibility is a potential stock catalyst: 92% of the 2025 first-event CAT tower already placed and multi-year capacity secured for 2026; management also filed a modest Florida rate decrease tied to 2022 reforms .
  • Consensus context: S&P Global Wall Street estimates were unavailable at the time of query; we cannot assess beats/misses vs consensus for Q4 2024 (S&P Global data unavailable at time of request).

What Went Well and What Went Wrong

  • What Went Well

    • Growth outside Florida accelerated: Other states’ direct premiums written grew 38.4% YoY in Q4; policies in force rose 5.6% YoY; premiums in force +7.5% YoY .
    • Investment & fee tailwinds: Net investment income rose to $15.6M (from $13.7M) on higher reinvestment yields and balances; commissions/policy fees/other rose 35.6% YoY due to replacing RAP and a cat bond with traditional reinsurance .
    • Strategic positioning on reinsurance and Florida rates: “92% of our first event catastrophe tower already placed… significant additional multi-year capacity secured for the 2026 hurricane season” and a “modest rate decrease” filed in Florida reflecting legislative reforms (CEO) .

  • What Went Wrong

    • Weather drove underwriting pressure: Combined ratio rose to 107.9% (+4.2 pts YoY) on higher loss ratio (Milton) and higher expense ratio; operating margin fell to 2.3% (from 7.3%) .
    • Expense intensity increased: Expense ratio up 3.8 pts YoY to 25.6% on policy acquisition costs tied to non-Florida growth and higher operating costs .
    • Higher ceded premium ratio: Ceded premium ratio increased to 32.9% (+2.5 pts YoY) due to replacing the state RAP layer with private market cover, diluting net earned premium leverage .

Financial Results

  • Income statement and underwriting metrics (chronological columns: Q2 → Q3 → Q4)
Metric (units)Q2 2024Q3 2024Q4 2024
Total Revenues ($USD Thousands)$380,214 $387,554 $384,809
Net Premiums Earned ($USD Thousands)$344,958 $345,736 $348,354
Diluted EPS ($)$1.21 $(0.57) $0.21
Adjusted Diluted EPS ($)$1.18 $(0.73) $0.25
Operating Income (Loss) ($USD Thousands)$49,528 $(16,504) $8,957
Operating Margin (%)13.0% (4.3)% 2.3%
Loss Ratio (%)70.6% 91.7% 82.3%
Expense Ratio (%)25.3% 25.2% 25.6%
Combined Ratio (%)95.9% 116.9% 107.9%
  • YoY snapshot (Q4 2024 vs Q4 2023, as disclosed)
MetricQ4 2024Q4 2023YoY Change
Total Revenues ($USD Thousands)$384,809 $375,456 +2.5%
Diluted EPS ($)$0.21 $0.68 (69.1%)
Operating Margin (%)2.3% 7.3% (5.0) pts
Combined Ratio (%)107.9% 103.7% +4.2 pts
  • Segment/Geographic (Direct Premiums Written)
Direct Premiums Written ($USD Thousands)Q2 2024Q3 2024Q4 2024
Florida$461,018 $440,018 $342,565
Other States$117,249 $134,333 $128,330
Total$578,267 $574,351 $470,895
  • KPIs and Capital
KPIQ2 2024Q3 2024Q4 2024
Policies in Force (Total)833,433 844,539 855,526
Ceded Premium Ratio (%)29.7% 31.9% 32.9%
Book Value/Share ($)$13.79 $14.15 $13.28
Adjusted Book Value/Share ($)$16.44 $15.76 $15.53
Annualized ROCE (%)37.4% (16.3)% 6.2%
Share Repurchases ($M)$5.3 $4.4 $7.7
Dividends (per share)$0.16 regular $0.16 regular; later $0.13 special declared Nov 6 Paid $0.16 regular + $0.13 special in Q4; $0.16 regular declared Feb 6, 2025

