Universal Insurance Holdings, Inc. (NYSE:UVE) Q2 2023 Earnings Conference Call July 28, 2023 10:00 AM ET

Company Participants

Arash Soleimani - Chief Strategy Officer

Steve Donaghy - Chief Executive Officer

Frank Wilcox - Chief Financial Otter

Conference Call Participants

Paul Newsome - Piper Sandler

Nic Iacoviello - Dowling & Partners

Operator

Good morning, ladies and gentlemen and welcome to Universal Second Quarter 2023 Earnings Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer. Please go ahead.

Arash Soleimani

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 Otter.

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 Investors 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

Thanks, Arash. Good morning, everyone. Results were solid, including a 25.3% annualized adjusted return on common equity and 85.1% adjusted diluted earnings per share growth year-over-year. While it’s still early days, we’re encouraged by favorable claims and litigation trends that are beginning to emerge as a result of recent legislative reforms and give us optimism as we look forward to 2024 and beyond. We continue to benefit from rate-driven premium growth and an improving spread of risk across our geographic footprint. I’m very proud of the reinsurance program we put together for the 2023, 2024 treaty year. Our programs terms, conditions and coverage are consistent with the prior year, but we reduced our consolidated retention and our ceded premium ratio.

I’ll turn it over to Frank to walk through our financial results. Frank?

Frank Wilcox

Thanks, Steve. Good morning. Adjusted diluted earnings per common share, was $0.87, up from $0.47 in the prior year quarter. The increase mostly stems from higher underwriting income, net investment income and commission revenue. Core revenue of $337 million was up 11.7% year-over-year, with growth primarily stemming from higher net premiums earned, net investment income and commission revenue.