Investor Presentation Q2 2022

United Insurance Holdings Corporation

(Nasdaq: UIHC)

Investor Presentation

August 8th, 2022

Company Overview

UPC Insurance is a specialty underwriter of catastrophe exposed property insurance in the U.S.

United Insurance Holding Corp. (NASDAQ: UIHC) was founded in 1999 and is the insurance holding company for 3 P&C carriers and operating affiliates operating under the brand UPC Insurance (UPC).

UPC has the #1 market share of commercial residential property insurance (commercial lines) in Florida with roughly 5,700 policies and $474 million of premium in-force.

UPC's homeowners & fire insurance products (personal lines) are focused on Florida, Louisiana, New York, and Texas with roughly 298,000 policies and $670 million of premium in-force. ¹

UIHC as of June 30, 2022

Total Assets:	$2.5 billion
Total Equity:	$167 million

Premium in-Force:	$1.14 billion ¹
Employees:	452
Headquarters:	St. Petersburg, FL
Credit Rating:	BBB- (Kroll)

Specialty Commercial Property			Specialty Homeowners

1 Excludes discontinued states where renewal rights have been sold

Executive Summary

Q2 Results
- Core loss of -$64.3m included a -$43.7m valuation allowance (VA) on UIHC's deferred tax asset.
- Core loss of -$20.6m excluding the VA compared favorably to -$24.6m core loss last year due to declines in losses and operating expenses.
- Gross current year CAT of $54.9m from 16 new PCS events. Ceded -$34.3m reducing our net current year CAT to $20.6m, which compared favorably to prior year of $40.3m.
- Stockholders' equity attributable to UIHC on June 30, 2022, was $167m or $3.85 per share with tangible book value of $1.77 per share. These amounts include an accumulated other comprehensive loss (AOCL) of -$48.9m or -$1.13 per share that may not be fully realized due to the short duration, high credit quality nature of UIHC's fixed income investment portfolio.
Other Highlights
- Completed reorganization by merging Journey Insurance Company into American Coastal Insurance Company (eff 6/1/22) and Family Security Insurance Company into United Property & Casualty Insurance Company (eff 5/31/22) allowing for expense reduction, reallocation of capital across the group, and redemption of the non-controlling interest.
- Successfully renewed the Company's catastrophe reinsurance programs effective June 1, 2022.
- On July 13, 2022, the Company announced a review of strategic and capital raising alternatives considering a wide range of options.
- Demotech affirmed A rating for American Coastal Insurance Company but downgraded United P&C from A to M (Moderate) on August 1, 2022.

Q2-2022 Results

Core loss excluding valuation allowance was -$20.6m, an improvement of $4m (16%) Y/Y

		Q2-22		Q2-21	Change
Core income (loss)	$	(64,280)	$	(24,636)	-160.9%
per diluted share (CEPS)	$	(1.49)	$	(0.57)

A valuation allowance was established against

100% of UIHC's deferred

tax asset driven by our

NOL carry forward

Included the following items
Net current year catastrophe loss & LAE incurred	$	20,553	$	40,257
Net (favorable) unfavorable reserve development (PYD)	$	7,766	$	(372)
Valuation allowance on deferred tax asset	$	43,660		$	-
Total items	$	71,979	$	39,885
Core income (loss) excluding items	$	1,752	$	6,873	-74.5%
CEPS excluding items	$	0.04	$	0.16
Direct Loss & LAE Ratio - NonCAT & PYD		40.5%			23.2%	17.3	pts
Direct Loss & LAE Ratio - CAT (Current AY)		17.9%			17.7%	0.2	pts
Direct Expense Ratio		26.5%			23.9%	2.6	pts
Ceding Ratio - quota share		-25.7%			-25.6%
Ceding Ratio - all other reinsurance		-37.9%			-33.6%
Ceding Ratio - total		-63.6%			-59.2%	(4.4) pts
Net loss & LAE ratio		80.9%			81.2%
Net expense ratio		50.7%			46.7%
Combined ratio		131.6%			127.9%	3.7	pts
Net current year catastrophe loss & LAE incurred		-18.4%			-27.7%
Net favorable (unfavorable) reserve development		-7.0%			0.3%
Underlying combined ratio		106.2%			100.5%	5.7	pts

Prior year reserve development (PYD) and

higher loss severity led to a higher direct loss &LAE ratio

Results by Line of Business

Commercial (CL) has a great quarter, but reinsurance & loss costs weighed on Personal (PL)

		Three Months Ended Jun 30, 2022			Six Months Ended Jun 30, 2022
$ in millions		CL		PL	Other		Total			CL		PL	Other		Total
Gross Premiums Earned	$	113.2	$	192.5	$	-	$	305.8	$	220.7	$	404.3	$	-	$	625.0
Ceded Premiums Earned		(61.8)		(132.6)		-		(194.4)			(123.8)		(288.9)		-		(412.7)
Net Premiums Earned		51.4		60.0		-		111.4			96.9		115.4		-		212.3
Investment & other revenue		1.4		8.1		0.0		9.5			2.5		10.7		0.0		13.2
Unrealized G(L) on Equities		(2.4)		(2.7)		-		(5.1)			(3.2)		(4.2)		-		(7.4)
Total Revenue		50.5		65.3		0.0		115.8			96.3		121.9		0.0		218.2
Underlying Loss & LAE		12.7		49.1		-		61.8			25.5		97.6		-		123.0
Current year CAT Loss & LAE		(2.6)		23.1		-		20.6			0.5		48.7		-		49.2
Prior year development		(1.9)		9.7		-		7.8			(3.7)		12.9		-		9.2
Total Loss		8.2		81.9		-		90.1			22.3		159.1		-		181.4
Operating & Interest Expense		23.5		32.4		3.0		58.9			43.6		66.2		5.8		115.5
Total Expenses		31.7		114.3		3.0		148.9			65.9		225.3		5.8		297.0
Other income (loss)		0.0		0.2		0.1		0.3			0.0		(0.1)		1.7		1.6

Income (Loss) before tax	$	18.8	$	(48.8)	$	(2.9)		(32.9)	$	30.4	$	(103.5)	$	(4.1)		(77.2)
Income tax expense (benefit)						36.2		36.2							25.1		25.1
Less: Non-controlling interests						(0.0)		(0.0)							(0.1)		(0.1)
Net income (loss) attributable to UIHC								(69.0)									(102.2)

Net Loss Ratio		15.9%		136.6%				80.9%			23.0%		137.9%				85.5%
Net Expense Ratio		45.6%		54.1%				50.7%			45.0%		57.3%				52.2%
Combined Ratio		61.5%		190.7%				131.6%			68.0%		195.2%				137.7%
CAT Loss		-5.0%		38.6%				18.4%			0.5%		42.2%				23.2%
PY Development (F)/U		-3.7%		16.1%				7.0%			-3.8%		11.2%				4.3%	5
Underlying Combined Ratio		70.2%	136.0%			106.2%			71.3%	141.8%				110.2%

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United Insurance Holdings Corp. published this content on 08 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 August 2022 20:32:46 UTC.