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FORM 10-K
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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UNIVERSAL INSURANCE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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65-0231984
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 Par Value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None.
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Exhibit 21:
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List of Subsidiaries
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Exhibit 23.1:
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Exhibit 31.1:
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CERTIFICATION
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Exhibit 31.2:
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CERTIFICATION
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Exhibit 32:
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CERTIFICATION
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ITEM 1.
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BUSINESS
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ITEM 1A.
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RISK FACTORS
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•
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the availability of sufficient and reliable data;
|
•
|
regulatory review periods or delays in approving filed rate changes or our failure to gain regulatory approval;
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•
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the uncertainties that inherently underlie estimates and assumptions;
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•
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changes in legal standards, claim resolution practices and restoration costs; and
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•
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legislatively imposed consumer initiatives.
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•
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engaging in rigorous underwriting;
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•
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carefully evaluating terms and conditions of our policies and binding guidelines; and
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•
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ceding risk to reinsurers.
|
•
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the accuracy of our adjusters as they make their assessments and submit their estimates of damages;
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•
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the training, background and experience of our claims representatives;
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•
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the ability of our claims professionals to ensure consistent claims handling;
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•
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the ability of our claims professionals to translate the information provided by adjusters into acceptable claims resolutions; and
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•
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the ability of our claims professionals to maintain and update its claims handling procedures and systems as they evolve over time based on claims and geographical trends in claims reporting as well as consumer behaviors affecting claims handling.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
Period Ended
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||||||||||||||||||
Index
|
|
12/31/2014
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12/31/2015
|
|
12/31/2016
|
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12/31/2017
|
|
12/31/2018
|
||||||||||
Universal Insurance Holdings, Inc.
|
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$
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146.57
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$
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170.75
|
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$
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216.03
|
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$
|
214.13
|
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$
|
302.86
|
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S&P 500 Index
|
|
113.69
|
|
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115.26
|
|
|
129.05
|
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157.22
|
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150.33
|
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Russell 2000 Index
|
|
104.89
|
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|
100.26
|
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|
121.63
|
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139.44
|
|
|
124.09
|
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|||||
S&P Insurance Select Industry Index
|
|
108.01
|
|
|
114.91
|
|
|
139.97
|
|
|
158.57
|
|
|
149.74
|
|
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share (1)
|
|
Total Number of
Shares Purchased
as Part of
Publicly
Announced
Plans or Programs
|
|
Maximum Number
of Shares that
May Yet Be
Purchased Under
the Plans or
Programs (2)
|
|||||
10/1/2018 - 10/31/2018
|
|
55,924
|
|
|
$
|
41.94
|
|
|
55,924
|
|
|
—
|
|
11/1/2018 - 11/30/2018
|
|
67,816
|
|
|
$
|
42.64
|
|
|
67,816
|
|
|
—
|
|
12/1/2018 - 12/31/2018
|
|
222,200
|
|
|
$
|
40.10
|
|
|
222,200
|
|
|
382,846
|
|
Total for the three months ended December 31, 2018
|
|
345,940
|
|
|
$
|
40.90
|
|
|
345,940
|
|
|
382,846
|
|
(1)
|
Average price paid per share does not reflect brokerage commissions paid to acquire shares in open market transactions.
|
(2)
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Number of shares was calculated using a closing price at December 31, 2018 of $37.92 per share.
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•
|
On September 5, 2017, our Board of Directors authorized the repurchase of up to $20 million of our outstanding common stock through December 31, 2018 (the “2018 Share Repurchase Program”) pursuant to which we repurchased 558,647 shares of our common stock at an aggregate cost of approximately $20.0 million. We completed the 2018 Share Repurchase Program in December 2018.
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•
|
On December 12, 2018, we announced that our Board of Directors authorized the repurchase of up to $20 million of our outstanding common stock through May 31, 2020 (the “2019-2020 Share Repurchase Program”). We repurchased 138,234 shares of our common stock under the 2019-2020 Share Repurchase Program during the year ended December 31, 2018 at an aggregate cost of approximately $5.5 million.
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ITEM 6.
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SELECTED FINANCIAL DATA
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Years Ended December 31,
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||||||||||||||||||
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2018
|
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2017
|
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2016
|
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2015
|
|
2014
|
||||||||||
Statement of Income Data:
|
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|
|
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||||||||||
Revenue:
|
|
|
|
|
|
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|
|
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|
||||||||||
Direct premiums written
|
|
$
|
1,190,875
|
|
|
$
|
1,055,886
|
|
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$
|
954,617
|
|
|
$
|
883,409
|
|
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$
|
789,577
|
|
Change in unearned premium
|
|
(69,235
|
)
|
|
(56,688
|
)
|
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(33,390
|
)
|
|
(46,617
|
)
|
|
(12,260
|
)
|
|||||
Direct premium earned
|
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1,121,640
|
|
|
999,198
|
|
|
921,227
|
|
|
836,792
|
|
|
777,317
|
|
|||||
Ceded premium earned
|
|
(353,258
|
)
|
|
(310,405
|
)
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(288,811
|
)
|
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(332,793
|
)
|
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(450,440
|
)
|
|||||
Premiums earned, net
|
|
768,382
|
|
|
688,793
|
|
|
632,416
|
|
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503,999
|
|
|
326,877
|
|
|||||
Net investment income (1)
|
|
24,816
|
|
|
13,460
|
|
|
9,540
|
|
|
5,155
|
|
|
2,375
|
|
|||||
Other revenues (2)
|
|
49,876
|
|
|
47,093
|
|
|
41,039
|
|
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36,330
|
|
|
34,397
|
|
|||||
Total revenue
|
|
823,816
|
|
|
751,916
|
|
|
685,289
|
|
|
546,544
|
|
|
369,276
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and loss adjustment expenses
|
|
414,455
|
|
|
350,428
|
|
|
301,229
|
|
|
187,739
|
|
|
123,275
|
|
|||||
Policy acquisition costs
|
|
157,327
|
|
|
138,846
|
|
|
125,979
|
|
|
88,218
|
|
|
33,502
|
|
|||||
Other operating costs
|
|
99,161
|
|
|
92,158
|
|
|
95,198
|
|
|
95,564
|
|
|
84,895
|
|
|||||
Total expenses
|
|
670,943
|
|
|
581,432
|
|
|
522,406
|
|
|
371,521
|
|
|
241,672
|
|
|||||
Income before income taxes
|
|
152,873
|
|
|
170,484
|
|
|
162,883
|
|
|
175,023
|
|
|
127,604
|
|
|||||
Income tax expense
|
|
35,822
|
|
|
63,549
|
|
|
63,473
|
|
|
68,539
|
|
|
54,616
|
|
|||||
Net income
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
|
$
|
106,484
|
|
|
$
|
72,988
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
|
$
|
2.85
|
|
|
$
|
3.06
|
|
|
$
|
2.17
|
|
Diluted earnings per common share
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
|
$
|
2.79
|
|
|
$
|
2.97
|
|
|
$
|
2.08
|
|
Dividends declared per common share
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
$
|
0.63
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
As of December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total invested assets
|
|
$
|
908,154
|
|
|
$
|
730,023
|
|
|
$
|
651,601
|
|
|
$
|
489,435
|
|
|
$
|
423,581
|
|
Cash and cash equivalents
|
|
166,428
|
|
|
213,486
|
|
|
105,730
|
|
|
197,014
|
|
|
115,397
|
|
|||||
Total assets
|
|
1,858,390
|
|
|
1,454,999
|
|
|
1,060,007
|
|
|
993,548
|
|
|
911,774
|
|
|||||
Unpaid losses and loss adjustment expenses
|
|
472,829
|
|
|
248,425
|
|
|
58,494
|
|
|
98,840
|
|
|
134,353
|
|
|||||
Unearned premiums
|
|
601,679
|
|
|
532,444
|
|
|
475,756
|
|
|
442,366
|
|
|
395,748
|
|
|||||
Long-term debt
|
|
11,397
|
|
|
12,868
|
|
|
15,028
|
|
|
24,050
|
|
|
30,610
|
|
|||||
Total liabilities
|
|
1,356,757
|
|
|
1,015,011
|
|
|
688,817
|
|
|
700,456
|
|
|
692,858
|
|
|||||
Total stockholders’ equity
|
|
$
|
501,633
|
|
|
$
|
439,988
|
|
|
$
|
371,190
|
|
|
$
|
293,092
|
|
|
$
|
199,916
|
|
Shares outstanding end of period
|
|
34,783
|
|
|
34,735
|
|
|
35,052
|
|
|
35,110
|
|
|
34,102
|
|
|||||
Book value per share
|
|
$
|
14.42
|
|
|
$
|
12.67
|
|
|
$
|
10.59
|
|
|
$
|
8.35
|
|
|
$
|
5.86
|
|
Return on average equity (ROE)
|
|
24.1
|
%
|
|
25.7
|
%
|
|
29.4
|
%
|
|
41.8
|
%
|
|
38.4
|
%
|
|||||
Selected Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expense ratio (3)
|
|
53.9
|
%
|
|
50.9
|
%
|
|
47.6
|
%
|
|
37.2
|
%
|
|
37.7
|
%
|
|||||
General and administrative expense ratio (4)
|
|
33.4
|
%
|
|
33.5
|
%
|
|
34.9
|
%
|
|
36.3
|
%
|
|
35.8
|
%
|
|||||
Combined Ratio (5)
|
|
87.3
|
%
|
|
84.4
|
%
|
|
82.5
|
%
|
|
73.5
|
%
|
|
73.5
|
%
|
(1)
|
Net investment income excludes net realized gains (losses) on sale of securities and net change in unrealized gains (losses) of equity securities.
|
(2)
|
Other revenue consists of commission revenue, policy fees, and other revenue.
|
(3)
|
The loss and loss adjustment expense ratio is calculated by dividing losses and loss adjustment expenses by premiums earned, net.
|
(4)
|
The general and administrative expense ratio is calculated by dividing general and administrative expense, excluding interest expense, by premiums earned, net. Interest expense was $346 thousand, $348 thousand, $421 thousand, $963 thousand and $1.5 million for the years ended December 31, 2018, 2017, 2016, 2015 and 2014, respectively.
