UNIVERSAL INSURANCE HOLDINGS INC
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| ITEM 1. | BUSINESS |
Overview
Universal Insurance Holdings, Inc. (“UVE,” and together with its wholly-owned subsidiaries, “we,” “our,” “us,” or the “Company”) is a holding company offering property and casualty insurance and value-added insurance services. We develop, market, and underwrite insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management, and distribution. Our primary insurance entities, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC” and together with UPCIC, the “Insurance Entities”), offer insurance products through both our appointed independent agent network and our online distribution channels across our multi-state footprint (primarily in Florida). The Insurance Entities seek to produce an underwriting profit (defined as earned premium minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs and expenses) over the long term; maintain a conservative balance sheet to prepare for years in which the Insurance Entities are not able to achieve an underwriting profit; and generate investment income on assets.
Business Strategy
UVE’s strategic focus is on creating a best-in-class experience for our customers and delivering strong shareholder returns across underwriting cycles. While weather-related volatility is an inherent part of property insurance, particularly in coastal markets such as Florida, our strategy includes generating non-risk bearing income that enhances returns in profitable underwriting periods, while serving as a buffer and potentially still allowing for consolidated profitability in challenging underwriting periods. We have more than 25 years of experience providing protection solutions. We continue to focus on disciplined underwriting in opportune markets and maintaining a resilient balance sheet that is enhanced by our reinsurance program. We have made substantial efforts in recent years to innovate across all of our service businesses, including continued development of our digital agency Clovered.com, where we have 39 carrier partners, and utilization of digital applications where applicable to administer claims. We continue to evaluate ways in which we can improve the customer experience across all touchpoints of the insurance value chain.
Products and Services
Insurance Products
UPCIC, our primary risk-bearing insurance entity, which accounts for the substantial majority of our Insurance Entities’ business, primarily distributes policies through our independent agency network and offers the following types of personal residential insurance: homeowners, renters/tenants, condo unit owners, and dwelling/fire. UPCIC also offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. APPCIC writes similar lines of insurance as UPCIC, but is only licensed in Florida and Georgia. APPCIC primarily distributes policies through our digital platforms, and beginning in the current year through our independent agency network.
Our Insurance Entities, UPCIC and APPCIC, are both currently rated “A” (“Exceptional”) by Demotech, Inc. (“Demotech”) and “A-” by Kroll Bond Rating Agency (“Kroll”), which are rating agencies specializing in evaluating insurer financial strength and stability. Our combined statutory capital and surplus was approximately $509.1 million at December 31, 2025.
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Risk Management
Our subsidiary, Evolution Risk Advisors, Inc. (“ERA,” formerly Universal Risk Advisors, Inc.), is the managing general agent for the Insurance Entities. In this capacity, ERA advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations. ERA’s underwriting service evaluates insurance risk and exposures on an individual and portfolio basis and assists the Insurance Entities with pricing risks. All underwriting is performed utilizing our state-filed rate and rule manuals as the basis of our rate-making and risk assessment. ERA collects fees from the Insurance Entities for the services it provides, as well as certain policy fees from insureds. Our subsidiary, Universal Inspection Corporation d/b/a Wicklow Inspection Corporation, complements ERA and our Insurance Entities by conducting inspections as part of our underwriting process.
The Insurance Entities rely heavily on reinsurance to limit potential exposure to catastrophic events. In most years, reinsurance coverage is one of the most significant costs we incur. In conjunction with ERA, our licensed reinsurance intermediary, Blue Atlantic Reinsurance Corporation (“BARC”), partners with a third-party reinsurance broker to place and manage our reinsurance programs for the Insurance Entities. BARC receives commission revenue, net of third-party co-broker fees, from third-party reinsurers in connection with these services, which can serve to mitigate reinsurance costs.
Due to our exposure to Florida’s residential property insurance market, we face risks associated with the adverse conditions that have affected the magnitude of both catastrophe and non-catastrophe losses and LAE in Florida in recent years. Although the Florida legislature passed law changes to address market abuses, including substantial reforms in December 2022, the benefits of these law changes may not be fully realized for several years while the Company continues to settle and respond to claims that occurred prior to reforms taking full effect. We have sought, and continue to seek, to mitigate these risks through our exposure management initiatives, efforts to attain rate adequacy, implementing product updates, and tailoring our claims and legal processes to market conditions.
As we are a property and casualty insurance company with a concentration in Florida and other coastal states, natural catastrophes are among the most serious risks facing our customers and communities. Changing climate conditions are increasing the unpredictability of natural catastrophes, such as hurricanes, floods, severe convective storms, and wildfires, leading to significant property losses. Our responsive claims team helps to restore our customers’ lives after catastrophic losses. Our enterprise risk management framework, overseen by senior management and the Board of Directors (the “Board of Directors” or the “Board”), models and assesses loss probabilities. We seek to mitigate catastrophe risk for our customers and shareholders through prudent exposure management, underwriting initiatives, and sensitivity to geographic concentrations as well as through reinsurance as noted above.
Claims Management
Our subsidiary, Universal Adjusting Corporation d/b/a Alder Adjusting (“Alder”), manages our claims processing and adjusting functions from claim inception to conclusion, which we believe allows us to increase efficiency and provide a high level of customer service. Alder updates its claims-handling procedures over time in response to market trends. Through Alder, we have adopted initiatives to adjust and pay straightforward, meritorious claims as promptly as possible through timely analysis and on-site field adjusting. Alder also has increased its use of technology to inspect properties and facilitate adjusting claims. In addition to our in-house claims operation, we assign some field inspections to third-party adjusters. Our relationships with these adjusters enable us to continue to provide high quality and timely service following a catastrophe, such as a hurricane in coastal states, and during any other period of unusually high claim volume. Through our continuous improvement and operational excellence initiatives, we continue to evaluate ways in which we can improve the customer’s claims experience. Alder’s data intelligence allows the Insurance Entities, ERA, and our reinsurance partners to identify trends and refine the underwriting process and guidelines to seek adequate pricing and identify needed adjustments. Our claims management operations provide cost-effective solutions in servicing claims for the Insurance Entities and generates additional fee income from adjusting claims ceded to reinsurers.
Our in-house claims litigation team continues to focus on more effectively and efficiently protecting our rights in litigation, including through subrogation. Subrogation is the act of seeking reimbursement from a third party that caused a covered event to an insured for the amount we paid on the insured’s behalf. Reflecting our efforts to improve and enhance our claims operations and to address emerging claims and litigation trends, approximately 54% of our employees work in our claims management operations. Of these employees, 56% comprise our in-house claims litigation team.
Distribution
We market and sell our products primarily through our network of approximately 9,500 licensed independent agents (3,900 in Florida). Our strong relationships with our independent agents and their relationships with their customers are critical to our ability to identify, attract, and retain profitable business. We actively participate in the recruitment and training of our independent agents and provide each agency with training sessions on topics such as underwriting guidelines and submitting claims.
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We utilize an attractive commission-based compensation plan as an incentive for independent agents to place business with us. We also strive to provide excellent service to our independent agents and brokers, which has yielded long-standing partnerships with our independent agents (a number of which have relationships with us that span more than a decade) that benefit the Company in our target markets through hard and soft market cycles. Our internal staff and specialists support our independent agents by providing access to our in-house technology systems to assist with the delivery of service to our policyholders. This arrangement creates a collaborative environment between the Company and our independent agents on continuous improvement initiatives and allows our independent agents to provide quotes within minutes. Our technology systems have evolved into a highly valued tool that enables agents to quickly understand the status of a policy and assist their clients with policy-related questions.
