United Insurance Holdings Corp (UPC Insurance) has posted a $29.9 million loss for 2019, following what President and CEO John Forney described as a “tough year” for the company.
Core income also fell to a loss of $46.2 million, compared to $17.3 million in the previous year. Net income in 2018 was recorded at just $290,000.
UPC Insurance attributed the decrease in net earnings to an increase in policy acquisition expenses and loss and loss adjustment expenses (LAE), which increased by $90.9 million, or 22.2%, to $499.5 million.
Catastrophe losses totalled $96.9 million for the year, compared to $100.0 million in the previous year.
Policy acquisition costs increased by $35.1 million, or 17.3%, to $238.3 million in 2019, from $203.1 million previously, primarily due to an increase in agent commissions and managing general agent commissions.
Operating and underwriting expenses also increased by $3.7 million, or 9.2%, to $44.3 million due to increased investments in software.
UPC Insurance also increased gross written premium by $127.9 million, or 10.2%, to $1.4 billion, reflecting organic growth in new and renewal business generated in all regions.
Excluding business for which it cedes 100% of the risk of loss, UPC Insurance’s reinsurance costs in the fourth quarter were 43.4% of gross premiums earned, compared to 40.0% for the same period in 2018.
President and CEO John Forney said he was optimistic about the company’s prospects in 2020 despite the challenging year it faced.
“We are starting 2020 in a very strong position with regard to our rate actions, reserve strength, capital adequacy and reinsurance placement,” said Forney. “I’m excited for what lies ahead in 2020 and beyond.”