|
(5)
|
The combined ratio is the sum of the losses and loss adjustment expense ratio and the general and administrative expense ratio.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
For the Years Ended
|
|
Growth
Year Over Year |
|||||||||||||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
|
|
|
|
|||||||||||||
State
|
|
Direct Premiums Written
|
|
%
|
|
Direct Premiums Written
|
|
%
|
|
$
|
|
%
|
|||||||||
Florida
|
|
$
|
1,013,290
|
|
|
85.1
|
%
|
|
$
|
923,962
|
|
|
87.5
|
%
|
|
$
|
89,328
|
|
|
9.7
|
%
|
Other states
|
|
177,585
|
|
|
14.9
|
%
|
|
131,924
|
|
|
12.5
|
%
|
|
45,661
|
|
|
34.6
|
%
|
|||
Grand total
|
|
$
|
1,190,875
|
|
|
100.0
|
%
|
|
$
|
1,055,886
|
|
|
100.0
|
%
|
|
$
|
134,989
|
|
|
12.8
|
%
|
|
|
As of December 31, 2018
|
||||||||||||||||||
|
|
|
|
|
|
In-Force
|
|
|
|
Total Insured
|
|
|
||||||||
County
|
|
Policy Count
|
|
%
|
|
Premium
|
|
%
|
|
Value
|
|
%
|
||||||||
South Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Broward
|
|
101,706
|
|
|
16.0
|
%
|
|
$
|
215,126
|
|
|
21.2
|
%
|
|
$
|
27,174,430
|
|
|
17.4
|
%
|
Miami-Dade
|
|
90,038
|
|
|
14.1
|
%
|
|
194,531
|
|
|
19.2
|
%
|
|
20,595,764
|
|
|
13.2
|
%
|
||
Palm Beach
|
|
85,692
|
|
|
13.4
|
%
|
|
163,959
|
|
|
16.1
|
%
|
|
24,316,423
|
|
|
15.6
|
%
|
||
South Florida exposure
|
|
277,436
|
|
|
43.5
|
%
|
|
573,616
|
|
|
56.5
|
%
|
|
72,086,617
|
|
|
46.2
|
%
|
||
Other significant* Florida counties
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pinellas
|
|
41,421
|
|
|
6.5
|
%
|
|
47,314
|
|
|
4.7
|
%
|
|
7,683,043
|
|
|
4.9
|
%
|
||
Hillsborough
|
|
26,495
|
|
|
4.1
|
%
|
|
35,098
|
|
|
3.5
|
%
|
|
6,565,146
|
|
|
4.2
|
%
|
||
Escambia
|
|
18,410
|
|
|
2.9
|
%
|
|
30,302
|
|
|
3.0
|
%
|
|
5,426,918
|
|
|
3.5
|
%
|
||
Pasco
|
|
24,647
|
|
|
3.9
|
%
|
|
27,881
|
|
|
2.7
|
%
|
|
8,279,011
|
|
|
5.3
|
%
|
||
Collier
|
|
20,832
|
|
|
3.3
|
%
|
|
26,503
|
|
|
2.6
|
%
|
|
3,545,544
|
|
|
2.3
|
%
|
||
Polk
|
|
16,798
|
|
|
2.6
|
%
|
|
25,751
|
|
|
2.5
|
%
|
|
5,329,879
|
|
|
3.4
|
%
|
||
Lee
|
|
25,712
|
|
|
4.0
|
%
|
|
25,506
|
|
|
2.5
|
%
|
|
4,076,423
|
|
|
2.6
|
%
|
||
Total other significant* counties
|
|
174,315
|
|
|
27.3
|
%
|
|
218,355
|
|
|
21.5
|
%
|
|
40,905,964
|
|
|
26.2
|
%
|
||
|
|
|
|
|
|
In-Force
|
|
|
|
Total Insured
|
|
|
||||||||
Summary for all of Florida
|
|
Policy Count
|
|
%
|
|
Premium
|
|
%
|
|
Value
|
|
%
|
||||||||
South Florida exposure
|
|
277,436
|
|
|
43.5
|
%
|
|
573,616
|
|
|
56.5
|
%
|
|
72,086,617
|
|
|
46.2
|
%
|
||
Total other significant* counties
|
|
174,315
|
|
|
27.3
|
%
|
|
218,355
|
|
|
21.5
|
%
|
|
40,905,964
|
|
|
26.2
|
%
|
||
Other Florida counties
|
|
186,175
|
|
|
29.2
|
%
|
|
223,695
|
|
|
22.0
|
%
|
|
43,126,374
|
|
|
27.6
|
%
|
||
Total Florida
|
|
637,926
|
|
|
100.0
|
%
|
|
$
|
1,015,666
|
|
|
100.0
|
%
|
|
$
|
156,118,955
|
|
|
100.0
|
%
|
*
|
Significant counties defined as greater than 2.5% of total in-force premium as of December 31, 2018.
|
|
|
As of December 31, 2018
|
||||||||||||||||||
|
|
|
|
|
|
In-Force
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
Premium
|
|
%
|
|
Value
|
|
%
|
||||||||
Florida
|
|
637,926
|
|
|
77.0
|
%
|
|
$
|
1,015,666
|
|
|
85.1
|
%
|
|
$
|
156,118,955
|
|
|
68.3
|
%
|
North Carolina
|
|
55,047
|
|
|
6.6
|
%
|
|
43,770
|
|
|
3.7
|
%
|
|
17,124,104
|
|
|
7.5
|
%
|
||
Georgia
|
|
37,652
|
|
|
4.6
|
%
|
|
40,395
|
|
|
3.4
|
%
|
|
14,584,974
|
|
|
6.4
|
%
|
||
Massachusetts
|
|
11,796
|
|
|
1.4
|
%
|
|
15,522
|
|
|
1.3
|
%
|
|
7,020,121
|
|
|
3.1
|
%
|
||
South Carolina
|
|
15,117
|
|
|
1.8
|
%
|
|
14,477
|
|
|
1.2
|
%
|
|
4,818,760
|
|
|
2.1
|
%
|
||
Indiana
|
|
16,059
|
|
|
1.9
|
%
|
|
13,305
|
|
|
1.1
|
%
|
|
5,464,439
|
|
|
2.4
|
%
|
||
Pennsylvania
|
|
15,454
|
|
|
1.9
|
%
|
|
10,762
|
|
|
0.9
|
%
|
|
6,158,602
|
|
|
2.7
|
%
|
||
Minnesota
|
|
9,466
|
|
|
1.1
|
%
|
|
10,632
|
|
|
0.9
|
%
|
|
4,352,908
|
|
|
1.9
|
%
|
||
Virginia
|
|
10,354
|
|
|
1.3
|
%
|
|
8,437
|
|
|
0.7
|
%
|
|
5,053,973
|
|
|
2.2
|
%
|
||
Alabama
|
|
6,817
|
|
|
0.8
|
%
|
|
7,187
|
|
|
0.6
|
%
|
|
2,304,683
|
|
|
1.0
|
%
|
||
New Jersey
|
|
3,683
|
|
|
0.4
|
%
|
|
3,763
|
|
|
0.3
|
%
|
|
1,870,394
|
|
|
0.8
|
%
|
||
Michigan
|
|
2,388
|
|
|
0.3
|
%
|
|
2,879
|
|
|
0.2
|
%
|
|
940,051
|
|
|
0.4
|
%
|
||
Maryland
|
|
3,070
|
|
|
0.4
|
%
|
|
2,539
|
|
|
0.2
|
%
|
|
1,161,678
|
|
|
0.5
|
%
|
||
Hawaii
|
|
2,176
|
|
|
0.3
|
%
|
|
1,937
|
|
|
0.2
|
%
|
|
887,555
|
|
|
0.4
|
%
|
||
Delaware
|
|
1,073
|
|
|
0.1
|
%
|
|
1,230
|
|
|
0.1
|
%
|
|
555,055
|
|
|
0.2
|
%
|
||
New York
|
|
461
|
|
|
0.1
|
%
|
|
432
|
|
|
0.1
|
%
|
|
228,334
|
|
|
0.1
|
%
|
||
New Hampshire
|
|
114
|
|
|
0.0
|
%
|
|
86
|
|
|
0.0
|
%
|
|
62,436
|
|
|
0.0
|
%
|
||
Total
|
|
828,653
|
|
|
100.0
|
%
|
|
$
|
1,193,019
|
|
|
100.0
|
%
|
|
$
|
228,707,022
|
|
|
100.0
|
%
|
|
|
As of December 31, 2017
|
||||||||||||||||||
|
|
|
|
|
|
In-Force
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
Premium
|
|
%
|
|
Value
|
|
%
|
||||||||
Florida
|
|
618,280
|
|
|
80.9
|
%
|
|
$
|
926,087
|
|
|
87.6
|
%
|
|
$
|
146,624,470
|
|
|
73.9
|
%
|
North Carolina
|
|
48,866
|
|
|
6.4
|
%
|
|
36,993
|
|
|
3.5
|
%
|
|
14,275,508
|
|
|
7.2
|
%
|
||
Georgia
|
|
31,305
|
|
|
4.1
|
%
|
|
32,343
|
|
|
3.1
|
%
|
|
11,380,109
|
|
|
5.7
|
%
|
||
Massachusetts
|
|
10,132
|
|
|
1.3
|
%
|
|
13,162
|
|
|
1.2
|
%
|
|
5,857,450
|
|
|
3.0
|
%
|
||
South Carolina
|
|
13,769
|
|
|
1.8
|
%
|
|
13,372
|
|
|
1.3
|
%
|
|
4,120,728
|
|
|
2.1
|
%
|
||
Indiana
|
|
11,622
|
|
|
1.5
|
%
|
|
9,236
|
|
|
0.9
|
%
|
|
3,768,044
|
|
|
1.9
|
%
|
||
Pennsylvania
|
|
10,554
|
|
|
1.4
|
%
|
|
7,292
|
|
|
0.7
|
%
|
|
4,047,997
|
|
|
2.1
|
%
|
||
Minnesota
|
|
4,769
|
|
|
0.6
|
%
|
|
5,198
|
|
|
0.5
|
%
|
|
2,103,731
|
|
|
1.1
|
%
|
||
Virginia
|
|
4,908
|
|
|
0.6
|
%
|
|
3,867
|
|
|
0.4
|
%
|
|
2,263,923
|
|
|
1.1
|
%
|
||
Alabama
|
|
2,861
|
|
|
0.4
|
%
|
|
2,934
|
|
|
0.3
|
%
|
|
895,380
|
|
|
0.5
|
%
|
||
New Jersey
|
|
877
|
|
|
0.1
|
%
|
|
858
|
|
|
0.0
|
%
|
|
428,072
|
|
|
0.2
|
%
|
||
Michigan
|
|
1,330
|
|
|
0.2
|
%
|
|
1,574
|
|
|
0.1
|
%
|
|
491,906
|
|
|
0.2
|
%
|
||
Maryland
|
|
2,354
|
|
|
0.3
|
%
|
|
1,901
|
|
|
0.2
|
%
|
|
869,685
|
|
|
0.4
|
%
|
||
Hawaii
|
|
2,009
|
|
|
0.3
|
%
|
|
1,830
|
|
|
0.2
|
%
|
|
842,740
|
|
|
0.4
|
%
|
||
Delaware
|
|
828
|
|
|
0.1
|
%
|
|
903
|
|
|
0.0
|
%
|
|
400,076
|
|
|
0.2
|
%
|
||
New York
|
|
54
|
|
|
0.0
|
%
|
|
52
|
|
|
0.0
|
%
|
|
27,191
|
|
|
0.0
|
%
|
||
New Hampshire
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
764,518
|
|
|
100.0
|
%
|
|
$
|
1,057,602
|
|
|
100.0
|
%
|
|
$
|