In addition to distributing our products through our independent agency network, we offer direct-to-consumer online distribution, including through our wholly-owned digital insurance agency, Clovered, which is operational across our multi-state footprint. As a personal lines property and casualty insurance agency, Clovered also partners with third-party insurance carriers and offers a wide suite of property and casualty insurance products, allowing us to earn non-risk bearing commission revenue for placing insurance on their behalf.
Investments
Funds in excess of operating needs for the Insurance Entities and UVE are invested in accordance with our investment policy guidelines. The Investment Committee of our Board oversees the investment portfolio and reports overall investment results to our Board, on a quarterly basis. The investment activities of the Insurance Entities are subject to regulation and supervision by the Florida Office of Insurance Regulation (“FLOIR”). See below under “—Government Regulation.” The Insurance Entities may only make investments that are consistent with regulatory guidelines, and our more restrictive investment policy guidelines for the Insurance Entities, including but not limited to, credit quality and concentration thresholds by issuer, by security type, and in aggregate, an average duration cap, and quarterly realized loss budget requirements. The primary objectives of our investment portfolio are the preservation of capital and providing adequate liquidity for claims payments and other cash needs. The portfolio’s secondary investment objective is to generate a stable risk-commensurate return with an emphasis on investment income while at the same time maintaining the high-quality standards of the portfolio. Our investment guidelines for fixed-income investments limit duration to 5 years or less and require a portfolio average credit rating of A- or better. UVE is not subject to the statutory investment guidelines governing insurance companies. Therefore, the investments made by UVE may differ from those made by the Insurance Entities.
See “Part II—Item 8—Note 3 (Investments)” for more information about our investments.
Markets and Competition
Markets
We sell insurance products in the following 19 states: Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia and Wisconsin. We have an additional license to write in Tennessee. During 2025, 72.6% of our overall direct premiums written were in Florida. The Florida market as a whole tends to consistently be a top-three personal residential homeowners insurance market in the United States based on direct premiums written, due in large part to higher average pricing levels that are necessary to address the hurricane risk exposure in the state, the litigation environment, and other market conditions.
Hurricanes or other catastrophic events can significantly impact earnings for insurance carriers in Florida and other coastal states, depending on the strength of their reinsurance programs and partners and the level of net retention to which the carriers subscribe. For example, volatility and market dislocation were evident in Florida following Hurricane Andrew in 1992, the 2004 and 2005 hurricane seasons (during which eight hurricanes made landfall in coastal states), as well as following 2017 (Hurricane Irma), 2018 (Hurricanes Michael and Florence), 2022 (Hurricane Ian), 2023 (Hurricane Idalia) and 2024 (Hurricanes Debby, Helene and Milton). Earnings of insurance carriers can also be affected by years similar to 2020 where there was a heightened frequency of events (e.g., Hurricanes Sally, Isaias, Zeta and Eta). Given the potential for significant personal property damage, the availability of homeowners insurance and claims servicing are vitally important to coastal states’ residents. The benefits of UVE’s reinsurance strategy in 2025 and the specific programs are further discussed below and in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Competition
The market for homeowners insurance typically is highly competitive. In many of the states in which we write business, we compete with small or regional insurers that might have greater familiarity with the local markets than we do. We also compete with large national insurers, many of which have substantial brand awareness, experience, and capital resources. Within the Florida marketplace, dislocating weather events of recent years and other market conditions, such as a proliferation of first-party litigation, have impacted competition from other admitted market insurers, but competition has started to show signs of normalization.
The personal residential homeowners insurance industry is strictly regulated. As a result, it is difficult for insurance companies to differentiate their products, which creates low barriers to entry (other than regulatory capital and other requirements) and in typical circumstances results in a highly competitive market based largely on price and the customer experience. The nature, size and experience of our primary competitors varies across the states in which we do business.
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Several states, including Florida, have insurance mechanisms that provide insurance to consumers who are not otherwise able to obtain coverage in the private insurance market. The largest such insurance mechanism is Florida’s Citizens Property Insurance Corporation (“Citizens”). The degree to which these state-authorized insurance mechanisms compete with private insurers such as the Insurance Entities varies over time depending on market and public policy considerations beyond our control. Citizens’ rate changes are limited by law, and accordingly, in times of rising insurance rates its premiums can significantly lag those of the authorized market. This in turn causes Citizens to increasingly become the low-cost option for many policyholders; in essence, in hard markets Citizens has a statutorily-created, and ultimately consumer-subsidized, pricing advantage over authorized insurers operating in the state, including the Insurance Entities. Although the gap between Citizens’ premiums and admitted market premiums typically narrows as market conditions improve, its premium can remain competitive with those in the admitted market for several years due to cumulative effects of the statutory caps and public policy decisions.
Price
Pricing has generally been defined by “hard” and “soft” cyclical markets. Hard markets are those in which policy premiums are increasing (as a result of periods of capital shortages resulting in a lack of insurance availability, relatively low levels of price competition, and more selective underwriting of risks). Soft markets are those in which pricing has stabilized or is decreasing (as a result of periods of greater capital availability, relatively high levels of price competition and less restrictive underwriting standards). Many factors influence the pricing environment, including, but not limited to, catastrophic events, loss experience, GDP growth/contraction, inflation, interest rates, legislation, primary insurance and reinsurance capacity and availability, share-of-wallet competition, the prevalence of litigation (including claims representation abuses, solicited claims and other first-party litigation), technological advancements in distribution, underwriting, claims management and overall operational efficiencies, and the risk appetite of competitors.
Our successful track record in writing homeowners insurance in catastrophe-exposed areas has enabled us to develop sophisticated risk selection and pricing techniques that strive to identify desirable risks and accurately price the risk of loss while allowing us to be competitive in our target markets. This risk selection and pricing approach allows us to offer competitive products in areas that have a high demand for property insurance.
The premiums we charge are based on rates specific to individual risks and locations and are generally subject to regulatory review. We periodically submit our rate revisions to regulators as required by law or as we deem necessary or appropriate for our business. The premiums we charge to policyholders are affected by legislative enactments and administrative rules, including state-mandated programs in Florida requiring residential property insurance companies like us to provide premium discounts when policyholders verify that insured properties have certain construction features, such as windstorm loss reduction techniques or devices.
Customer Experience
Drivers of the customer experience include reliability and value, financial strength, and ease-of-use. We strive to provide excellent reliability and value through the strength of our distribution networks, high-quality service to our policyholders and independent agents, our claims handling ability and product features tailored to our markets.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise requires, all references to “we,” “us,” “our,” and “Company” refer to Universal Insurance Holdings, Inc. (“UVE”) and its wholly-owned subsidiaries. You should read the following discussion together with our unaudited condensed consolidated financial statements (“Financial Statements”) and the related notes thereto included in “Part I, Item 1—Financial Statements,” and our audited consolidated financial statements and the related notes thereto included in “Part II, Item 8—Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the year ended December 31, 2025. Operating results for any one quarter are not necessarily indicative of results to be expected for any quarter or for the year.
