Universal Insurance Holdings Inc. (NYSE:UVE) Q4 2018 Earnings Conference Call Transcript
Mar 01, 2019 • 08:30 am ET
Good morning, ladies and gentlemen, and welcome to the UVE Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.
I'd now like to turn the conference over to Rob Luther, Vice President of Corporate Strategy and Investor Relations.
Thank you, and good morning everyone. Welcome to our discussion on our fourth quarter 2018 earnings results, which we reported yesterday. On the call with me today is Sean Downes, Chairman and Chief Executive Officer; Jon Springer, President and Chief Risk Officer; Steve Donaghy, Chief Operating Officer and Frank Wilcox, Chief Financial Officer.
Before we begin, please note, today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release, the all-new earnings presentation and UVE's SEC filings, all of which are available on the Investors section of our website at universalinsuranceholdings.com and on the SEC's website. A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press releases.
With that, Sean I will turn it over to you.
Sean P. Downes
Thank you, Rob, and good morning, everyone. Thank you for joining us today. Let me start by touching at a high level on our financial results, and then I'll go into some of the exciting new strategic initiatives we've been working on. We ended 2018 with fourth quarter direct written premium of 12.3%, due to strong growth in Florida and others states.
GAAP EPS of an $0.18 loss was primarily impacted by Hurricane Irma companion claims, which propagated into non-cat systemic claims representation in Florida, resulting an increase in prior year development. This strengthening resulted from an increase in the frequency and severity of non-cat claims spanning several prior accident years, including reopen claims, newly reported claims, increased litigation and increased loss settlements of claims above carried values. This reflects the trends and dynamics in the Florida marketplace attributable to assignment of benefits and the increased solicitation of prior year's claims in the post Irma environment.
On a non-GAAP adjusted EPS base, excluding net realized and unrealized gains and losses on investments, which are not core operations of our, as well as extraordinary reinstatement premiums and associated commissions, we reported a quarterly adjusted EPS of $0.13. We continue to monitor assignment of benefits AOB legislation in Florida and continue to take steps to address the Florida market dynamics.
Over the past year, particularly in the fourth quarter, we have accelerated our operational focus on claims resolutions, including increasing our litigation talent pool, appointing a new Chief Legal Officer from our Board, Darryl Lewis and most importantly resolving outstanding claims in a timely, fair and equitable manner.
Enabled going forward with our digital claims structure to improve the customer's experience. These efforts have resulted