198,397,010
|
|
|
100.0
|
%
|
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
|
|
|
|
In-Force
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
Premium
|
|
%
|
|
Value
|
|
%
|
||||||||
Florida
|
|
577,783
|
|
|
84.6
|
%
|
|
$
|
862,332
|
|
|
90.2
|
%
|
|
$
|
134,493,470
|
|
|
79.1
|
%
|
North Carolina
|
|
41,393
|
|
|
6.1
|
%
|
|
30,858
|
|
|
3.2
|
%
|
|
11,972,066
|
|
|
7.0
|
%
|
||
Georgia
|
|
24,257
|
|
|
3.6
|
%
|
|
23,849
|
|
|
2.5
|
%
|
|
8,450,315
|
|
|
5.0
|
%
|
||
Massachusetts
|
|
7,451
|
|
|
1.1
|
%
|
|
9,964
|
|
|
1.0
|
%
|
|
4,352,990
|
|
|
2.6
|
%
|
||
South Carolina
|
|
12,230
|
|
|
1.8
|
%
|
|
12,393
|
|
|
1.3
|
%
|
|
3,592,203
|
|
|
2.1
|
%
|
||
Indiana
|
|
6,835
|
|
|
1.0
|
%
|
|
5,381
|
|
|
0.6
|
%
|
|
2,162,967
|
|
|
1.3
|
%
|
||
Pennsylvania
|
|
5,303
|
|
|
0.8
|
%
|
|
3,677
|
|
|
0.4
|
%
|
|
1,925,226
|
|
|
1.1
|
%
|
||
Minnesota
|
|
2,089
|
|
|
0.3
|
%
|
|
2,251
|
|
|
0.2
|
%
|
|
896,969
|
|
|
0.5
|
%
|
||
Virginia
|
|
269
|
|
|
0.0
|
%
|
|
224
|
|
|
0.0
|
%
|
|
130,556
|
|
|
0.1
|
%
|
||
Alabama
|
|
624
|
|
|
0.1
|
%
|
|
624
|
|
|
0.1
|
%
|
|
182,456
|
|
|
0.1
|
%
|
||
New Jersey
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Michigan
|
|
538
|
|
|
0.1
|
%
|
|
651
|
|
|
0.1
|
%
|
|
190,360
|
|
|
0.1
|
%
|
||
Maryland
|
|
1,756
|
|
|
0.2
|
%
|
|
1,413
|
|
|
0.1
|
%
|
|
640,919
|
|
|
0.4
|
%
|
||
Hawaii
|
|
1,767
|
|
|
0.2
|
%
|
|
1,689
|
|
|
0.2
|
%
|
|
756,428
|
|
|
0.4
|
%
|
||
Delaware
|
|
621
|
|
|
0.1
|
%
|
|
663
|
|
|
0.1
|
%
|
|
289,941
|
|
|
0.2
|
%
|
||
New York
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
New Hampshire
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
682,916
|
|
|
100.0
|
%
|
|
$
|
955,969
|
|
|
100.0
|
%
|
|
$
|
170,036,866
|
|
|
100.0
|
%
|
•
|
59% of $76 million in excess of $35 million provides coverage for the 2018-2019 period;
|
•
|
20% of $55 million in excess of $35 million provides coverage on a multi-year basis through May 31, 2021;
|
•
|
21% of $55 million in excess of $35 million provides coverage for the 2018-2019 period; and
|
•
|
100% of $76 million in excess of $35 million and in excess of $152 million otherwise recoverable (from the first and second events) provides the third and fourth event coverage for the 2018-2019 period.
|
•
|
58% of $355 million in excess of $90 million provides coverage on a multi-year basis through May 31, 2020;
|
•
|
19.5% of $334 million in excess of $111 million provides coverage on a multi-year basis through May 31, 2021; and
|
•
|
22.5% of $334 million in excess of $111 million provides coverage for the 2018-2019 period.
|
•
|
65% of $84 million in excess of $445 million provides coverage on a multi-year basis through May 31, 2021; and
|
•
|
35% of $84 million in excess of $445 million provides coverage for the 2018-2019 period.
|
•
|
65% of $106 million in excess of $529 million provides coverage for the 2018-2019 period; and
|
•
|
35% of $106 million in excess of $529 million provides coverage for the 2018-2019 period.
|
•
|
65% of $45 million in excess of $635 million provides coverage on a multi-year basis through May 31, 2021; and
|
•
|
35% of $45 million in excess of $635 million provides coverage for the 2018-2019 period.
|
Reinsurer
|
|
A.M. Best
|
|
S&P
|
Allianz Risk Transfer
|
|
A+
|
|
AA
|
Everest Reinsurance Company
|
|
A+
|
|
A+
|
Renaissance Re
|
|
A+
|
|
A+
|
Chubb Tempest Reinsurance Ltd.
|
|
A++
|
|
AA
|
Various Lloyd’s of London Syndicates
|
|
A
|
|
A+
|
Florida Hurricane Catastrophe Fund
|
|
N/A
|
|
N/A
|
Reinsurer
|
|
A.M. Best
|
|
S&P
|
Everest Reinsurance Company
|
|
A+
|
|
A+
|
Chubb Tempest Reinsurance Ltd.
|
|
A++
|
|
AA
|
Hiscox Insurance Co (Bermuda) Ltd.
|
|
A
|
|
A
|
Hannover Ruck SE
|
|
A+
|
|
AA-
|
Various Lloyd’s of London Syndicates
|
|
A
|
|
A+
|
•
|
Five-year accident year table on incurred claim and allocated claim adjustment expenses, net of reinsurance including columns of:
|
◦
|
IBNR—Total of Incurred-but-not-reported liabilities plus expected development (redundancy) on reported claims by accident year, and
|
◦
|
Claim counts—cumulative number of reported claims by accident year.
|
•
|
Five-year accident year table on cumulative paid claims and allocated claim adjustment expenses, net of reinsurance,
|
•
|
Reconciliation of net incurred and paid claims development tables to the liability for unpaid losses and LAE in the consolidated balance sheet,
|
•
|
Duration—a table of the average historical claims duration for the past five years, and
|
•
|
Reconciliation of the change in liability for unpaid losses and LAE presented in the consolidated financial statements.
|
•
|
Adverse changes in loss cost trends, including inflationary pressures in home repair costs;
|
•
|
Judicial expansion of policy coverage and the impact of new theories of liability; and
|
•
|
Plaintiffs targeting property and casualty insurers in purported class action litigation related to claims-handling and other practices.
|
•
|
Direct premiums written overall grew by $135.0 million, or 12.80%, to $1,190.9 million.
|
•
|
The Company achieved over $1 billion in-force premium for the state of Florida during 2018.
|
•
|
In Florida, direct premiums written grew by $89.3 million, or 9.7%, and in our Other States, direct premiums written grew by $45.7 million, or 34.6%.
|
•
|
Premiums earned, net grew by $79.6 million, or 11.60%, to $768.4 million.
|
•
|
Total revenues increased by $71.9 million, or 9.60%, to $823.8 million.
|
•
|
Although Hurricanes Michael and Florence caused substantial losses, our vertically integrated structure and comprehensive reinsurance program substantially limited the overall financial impact from these damaging storms.
|
•
|
Net loss ratio was 53.9% as compared to 50.9%, driven by prior year reserve strengthening recorded in the fourth quarter of 2018.
|
•
|
Expense ratio improved to 33.4% from 33.5%.
|
•
|
Net income increased by $10.1 million, or 9.5%, to $117.1 million.
|
•
|
Diluted EPS increased by $0.28 to $3.27 per common share.
|
•
|
Increased our normal dividend 14% in the third quarter from $0.14 to $0.16 per share.
|
•
|
Declared and paid dividends per common share of $0.73, including a $0.13 special dividend in December 2018.
|
•
|
Repurchased approximately 689,000 shares in 2018 at an aggregate cost of $25.3 million.
|
•
|
Offered Universal DirectSM in all 17 states in which the Company writes policies as of December 31, 2018.
|
•
|
UPCIC commenced writing homeowners policies in New Hampshire.
|
•
|
UPCIC implemented an overall 3.4% rate increase in Florida.