Cautionary Note Regarding Forward-Looking Statements
In addition to historical information, this report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These forward-looking statements may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets,” and other words with similar meanings. These statements may address, among other things, our strategy for growth, catastrophe exposure and other risk management, product development, investment results, regulatory approvals, market position, expenses, financial results, projections, estimates, litigation and reserves. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We believe that these statements are based on reasonable estimates, assumptions and plans. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is set forth below, which are a summary of those discussed in the section titled “Risk Factors” (Part I, Item 1A) of our Annual Report on Form 10-K for the year ended December 31, 2025. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Risks and uncertainties that may affect, or have affected, our financial condition and operating results include, but are not limited to, the following:
•As a property and casualty insurer, we may face significant losses, and our financial results may vary from period to period, due to exposure to catastrophic events and severe weather conditions, the frequency and severity of which could be affected by climate change.
•Because we have significant exposure to the Florida market, our financial results are affected by the regulatory, economic, and weather conditions in Florida.
•We have entered new markets and expect that we will continue to do so, but there can be no assurance that our diversification and growth strategy will be effective.
•Actual claims incurred have exceeded, and in the future may exceed, reserves established for claims, adversely affecting our operating results and financial condition.
•If we fail to adequately price the risks we underwrite, if emerging trends outpace our ability to adjust prices in a timely manner, or if we lose desirable exposures to competitors by overpricing our risks, we may experience underwriting losses, thereby depleting surplus at the Insurance Entities and capital at the holding company.
•Unanticipated increases in the severity or frequency of claims adversely affect our profitability and financial condition.
•The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial condition or results of operations.
•Pandemics and macroeconomic conditions could impact our business, financial results, and growth.
•Because we rely on independent insurance agents, the loss of these independent agent relationships and the business they control or our ability to attract new independent agents could have an adverse impact on our business.
•We rely on models as a tool to evaluate risk, and those models are inherently uncertain and may not accurately predict existing or future losses.
•Reinsurance may be unavailable in the future at reasonable levels and prices or on reasonable terms, which may limit our ability to write new business or to adequately mitigate our exposure to loss.
•Reinsurance subjects us to the credit risk of our reinsurers, which could have a material adverse effect on our operating results and financial condition.
•Our financial condition and operating results are subject to the cyclical nature of the property and casualty insurance business.
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•An overall decline in the housing market or general economic conditions could have a material adverse effect on the financial condition and results of operations of our business.
•Our success depends, in part, on our ability to attract, retain, and develop talented employees, and the loss of any one of our key personnel could adversely impact our operations.
•We could be adversely affected if our controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.
•The failure of our claims professionals to effectively manage claims could adversely affect our insurance business and financial results.
•Litigation or regulatory actions could result in material settlements, judgments, fines, or penalties and consequently have a material adverse impact on our financial condition and reputation.
•Failure to maintain or enhance our brand or damage to our reputation could adversely impact our business.
•Our future results are dependent in part on our ability to successfully operate in a highly competitive insurance industry.
•A downgrade in our financial strength or stability ratings may have an adverse effect on our competitive position, the marketability of our product offerings, and our liquidity, operating results and financial condition.
•Breaches or other failures of our information systems or denial of service on our website could have an adverse impact on our business and reputation.
•Our ability to implement or adjust to technological changes, especially regarding artificial intelligence (“AI”), may be limited, or we could introduce technology containing errors, which may trigger regulatory actions or put us at a competitive disadvantage.
•Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we write or changes in laws and/or potential regulatory approaches relating to them could have a material adverse effect on our financial condition or results of operations.
•We are subject to market risk, which may adversely affect investment income.
•Our overall financial performance depends in part on the returns on our investment portfolio.
•We are subject to extensive regulation and potential further restrictive regulation may increase our operating costs and limit our growth and profitability.
•UVE is a holding company and, consequently, its cash flow is dependent on dividends and other permissible payments from its subsidiaries.
•Regulations limiting rate changes and requiring us to participate in loss sharing or assessments may decrease our profitability.
•The amount of statutory capital and surplus that each of the Insurance Entities has and the amount of statutory capital and surplus it must hold vary and are sensitive to a number of factors outside of our control, including market conditions and the regulatory environment and rules.
•To service our debt, we will require a significant amount of cash. Our ability to generate cash depends on many factors.
•Our indebtedness could adversely affect our financial results and prevent us from fulfilling our obligations under the Notes.
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OVERVIEW
We are a vertically integrated insurance holding company focused primarily on personal residential homeowners insurance. Our insurance subsidiaries, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC” and, together with UPCIC, the “Insurance Entities”), write homeowners and related property insurance through appointed independent agents and online distribution channels across 19 states. Our integrated operating model allows us to manage underwriting, product design, distribution, risk management and claims handling through affiliated service companies, which supports consistency in execution and provides additional fee-based revenue streams.
Our results are driven principally by the size, mix and profitability of our insured portfolio; the frequency and severity of weather and non-weather claims; the cost and structure of our catastrophe reinsurance program; investment income; and operating efficiency. Management’s objective is to generate long-term underwriting profitability while maintaining sufficient liquidity and capital to support policyholder obligations, catastrophe exposure and disciplined growth. We evaluate underwriting profitability based on net premiums earned less losses, loss adjustment expenses, policy acquisition costs and other operating costs and expenses.
During 2026, we continued to pursue selective growth in Florida and other states where market conditions have improved or otherwise support attractive risk-adjusted returns. In Florida, legislative reforms enacted in late 2022 have contributed to improved claim and litigation trends on policies issued or renewed after the reforms, supporting our decision to expand new homeowners writings in most territories, introduce new coverage options and adjust rates. Outside Florida, we continued to refine rates, coverage offerings and underwriting criteria in response to inflation, weather risk, reinsurance costs and other market conditions. These actions are intended to support growth while maintaining underwriting discipline and geographic diversification.
Although Florida represented approximately 72.9% of direct premiums written for the six months ended June 30, 2026, it represented approximately 47.1% of total insured value as of June 30, 2026. This difference reflects the higher premium levels associated with Florida’s catastrophe exposure, reinsurance costs and market conditions, while also demonstrating the Company’s continued diversification of insured exposure outside Florida. Management views this diversification as an important component of its long-term strategy to balance growth, underwriting profitability and catastrophe risk across its multi-state homeowners insurance platform.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements, related notes and MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2025. This MD&A contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those discussed due to the factors described under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this report.
Trends and Geographical Distribution
Florida Trends
Regulatory Environment
We seek to achieve long-term rate adequacy and earnings for the Insurance Entities while managing our risks through market cycles and looking to take advantage of what we believe to be market opportunities. We currently write insurance policies in 19 states. Although the majority of our policies cover properties in Florida, our business in other states continues to grow as a percentage of our total policies in force and premium volume.
Our ability to write and retain policies is influenced by a range of local, national and global factors. Among these, the amount and types of policies we write depend on the regulatory environments in the states in which the Insurance Entities write policies. In particular, the Florida personal residential insurance market has experienced and continues to experience significant transitions due to a series of law changes passed in December 2022 that were intended to address previous market disruption.
Prior to the law changes, the Florida residential property insurance market suffered from declining availability and increasing premiums among authorized insurers. This was attributable to elevated loss and LAE levels and related impacts on insurers’ operating results and reinsurance pricing and availability. During this period, Citizens, Florida’s statutorily-created insurer that generally is intended to be the state’s market of last resort, instead became a market of choice as authorized insurers limited writings and Citizens’ rate levels were suppressed by statutory limitations on its rate changes.
