Third Quarter 2026 Results - UNIVERSAL INSURANCE HOLDINGS INC

Financial Performance:

• Adjusted diluted EPS increased to $1.93 from $1.36 year-over-year, driven by higher underwriting and net investment income.
• Core revenue reached $444.3 million, an 11.1% year-over-year increase; Direct premiums written rose 2.7% to $608.9 million.
• Net premiums earned grew 12.1% to $403.2 million, while Direct premiums earned increased 4.2% to $556.7 million.
• Net combined ratio improved to 91% (down 5.4 points sequentially), with the net loss ratio falling to 64.6% (down 5.6 points year-over-year).
• Net expense ratio rose slightly to 26.4%, attributed to higher acquisition costs outside Florida and other operating expenses.
• Company returned approximately $7.4 million in capital via share repurchases (174,000 shares); $1.1 million of authorization remains.
• Board declared a quarterly dividend of $0.16 per share, payable August 7, 2027.
• Annualized return on common equity achieved a strong 32.7%.

Guidance and Future Outlook:

• Management expressed confidence in organic growth across all served states, citing a robust pipeline of business.
• New business trends remain solid with an 8% growth in policies and force.
• Outlook for capital allocation prioritizes adequate capitalization of insurance entities to protect policyholders before expanding capital returns.
• Future capital management decisions, including potential changes to share repurchase programs, will be reviewed by the Board.
• Hurricane Isaias was characterized as manageable based on initial claims activity, with no long-term disruption expected.

Business Segments and Product Lines:

• Growth in other states was a primary driver, contributing an 18.5% increase in premiums, offset by a 3.3% decline in Florida.
• Revenue growth stems from higher net premiums earned and net investment income.
• Hurricane claims response team deployed immediately post-landfall in western Florida panhandle to expedite inspections and payments.

Market and Competitive Landscape:

• Florida market conditions benefit from recent legislation, strengthening relationships with the agency force.
• Outside Florida, the company targets niches with rate adequacy rather than volume-driven growth.
• Management does not "chase" business, focusing instead on underwriting quality and pricing adequacy across a multi-state footprint.

Risks and Challenges:

• Increased net expense ratio due to acquisition costs associated with non-Florida growth and rising other operating expenses.
• Exposure to catastrophic weather events, specifically Hurricane Isaias, though currently assessed as low-impact.
• Dependence on maintaining adequate capitalization levels for insurance entities to sustain underwriting capacity.

Management Commentary and Tone:

• Tone was highly confident and positive, emphasizing strong underwriting discipline and capital generation.
• Management highlighted solid trends in policy growth and improved loss ratios as key performance drivers.
• CEO Steve Donaghy and CFO Frank Wilcox emphasized disciplined capital management and shareholder value creation.

Analyst Questions and Answers:

• Paul Newsome (Piper Sandler) asked about the competitive environment and capital allocation given high ROEs.
• Management Response: Confirmed strong writing momentum in both Florida and non-Florida markets due to rate adequacy and favorable legislation; reaffirmed that capitalization for policyholder protection remains the top priority.

Other Key Points:

• Non-GAAP financial measures and reconciliations are available on the company's investor website and SEC filings.
• Transcript includes standard forward-looking statement disclaimers regarding risks and uncertainties.
• The company has a multi-state footprint with diverse growth opportunities beyond the Florida market.