|
|
|
For The Year Ended December 31, 2018
|
|||||||||||||||||||
|
|
Direct
|
|
Loss Ratio
|
|
Ceded
|
|
Loss Ratio
|
|
Net
|
|
Loss Ratio
|
|||||||||
Premiums earned
|
|
$
|
1,121,640
|
|
|
|
|
$
|
353,258
|
|
|
|
|
$
|
768,382
|
|
|
|
|||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weather events*
|
|
$
|
395,000
|
|
|
35.2
|
%
|
|
$
|
380,250
|
|
|
107.6
|
%
|
|
$
|
14,750
|
|
|
1.9
|
%
|
Prior year adverse/(favorable) reserve development
|
|
622,028
|
|
|
55.5
|
%
|
|
522,506
|
|
|
147.9
|
%
|
|
99,522
|
|
|
13.0
|
%
|
|||
All other losses and loss adjustment expenses
|
|
308,295
|
|
|
27.5
|
%
|
|
8,112
|
|
|
2.3
|
%
|
|
300,183
|
|
|
39.1
|
%
|
|||
Total losses and loss adjustment expenses
|
|
$
|
1,325,323
|
|
|
118.2
|
%
|
|
$
|
910,868
|
|
|
257.8
|
%
|
|
$
|
414,455
|
|
|
53.9
|
%
|
|
|
For The Year Ended December 31, 2017
|
|||||||||||||||||||
|
|
Direct
|
|
Loss Ratio
|
|
Ceded
|
|
Loss Ratio
|
|
Net
|
|
Loss Ratio
|
|||||||||
Premiums earned
|
|
$
|
999,198
|
|
|
|
|
$
|
310,405
|
|
|
|
|
$
|
688,793
|
|
|
|
|||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weather events*
|
|
$
|
446,700
|
|
|
44.7
|
%
|
|
$
|
417,543
|
|
|
134.5
|
%
|
|
$
|
29,157
|
|
|
4.2
|
%
|
Prior year adverse/(favorable) reserve development
|
|
37,173
|
|
|
3.7
|
%
|
|
9,674
|
|
|
3.1
|
%
|
|
27,499
|
|
|
4.0
|
%
|
|||
All other losses and loss adjustment expenses
|
|
295,249
|
|
|
29.5
|
%
|
|
1,477
|
|
|
0.5
|
%
|
|
293,772
|
|
|
42.7
|
%
|
|||
Total losses and loss adjustment expenses
|
|
$
|
779,122
|
|
|
77.9
|
%
|
|
$
|
428,694
|
|
|
138.1
|
%
|
|
$
|
350,428
|
|
|
50.9
|
%
|
|
|
For the Years Ended December 31,
|
|
Change
|
|||||||||||||||||
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||||||||
|
|
$
|
|
Ratio
|
|
$
|
|
Ratio
|
|
|
|
|
|||||||||
Premiums earned, net
|
|
$
|
768,382
|
|
|
|
|
$
|
688,793
|
|
|
|
|
$
|
79,589
|
|
|
11.6
|
%
|
||
General and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policy acquisition costs
|
|
157,327
|
|
|
20.5
|
%
|
|
138,846
|
|
|
20.2
|
%
|
|
18,481
|
|
|
13.3
|
%
|
|||
Other operating costs
|
|
99,161
|
|
|
12.9
|
%
|
|
92,158
|
|
|
13.3
|
%
|
|
7,003
|
|
|
7.6
|
%
|
|||
Total general and administrative expenses
|
|
$
|
256,488
|
|
|
33.4
|
%
|
|
$
|
231,004
|
|
|
33.5
|
%
|
|
$
|
25,484
|
|
|
11.0
|
%
|
|
|
For the Year Ended December 31, 2017
|
|||||||||||||||||||
|
|
Direct
|
|
Loss Ratio
|
|
Ceded
|
|
Loss Ratio
|
|
Net
|
|
Loss Ratio
|
|||||||||
Premiums earned
|
|
$
|
999,198
|
|
|
|
|
$
|
310,405
|
|
|
|
|
$
|
688,793
|
|
|
|
|||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Hurricane Irma losses and loss adjustment expenses
|
|
$
|
446,700
|
|
|
44.7
|
%
|
|
$
|
417,543
|
|
|
134.5
|
%
|
|
$
|
29,157
|
|
|
4.2
|
%
|
All other losses and loss adjustment expenses
|
|
332,422
|
|
|
33.3
|
%
|
|
11,151
|
|
|
3.6
|
%
|
|
321,271
|
|
|
46.7
|
%
|
|||
Total losses and loss adjustment expenses
|
|
$
|
779,122
|
|
|
78.0
|
%
|
|
$
|
428,694
|
|
|
138.1
|
%
|
|
$
|
350,428
|
|
|
50.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
For the Year Ended December 31, 2016
|
|||||||||||||||||||
|
|
Direct
|
|
Loss Ratio
|
|
Ceded
|
|
Loss Ratio
|
|
Net
|
|
Loss Ratio
|
|||||||||
Premiums earned
|
|
$
|
921,227
|
|
|
|
|
$
|
288,811
|
|
|
|
|
$
|
632,416
|
|
|
|
|||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weather events*
|
|
$
|
51,400
|
|
|
5.6
|
%
|
|
$
|
5,300
|
|
|
1.8
|
%
|
|
$
|
46,100
|
|
|
7.3
|
%
|
All other losses and loss adjustment expenses
|
|
251,636
|
|
|
27.3
|
%
|
|
(3,493
|
)
|
|
(1.2
|
)%
|
|
255,129
|
|
|
40.3
|
%
|
|||
Total losses and loss adjustment expenses
|
|
$
|
303,036
|
|
|
32.9
|
%
|
|
$
|
1,807
|
|
|
0.6
|
%
|
|
$
|
301,229
|
|
|
47.6
|
%
|
|
|
For the Years Ended December 31,
|
|
Change
|
|||||||||||||||||
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||
|
|
$
|
|
Ratio
|
|
$
|
|
Ratio
|
|
|
|
|
|||||||||
Premiums earned, net
|
|
$
|
688,793
|
|
|
|
|
$
|
632,416
|
|
|
|
|
$
|
56,377
|
|
|
8.9
|
%
|
||
General and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policy acquisition costs
|
|
138,846
|
|
|
20.2
|
%
|
|
125,979
|
|
|
19.9
|
%
|
|
12,867
|
|
|
10.2
|
%
|
|||
Other operating costs
|
|
92,158
|
|
|
13.3
|
%
|
|
95,198
|
|
|
15.1
|
%
|
|
(3,040
|
)
|
|
(3.2
|
)%
|
|||
Total general and administrative expenses
|
|
$
|
231,004
|
|
|
33.5
|
%
|
|
$
|
221,177
|
|
|
35.0
|
%
|
|
$
|
9,827
|
|
|
4.4
|
%
|
|
|
As of December 31,
|
||||||
Type of Investment
|
|
2018
|
|
2017
|
||||
Available-for-sale debt securities
|
|
$
|
820,438
|
|
|
$
|
639,334
|
|
Available-for-sale short-term investments
|
|
—
|
|
|
10,000
|
|
||
Equity securities
|
|
63,277
|
|
|
62,215
|
|
||
Investment real estate, net
|
|
24,439
|
|
|
18,474
|
|
||
Total
|
|
$
|
908,154
|
|
|
$
|
730,023
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Stockholders’ equity
|
|
$
|
501,633
|
|
|
$
|
439,988
|
|
Total long-term debt
|
|
11,397
|
|
|
12,868
|
|
||
Total capital
|
|
$
|
513,030
|
|
|
$
|
452,856
|
|
|
|
|
|
|
||||
Debt-to-total capital ratio
|
|
2.2
|
%
|
|
2.8
|
%
|
||
Debt-to-equity ratio
|
|
2.3
|
%
|
|
2.9
|
%
|
•
|
On September 5, 2017, UVE announced that its Board of Directors authorized the repurchase of up to $20 million of the Company’s outstanding common stock through December 31, 2018. UVE repurchased 558,647 shares of its common stock on the open market at an aggregate price of $20 million with an average price per share of $35.80. The Company completed this share repurchase program in December 2018.
|
•
|
In December 2018, UVE announced that its Board of Directors authorized a share repurchase program under which UVE may repurchase shares in the open market up to $20 million of its outstanding shares of common stock through May 31, 2020. UVE repurchased 138,234 shares, at an aggregate price of approximately $5.5 million, pursuant to such repurchase program through December 31, 2018.
|
|
|
Dividend
|
|
Shareholders
|
|
Dividend
|
|
Cash Dividend
|
||
2018
|
|
Declared Date
|
|
Record Date
|
|
Payable Date
|
|
Per Share Amount
|
||
First Quarter
|
|
January 22, 2018
|
|
February 28, 2018
|
|
March 12, 2018
|
|
$
|
0.14
|
|
Second Quarter
|
|
April 12, 2018
|
|
April 27, 2018
|
|
May 4, 2018
|
|
$
|
0.14
|
|
Third Quarter
|
|
May 29, 2018
|
|
July 2, 2018
|
|
July 16, 2018
|
|
$
|
0.16
|
|
Fourth Quarter
|
|
November 16, 2018
|
|
November 27, 2018
|
|
December 4, 2018
|
|
$
|
0.29
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Unpaid loss and LAE, net
|
|
$
|
55,765
|
|
|
$
|
58,669
|
|
IBNR loss and LAE, net
|
|
23,699
|
|
|
7,351
|
|
||
Total unpaid loss and LAE, net
|
|
$
|
79,464
|
|
|
$
|
66,020
|
|
|
|
|
|
|
||||
Reinsurance recoverable on unpaid loss and LAE
|
|
$
|
47,103
|
|
|
$
|
57,261
|
|
Reinsurance recoverable on IBNR loss and LAE
|
|
346,262
|
|
|
125,144
|
|
||
Total reinsurance recoverable on unpaid loss and LAE
|
|
$
|
393,365
|
|
|
$
|
182,405
|
|
|
|
Years Ended December 31,
|
||||
|
|
2018
|
|
2017
|
||
Loss and LAE Ratio (1)
|
|
|
|
|
||
UPCIC
|
|
63
|
%
|
|
56
|
%
|
APPCIC
|
|
63
|
%
|
|
82
|
%
|
Expense Ratio (1)
|
|
|
|
|
|
|
UPCIC
|
|
35
|
%
|
|
35
|
%
|
APPCIC
|
|
70
|
%
|
|
47
|
%
|
Combined Ratio (1)
|
|
|
|
|
|
|
UPCIC
|
|
98
|
%
|
|
91
|
%
|
APPCIC
|
|
133
|
%
|
|
129
|
%
|
(1)
|
The ratios are net of ceded premiums and losses and LAE, including premiums ceded to the Company’s catastrophe reinsurers which comprise a significant cost, and losses and LAE ceded to reinsurers. The expense ratio includes
|
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over 5
years
|
||||||||||
Reinsurance payable and multi-year commitments (1)
|
|
$
|
209,582
|
|
|
$
|
93,306
|
|
|
$
|
116,276
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unpaid losses and LAE, direct (2)
|
|
472,829
|
|
|
292,681
|
|
|
131,919
|
|
|
36,408
|
|
|
11,821
|
|
|||||
Long-term debt
|
|
12,792
|
|
|
1,803
|
|
|
5,137
|
|
|
3,200
|
|
|
2,652
|
|
|||||
Total contractual obligations
|
|
$
|
695,203
|
|
|
$
|
387,790
|
|
|
$
|
253,332
|
|
|
$
|
39,608
|
|
|
$
|
14,473
|
|
(1)
|
The 1-3 years amount represents the payment of reinsurance premiums payable under multi-year commitments. See “Item 8—Note 15 (Commitments and Contingencies).”
|
(2)
|
There are generally no notional or stated amounts related to unpaid losses and LAE. Both the amounts and timing of future loss and LAE payments are estimates and subject to the inherent variability of legal and market conditions affecting the obligations and make the timing of cash outflows uncertain. The ultimate amount and timing of unpaid losses and LAE could differ materially from the amounts in the table above. Further, the unpaid losses and LAE do not represent all the obligations that will arise under the contracts, but rather only the estimated liability incurred through December 31, 2018.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
|
|
Fair Value
|
|
Percent
|
|
Fair Value
|
|
Percent
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||
Common stock
|
|
$
|
15,564
|
|
|
24.6
|
%
|
|
$
|
18,811
|
|
|
30.2
|
%
|
Mutual funds
|
|
47,713
|
|
|
75.4
|
%
|
|
43,404
|
|
|
69.8
|
%
|
||
Total equity securities
|
|
$
|
63,277
|
|
|
100.0
|
%
|
|
$
|
62,215
|
|
|
100.0
|
%
|
Item 8.
