Reinsurance News

Universal’s Q4 to feature $80.1m of reserve strengthening & development

14th February 2022 - Author: Luke Gallin

Florida headquartered and expansive primary insurance company, Universal Insurance Holdings, has pre-announced an estimated net impact of around $80.1 million to its fourth quarter 2021 result as the company takes a more “conservative inflationary stance.”

universal-insurance-holdings-logoThe $80.1 million after-tax hit contributes 10.1 percentage points to Universal’s full-year 2021 combined ratio.

Universal estimates 2021 accident year strengthening of reserves in Q4 2021 of $30.7 million on an after-tax, net basis.

In addition, the insurer has announced $21.5 million in weather above plan on an after-tax, net basis, and catastrophe and non-catastrophe related prior years’ adverse development of $27.9 million on an after-tax, net basis.

Stephen J. Donaghy, Chief Executive Officer (CEO), commented: “As the second half of 2021 has matured, we have seen the effects of inflationary pressures, which we are addressing through our primary rate increases and current year reserve strengthening on attritional claims and PCS events, as well as on prior years’ claims.

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“These actions to combat inflationary and social pressures have resulted in substantial positive strides on our reserve position over the past 24 months. We remain positive on the recent legislative actions taken in Florida and continue to hold all of the capital we raised during the fourth quarter at the parent company level to continue to support growth.”

Alongside the reserves strengthening announcement, Universal’s Board of Directors has declared a quarterly cash dividend of 16 cents per share of common stock, payable March 17th, 2022.

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