The overall residential property insurance market in Florida has steadily improved since the reforms were enacted. Even so, the long-term benefits of Florida’s statutory reforms remain unknown and difficult to predict. The Florida political environment, prevailing sentiment among policymakers or the public such as growing concerns with inflation and costs of living, and economic factors beyond insurers’ control may directly or indirectly mitigate the impact of the reforms. These influences can mask the reforms’ benefits or diminish their perceived effectiveness even when the market shows objective signs of improvement through moderating rate levels, increased product availability and competition, and reductions in Citizens’ policy count. Over time, political or external influences attributing broader rising costs or other market conditions to deficiencies in the reforms rather than other causes can result in policymakers questioning the merits of the reforms, considering proposals to reverse them, or pursuing other law changes or interpretations that could negate improvements in the Florida market and renew concerns with rising costs and reduced availability.
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Competition
Prior to the 2022 reforms, most residential property insurers in Florida, including the Insurance Entities, sought to limit their exposure to rising losses and LAE. Although the Insurance Entities faced little competition from authorized insurers during this period, the Insurance Entities’ own exposure management considerations led them to limit their new business intake. The Insurance Entities historically have enjoyed a high policyholder retention rate from year to year, both prior to the reforms and currently. Nonetheless, the Company’s limited appetite for new business prior to the reforms led to a decline in its in-force Florida policy count. As other insurers similarly limited their writings during this time, Citizens grew to become the largest insurer of residential property in Florida by a wide margin.
Since 2023, the Insurance Entities have gradually increased their appetite for new business in Florida. In both 2024 and 2025, the Insurance Entities filed and gained regulatory approval of statewide average rate decreases for their homeowners’ insurance programs. In addition, the Insurance Entities began to expand, and have continued to expand, the areas in Florida and the types of policies they seek to write. The Insurance Entities also implemented optional product updates for consumers seeking to evaluate their coverage and price options in Florida’s improving market.
Other insurers also are expanding new business writings. Established insurers are increasingly expanding their writings by location and policy type. In addition, approximately 20 new insurers have entered the Florida market in recent years. Unlike the Insurance Entities, some new and established insurers write business predominantly by assuming risks from Citizens. Altogether, increased activity among authorized insurers has led to a decrease in Citizens’ policy count by approximately one million policies since the reforms. The current Florida residential property insurance market therefore is characterized by increased competition among authorized insurers, expanded coverage options for consumers, declining average rate levels and a significantly smaller residual insurance market.
Other states have experienced less disruption than Florida. The Insurance Entities therefore face a high but stable degree of competition when entering and expanding into other states. In these states, the Insurance Entities often compete with national or regional insurers with greater experience in the specific markets. Our growth plan therefore includes developing relationships with the states’ independent agents and gradually expanding our presence as we gain familiarity with new markets. Over time, this has allowed our business outside of Florida to steadily increase as a percentage of our overall business.
Claims
The Insurance Entities’ loss and LAE experience on Florida claims has improved significantly for policies written after the statutory reforms. This is attributable to reduced incentives for policyholders, vendors and their representatives to pursue questionable, inflated and litigated claims. In addition, the Company’s own initiatives, coupled with enhanced claim-handling standards included in the reforms, have resulted in faster claims-handling times, process improvements and greater customer satisfaction.
The Company continues to experience higher costs associated with claims that pre-date the reforms. The remaining pre-reform claims typically are litigated claims that have resisted formal and informal efforts at dispute resolution. Although the number of claims subject to pre-reform laws has declined substantially, some might be resolved only through litigation and therefore might remain pending for months or longer.
The Company has increasingly used video and other technology to facilitate review of damaged property and improve efficiency in the claims process. As technologies evolve, the Company continually evaluates and implements enhancements to streamline workflows and enhance the customer experience. The Company also regularly monitors regulatory developments pertaining to uses of technology, including oversight of AI in claims processes and other aspects of our operations.
Across the United States, third-party financing contributes to expansion of claims litigation and vendors’ efforts to solicit claims. Some states have enacted laws intended to curtail or require disclosure of litigation financing. The largest state in which we write business, Florida, does not currently have any such laws. It is difficult to quantify the impact on losses, LAE and ultimately premium attributable to vendor-related financing and litigation financing.
Other Trends
Economic Conditions
Our business is affected by evolving domestic, national or global economic conditions, including the potential impact from tariffs and other inflationary pressures. Increased labor and materials costs can increase our claims costs. They can also have other direct effects on our business, such as increasing the values of properties we insure and the corresponding premium levels, as well as indirect effects such as offsetting and diminishing the perceived benefits of the statutory reforms. We will continue to monitor our business model and strategy as economic conditions develop.
We also rely on global reinsurance markets to mitigate our exposure under policies we write. The availability and pricing of reinsurance can be influenced by global economic conditions such as inflation. Our ability to purchase desired levels of reinsurance at competitive prices also can be influenced by severe weather in Florida and elsewhere. Florida did not suffer a landfalling hurricane in 2025, which contributed to favorable reinsurance market conditions for the mid-year renewal of our catastrophe reinsurance program. However, the benefit of short-term weather or economic conditions can be tempered by reinsurers’ assessments of past and potential future events.
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Artificial Intelligence and Technology Trends
Data analytics, artificial intelligence (“AI”) and other emerging technologies are increasingly affecting the property and casualty insurance industry. Insurers, technology providers, vendors and other market participants continue to invest in tools intended to improve the speed, accuracy and cost-effectiveness of insurance operations. These technologies may create opportunities to improve underwriting and risk selection, claims handling, fraud detection, customer service, operational efficiency and analytical capabilities. In the residential property insurance market, emerging technologies are increasingly used to evaluate property characteristics, model catastrophe and non-catastrophe risk, support inspection and underwriting processes, triage or estimate claims, detect potentially questionable claim activity, and assist with communications. The effective use of these technologies depends on the quality of underlying data, governance structures in place, integration with existing systems, vendor performance and continued human oversight.
The use of AI and other automated technologies is subject to evolving legal and regulatory scrutiny and changing market expectations regarding data privacy, cybersecurity, transparency, governance and compliance with insurance, information security and consumer protection requirements. These requirements may vary by jurisdiction and could affect our ability to implement or expand AI-enabled tools, increase compliance costs, or expose us to regulatory, litigation or reputational risks if such tools are alleged to produce inaccurate, unfair or unexplained outcomes. If we are unable to adopt, implement or manage emerging technologies effectively, or if competitors are able to use them more effectively, we could experience higher operating costs, process inefficiencies, customer or agent service disadvantages, regulatory concerns, reputational harm or other competitive disadvantages. Additionally, because Florida remains our largest market and the domiciliary state of our Insurance Entities, changes in Florida regulatory expectations related to the use of AI or other technologies could have a disproportionate impact on our operations. Conversely, if appropriately implemented and governed, these technologies may support our efforts to improve operational efficiency, strengthen analytical capabilities, enhance customer and agent experiences, and respond to market opportunities and risks.