|
Financial Statements and supplementary data
|
|
PAGE
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Available-for-sale debt securities, at fair value (amortized cost: $831,127 and $643,715)
|
|
$
|
820,438
|
|
|
$
|
639,334
|
|
Available-for-sale short-term investments, at fair value (amortized cost: $10,000)
|
|
—
|
|
|
10,000
|
|
||
Equity securities, at fair value (cost: $86,271 and $68,040)
|
|
63,277
|
|
|
62,215
|
|
||
Investment real estate, net
|
|
24,439
|
|
|
18,474
|
|
||
Total invested assets
|
|
908,154
|
|
|
730,023
|
|
||
Cash and cash equivalents
|
|
166,428
|
|
|
213,486
|
|
||
Restricted cash and cash equivalents
|
|
2,635
|
|
|
2,635
|
|
||
Prepaid reinsurance premiums
|
|
142,750
|
|
|
132,806
|
|
||
Reinsurance recoverable
|
|
418,603
|
|
|
182,405
|
|
||
Premiums receivable, net
|
|
59,858
|
|
|
56,500
|
|
||
Property and equipment, net
|
|
34,991
|
|
|
32,866
|
|
||
Deferred policy acquisition costs
|
|
84,686
|
|
|
73,059
|
|
||
Income taxes recoverable
|
|
11,159
|
|
|
9,472
|
|
||
Deferred income tax asset, net
|
|
14,586
|
|
|
9,286
|
|
||
Other assets
|
|
14,540
|
|
|
12,461
|
|
||
Total assets
|
|
$
|
1,858,390
|
|
|
$
|
1,454,999
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
|
$
|
472,829
|
|
|
$
|
248,425
|
|
Unearned premiums
|
|
601,679
|
|
|
532,444
|
|
||
Advance premium
|
|
26,222
|
|
|
26,216
|
|
||
Accounts payable
|
|
3,059
|
|
|
2,866
|
|
||
Book overdraft
|
|
102,843
|
|
|
36,715
|
|
||
Reinsurance payable, net
|
|
93,306
|
|
|
110,381
|
|
||
Other liabilities and accrued expenses
|
|
45,422
|
|
|
45,096
|
|
||
Long-term debt
|
|
11,397
|
|
|
12,868
|
|
||
Total liabilities
|
|
1,356,757
|
|
|
1,015,011
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
||||
Cumulative convertible preferred stock, $.01 par value
|
|
—
|
|
|
—
|
|
||
Authorized shares - 1,000
|
|
|
|
|
||||
Issued shares - 10 and 10
|
|
|
|
|
||||
Outstanding shares - 10 and 10
|
|
|
|
|
||||
Minimum liquidation preference - $9.99 and $9.99 per share
|
|
|
|
|
||||
Common stock, $.01 par value
|
|
465
|
|
|
458
|
|
||
Authorized shares - 55,000
|
|
|
|
|
||||
Issued shares - 46,514 and 45,778
|
|
|
|
|
||||
Outstanding shares - 34,783 and 34,735
|
|
|
|
|
||||
Treasury shares, at cost - 11,731 and 11,043
|
|
(130,399
|
)
|
|
(105,123
|
)
|
||
Additional paid-in capital
|
|
86,353
|
|
|
86,186
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
(8,010
|
)
|
|
(6,281
|
)
|
||
Retained earnings
|
|
553,224
|
|
|
464,748
|
|
||
Total stockholders’ equity
|
|
501,633
|
|
|
439,988
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,858,390
|
|
|
$
|
1,454,999
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
PREMIUMS EARNED AND OTHER REVENUES
|
|
|
|
|
|
|
||||||
Direct premiums written
|
|
$
|
1,190,875
|
|
|
$
|
1,055,886
|
|
|
$
|
954,617
|
|
Change in unearned premium
|
|
(69,235
|
)
|
|
(56,688
|
)
|
|
(33,390
|
)
|
|||
Direct premium earned
|
|
1,121,640
|
|
|
999,198
|
|
|
921,227
|
|
|||
Ceded premium earned
|
|
(353,258
|
)
|
|
(310,405
|
)
|
|
(288,811
|
)
|
|||
Premiums earned, net
|
|
768,382
|
|
|
688,793
|
|
|
632,416
|
|
|||
Net investment income
|
|
24,816
|
|
|
13,460
|
|
|
9,540
|
|
|||
Net realized gains (losses) on sale of securities
|
|
(2,089
|
)
|
|
2,570
|
|
|
2,294
|
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
(17,169
|
)
|
|
—
|
|
|
—
|
|
|||
Commission revenue
|
|
22,438
|
|
|
21,253
|
|
|
17,733
|
|
|||
Policy fees
|
|
20,275
|
|
|
18,838
|
|
|
16,880
|
|
|||
Other revenue
|
|
7,163
|
|
|
7,002
|
|
|
6,426
|
|
|||
Total premiums earned and other revenues
|
|
823,816
|
|
|
751,916
|
|
|
685,289
|
|
|||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
||||||
Losses and loss adjustment expenses
|
|
414,455
|
|
|
350,428
|
|
|
301,229
|
|
|||
General and administrative expenses
|
|
256,488
|
|
|
231,004
|
|
|
221,177
|
|
|||
Total operating costs and expenses
|
|
670,943
|
|
|
581,432
|
|
|
522,406
|
|
|||
INCOME BEFORE INCOME TAXES
|
|
152,873
|
|
|
170,484
|
|
|
162,883
|
|
|||
Income tax expense
|
|
35,822
|
|
|
63,549
|
|
|
63,473
|
|
|||
NET INCOME
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
Basic earnings per common share
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
|
$
|
2.85
|
|
Weighted average common shares outstanding - Basic
|
|
34,856
|
|
|
34,841
|
|
|
34,919
|
|
|||
Diluted earnings per common share
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
|
$
|
2.79
|
|
Weighted average common shares outstanding - Diluted
|
|
35,786
|
|
|
35,809
|
|
|
35,650
|
|
|||
Cash dividend declared per common share
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
Other comprehensive income (loss)
|
|
(4,748
|
)
|
|
127
|
|
|
(2,402
|
)
|
|||
Comprehensive income (loss)
|
|
$
|
112,303
|
|
|
$
|
107,062
|
|
|
$
|
97,008
|
|
|
|
Common
Shares
Issued
|
|
Preferred
Shares
Issued
|
|
Common
Stock
Amount
|
|
Preferred
Stock
Amount
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total
Stockholders’
Equity
|
||||||||||||||||
Balance, December 31, 2015
|
|
45,525
|
|
|
10
|
|
|
$
|
455
|
|
|
$
|
—
|
|
|
$
|
70,789
|
|
|
$
|
306,656
|
|
|
$
|
(4,006
|
)
|
|
$
|
(80,802
|
)
|
|
$
|
293,092
|
|
Stock option exercises
|
|
124
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
905
|
|
|
—
|
|
|
—
|
|
|
(6,238
|
)
|
|
(5,332
|
)
|
|||||||
Purchases of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,510
|
)
|
|
(8,510
|
)
|
|||||||
Treasury shares reissued
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,670
|
|
|
—
|
|
|
—
|
|
|
2,330
|
|
|
10,000
|
|
|||||||
Retirement of treasury shares
|
|
(325
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(6,235
|
)
|
|
—
|
|
|
—
|
|
|
6,238
|
|
|
—
|
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,288
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,288
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99,410
|
|
|
—
|
|
|
—
|
|
|
99,410
|
|
|||||||
Change in net unrealized gains (losses) (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,402
|
)
|
|
—
|
|
|
(2,402
|
)
|
|||||||
Excess tax benefit (shortfall), net (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,154
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,154
|
)
|
|||||||
Declaration of dividends
($0.69 per common share and $1.00 per preferred share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,202
|
)
|
|
—
|
|
|
—
|
|
|
(24,202
|
)
|
|||||||
Balance, December 31, 2016
|
|
45,324
|
|
|
10
|
|
|
453
|
|
|
—
|
|
|
82,263
|
|
|
381,864
|
|
|
(6,408
|
)
|
|
(86,982
|
)
|
|
371,190
|
|
|||||||
Vesting of performance share units
|
|
115
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,183
|
)
|
|
(1,183
|
)
|
|||||||
Stock option exercises
|
|
804
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
5,578
|
|
|
—
|
|
|
—
|
|
|
(11,625
|
)
|
|
(6,039
|
)
|
|||||||
Common stock issued
|
|
26
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|||||||
Retirement of treasury shares
|
|
(491
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(12,803
|
)
|
|
—
|
|
|
—
|
|
|
12,808
|
|
|
—
|
|
|||||||
Purchases of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,141
|
)
|
|
(18,141
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,515
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106,935
|
|
|
—
|
|
|
—
|
|
|
106,935
|
|
|||||||
Change in net unrealized gains (losses) (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
127
|
|
|||||||
Declaration of dividends
($0.69 per common share and $1.00 per preferred share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,051
|
)
|
|
—
|
|
|
—
|
|
|
(24,051
|
)
|
|||||||
Balance, December 31, 2017
|
|
45,778
|
|
|
10
|
|
|
458
|
|
|
—
|
|
|
86,186
|
|
|
464,748
|
|
|
(6,281
|
)
|
|
(105,123
|
)
|
|
439,988
|
|
|||||||
Cumulative effect of change in accounting
principle (ASU 2016-01) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,601
|
)
|
|
3,601
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, January 1, 2018
|
|
45,778
|
|
|
10
|
|
|
458
|
|
|
—
|
|
|
86,186
|
|
|
461,147
|
|
|
(2,680
|
)
|
|
(105,123
|
)
|
|
439,988
|
|
|||||||
Vesting of performance share units
|
|
127
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,273
|
)
|
|
(1,273
|
)
|
|||||||
Grants and vesting of restricted stock
|
|
80
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
(154
|
)
|
|||||||
Stock option exercises
|
|
1,890
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
36,568
|
|
|
—
|
|
|
—
|
|
|
(47,772
|
)
|
|
(11,185
|
)
|
|||||||
Retirement of treasury shares
|
|
(1,361
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(49,185
|
)
|
|
—
|
|
|
—
|
|
|
49,199
|
|
|
—
|
|
|||||||
Purchases of treasury stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,276
|
)
|
|
(25,276
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,786
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,786
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,051
|
|
|
—
|
|
|
—
|
|
|
117,051
|
|
|||||||
Change in net unrealized gains (losses) (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,748
|
)
|
|
—
|
|
|
(4,748
|
)
|
|||||||
Reclassification of income taxes upon
adoption of ASU 2018-02 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
582
|
|
|
(582
|
)
|
|
—
|
|
|
—
|
|
|||||||
Declaration of dividends
($0.73 per common share and $1.00 per preferred share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,556
|
)
|
|
—
|
|
|
—
|
|
|
(25,556
|
)
|
|||||||
Balance, December 31, 2018
|
|
46,514
|
|
|
10
|
|
|
$
|
465
|
|
|
$
|
—
|
|
|
$
|
86,353
|
|
|
$
|
553,224
|
|
|
$
|
(8,010
|
)
|
|
$
|
(130,399
|
)
|
|
$
|
501,633
|
|
(1)
|
Represents change in fair value of available-for-sale investments, net of income tax provision of $76 thousand for the year ended December 31, 2017 and a change in fair value of available-for-sale investments, net of income tax benefit of $1,560 thousand and $1,486 thousand for the years ended December 31, 2018 and 2016, respectively.
|
(2)
|
Excess tax benefit (shortfall), net for the year ended December 31, 2016 were recognized in additional paid-in capital. For the years ended December 31, 2018 and 2017 excess tax benefit (shortfall) were recognized in income tax expense in the consolidated statements of income when the share-based awards vest or are settled. See “—Note 9 (Share-Based Compensation).”
