United Insurance Holdings Corp. (NASDAQ:UIHC) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 05:00 pm ET


United Insurance Holdings Corp. (NASDAQ:UIHC) Q2 2020 Earnings Conference Call - Final Transcript


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Bennett Bradford Martz

earned compared to 42.3% last year. This change was due to the increased sessions to our quota share reinsurance program, which were 13% of gross premiums for $44.7 million in the current quarter versus only 9.2% of gross premiums earned or $30.3 million last year. Other significant items impacting total revenues during the second quarter included unrealized gains from equity securities of $20.5 million compared totaling $2.7 million from the same period a year ago; and investment income of $5.9 million, which declined $1.7 million from the prior year due to lower yields on cash, deposits and fixed maturity securities.

UPC's second quarter net loss in LAE was $101.7 million, a decrease of $14.6 million or 12.5% year-over-year. UPC's gross loss ratio of 29.5% improved 5.7 points and a net loss ratio of 54.8% improved over 6 points compared to the second quarter last year. As I mentioned, cat losses of $29.8 million added 16 points to our net loss ratio, which is partially offset by $823,000 of favorable reserve development. Excluding those two items, our underlying loss in LAE was $72.7 million, down $12.4 million or 15% year-over-year resulting in an underlying gross loss ratio of 21.1%, which also compared favorably to 25.8% a year ago.

UPC's operating expenses were $82.7 million, a decrease of $7 million or approximately 8% year-over-year. The decrease was primarily driven by policy acquisition costs, which declined $9 million due to higher ceding commissions earned and lower E&S production. Our gross expense ratio was 24%, an improvement of 3.2 points over the prior year.

On the balance sheet, UPC's assets totaled $2.8 billion, including cash and invested assets of just under $1.4 billion. The modified duration of our bond holdings was unchanged at 3.54 years with an overall deposit rating of 8-plus at June 30th. GAAP shareholders' equity attributable to UIHC stockholders was $528.3 million, resulting in a book value per share of $12.27 or $11.58, excluding accumulated other comprehensive income. And our group statutory surplus was $427.2 million at the end of the current quarter.

That concludes our remarks, and we'd now be happy to take any questions.