Summary of Recent Rate Changes
In 2024, for Florida, UPCIC implemented new homeowners policy rates, resulting in an average rate decrease of 1.5% compared to previous rates, effective for new policies August 15, 2024 and renewal policies May 17, 2025. In October 2025, UPCIC implemented new homeowners policy rates for new and renewal business policies, resulting in an average rate decrease of 5.1% compared to previous rates with an effective date of October 16, 2025. These Florida rate changes were implemented under use and file rating laws and subsequently received regulatory approval.
For 2026, the following rate changes for UPCIC have been approved by regulators in states other than Florida:
•Maryland: +4.6%, effective January 6, 2026, for new business and renewal business
•Alabama: +7.9%, effective May 2, 2026, for new business and renewal business
•Georgia: +7.9%, effective May 5, 2026, for new business and renewal business
•Massachusetts: +6.1%, effective May 28, 2026, for new business and renewal business
•North Carolina: +7.5%, effective June 1, 2026, for new business and renewal business
•South Carolina: +6.9%, effective June 10, 2026, for new business and renewal business
•New Jersey: +18.9%, effective July 6, 2026, for new business and renewal business
•Delaware: +9.9%, effective August 13, 2026, for new business and renewal business
•Pennsylvania: +14.9%, effective September 21, 2026, for new business and renewal business
•Illinois: +17.8%, effective October 1, 2026, for new business and renewal business
•Wisconsin: +39.9%, effective October 22, 2026, for new business and renewal business
•Iowa: +9.0%, effective October 24, 2026, for new business and renewal business
The following rate filings are pending approval by state regulators:
•New York: +10.0%, the effective date for new and renewal business is pending approval
•Minnesota: +15.0%, the effective date for new and renewal business is pending approval
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KEY PERFORMANCE INDICATORS
The Company considers the measures and ratios in the following discussion to be key performance indicators for its businesses. Management believes that these indicators are helpful in understanding the underlying trends in the Company’s businesses. Some of these indicators are reported on a quarterly basis and others on an annual basis. Please also refer to “Part II, Item 8—Note 2 (Summary of Significant Accounting Policies)” of our Annual Report on Form 10-K for the year ended December 31, 2025, for definitions of certain other terms we use when describing our financial results.
These indicators may not be comparable to other performance measures used by the Company’s competitors and should only be evaluated together with our condensed consolidated financial statements and accompanying notes.
Definitions of Key Performance Indicators
Book Value Per Common Share ― total stockholders’ equity, adjusted for preferred stock liquidation, divided by the number of common shares outstanding as of a reporting period. Book value per common share is the excess of assets over liabilities at a reporting period attributed to each share of common stock. Changes in book value per common share informs shareholders of retained equity in the Company on a per share basis, which may assist in understanding market value trends for the Company’s stock.
Combined Ratio ― the combined ratio is a measure of underwriting profitability for a reporting period and is calculated by dividing total operating costs and expenses (which is made up of losses and LAE, policy acquisition costs and other operating costs and expenses) by premiums earned, net, which is net of ceded premium earned. Changes to the combined ratio over time provide management with an understanding of costs to operate its business in relation to net premiums it is earning and the impact of rate, underwriting and other business management actions, weather and other external factors on underwriting profitability. A combined ratio below 100% indicates an underwriting profit; a combined ratio above 100% indicates an underwriting loss.
Core Loss Ratio ― an operational metric used in the insurance industry to describe the ratio of current year losses and LAE, excluding current accident year weather and prior year development, to premiums earned. Core loss ratio is an important measure identifying profitability trends of premiums in force. Core losses consist of losses and LAE excluding current year weather events and prior years’ reserve development and is net of estimated subrogation recoveries. The financial benefit from the management of claims, including claim fees ceded to reinsurers, is also recorded in the condensed consolidated financial statements as a reduction to core losses. The core loss ratio can be measured on a direct basis, using direct earned premiums, or on a net basis, using premiums earned, net (i.e., direct premiums earned less ceded premiums earned).
Debt-to-Equity Ratio ― debt, including current portion divided by stockholders’ equity. This ratio helps management measure the amount of financing leverage in place in relation to equity and allows investors to evaluate future leverage capacity.
Debt-to-Total Capital Ratio ― debt, including current portion divided by the sum of total stockholders’ equity and debt (often referred to as total capital resources). This ratio helps management measure the amount of financing leverage in place (debt) in relation to total capital resources and allows investors to evaluate future leverage capacity.
Direct Premiums Written (“DPW”) ― reflects the total value of policies issued during a period before considering premiums ceded to reinsurers. Direct premiums written, comprised of renewal premiums, endorsements, and new business, is initially recorded as unearned premium in the balance sheet, which is then earned pro-rata over the next year or remaining policy term. Direct premiums written reflect current trends in the Company’s sale of property and casualty insurance products and amounts that will be recognized as earned premiums in the future.
DPW (Florida) ― includes only DPW in the state of Florida. This measure allows management to analyze growth in our primary market and is also a measure of business concentration risk.
Expense Ratio (Including Policy Acquisition Cost Ratio and Other Operating Costs and Expenses Ratio) ― calculated as policy acquisition costs and other operating costs and expenses as a percentage of premiums earned, net. Policy acquisition costs and other operating costs and expenses include such items as underwriting costs, facilities, and corporate overhead. The expense ratio, including the sub-expense ratios of policy acquisition cost ratio and other operating costs and expenses ratio, are indicators to management of the Company’s cost efficiency in acquiring and servicing its business and the impact of expense items to overall profitability.
Losses and Loss Adjustment Expense Ratio or Loss and LAE Ratio ― a measure of the cost of claims and claim settlement expenses incurred in a reporting period as a percentage of premiums earned in that same reporting period. Losses and LAE incurred in a reporting period includes both amounts related to the current accident year and prior accident years, if any, referred to as development. Ultimate losses and LAE are based on actuarial estimates with changes in those estimates recognized in the period the estimates are revised. Losses and LAE consist of claim costs arising from claims occurring and settling in the current period, an estimate of claim costs for reported but unpaid claims, an estimate of unpaid claim costs for incurred-but-not-reported claims and an estimate of claim settlement expenses associated with reported and unreported claims which occurred during the reporting period. The loss and LAE ratio can be measured on a direct basis, which includes losses and LAE divided by direct earned premiums, or on a net basis, which includes losses and LAE divided by premiums earned, net (i.e., direct premium earned less ceded premium earned). The net loss and LAE ratio is a measure of underwriting profitability after giving consideration to the effect of reinsurance. Trends in the net loss and LAE ratio are an indication to management of current and future profitability.
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Monthly Weighted Average Renewal Retention Rate ― measures the monthly average of policyholders that renew their policies over the period of a calendar year. This measure allows management to assess customer retention.
Premiums Earned, Net ― the pro-rata portion of current and previously written premiums that the Company recognizes as earned premium during the reporting period, net of ceded premium earned. Ceded premiums are premiums paid or payable by the Company for reinsurance protection. Written premiums are considered earned and are recognized pro-rata over the policy coverage period. Premiums earned, net is a measure that allows management to identify revenue trends.
Policies in Force ― represents the number of active policies with coverage in effect as of the end of the reporting period. The change in the number of policies in force is a growth measure and provides management with an indication of progress toward achieving strategic objectives. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.
Premium in Force ― is the amount of the annual direct premiums written previously recorded by the Company for policies which are still active as of the reporting date. This measure assists management in measuring the level of insured exposure and progress toward meeting revenue goals for the current year, and provides an indication of business available for renewal in the next twelve months. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.
