雅虎香港財經 Universal Insurance Holdings, Inc. (NYSE:UVE) Q4 2023 Earnings Call Transcript
Universal Insurance Holdings, Inc. (NYSE:UVE) Q4 2023 Earnings Call Transcript February 23, 2024
Universal Insurance Holdings, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning, ladies and gentlemen, and welcome to Universal's Fourth Quarter 2023 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. Please go ahead.
Arash Soleimani: Good morning. Thank you for joining us today. Welcome 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 filing, 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. We closed out both the fourth quarter and full year with double-digit adjusted returns on common equity. And I believe that even stronger results are firmly in our future. 2023 was a transformative year for us and our significant efforts position us for meaningful success in the new legislative environment. We've added a buffer to our loss picks and bolstered reserves for years that predate the elimination of one-way attorney fees and assignment of benefits to what I view as the most conservative level in our history. Importantly, we did this because we wanted to place the past in the rearview mirror and shift our focus to the future. In 2023, we took yet another step towards the future by commuting Hurricane Irma, the largest and most significant storm in our history with the Florida Hurricane Catastrophe Fund.
Now that we're past the one-year anniversary date of the 2022 special legislative session, and all new and renewal policies are subject to the new legislation, the impact of the reforms is becoming clear. Claims trends across the board are improving, including reductions in total claims, represented claims, assigned claims and daily claims. Our first event 2024-2025 reinsurance tower is already 90% secured, and we've negotiated additional multi-year capacity for the future. Given our size, scale, independent agency and reinsurer relationships, and the recent steps we've taken, we are particularly well-positioned to succeed in the revamp Florida environment. 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 $0.43, down from adjusted diluted earnings per common share of $0.72 from the prior year quarter. The decrease mostly stems from a higher net loss ratio and lower commission revenue, partially offset by a lower net expense ratio and higher net investment income. Core revenue of $365.7 million was up 12.1% year-over-year, with growth primarily stemming from higher net premiums earned and net investment income, partially offset by lower commission revenue. Direct premiums written were $432.6 million up 4% from the prior year quarter, including point 6% growth in Florida and 18.6% growth in other states. Overall growth reflects rate increases partially offset by lower policies in force.
Direct premiums earned 482.1 million were up 3.9% year-over-year, reflecting rate driven premiums written growth over the last 12 months. Net premiums earned were 335.4 million, up 14.9% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower seated premium ratio. The net combined ratio was 103.7% up 2.3 points compared to the prior year quarter. The increase reflects a higher net loss ratio and a lower net expense ratio. The 81.9% net loss ratio was up 5.6 points year-over-year, with the increase primarily attributable to a higher calendar loss pick. The 21.8% net expense ratio improved by 3.3 points year-over-year, primarily reflecting lower renewal commission rates paid to distribution partners.
During the fourth quarter, the company repurchased approximately 223,000 shares at an aggregate cost of 3.6 million. The company's current share repurchase authorization program has 4.1 million remaining. On February 8, 2024, the Board of Directors declared a regular quarterly cash dividend of $0.16 per share of common stock payable March 15, 2024. to shareholders of record as of the close of business on March 8, 2024. With that, I'd like to ask the operator to open the line for questions.
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