Property and casualty insurance holding company United (UPC Insurance) has reported a net loss of $2.3 million for the fourth quarter of 2021, which has been termed a “transition year” for the company as it attempts to reshape its operations.
The Q4 loss compares with a much larger loss figure of $33.9 million for the same period in the previous year.
Looking at the whole of 2021, UPC’s net loss still amounted to a considerable $57.9 million, but this was still a significant improvement over the $96.5 million losses reported previously.
UPC attributed the Q4 improvement to a decrease in loss and LAE expense for the quarter, driven by a decision to lower the retention on its core catastrophe reinsurance program for the 2021-2022 hurricane season coupled with a lower frequency of catastrophic weather activity and an increase in ceded losses to the company’s quota share reinsurance program.
This was partially offset by a decrease in revenue, driven by a decrease in gross written premiums, which fell 15.0% to $268.9 million, mainly across the personal lines business, due to underwriting actions taken at the end of 2020 and throughout 2021, as well as the transition of the Northeast business.
For the full year, total gross written premium decreased by $127.4 million, or 8.7%, to $1.3 billion.
“Results in the fourth quarter demonstrate our continuing transition year, being the second consecutive quarter over quarter and year over year improvement in operating results,” said Dan Peed, CEO of UPC Insurance.
“In the second half of 2021, we continued to see escalating rate increases compound and begin to earn their way through our portfolio. Our commercial lines portfolio is performing well and growing strongly. The Personal Lines portfolio footprint and exposure levels are shrinking quickly, including active exposure management and risk selection, as well as the sale of renewal rights in Georgia, North Carolina and South Carolina,” Peed continued.
“With these strategic changes, we are nearing our targeted goal of an even balance of Commercial and Personal lines business, well ahead of our three-year timeline. Going forward, we plan to continue our focus on underwriting execution including rate increases, risk selection and exposure management, all expected to drive a return to underwriting profitability in 2022 and target returns on equity in 2023.”
