Universal Insurance Holdings, Inc. (NYSE:UVE) Q1 2022 Earnings Conference Call April 29, 2022 10:00 AM ET

Company Participants

Arash Soleimani - Chief Strategy Officer

Steve Donaghy - Chief Executive Officer

Frank Wilcox - Chief Financial Officer

Conference Call Participants

Paul Newsome - Piper Sandler

Nick Iacoviello - Dowling & Partners

Operator

Good morning, ladies and gentlemen. And welcome to the Universal’s First Quarter 2022 Earnings Conference Call. 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

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 and 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 will turn the call over to Steve.

Steve Donaghy

Thank you, Arash. Good morning, everyone. We reported a 16.9% annualized return on equity, despite the challenging external environment, which is a testament to the strength and resilience of our business.

Direct premiums written were up 8.5% from the prior year quarter, significantly outpacing a 6.1% policies in force decline, as meaningful rate increases benefited premium volumes. We are laser focused on improving underwriting profitability, as we prioritize combined ratio improvement over topline growth.

In addition to raising rates across Florida and our broader footprint, we’ve reduced exposure to less profitable geographies, tighten underwriting criteria, renegotiated commission rates with our agency partners and exercise prudent expense management.

Lastly, rising yields are benefiting our investment income results and should continue to serve as a tailwind moving forward.

Given our strong capital position, the profitability of our business and the steps we continue to take to improve results, we believe we stand out favorably as reinsures increasingly differentiate among seasons in the current market.

Our team has been hard at work over the last several months meeting face-to-face with our reinsurance partners around the globe, securing our desired capacity for the June 1, 2022 renewal.