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Bad debt expense
|
|
467
|
|
|
501
|
|
|
406
|
|
|||
Depreciation and amortization
|
|
4,820
|
|
|
4,058
|
|
|
3,242
|
|
|||
Amortization of share-based compensation
|
|
12,786
|
|
|
10,515
|
|
|
10,288
|
|
|||
Amortization of original issue discount on debt
|
|
—
|
|
|
10
|
|
|
149
|
|
|||
Accretion of deferred credit
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|||
Book overdraft increase (decrease)
|
|
66,128
|
|
|
36,715
|
|
|
—
|
|
|||
Net realized (gains) losses sale of securities
|
|
2,089
|
|
|
(2,570
|
)
|
|
(2,294
|
)
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
17,169
|
|
|
—
|
|
|
—
|
|
|||
Amortization of premium/accretion of discount, net
|
|
1,482
|
|
|
3,994
|
|
|
3,481
|
|
|||
Deferred income taxes
|
|
(3,740
|
)
|
|
1,309
|
|
|
4,724
|
|
|||
Excess tax (benefit) shortfall from share-based compensation
|
|
(5,427
|
)
|
|
(5,793
|
)
|
|
1,154
|
|
|||
Other
|
|
196
|
|
|
35
|
|
|
31
|
|
|||
Issuance of common stock
|
|
—
|
|
|
634
|
|
|
—
|
|
|||
Net change in assets and liabilities relating to operating activities:
|
|
|
|
|
|
|
||||||
Prepaid reinsurance premiums
|
|
(9,944
|
)
|
|
(8,421
|
)
|
|
(9,712
|
)
|
|||
Reinsurance recoverable
|
|
(236,198
|
)
|
|
(182,299
|
)
|
|
22,747
|
|
|||
Reinsurance receivable, net
|
|
—
|
|
|
186
|
|
|
167
|
|
|||
Premiums receivable, net
|
|
(3,823
|
)
|
|
(3,162
|
)
|
|
(3,249
|
)
|
|||
Accrued investment income
|
|
(1,149
|
)
|
|
(708
|
)
|
|
(1,514
|
)
|
|||
Income taxes recoverable
|
|
3,741
|
|
|
(417
|
)
|
|
1,004
|
|
|||
Deferred policy acquisition costs, net
|
|
(11,627
|
)
|
|
(8,147
|
)
|
|
(4,893
|
)
|
|||
Other assets
|
|
(968
|
)
|
|
(1,860
|
)
|
|
767
|
|
|||
Unpaid losses and loss adjustment expenses
|
|
224,404
|
|
|
189,931
|
|
|
(40,346
|
)
|
|||
Unearned premiums
|
|
69,235
|
|
|
56,688
|
|
|
33,390
|
|
|||
Accounts payable
|
|
193
|
|
|
(321
|
)
|
|
2,809
|
|
|||
Reinsurance payable, net
|
|
(17,075
|
)
|
|
29,490
|
|
|
7,306
|
|
|||
Other liabilities and accrued expenses
|
|
289
|
|
|
9,287
|
|
|
(505
|
)
|
|||
Advance premium
|
|
6
|
|
|
8,420
|
|
|
(7,017
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
230,105
|
|
|
245,010
|
|
|
121,396
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
35
|
|
|
23
|
|
|
36
|
|
|||
Purchases of property and equipment
|
|
(6,731
|
)
|
|
(4,618
|
)
|
|
(8,223
|
)
|
|||
Purchases of equity securities
|
|
(25,803
|
)
|
|
(89,302
|
)
|
|
(66,688
|
)
|
|||
Purchases of available -for-sale debt securities
|
|
(437,635
|
)
|
|
(180,604
|
)
|
|
(320,131
|
)
|
|||
Purchases of short-term investments
|
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|||
Purchases of investment real estate, net
|
|
(6,375
|
)
|
|
(7,218
|
)
|
|
(5,496
|
)
|
|||
Proceeds from sales of equity securities
|
|
8,285
|
|
|
77,640
|
|
|
60,558
|
|
|||
Proceeds from sales of available-for-sale debt securities
|
|
134,591
|
|
|
26,179
|
|
|
86,018
|
|
|||
Maturities of available-for-sale debt securities
|
|
111,347
|
|
|
97,191
|
|
|
54,615
|
|
|||
Maturities of short-term investments
|
|
10,000
|
|
|
5,000
|
|
|
25,000
|
|
|||
Net cash provided by (used in) investing activities
|
|
(212,286
|
)
|
|
(85,709
|
)
|
|
(174,311
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Preferred stock dividend
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Common stock dividend
|
|
(25,508
|
)
|
|
(24,001
|
)
|
|
(24,192
|
)
|
|||
Issuance of common stock for stock option exercises
|
|
102
|
|
|
—
|
|
|
119
|
|
|||
Purchase of treasury stock
|
|
(25,276
|
)
|
|
(18,141
|
)
|
|
(8,510
|
)
|
|||
Sale of treasury stock
|
|
—
|
|
|
—
|
|
|
2,965
|
|
|||
Payments related to tax withholding for share-based compensation
|
|
(12,714
|
)
|
|
(7,223
|
)
|
|
(5,451
|
)
|
|||
Excess tax benefit (shortfall) from share-based compensation
|
|
—
|
|
|
—
|
|
|
(1,154
|
)
|
|||
Repayment of debt
|
|
(1,471
|
)
|
|
(2,170
|
)
|
|
(2,136
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(64,877
|
)
|
|
(51,545
|
)
|
|
(38,369
|
)
|
|||
Cash and cash equivalents, and restricted cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Net increase (decrease) during the period
|
|
(47,058
|
)
|
|
107,756
|
|
|
(91,284
|
)
|
|||
Balance, beginning of period
|
|
216,121
|
|
|
108,365
|
|
|
199,649
|
|
|||
Balance, end of period
|
|
$
|
169,063
|
|
|
$
|
216,121
|
|
|
$
|
108,365
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental cash and non-cash flow disclosures:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
346
|
|
|
$
|
348
|
|
|
$
|
421
|
|
Income taxes paid
|
|
$
|
41,996
|
|
|
$
|
68,883
|
|
|
$
|
63,378
|
|
Income tax refund
|
|
$
|
747
|
|
|
$
|
434
|
|
|
$
|
5,633
|
|
|
|
As of December 31,
|
|||||||||
|
|
2018
|
|
2017
|
2016
|
||||||
Cash and cash equivalents
|
|
$
|
166,428
|
|
|
$
|
213,486
|
|
$
|
105,730
|
|
Restricted cash and cash equivalents (1)
|
|
2,635
|
|
|
2,635
|
|
2,635
|
|
|||
Total cash and cash equivalents and restricted cash and cash equivalents
|
|
$
|
169,063
|
|
|
$
|
216,121
|
|
$
|
108,365
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
67,435
|
|
|
$
|
241
|
|
|
$
|
(1,039
|
)
|
|
$
|
66,637
|
|
Corporate bonds
|
|
434,887
|
|
|
714
|
|
|
(6,736
|
)
|
|
428,865
|
|
||||
Mortgage-backed and asset-backed securities
|
|
312,840
|
|
|
912
|
|
|
(4,155
|
)
|
|
309,597
|
|
||||
Municipal bonds
|
|
3,405
|
|
|
—
|
|
|
(43
|
)
|
|
3,362
|
|
||||
Redeemable preferred stock
|
|
12,560
|
|
|
55
|
|
|
(638
|
)
|
|
11,977
|
|
||||
Total
|
|
$
|
831,127
|
|
|
$
|
1,922
|
|
|
$
|
(12,611
|
)
|
|
$
|
820,438
|
|
|
|
December 31, 2017
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
60,481
|
|
|
$
|
—
|
|
|
$
|
(877
|
)
|
|
$
|
59,604
|
|
Corporate bonds
|
|
228,336
|
|
|
476
|
|
|
(1,308
|
)
|
|
227,504
|
|
||||
Mortgage-backed and asset-backed securities
|
|
221,956
|
|
|
19
|
|
|
(2,523
|
)
|
|
219,452
|
|
||||
Municipal bonds
|
|
120,883
|
|
|
599
|
|
|
(1,187
|
)
|
|
120,295
|
|
||||
Redeemable preferred stock
|
|
12,059
|
|
|
485
|
|
|
(65
|
)
|
|
12,479
|
|
||||
Short-term investments
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
||||
Total
|
|
$
|
653,715
|
|
|
$
|
1,579
|
|
|
$
|
(5,960
|
)
|
|
$
|
649,334
|
|
|
|
December 31, 2018
|
|
December 31, 2017(1)
|
||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
||||||
Average Credit Ratings
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
||||||
AAA
|
|
$
|
388,672
|
|
|
47.4
|
%
|
|
$
|
317,313
|
|
|
48.9
|
%
|
AA
|
|
100,791
|
|
|
12.3
|
%
|
|
129,573
|
|
|
20.0
|
%
|
||
A
|
|
214,503
|
|
|
26.1
|
%
|
|
146,749
|
|
|
22.6
|
%
|
||
BBB
|
|
112,613
|
|
|
13.7
|
%
|
|
51,020
|
|
|
7.8
|
%
|
||
BB and Below
|
|
494
|
|
|
0.1
|
%
|
|
1,569
|
|
|
0.2
|
%
|
||
No Rating Available
|
|
3,365
|
|
|
0.4
|
%
|
|
3,110
|
|
|
0.5
|
%
|
||
Total
|
|
$
|
820,438
|
|
|
100.0
|
%
|
|
$
|
649,334
|
|
|
100.0
|
%
|
(1)
|
The credit ratings in the table above have been reclassified from the prior periods’ consolidated financial statements to conform to the current periods’ presentation.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
|
$
|
139,418
|
|
|
$
|
136,291
|
|
|
$
|
118,014
|
|
|
$
|
116,014
|
|
Non-agency
|
|
61,689
|
|
|
61,933
|
|
|
17,676
|
|
|
17,488
|
|
||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Auto loan receivables
|
|
53,449
|
|
|
53,341
|
|
|
35,105
|
|
|
34,962
|
|
||||
Credit card receivables
|
|
29,594
|
|
|
29,366
|
|
|
38,844
|
|
|
38,719
|
|
||||
Other receivables
|
|
28,690
|
|
|
28,666
|
|
|
12,317
|
|
|
12,269
|
|
||||
Total
|
|
$
|
312,840
|
|
|
$
|
309,597
|
|
|
$
|
221,956
|
|
|
$
|
219,452
|
|
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
||||||||||||||||||
|
|
Number of
Issues
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Number of
Issues
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations and agencies
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
13
|
|
|
$
|
56,531
|
|
|
$
|
(1,039
|
)
|
Corporate bonds
|
|
228
|
|
|
210,152
|
|
|
(3,318
|
)
|
|
160
|
|
|
131,225
|
|
|
(3,418
|
)
|
||||
Mortgage-backed and asset-backed securities
|
|
36
|
|
|
57,487
|
|
|
(196
|
)
|
|
103
|
|
|
148,436
|
|
|
(3,959
|
)
|
||||
Municipal bonds
|
|
6
|
|
|
3,362
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Redeemable preferred stock
|
|
61
|
|
|
8,092
|
|
|
(506
|
)
|
|
5
|
|
|
1,034
|
|
|
(132
|
)
|
||||
Total
|
|
331
|
|
|
$
|
279,093
|
|
|
$
|
(4,063
|
)
|
|
281
|
|
|
$
|
337,226
|
|
|
$
|
(8,548
|
)
|
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
||||||||||||||||||
|
|
Number of
Issues
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Number of
Issues
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations and agencies
|
|
7
|
|
|
$
|
35,464