Return on Average Common Equity (“ROCE”) ― calculated as actual net income (loss) attributable to common stockholders divided by average common stockholders' equity. ROCE is a capital profitability measure of how efficiently management creates profits.
Total Insured Value ― represents the amount of insurance limits available on a policy for a single loss based on all policies active as of the reporting date. This measure assists management in measuring the level of insured exposure.
Unearned Premiums ― represents the portion of direct premiums corresponding to the time period remaining on an insurance policy and available for future earning by the Company. Trends in unearned premiums generally indicate expansion, if growing, or contraction, if declining, which are important indicators to management. Inherent seasonality in our business makes this measure more useful when comparing each quarter’s balance to the same quarter in prior years.
Weather events ― an estimate of losses and LAE from weather events occurring during the current accident year that exceed initial estimates of expected weather events when establishing the core loss ratio for each accident year. This metric informs management of factors impacting overall current year profitability.
REINSURANCE
Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events. Developing and implementing our reinsurance strategy to adequately protect our policyholders, balance sheet, and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been our key strategic priority. To limit the Insurance Entities’ potential exposure to catastrophic events, we purchase significant reinsurance from third-party reinsurers and the FHCF. The FLOIR requires the Insurance Entities, like all residential property insurance companies doing business in Florida, to have a certain amount of capital and reinsurance coverage to cover losses upon the occurrence of a single catastrophic event and a series of catastrophic events occurring in the same hurricane season. The Insurance Entities’ 2026-2027 catastrophic reinsurance program meets the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance coverages that protect the policyholders of our Insurance Entities under a series of stress test catastrophe loss scenarios. Similarly, the Insurance Entities’ 2026-2027 catastrophic reinsurance programs meet the stress test and review requirements of Demotech, Inc., for maintaining Financial Stability Ratings® of “A” (Exceptional) and of Kroll for maintaining insurer financial strength rating of “A-”.
We believe the Insurance Entities’ retention under the jointly shared reinsurance program is appropriate and structured to protect policyholders and the Insurance Entities’ capital structure. We test the sufficiency of the catastrophe reinsurance coverage by subjecting the Insurance Entities’ personal residential exposures to scenario testing using third-party catastrophe models. These models combine simulations of the natural occurrence patterns and characteristics of hurricanes, tornadoes, earthquakes, and other catastrophes with information on property values, construction types, and occupancy classes. These models’ outputs provide information concerning the potential for simulated large losses, which enables the Insurance Entities to limit the financial impact from catastrophic events. Refer to the risk factors disclosed in “Part I, Item 1A—Risk Factors,” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for details of specific risks attributable to catastrophic losses and reinsurance.
Effective June 1, 2026, the Insurance Entities entered into multiple reinsurance agreements comprising our 2026-2027 reinsurance program. See “Item 1—Note 4 (Reinsurance).”
Insurance Entities 2026-2027 All States Reinsurance Program (“All States”)
•First event All States combined retention of $45 million.
•All States first event tower extends to $2.623 billion with no co-participation in any of the layers, no limitation on loss adjustment expenses and no accelerated deposit premiums.
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•Assuming a first event completely exhausts the $2.623 billion tower, the second event exhaustion point would be $1.209 billion.
•Full reinstatement is available on $1.098 billion of non-FHCF first event catastrophe coverage for guaranteed second event coverage. For all layers purchased between $45 million and the projected attachment point of the FHCF layer, to the extent that all of our coverage or a portion thereof is exhausted in a catastrophic event and reinstatement premium is due, we have purchased enough reinstatement premium protection (“RPP”) limit to pay the premium necessary for the reinstatement of these coverages or have secured a specific second event contract.
•First event layer of 100% of $66 million in excess of $45 million is established by Universal Insurance Holdings, Inc (“UIH”) in captive insurance arrangement. See “Item 1—Note 14 (Variable Interest Entities).”
•Specific second event private market excess of loss coverage of $66 million in excess of $45 million is sitting behind captive arrangement.
•Specific third and fourth event private market catastrophe excess of loss coverage of $86 million in excess of $25 million provides frequency protection for multiple events during the treaty period including a $20 million reduction in retention for a third and fourth event.
•For the FHCF Reimbursement Contracts effective June 1, 2026, both UPCIC and APPCIC have continued the election of the 90% coverage level. We estimate the total mandatory FHCF layer will provide approximately $1.39 billion of coverage for UPCIC, which inures to the benefit of the open market coverage secured from private reinsurers and we estimate the total mandatory FHCF layer will provide approximately $25.0 million of coverage for APPCIC, which inures to the benefit of the open market coverage secured from private reinsurers.
•To further insulate for future years, UPCIC and APPCIC have secured $352 million of catastrophe capacity with contractually agreed limits that extend coverage to include the 2027-2028 treaty period, of which $277 million of the capacity sits below the FHCF layer.
Reinsurers
The table below provides the A.M. Best and S&P financial strength ratings for each of the largest rated third-party reinsurers in the Insurance Entities’ 2026-2027 reinsurance program:
| Reinsurer | A.M. Best | S&P | ||||||||||
Florida Hurricane Catastrophe Fund (1) | N/A | N/A | ||||||||||
Various Lloyd’s of London Syndicates (2) | A+ | AA- | ||||||||||
| DaVinci Reinsurance Ltd. | A | A+ | ||||||||||
| Renaissance Reinsurance Ltd. | A+ | A+ | ||||||||||
| Markel Bermuda Ltd. | A | A | ||||||||||
Everest Reinsurance Co. | A+ | A+ | ||||||||||
(1)No rating is available, because the fund is not rated.
(2)The reinsurer is fully collateralized with a trust agreement.
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RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL CONDITION
Results of Operations for the three months ended June 30, 2026, or second quarter, are compared to the same period last year, unless stated otherwise
Highlights for the three months ended June 30, 2026
•The Company delivered continued top-line growth in 2026, with direct premiums written increasing 4.1% year over year in the second quarter and 6% year to date. Growth was supported by management’s strategy to selectively expand the homeowners insurance book in Florida and other states where market conditions are improving or otherwise attractive, while maintaining underwriting discipline through risk selection, rate adequacy, product design, and targeted marketing initiatives.
•As of June 30, 2026, total policies in force increased 62,028, or 7.1%, to 934,371, compared with June 30, 2025. The increase included 31,722 policies, or 5.7%, in Florida and 30,306 policies, or 9.7%, in other states.
•Net investment income increased $2.96 million, or 17.1%, to $20.2 million in the second quarter of 2026, compared with $17.3 million in the second quarter of 2025, driven by higher book yields and increased invested assets.
•The Insurance Entities secured their combined UPCIC and APPCIC 2026–27 catastrophe reinsurance program to manage catastrophe exposure across their homeowners insurance book and support continued underwriting capacity in Florida and other states. The program maintains continuity with historical reinsurance partners and includes no material changes to key terms or conditions. It provides a combined single-event All States reinsurance tower, including Florida, of $2.623 billion, an increase of approximately $50 million over the expiring program. In the second quarter of 2026, ceded written premium declined 12.1% to $612.6 million, from $696.8 million in the second quarter of 2025, reflecting lower reinsurance costs for June 1, 2026 through May 31, 2027 contract period.
