Florida-domiciled and expansive primary insurance company, Universal Insurance Holdings, has reported a 4.7% increase in direct premiums written for the first quarter of 2025, at $467.1 million from $446.1 million a year earlier, driven by 34.7% growth in other states, slightly offset by a 3% decrease in Florida.
For Q1 2025, direct premiums earned were $513.3 million, a 6.5% year on year increase driven by direct premiums written growth over the year. However, the ceded premium ratio remained unchanged from the prior year quarter at 30.7%.
The quarter’s net premiums earned were $355.7 million, also a 6.5% increase attributed to higher direct premiums earned. The overall growth mostly reflects higher policies in force, higher rates, and inflation adjustments.
The combined ratio for Q1 2025 was 95%, down 0.5 points compared to the prior year quarter, due to a lower net loss ratio and higher net expense ratio.
The insurer’s Q1 2025 net loss ratio was 70.5%, down 1.4 points compared to the prior year quarter, due to lower weather losses in the current quarter. The net expense ratio for Q1 2025 was 24.5%, up 0.9 points from 23.6% due to higher policy acquisition costs associated with growth outside Florida and higher other operating costs.
Meanwhile, the operating income margin was 14.5%, compared to 13.3% in Q1 2024. The adjusted operating income margin was 14.5% for this quarter, compared to 12.6% in the prior year quarter. The increase primarily reflects a lower net combined ratio and higher net investment income and commission revenue.
Universal’s net income available to common stockholders was $41.4 million, an increase from Q1 2024’s $33.7 million, with adjusted net income of $41.4 million, an increase from $31.4 million in the prior year quarter. Meanwhile, the insurer’s revenue was $394.9 million, an increase of 7.3%, and core revenue was $394.9 million, up 8.2% from Q1 2024. These were all driven by higher underwriting, net investment income, and commission revenue.
Finally, net investment income for Q1 2025 was $16.1 million, up from $13.5 million in the prior year quarter, driven by higher fixed income reinvestment yields and higher invested assets.
The insurer’s commissions, policy fees and other revenue were $23.1 million, up 32.8% from the prior year quarter, due to higher reinsurance brokerage commissions driven by the replacement of the RAP layer with private market coverage and replacement of the catastrophe bond with traditional reinsurance coverage in the 2024-2025 program.
Stephen J. Donaghy, Chief Executive Officer, Universal Insurance Holdings, commented, “We continue to see signs that the 2022 Florida legislative reforms are working, providing much-needed stability to the property insurance market, which ultimately benefits policyholders with increased certainty and choice. In the quarter, we experienced lower weather losses, benefiting the loss and LAE ratio.
“On a separate note, I’m pleased to announce the completion of our 2025-2026 reinsurance renewal for our insurance entities. Our program was fully supported and secured well before the June 1st inception date, something we have consistently achieved over the last few renewal cycles.
“We’ve also secured $352 million of additional multi-year coverage, taking us through the 2026-2027 hurricane season. The program costs and coverage were consistent with our expectations, and we’ll provide specific details at the end of May, as we typically do. The solid execution of our reinsurance strategy is a testament to the strength and consistency of our long-term reinsurance partnerships, some of which span two decades.”