|
|
|
$
|
(301
|
)
|
|
9
|
|
|
$
|
24,140
|
|
|
$
|
(576
|
)
|
Corporate bonds
|
|
159
|
|
|
142,208
|
|
|
(792
|
)
|
|
39
|
|
|
29,796
|
|
|
(516
|
)
|
||||
Mortgage-backed and asset-backed securities
|
|
83
|
|
|
137,481
|
|
|
(955
|
)
|
|
37
|
|
|
70,218
|
|
|
(1,568
|
)
|
||||
Municipal bonds
|
|
36
|
|
|
28,265
|
|
|
(246
|
)
|
|
30
|
|
|
48,370
|
|
|
(941
|
)
|
||||
Redeemable preferred stock
|
|
21
|
|
|
2,464
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
306
|
|
|
$
|
345,882
|
|
|
$
|
(2,359
|
)
|
|
115
|
|
|
$
|
172,524
|
|
|
$
|
(3,601
|
)
|
|
|
December 31, 2018
|
||||||
|
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
|
$
|
123,110
|
|
|
$
|
122,333
|
|
Due after one year through five years
|
|
401,175
|
|
|
395,735
|
|
||
Due after five years through ten years
|
|
286,921
|
|
|
283,350
|
|
||
Due after ten years
|
|
14,533
|
|
|
13,864
|
|
||
Perpetual maturity securities
|
|
5,388
|
|
|
5,156
|
|
||
Total
|
|
$
|
831,127
|
|
|
$
|
820,438
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Proceeds from sales and maturities (fair value)
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
255,938
|
|
|
$
|
128,370
|
|
|
$
|
165,633
|
|
Equity securities
|
|
$
|
8,285
|
|
|
$
|
77,640
|
|
|
$
|
60,558
|
|
Gross realized gains on sale of securities:
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
326
|
|
|
$
|
458
|
|
|
$
|
557
|
|
Equity securities
|
|
$
|
714
|
|
|
$
|
2,415
|
|
|
$
|
1,772
|
|
Gross realized losses on sale of securities:
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
(3,129
|
)
|
|
$
|
(150
|
)
|
|
$
|
(35
|
)
|
Equity securities
|
|
$
|
—
|
|
|
$
|
(153
|
)
|
|
$
|
—
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Available-for-sale debt securities
|
|
$
|
18,198
|
|
|
$
|
12,375
|
|
|
$
|
9,523
|
|
Equity securities
|
|
2,978
|
|
|
1,799
|
|
|
1,414
|
|
|||
Available-for-sale short-term investments
|
|
145
|
|
|
22
|
|
|
75
|
|
|||
Cash and cash equivalents
|
|
4,331
|
|
|
981
|
|
|
325
|
|
|||
Other (1)
|
|
2,124
|
|
|
478
|
|
|
409
|
|
|||
Total investment income
|
|
27,776
|
|
|
15,655
|
|
|
11,746
|
|
|||
Less: Investment expenses (2)
|
|
(2,960
|
)
|
|
(2,195
|
)
|
|
(2,206
|
)
|
|||
Net investment income
|
|
$
|
24,816
|
|
|
$
|
13,460
|
|
|
$
|
9,540
|
|
(1)
|
Includes interest earned on restricted cash and cash equivalents. Also includes investment income earned on real estate investments.
|
(2)
|
Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net gains and (losses) recognized during the period on equity securities
|
|
$
|
(16,455
|
)
|
|
$
|
2,262
|
|
|
$
|
1,772
|
|
Less: Net (gains) and losses recognized during the period on equity
securities sold during the period
|
|
(714
|
)
|
|
(2,262
|
)
|
|
(1,772
|
)
|
|||
Unrealized gains and (losses) recognized during the reported period
on equity securities still held at the reporting period
|
|
$
|
(17,169
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Income Producing:
|
|
|
|
|
||||
Investment real estate (1)
|
|
$
|
14,619
|
|
|
$
|
6,918
|
|
Less: Accumulated depreciation
|
|
(870
|
)
|
|
(460
|
)
|
||
|
|
13,749
|
|
|
6,458
|
|
||
Non-Income Producing:
|
|
|
|
|
||||
Investment real estate (1)
|
|
10,690
|
|
|
12,016
|
|
||
Investment real estate, net
|
|
$
|
24,439
|
|
|
$
|
18,474
|
|
(1)
|
During the year ended December 31, 2018, the Company transferred $7.4 million from non-income producing investment real estate to income producing investment real estate.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation expense on investment real estate
|
|
$
|
410
|
|
|
$
|
179
|
|
|
$
|
178
|
|
|
|
Ratings as of December 31, 2018
|
|
|
||||||||||
|
|
|
|
Standard
|
|
|
|
|
|
|
||||
|
|
AM Best
|
|
and Poor’s
Rating
|
|
Moody’s
Investors
|
|
Due from as of
December 31,
|
||||||
Reinsurer
|
|
Company
|
|
Services, Inc.
|
|
Service, Inc.
|
|
2018
|
|
2017
|
||||
Florida Hurricane Catastrophe Fund (1)
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
165,022
|
|
|
$
|
52,054
|
|
Allianz Risk Transfer
|
|
A+
|
|
AA
|
|
Aa3
|
|
139,565
|
|
|
105,573
|
|
||
Renaissance Reinsurance Ltd
|
|
A+
|
|
A+
|
|
A1
|
|
39,459
|
|
|
22,545
|
|
||
Chubb Tempest Reinsurance Ltd
|
|
A++
|
|
AA
|
|
Aa3
|
|
16,208
|
|
|
—
|
|
||
Total (2)
|
|
|
|
|
|
|
|
$
|
360,254
|
|
|
$
|
180,172
|
|
(1)
|
No rating is available, because the fund is not rated.
|
(2)
|
Amounts represent prepaid reinsurance premiums, reinsurance receivables, and net recoverables for paid and unpaid losses, including incurred but not reported reserves, loss adjustment expenses, and offsetting reinsurance payables.
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Prepaid reinsurance premiums
|
|
$
|
142,750
|
|
|
$
|
132,806
|
|
Reinsurance recoverable on paid losses and LAE
|
|
$
|
25,238
|
|
|
$
|
—
|
|
Reinsurance recoverable on unpaid losses and LAE
|
|
393,365
|
|
|
182,405
|
|
||
Reinsurance recoverable
|
|
$
|
418,603
|
|
|
$
|
182,405
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
DPAC, beginning of year
|
|
$
|
73,059
|
|
|
$
|
64,912
|
|
|
$
|
60,019
|
|
Capitalized Costs
|
|
174,814
|
|
|
144,849
|
|
|
130,243
|
|
|||
Amortization of DPAC
|
|
(163,187
|
)
|
|
(136,702
|
)
|
|
(125,350
|
)
|
|||
DPAC, end of year
|
|
$
|
84,686
|
|
|
$
|
73,059
|
|
|
$
|
64,912
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Ten percent of total liabilities
|
|
|
|
|
||||
UPCIC
|
|
$
|
90,610
|
|
|
$
|
72,633
|
|
APPCIC
|
|
$
|
489
|
|
|
$
|
572
|
|
Statutory capital and surplus
|
|
|
|
|
||||
UPCIC
|
|
$
|
291,438
|
|
|
$
|
307,686
|
|
APPCIC
|
|
$
|
15,973
|
|
|
$
|
16,633
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Combined net income (loss)
|
|
$
|
3,118
|
|
|
$
|
35,650
|
|
|
$
|
58,194
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016*
|
||||||
Capital Contributions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Restricted cash and cash equivalents
|
|
$
|
2,635
|
|
|
$
|
2,635
|
|
Investments
|
|
$
|
3,876
|
|
|
$
|
3,910
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Land
|
|
$
|
4,489
|
|
|
$
|
4,489
|
|
Building
|
|
24,027
|
|
|
17,644
|
|
||
Computers
|
|
7,390
|
|
|
5,589
|
|
||
Furniture
|
|
2,142
|
|
|
1,637
|
|
||
Automobiles and other vehicles
|
|
8,348
|
|
|
6,857
|
|
||
Software
|
|
2,689
|
|
|
2,646
|
|
||
Total
|
|
49,085
|
|
|
38,862
|
|
||
Less: Accumulated depreciation
|
|
(14,094
|
)
|
|
(10,829
|
)
|
||
Net of accumulated depreciation
|
|
34,991
|
|
|
28,033
|
|
||
Construction in progress
|
|
—
|
|
|
4,833
|
|
||
Property and equipment, net
|
|
$
|
34,991
|
|
|
$
|
32,866
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Realized gain (loss) on disposal
|
|
$
|
(196
|
)
|
|
$
|
(35
|
)
|
|
$
|
(31
|
)
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Surplus note
|
|
$
|
11,397
|
|
|
$
|
12,868
|
|
2019
|
$
|
1,471
|
|
2020
|
1,471
|
|
|
2021
|
1,471
|
|
|
2022
|
1,471
|
|
|
2023
|
1,471
|
|
|
Thereafter
|
4,042
|
|
|
Total
|
$
|
11,397
|
|
|
|
As of December 31,
|
||||
|
|
2018
|
|
2017
|
||
Shares issued and outstanding
|
|
10
|
|
|
10
|
|
Conversion factor
|
|
2.50
|
|
|
2.50
|
|
Common shares resulting if converted
|
|
25
|
|
|
25
|
|
|
|
Issued
Shares
|
|
Treasury
Shares
|
|
Outstanding
Shares
|
|||
Balance, as of December 31, 2015
|
|
45,525
|
|
|
(10,415
|
)
|
|
35,110
|
|
Shares repurchased
|
|
—
|
|
|
(441
|
)
|
|
(441
|
)
|
Shares reissued
|
|
—
|
|
|
584
|
|
|
584
|
|
Options exercised
|
|
124
|
|
|
—
|
|
|
124
|
|
Shares acquired through cashless exercise (1)
|
|
—
|
|
|
(325
|
)
|
|
(325
|
)
|
Shares cancelled
|
|
(325
|
)
|
|
325
|
|
|
—
|
|
Balance, as of December 31, 2016
|
|
45,324
|
|
|
(10,272
|
)
|
|
35,052
|
|
Shares repurchased
|
|
—
|
|
|
(771
|
)
|
|
(771
|
)
|
Vesting of performance share units
|
|
115
|
|
|
—
|
|
|
115
|
|
Options exercised
|
|
804
|
|
|
—
|
|
|
804
|
|
Common stock issued
|
|
26
|
|
|
—
|
|
|
26
|
|
Shares acquired through cashless exercise (1)
|
|
—
|
|
|
(491
|
)
|
|
(491
|
)
|
Shares cancelled
|
|
(491
|
)
|
|
491
|
|
|
—
|
|
Balance, as of December 31, 2017
|
|
45,778
|
|
|
(11,043
|
)
|
|
34,735
|
|
Shares repurchased
|
|
—
|
|
|
(688
|
)
|
|
(688
|
)
|
Vesting of performance share units
|
|
127
|
|
|
—
|
|
|
127
|
|
Options exercised
|
|
1,890
|
|
|
—
|
|
|
1,890
|
|
Restricted stock grant
|
|
80
|
|
|
—
|
|
|
80
|
|
Shares acquired through cashless exercise (1)
|
|
—
|
|
|
(1,361
|
)
|
|
(1,361
|
)
|
Shares cancelled
|
|
(1,361
|
)
|
|
1,361
|
|
|
—
|
|
Balance, as of December 31, 2018
|
|
46,514
|
|
|
(11,731
|
)
|
|
34,783
|
|
(1)
|
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised or performance share units or restricted stock (as defined in “—Note 9 (Share-Based Compensation)”) vested. These shares have been canceled by the Company.
