Investor Presentation Q4 2021
(Nasdaq: UIHC)
Investor Presentation
Company Overview
UPC has the #1 market share of commercial residential property insurance (commercial lines) in
UPC's homeowners & fire insurance products (personal lines) are focused on
UIHC as of
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Total Assets: |
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Total Equity: |
|
|
Premium in-Force: |
|
|
Employees: |
468 |
|
Headquarters: |
|
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Financial Strength |
A- (Kroll) |
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Ratings: |
A- (AM Best) ² |
|
A (Demotech) |
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Specialty Commercial Property Underwriters |
Specialty Homeowners Underwriters |
||
- Excludes discontinued states where renewal rights have been sold
- AM Best rating for
Journey Insurance Company only
2
Executive Summary
- Q4-2021Results
-
- Core loss of -
$1.0m (-$0.02 per share) compared favorably to-$58.1m (-$1.35 per share) last year due to lower net retained losses from catastrophe events. - Stockholders' equity attributable to UIHC at
12.31.2021 was$312.4m ($7.20 per share) with tangible book value per share of$5.10 . - Risk based capital projected to be at or above 300% for all statutory carriers as of
12.31.2021 .
- Core loss of -
- Other Highlights
-
- Entry into a renewal rights and quota share reinsurance agreement to transfer all risk of loss for the Southeast region.
- Successful renewal of All Other Perils (AOP) catastrophe reinsurance program with retention unchanged at
$15m . - Exposure reduction and renewal rate increases continued to trend favorably producing more premium relative to risk.
3
Q4-2021 Results
Core earnings improved dramatically from last year's -
- We labeled 2021 a transition year because we significantly increased our reinsurance spend to de-risk and de-leverage our portfolio.
- Ceded premiums hurt Q4 results, but our lower risk retention and operating leverage combined with improving underwriting metrics now have us better positioned for the long-term.
|
Q4-21 |
Q4-20 |
Change |
|
-98.2% |
||
|
Included the following items |
||||||
|
Net current year catastrophe loss & LAE incurred |
$ |
12,515 |
$ |
107,618 |
||
|
Net (favorable) unfavorable reserve development |
$ |
(3,488) |
$ |
(621) |
||
|
Total items |
$ |
9,027 |
$ |
106,997 |
||
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Core income (loss) excluding named windstorms |
$ |
(1,027) |
$ |
3,298 |
-131.1% |
|
|
CEPS excluding named windstorm |
$ |
(0.02) |
$ |
0.08 |
||
|
Gross underlying loss & LAE ratio |
22.4% |
21.5% |
0.9 |
pts |
||
|
Gross expense ratio |
21.3% |
27.2% |
(5.9) pts |
|||
|
Net loss & LAE ratio |
58.9% |
92.6% |
||||
|
Net expense ratio |
50.2% |
49.5% |
||||
|
Combined ratio |
109.1% |
142.1% |
(33.0) pts |
|||
|
Net current year catastrophe loss & LAE incurred |
-8.6% |
-53.9% |
||||
|
Net favorable (unfavorable) reserve development |
2.4% |
0.3% |
||||
|
Underlying combined ratio |
102.9% |
88.5% |
14.4 |
pts |
4
Key Underwriting Metrics
Gross loss & expense ratios were better than last year & long-term average.
|
Year ending |
|||||||
|
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
6-Yr Avg |
|
|
Ratios on gross premiums earned |
27.0% |
||||||
|
Net Loss & LAE - Underlying |
36.4% |
25.3% |
26.1% |
30.2% |
22.3% |
21.9% |
|
|
Net Loss & LAE - Named Windstorm CAT |
4.5% |
8.5% |
4.6% |
2.4% |
14.8% |
2.5% |
6.2% |
|
Net Loss & LAE - AOP CAT |
3.9% |
3.3% |
3.9% |
4.8% |
6.1% |
5.6% |
4.6% |
|
Net Loss & LAE |
44.7% |
37.1% |
34.6% |
37.5% |
43.2% |
30.0% |
37.8% |
|
Expense |
27.2% |
28.9% |
26.2% |
26.1% |
25.7% |
20.4% |
25.7% |
|
Ceding Ratio |
-31.5% |
-43.5% |
|||||
|
-40.6% |
-41.6% |
-43.6% |
-45.6% |
-58.2% |
|||
|
Ratios on net premiums earned |
|||||||
|
Net Loss & LAE - Underlying |
53.1% |
42.5% |
44.8% |
53.6% |
41.0% |
52.3% |
47.9% |
|
Net Loss & LAE - Named Windstorm CAT |
6.6% |
14.3% |
7.9% |
4.3% |
27.1% |
5.9% |
11.0% |
|
Net Loss & LAE - AOP CAT |
5.7% |
5.6% |
6.6% |
8.6% |
11.3% |
13.4% |
8.5% |
|
Net Loss & LAE |
65.3% |
62.4% |
59.3% |
66.4% |
79.4% |
71.6% |
67.4% |
|
Expense |
39.6% |
48.7% |
45.0% |
46.3% |
47.1% |
48.7% |
45.9% |
|
Combined Ratio |
104.9% |
111.1% |
104.2% |
112.7% |
126.5% |
120.3% |
113.3% |
|
CAT Losses |
-12.2% |
-19.9% |
-14.5% |
-12.8% |
-38.4% |
-19.3% |
-19.5% |
|
Prior year development |
-3.7% |
0.4% |
-0.6% |
-4.4% |
0.9% |
-4.7% |
-2.0% |
|
Underlying Combined Ratio |
89.0% |
91.7% |
89.1% |
95.5% |
88.9% |
96.3% |
91.7% |
|
Gross Loss Ratio - Underlying |
Gross Loss Ratio - CAT |
||||||||||||
|
40.0% |
25.0% |
||||||||||||
|
35.0% |
20.0% |
||||||||||||
|
30.0% |
|||||||||||||
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25.0% |
15.0% |
||||||||||||
|
20.0% |
10.0% |
||||||||||||
|
15.0% |
|||||||||||||
|
10.0% |
5.0% |
||||||||||||
|
5.0% |
|||||||||||||
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0.0% |
|||||||||||||
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0.0% |
|||||||||||||
|
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
||||||||
|
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
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93% of the y/y change driven by reinsurance programs designed to reduce operating leverage and earnings volatility.
5
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