Universal Insurance Holdings has reported a Q3 net loss of $5.9 million, much improved compared to a loss of $72.3 million in the same quarter last year, while the firm’s combined ratio dropped 28.5 points to 110.7%.
Universal’s adjusted net loss available to common stockholders was $4.6 million, compared to a loss of $69.4 million in the prior year quarter.
The firm explained that the improvement in adjusted net loss mostly stems from better underwriting income and net investment income.
Net investment income in Q3 was $12.8 million, up from $6.1 million in the prior year quarter, driven by higher fixed income reinvestment yields and higher yields on cash.
Universal’s Q3 revenue was $360 million, up 15.1% from the same quarter last year, and core revenue was $361.8 million, up 14.2%.
“The increase in core revenue primarily stems from higher net premiums earned and net investment income, partly offset by lower commission revenue,” Universal explained.
Meanwhile, the firm’s direct premiums written in Q3 were $532.0 million, up 6.3% from the prior year quarter. Universal said the increase stems from 4.4% growth in Florida and 14.7% growth in other states. Net premiums earned were $331 million, up 13.9% from the same period last year.
Universal’s net loss ratio in Q3 was 87.0%, down 26.7 points compared to the same period last year. As per the results, the decrease reflects a lower current accident year net loss ratio, primarily stemming from lower weather-related losses.
The net combined ratio was 110.7%, down 28.5 points compared to the prior year quarter.
Stephen J. Donaghy, Universal’s Chief Executive Officer, commented, “The third quarter benefited from strong and improving underlying trends and I’m optimistic as I look forward.
“During the quarter, Hurricane Idalia made Florida landfall, and, as always, we were there immediately to assist our policyholders in their time of need. The storm’s severity appears considerably smaller than initially anticipated and is comfortably absorbed within our retention.
“We continue to enhance our best-in-class claims infrastructure, which together with our reinsurance capabilities, serves to differentiate us from our peers.
“As we look forward, we are more confident in the Florida market, which is our largest geography, and have started to slowly increase new business in additional territories.”