•On June 16, 2026, the Company issued and sold $100.0 million of 7.75% Senior Unsecured Notes due June 30, 2031 (the “2031 Notes”), and used the net proceeds to redeem its $100.0 million of 5.625% Senior Unsecured Notes due November 30, 2026 (the “2026 Notes”). This refinancing extends the Company’s debt maturity profile to 2031, preserves financial flexibility, and supports its capital strategy to maintain liquidity, manage refinancing risk, and fund opportunities in an improving Florida homeowners’ market and across its multi-state platform.
•In connection with its $100.0 million debt financing, KBRA assigned UVE a BBB issuer rating and a BBB long-term credit rating on its 2031 Notes, each with a Stable Outlook. These investment-grade ratings support the Company’s access to capital and reflect an independent assessment of UVE’s financial strength and credit profile. The 2031 Notes rank equally with UVE’s current and future senior unsecured indebtedness and remain structurally subordinated to policyholder obligations and other liabilities of UVE’s subsidiaries.
•On May 29, 2026, the Company entered a committed, unsecured $50.0 million revolving credit facility with JP Morgan Chase Bank, N.A., replacing its prior facility of the same size. The facility has been maintained since 2021 through annual 364-day renewal terms, with each renewal subject to customary annual review and adjustment. The current facility matures on May 28, 2027. The facility supports the Company’s capital strategy by providing committed liquidity and financial flexibility to manage working capital needs, support operating requirements, and pursue strategic opportunities across its homeowner’s insurance platform.
•During the three months ended June 30, 2026, the Company repurchased 121,808 shares for $4.5 million at an average price of $37.19 per share. As of June 30, 2026, $8.6 million remains under the share repurchase plan, which expires January 8, 2028.
•The combined ratio was 91.6% for the three months ended June 30, 2026 and 90.7% year to date, compared with 97.8% for the three months ended 2025 and 96.4% year to date as of June 30, 2025, reflecting operating improvements.
•Book value per share was $22.89 at June 30, 2026, compared to $19.67 at December 31, 2025, an increase of 16.4%.
•On April 10, 2026, the Company declared a quarterly cash dividend of $0.16 per share of common stock, payable on May 15, 2026, to shareholders of record on May 8, 2026.
•Demotech reaffirmed its A rating for UPCIC and APPCIC on June 19, 2026.
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Results of Operations for the three months ending June 30, 2026, are compared to the same period last year, unless stated otherwise.
Results of Operations—Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025
For the three months ended June 30, 2026, net income was $59.2 million compared to $35.1 million in 2025, with diluted EPS increasing to $2.04 from $1.21. Growth in premiums earned, net, investment income, and unrealized gains contributed to improved performance. Lower realized gains and commission revenue partially offset these increases. While losses and LAE costs were reduced, these were partially offset by increases in acquisition costs and other operating costs and expenses. The net loss ratio declined to 64.8% from 72.3% in 2025, and the combined ratio was 91.6%, down from 97.8% in 2025. No catastrophe events or prior-year reserve developments occurred in either period. See the “Overview—Trends and Geographical Distribution—Florida Trends” section for more information.
A detailed discussion of our results of operations follows in the table below (in thousands, except per share data).
| Three Months Ended June 30, | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||
| REVENUES | ||||||||||||||||||||||
| Direct premiums written | $ | 621,314 | $ | 596,720 | $ | 24,594 | 4.1 | % | ||||||||||||||
| Change in unearned premium | (76,508) | (73,295) | (3,213) | 4.4 | % | |||||||||||||||||
| Direct premium earned | 544,806 | 523,425 | 21,381 | 4.1 | % | |||||||||||||||||
| Ceded premium earned | (167,533) | (163,232) | (4,301) | 2.6 | % | |||||||||||||||||
| Premiums earned, net | 377,273 | 360,193 | 17,080 | 4.7 | % | |||||||||||||||||
| Net investment income | 20,213 | 17,258 | 2,955 | 17.1 | % | |||||||||||||||||
| Net realized gains (losses) on investments | 1,257 | 5,280 | (4,023) | (76.2) | % | |||||||||||||||||
Net change in unrealized gains (losses) on investments | 6,400 | (6,061) | 12,461 | NM | ||||||||||||||||||
| Commission revenue | 13,780 | 15,854 | (2,074) | (13.1) | % | |||||||||||||||||
| Policy fees | 6,039 | 5,603 | 436 | 7.8 | % | |||||||||||||||||
| Other revenue | 2,071 | 2,014 | 57 | 2.8 | % | |||||||||||||||||
| Total revenues | 427,033 | 400,141 | 26,892 | 6.7 | % | |||||||||||||||||
| OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||
| Losses and loss adjustment expenses | 244,562 | 260,305 | (15,743) | (6.0) | % | |||||||||||||||||
Policy acquisition costs | 68,067 | 61,878 | 6,189 | 10.0 | % | |||||||||||||||||
| Other operating costs and expenses | 32,794 | 29,964 | 2,830 | 9.4 | % | |||||||||||||||||
| Total operating costs and expenses | 345,423 | 352,147 | (6,724) | (1.9) | % | |||||||||||||||||
| Interest and amortization of debt issuance costs | 1,995 | 1,608 | 387 | 24.1 | % | |||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 79,615 | 46,386 | 33,229 | 71.6 | % | |||||||||||||||||
| Income tax expense (benefit) | 20,427 | 11,293 | 9,134 | 80.9 | % | |||||||||||||||||
| NET INCOME (LOSS) | $ | 59,188 | $ | 35,093 | $ | 24,095 | 68.7 | % | ||||||||||||||
| Other comprehensive income (loss), net of taxes | (1,004) | 10,290 | (11,294) | NM | ||||||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 58,184 | $ | 45,383 | $ | 12,801 | 28.2 | % | ||||||||||||||
| DILUTED EARNINGS (LOSS) PER SHARE DATA: | ||||||||||||||||||||||
| Diluted earnings (loss) per common share | $ | 2.04 | $ | 1.21 | $ | 0.83 | 68.6 | % | ||||||||||||||
| Weighted average diluted common shares outstanding | 29,043 | 29,072 | (29) | (0.1) | % | |||||||||||||||||
NM – Not Meaningful | ||||||||||||||||||||||
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Premium Revenues
The Company’s 2026 premium growth reflects management’s strategy to expand the homeowner’s insurance book in Florida and other states while responding to market conditions through targeted underwriting, product, rate, and marketing actions. In Florida, the Insurance Entities resumed writing new homeowners and dwelling business in most areas, introduced water damage coverage options, and filed for an overall 5.1% homeowners rate reduction, which helped improve competitiveness and supported new business production. Outside Florida, the Insurance Entities continued to pursue rate increases and refine coverage offerings to address inflation, claim cost trends, reinsurance costs, weather risk, and other market forces. Policies in force, premium in force, and total insured value increased year over year, reflecting organic growth, expanded marketing initiatives, new product offerings, and additional open territories. Management remains focused on disciplined growth, risk selection, geographic diversification, rate adequacy, and product design to support profitable expansion across the Company’s multi-state homeowner’s platform.
For the three months ended June 30, 2026, direct premiums written totaled $621.3 million, representing an increase of $24.6 million or 4.1%. This growth was due to a $21.1 million, or 14.4%, increase from other states and a $3.5 million or 0.8%, increase in Florida compared to the same period in 2025. Direct premiums written have increased in 14 states we operate in since June 30, 2025.
