UNITED INSURANCE HOLDINGS CORP. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our Unaudited Condensed
Consolidated Financial Statements and related notes appearing elsewhere in this
Form 10-Q, as well as with the Consolidated Financial Statements and related
footnotes under Part II. Item 8 of our Annual Report on Form 10-K for the year
ended
statements that involve risks, uncertainties and assumptions. Actual results may
differ materially from those expressed or implied in these forward-looking
statements as a result of certain known and unknown risks and uncertainties. See
"Forward-Looking Statements."
EXECUTIVE SUMMARY Overview
the Company or
and commercial property and casualty insurance business with investments in
United States
wholly-owned insurance subsidiaries:
Company
Insurance Company
our subsidiaries, including non-insurance subsidiaries, as "
which is the preferred brand identification for our Company.
Our Company's primary source of revenue is generated from writing insurance in
and all premiums and losses are ceded. Effective
write in the state of
longer write in the state of
write in the state of
in the states of
write in all five states. We are also licensed to write property and casualty
insurance in an additional six states; however, we have not commenced writing or
no longer write in these states.
On
the states of
withdrawal in the state of
personal lines policies in these states. With this action, UPC will effectively
be placed into an orderly run-off so long as UPC remains in compliance with the
rules and regulations of each state. Additionally, we announced that
Inc.
Financial Stability Rating.
Our Company, together with wholly-owned subsidiaries UPC and United Insurance
Management, L.C. (UIM), entered into a Renewal Rights Agreement (Southeast
Renewal Agreement), dated as of
Property and Casualty, Inc.
agreed to sell, and HCPCI agreed to purchase, the renewal rights to UPC's
personal lines homeowners business in
Carolina
was consummated on
Effective
Agreement. Under the terms of this agreement, we cede 100% of our in-force, new,
and renewal policies in the states of
Carolina
effective
reinsurance agreements were renewed to exclude these states. We will no longer
retain any risk associated with these states.
Our Company, together with wholly-owned subsidiaries UPC and UIM, entered into a
Renewal Rights Agreement (Northeast Renewal Agreement), dated as of
2021
and UIM agreed to sell, and HCPCI agreed to purchase, the renewal rights to
UPC's personal lines homeowners business in
Jersey
2022
Effective
HCPCI and TypTap in connection with the Northeast Renewal Agreement. Under the
terms of this agreement, we cede 100% of our in-force, new, and renewal policies
in the states of
cession of these policies is 50% to HCPCI and 50% to TypTap.
38
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UNITED INSURANCE HOLDINGS CORP.
We have historically grown our business through strong organic growth,
complemented by strategic acquisitions and partnerships, including our
acquisitions of
ACIC, in
including its subsidiary
Kiln Group Limited
in
the surviving entity. Effective
being the surviving entity.
As a result of underwriting actions implemented during the fourth quarter of
2020 and throughout 2021, as well as the transfer of
in-force decreased by 42.5% from 525,969 policies in-force at
to 302,296 policies in-force at
The following discussion highlights significant factors influencing the
consolidated financial position and results of operations of
evaluating our results of operations, we use premiums written and earned,
policies in-force and new and renewal policies by geographic concentration. We
also consider the impact of catastrophe losses and prior year development on our
loss ratios, expense ratios and combined ratios. In monitoring our investments,
we use credit quality, investment income, cash flows, realized gains and losses,
unrealized gains and losses, asset diversification and portfolio duration. To
evaluate our financial condition, we consider our liquidity, financial strength,
ratings, book value per share and return on equity.
Impact of COVID-19
We did not experience a material impact from COVID-19 on our business
operations, financial position, liquidity or our ability to service our
policyholders during the three and nine months ended
addition, the COVID-19 pandemic and resulting global disruptions did not have a
material impact on our access to credit and capital markets needed to maintain
sufficient liquidity for our continued operating needs during the quarter ended
Additionally, during the fourth quarter of 2021 we implemented our new flexible
work policy. This policy allows all employees to work remotely permanently, with
the return to our offices being completely voluntary at this time. We will
continue to respond to the COVID-19 pandemic and take reasonable measures to
make sure customers continue to be served without interruption.
39
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UNITED INSURANCE HOLDINGS CORP.
2022 Highlights
Three Months Ended September Nine Months Ended September 30,
30,
2022 2021 2022 2021
Gross premiums written $ 255,203 $ 322,493 $ 894,824 $ 1,060,555
Gross premiums earned 301,896 353,461 926,860 1,066,557
Net premiums earned 116,187 153,271 328,449 444,680
Total revenues 123,788 162,740 341,947 479,983
Earnings before income tax (70,797) (18,600) (148,009) (77,655)
Consolidated net loss
attributable to UIHC (70,884) (14,322) (173,085) (55,603)
Net loss available to UIHC
stockholders per diluted share $ (1.65) $ (0.33) $ (4.02) $ (1.29)
Reconciliation of net loss to
core loss:
Plus: Non-cash amortization of
intangible assets and goodwill
impairment (1) $ 14,381 $ 812 $ 16,005 $ 2,744
Less: Realized gains on
investment portfolio (9) 5,537 (1,856) 5,916
Less: Unrealized gains
(losses) on equity securities (2,518) (3,293) (9,870) 1,709
Less: Net tax impact (2) 3,551 (301) 5,824 (1,025)
Core loss (3) (4) (57,527) (15,453) (151,178) (59,459)
Core loss per diluted share(3)
(4) $ (1.34) $ (0.36) $ (3.51) $ (1.38)
Book value per share $ 1.86 $ 7.42
(1) For both the three and nine months ended
amortization of intangible assets includes
of goodwill attributable to our personal lines operating segment.
(2) In order to reconcile the net loss to the core loss measure, we included the
tax impact of all adjustments using the 21% corporate federal tax rate.
(3) For the three and nine months ended
Company's recognition of a valuation allowance.
(4) Core loss, a measure that is not based on
principles (GAAP), is reconciled above to net loss, the most directly comparable
GAAP measure. Additional information regarding non-GAAP financial measures
presented in this Form 10-Q is in "Definitions of Non-GAAP Measures" below.
40
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OSCAR HEALTH, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations.
NATIONAL WESTERN LIFE GROUP, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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