Guidance Changes

  • Management did not issue formal financial guidance (revenue/margins/EPS). They provided reinsurance placement status and rate actions, plus capital return updates.
MetricPeriodPrevious GuidanceCurrent Guidance/UpdateChange
First-event CAT reinsurance tower placement2025 programNot previously quantified92% placed as of Q4 call Update
Multi-year reinsurance capacity2026 seasonNot previously disclosed“Significant additional multi-year capacity secured” Update
Florida homeowners rate action2025 (filed)N/A“Modest rate decrease” filed, tied to Dec 2022 reforms New
Regular dividendQ1 2025$0.16$0.16 declared, payable Mar 14, 2025 Maintained
Special dividendQ4 2024N/A$0.13 paid Dec 13, 2024 New (one-time)
Share repurchase authorization remainingQ4 2024~$10.3M at Q3-end $2.6M remaining post Q4 buybacks Reduced (usage)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Catastrophe/weather impactsQ2: benign; CR 95.9% . Q3: heavy cat losses (Helene) drove CR 116.9% .Milton drove higher loss ratio; CR 107.9% .Improving vs Q3 but still elevated loss activity.
Reinsurance programQ2: 2024-25 program completed, cost up modestly despite more private market demand .Q3: reiterated resilience; set expectations for smaller Q4 weather impact .Q4: 92% of first-event tower placed; multi-year capacity for 2026 .
Florida legal reforms/claimsQ2: improving claims/litigation trends .Q3: non-cat underwriting trends improving .Q4: filed modest FL rate decrease linked to Dec 2022 reforms .
Geographic expansionQ2: other states DPW +30% YoY .Q3: entered Wisconsin (19th state) .Q4: other states DPW +38.4% YoY .
Expense dynamicsQ2: expense ratio flat YoY .Q3: expense ratio +1.5 pts on costs .Q4: expense ratio +3.8 pts YoY (non-FL acquisition, OpEx) .
Capital returnQ2: $5.3M buybacks; $0.16 dividend .Q3: $4.4M buybacks; $0.16 dividend .Q4: $7.7M buybacks; $0.16 regular + $0.13 special dividend .

Management Commentary

  • Strategic tone (CEO): “We continue to see progress relative to claims trends in our Florida book and recently filed a modest rate decrease… directly correlated with the legislative changes made in December 2022… 92% of our first event catastrophe tower already placed… significant additional multi-year capacity secured for the 2026 hurricane season.”
  • Financial drivers (CFO): “Adjusted diluted earnings per common share was $0.25… decrease mostly stems from lower underwriting income, partially offset by higher net investment income and commission revenue… Combined ratio 107.9% driven by higher loss and expense ratios… Milton was a $45 million net retention event… prior year development down significantly ($45M vs $76M last year).”

Q&A Highlights

  • Weather and reserves: Q4 included Hurricane Milton as a $45M net retention event; prior-year development decreased to ~$45M from $76M last year, helping offset some loss pressure .
  • Growth focus and rate adequacy: Management is “laser-focused on profitability and writing business where it makes the most sense,” opening/closing markets based on rate adequacy; growth outside Florida benefited from new market entries .
  • Reinsurance renewals: 92% of first tower accomplished early; reinsurer reception characterized as strong; details on cost and structure to be provided in May when the program is finalized .

Estimates Context

  • We attempted to retrieve S&P Global Wall Street consensus for Q4 2024 EPS and revenue, but the data was unavailable at the time of query due to provider limits (therefore we cannot determine beat/miss vs consensus for Q4 2024). Results reported were: EPS $0.21, adjusted EPS $0.25, revenues $384.8M .
  • Implication: In the absence of consensus, we anchor on sequential and YoY trends. Sequentially, Q4 improved materially vs Q3 on losses (CR 107.9% vs 116.9%), but remained above underwriting breakeven; YoY earnings declined on higher losses and expenses despite higher premiums and fee income .

Key Takeaways for Investors

  • Cat normalization path: Loss activity moderated from Q3’s peak but remained elevated due to Milton; a return to sub-100% combined ratios is the key near-term earnings lever .
  • Reinsurance execution is a catalyst: 92% placement of the 2025 first-event tower and multi-year capacity for 2026 should de-risk renewal outcomes; detailed cost disclosure in May could drive stock moves .
  • Florida backdrop improving: Filing of a modest FL rate decrease linked to 2022 reforms suggests claims/litigation benefits are materializing; this supports medium-term margin recovery .
  • Diversification working: Other states DPW +38.4% YoY in Q4, expanding the addressable market and reducing exposure concentration over time .
  • Expense discipline needed: Higher acquisition and OpEx from non-FL growth lifted the expense ratio; capturing scale and mix efficiencies will be important to restore margins .
  • Capital returns remain active: Q4 buybacks ($7.7M) plus regular and special dividends underscore balance sheet and cash generation resilience despite volatile cat seasons .
  • Trading setup: Into May’s reinsurance update, the narrative hinges on reinsurance cost visibility and 2025 hurricane expectations; improved legal climate and diversification provide a constructive medium-term earnings trajectory if loss activity normalizes .