Universal Insurance Holdings has reported a net income of $25.1 million for the fourth quarter of 2022, up from a net loss of $48.1 million in the prior year quarter.
The company also reported an adjusted net income of $22.1 million, up from adjusted net loss of $47.8 million in the prior year quarter. The increase in adjusted net income mostly stems from lower net loss and expense ratios and higher net investment income and commission revenue.
Universal’s overall revenue for Q4 was $330.4 million, an 12.9% increase from the prior year quarter and core revenue was $326.4 million, up 11.3% from the prior year quarter.
At the same time, direct premiums written for the quarter were $416.1 million, up 4.2% from the same period last year. Universal stated that the increase stems from a 3.6% growth in Florida and 6.8% growth in other states.
Moreover, direct premiums earned were $463.8 million for the quarter, a 11.0% increase from the prior year quarter.
The ceded premium ratio was 37.1%, up from 35.1%, in the prior year quarter. According to the insurer, the increase primarily reflects reinstatement premiums associated with Hurricane Ian, higher reinsurance pricing and higher reinsurance costs associated with the increase in insured values.
This, Universal added, was partly offset by direct premiums earned growth associated with primary rate increases and reinsurance savings associated with leveraging our self-insured captive to a greater degree than the prior year.
Net premiums earned were $291.9 million in Q4 2022, up 7.6% from the same period last year. While net investment income was $10.4 million, up from $3.9 million in the prior year quarter.
Meanwhile, Universal’s net loss ratio for Q4 was 76.3%, up 27.0 points compared to Q4 2021. The decrease primarily reflects a lower current accident year net loss ratio and lower adverse prior year reserve development ($17.9 million in the current year quarter, down from $36.5 million in the prior year quarter).
Stephen J. Donaghy, Chief Executive Officer, commented: “It was a tough year, but I’m proud of what our team accomplished despite the circumstances. The Florida homeowners insurance market has faced significant challenges, but we remain committed to our home state and continue to write new and renewal business.
“We’re grateful to state officials for passing meaningful reforms at the recent special legislative session, including elimination of one-way attorney fees and assignment-of-benefits, shortening the claims filing deadline to one year and taking steps to reduce the competitiveness of Citizens, among other measures.
“It will take time for the reforms to benefit results, but we believe the legislature’s actions will restore the health of the market over the long term. Given our differentiated business model, solid balance sheet and strong reinsurer relationships, we’re uniquely positioned to succeed in the dynamic Florida landscape.”