As of June 30, 2026, policies in force rose by 62,028 or 7.1%, premium in force increased by $90.5 million or 4.3%, and total insured value grew by $39.6 billion or 10.5%, compared to June 30, 2025, as noted in the following table (in thousands, except policies in force data):
| June 30, | Change | |||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||
Policies in Force | 934,371 | 872,343 | 62,028 | 7.1 | % | |||||||||||||||||
| Premiums in Force | $ | 2,204,705 | $ | 2,114,219 | $ | 90,486 | 4.3 | % | ||||||||||||||
| Total Insured Value | $ | 416,024,237 | $ | 376,427,554 | $ | 39,596,683 | 10.5 | % | ||||||||||||||
Direct premiums earned increased $21.4 million, or 4.1%, for the three months ended June 30, 2026, compared with the same period in 2025, primarily reflecting the recognition of premiums written over the applicable policy terms. Premiums are generally earned ratably over the policy coverage period, so changes in direct premiums earned reflect policies written in both the current and prior periods as coverage is provided.
Policies in force were 934,371 on June 30, 2026, an increase of 38,444 or 4.3%, from 895,927 on December 31, 2025. As of June 30, 2026, we have policies in 19 states and are authorized to do business in Tennessee with a rate filing underway. Details on recent rate changes impacting premiums are discussed in “Overview—Trends and Geographical Distribution—Florida Trends.”
Reinsurance
Reinsurance is a critical component of the Company’s risk management, capital, and liquidity strategy, particularly for its catastrophe-exposed Florida homeowners business. The Insurance Entities use reinsurance to reduce exposure to hurricanes and other significant insured events, protect statutory capital, support policyholder obligations, and maintain underwriting capacity in Florida and other states. Because reinsurance is integral to managing catastrophe risk, changes in pricing, availability, coverage limits, retention levels, and program structure can materially affect the Company’s results of operations, financial ratios, statutory capital position, and ability to write business. Reinsurance costs are recognized ratably over the annual contract period from June 1 through May 31.
For the three months ended June 30, 2026, ceded premiums earned increased $4.3 million, or 2.6%, compared with the same period in 2025. Ceded earned premiums represented 30.8% of direct earned premiums in 2026, compared with 31.2% in 2025. Second quarter results include ceded premiums earned from the 2025–26 reinsurance program, which concluded on May 31, 2026, as well as the initial ceded premiums earned under the new 2026–27 reinsurance program beginning June 1, 2026.
On June 1, 2026, the Insurance Entities entered into the 2026–27 catastrophic reinsurance program with lower ceded written premium, under which ceded written premium declined 12.1% to $612.6 million from $696.8 million in the prior-year period. Because reinsurance costs are earned ratably over the June 1 through May 31 contract period, the majority of the benefit of the lower-cost 2026–27 reinsurance program is expected to be recognized in ceded premiums earned over future periods.
The 2026–27 reinsurance program provides $2.623 billion of single-event All States catastrophe capacity, including Florida, an increase of approximately $50 million over the 2025–26 treaty period. The program also includes $352 million of forward catastrophe capacity extending into the 2027–28 treaty period, including $277 million below the Florida Hurricane Catastrophe Fund layer. As of June 30, 2026, Florida represented less than 50% of the Company’s total insured value, reflecting management’s strategy to diversify catastrophe exposure by expanding the homeowners insurance book in other states while maintaining underwriting discipline in Florida. The Insurance Entities’ combined $45 million first-event statutory retention remained unchanged from the prior year.
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Universal Insurance Holdings, Inc. (“UIH”) established a captive insurance arrangement to assume the first-event layer of $66 million in excess of the Insurance Entities’ $45 million retention as part of the 2026–27 reinsurance program. The captive is consolidated by UIH; therefore, premiums ceded to the captive and related recoveries are eliminated in UIH’s consolidated financial statements. Although the captive arrangement does not result in net ceded premium expense or reinsurance recoveries at the consolidated level, it allows the Company to retain a defined layer of catastrophe risk within the consolidated group. Management believes this structure supports the overall efficiency of the reinsurance program by helping align retained risk with the Company’s capital position, reduce reliance on third-party reinsurance for that layer, and preserve external reinsurance capacity for higher layers of catastrophe protection. See “Item 1—Note 14 (Variable Interest Entities).”
Additional information regarding the Insurance Entities’ 2026–27 reinsurance program is provided in the preceding discussion and in “Item 1—Note 4 (Reinsurance).”
Investment Results
Net investment income was $20.2 million for the three months ended June 30, 2026, compared to $17.3 million for the same period in 2025, an increase of $3.0 million, or 17.1%. The increase was primarily driven by growth in average invested assets and higher average book yields, as operating cash flows and maturities were reinvested into securities with higher yields than the assets they replaced. The benefit was partially offset by lower yields on cash and cash equivalents compared with 2025, although higher cash balances in the 2026 period mitigated a portion of that decline. See “Item 1—Note 3 (Investments)” for additional information regarding investment income.
Net realized gains for the three months ended June 30, 2026 primarily reflected gains from net sales of equity securities. These gains were partially offset by net realized losses from sales of available-for-sale debt securities as the Company repositioned a portion of the fixed-income portfolio into longer-duration securities.
The net change in unrealized gains and losses during the quarter primarily reflected increases in the fair value of equity securities held at June 30, 2026, together with the recognition in earnings of previously unrealized gains or losses on equity securities sold during the period. Changes in the fair value of fixed-maturity securities were primarily affected by interest rate movements, credit spreads, and portfolio duration. See “Analysis of Financial Condition” for additional information regarding changes in total invested assets during 2026.
Commissions, Policy Fees and Other Revenue
Commission revenue is generated when the Company places reinsurance coverage with traditional open-market third-party reinsurers and earns a brokerage commission on those placements. The Company does not earn commission revenue on premiums ceded to the Florida Hurricane Catastrophe Fund because that coverage is provided through a state-sponsored program rather than through open-market reinsurance placements. Commission revenue is recognized ratably over the applicable reinsurance contract period, which generally runs from June 1 through May 31, as the related reinsurance coverage is provided.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-09-11 | DOWNES SEAN P | Executive Chairman | Sell | -20,000 | $43.98 | -$879,562 |
| 2026-08-05 | DOWNES SEAN P | Executive Chairman | Sell | -20,000 | $44.27 | -$885,364 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-30 10-Q expected by 2026-11-09 (in 1 day)
- ~2027-02-27 10-K expected by 2027-03-01 (in 121 days)
- ~2027-04-29 10-Q expected by 2027-05-09 (in 182 days)
- ~2027-07-30 10-Q expected by 2027-08-09 (in 274 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-22 8-K Earnings Release; Financial Statements and Exhibits
- 2026-09-09 S-4 Registration (Merger)
- 2026-07-30 10-Q Quarterly Report
- 2026-07-23 8-K Earnings Release; Financial Statements and Exhibits
- 2026-06-18 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2026-06-05 8-K Other Events; Financial Statements and Exhibits
- 2026-05-28 8-K Other Events; Financial Statements and Exhibits
- 2026-04-29 10-Q Quarterly Report
- 2026-04-24 DEF 14A Proxy Statement
- 2026-04-23 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-27 10-K Annual Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-30 10-Q Quarterly Report
- 2025-10-23 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-30 10-Q Quarterly Report