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
|
Per Share
Amount
|
|
Aggregate
Amount (1)
|
|
Per Share
Amount
|
|
Aggregate
Amount (1)
|
|
Per Share
Amount
|
|
Aggregate
Amount
|
||||||||||||
First Quarter
|
|
$
|
0.14
|
|
|
$
|
4,904
|
|
|
$
|
0.14
|
|
|
$
|
4,932
|
|
|
$
|
0.14
|
|
|
$
|
4,915
|
|
Second Quarter
|
|
$
|
0.14
|
|
|
$
|
4,920
|
|
|
$
|
0.14
|
|
|
$
|
4,887
|
|
|
$
|
0.14
|
|
|
$
|
4,913
|
|
Third Quarter
|
|
$
|
0.16
|
|
|
$
|
5,592
|
|
|
$
|
0.14
|
|
|
$
|
4,830
|
|
|
$
|
0.14
|
|
|
$
|
4,903
|
|
Fourth Quarter
|
|
$
|
0.29
|
|
|
$
|
10,130
|
|
|
$
|
0.27
|
|
|
$
|
9,392
|
|
|
$
|
0.27
|
|
|
$
|
9,461
|
|
(1)
|
Includes dividend equivalents due to certain employees who hold Performance Share Units which are subject to time-vesting conditions.
|
|
|
For the Year Ended December 31, 2018
|
|||||||||||||||||||||||||
|
|
Stock Options
|
|
Restricted Stock
|
|
Performance
Share Units
|
|||||||||||||||||||||
|
|
Number of
Options (2)
|
|
Weighted
Average
Exercise
Price per
Share (1)
|
|
Aggregate
Intrinsic
Value
|
|
Weighted
Average
Remaining
Term
|
|
Number of Shares (2)
|
|
Weighted
Average
Grant Date
Fair Value
per Share (1)
|
|
Number
of Share
Units (2)
|
|
Weighted
Average
Grant Date
Fair Value
per Share (1)
|
|||||||||||
Outstanding as of December 31, 2017
|
|
3,207
|
|
|
$
|
20.82
|
|
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
205
|
|
|
$
|
26.07
|
|
||
Granted
|
|
463
|
|
|
28.85
|
|
|
|
|
|
|
80
|
|
|
33.64
|
|
|
142
|
|
|
32.51
|
|
|||||
Forfeited
|
|
(4
|
)
|
|
21.86
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|||||
Exercised
|
|
(1,890
|
)
|
|
19.35
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|||||
Vested
|
|
n/a
|
|
|
n/a
|
|
|
|
|
|
|
(17
|
)
|
|
30.85
|
|
|
(127
|
)
|
|
26.29
|
|
|||||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|||||
Outstanding as of December 31, 2018
|
|
1,776
|
|
|
$
|
24.48
|
|
|
$
|
23,869
|
|
|
6.96
|
|
63
|
|
|
$
|
34.38
|
|
|
220
|
|
|
$
|
30.10
|
|
Exercisable as of December 31, 2018
|
|
410
|
|
|
$
|
19.94
|
|
|
$
|
7,367
|
|
|
3.42
|
|
|
|
|
|
|
|
|
(1)
|
Unless otherwise specified, such as in the case of the exercise of Stock Options, the per share prices were determined using the closing price of the Company’s Common Stock as quoted on the exchanges on which the Company was listed. Shares issued upon exercise of options represent original issuances in private transactions pursuant to Section 4(2) of the Securities Act of 1933, as amended or issuances under the Company’s Incentive Plan.
|
(2)
|
All shares outstanding as of December 31, 2018, are expected to vest.
|
n/a
|
Not applicable
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation expense:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
7,579
|
|
|
$
|
6,907
|
|
|
$
|
3,641
|
|
Restricted stock
|
|
609
|
|
|
—
|
|
|
3,433
|
|
|||
Performance share units
|
|
4,598
|
|
|
3,608
|
|
|
3,214
|
|
|||
Total
|
|
$
|
12,786
|
|
|
$
|
10,515
|
|
|
$
|
10,288
|
|
Deferred tax benefits:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
1,877
|
|
|
$
|
2,640
|
|
|
$
|
1,392
|
|
Restricted stock
|
|
8
|
|
|
—
|
|
|
1,312
|
|
|||
Performance share units
|
|
945
|
|
|
1,379
|
|
|
1,229
|
|
|||
Total
|
|
$
|
2,830
|
|
|
$
|
4,019
|
|
|
$
|
3,933
|
|
Realized tax benefits:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
7,957
|
|
|
$
|
5,831
|
|
|
$
|
724
|
|
Restricted stock
|
|
—
|
|
|
—
|
|
|
4,326
|
|
|||
Performance share units
|
|
920
|
|
|
1,264
|
|
|
—
|
|
|||
Total
|
|
$
|
8,877
|
|
|
$
|
7,095
|
|
|
$
|
5,050
|
|
Excess tax benefits (shortfall) (1):
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
5,330
|
|
|
$
|
5,548
|
|
|
$
|
642
|
|
Restricted stock
|
|
—
|
|
|
—
|
|
|
(1,796
|
)
|
|||
Performance share units
|
|
97
|
|
|
245
|
|
|
—
|
|
|||
Total
|
|
$
|
5,427
|
|
|
$
|
5,793
|
|
|
$
|
(1,154
|
)
|
Weighted average fair value per option or share:
|
|
|
|
|
|
|
||||||
Stock option grants
|
|
$
|
11.74
|
|
|
$
|
10.18
|
|
|
$
|
6.01
|
|
Restricted stock grants
|
|
$
|
33.64
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Performance share unit grants
|
|
$
|
32.51
|
|
|
$
|
27.20
|
|
|
$
|
23.18
|
|
Intrinsic value of options exercised
|
|
$
|
32,217
|
|
|
$
|
15,256
|
|
|
$
|
1,894
|
|
Fair value of restricted stock vested
|
|
$
|
632
|
|
|
$
|
—
|
|
|
$
|
11,319
|
|
Fair value of performance share units vested
|
|
$
|
3,726
|
|
|
$
|
3,307
|
|
|
$
|
—
|
|
Cash received for strike price and tax withholdings
|
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
119
|
|
Shares acquired through cashless exercise (2)
|
|
1,361
|
|
|
491
|
|
|
325
|
|
|||
Value of shares acquired through cashless exercise (2)
|
|
$
|
49,199
|
|
|
$
|
12,808
|
|
|
$
|
6,238
|
|
(1)
|
Excess tax benefits (shortfalls) for the years ended December 31, 2018 and 2017 were recognized within income and within additional paid in capital for the year ended December 31, 2016.
|
(2)
|
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised, Restricted Stock vested or PSUs vested. These shares have been canceled by the Company.
|
|
|
As of December 31, 2018
|
||||||||||
|
|
Stock
Options
|
|
Restricted Stock
|
|
Performance
Share Units
|
||||||
Unrecognized expense
|
|
$
|
6,898
|
|
|
$
|
2,082
|
|
|
$
|
1,183
|
|
Weighted average remaining years
|
|
1.54
|
|
|
1.24
|
|
|
1.43
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted-average risk-free interest rate
|
|
2.69
|
%
|
|
1.94
|
%
|
|
1.40
|
%
|
|||
Expected term of option in years
|
|
6.00
|
|
|
5.84
|
|
|
5.44
|
|
|||
Weighted-average volatility
|
|
40.2
|
%
|
|
45.1
|
%
|
|
45.2
|
%
|
|||
Dividend yield
|
|
1.7
|
%
|
|
2.0
|
%
|
|
3.4
|
%
|
|||
Weighted average grant date fair value per share
|
|
$
|
11.74
|
|
|
$
|
10.18
|
|
|
$
|
6.01
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
31,981
|
|
|
$
|
53,962
|
|
|
$
|
50,645
|
|
State and local
|
|
7,581
|
|
|
8,278
|
|
|
8,105
|
|
|||
Total current expense
|
|
39,562
|
|
|
62,240
|
|
|
58,750
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(3,487
|
)
|
|
851
|
|
|
4,106
|
|
|||
State and local
|
|
(253
|
)
|
|
458
|
|
|
617
|
|
|||
Total deferred expense (benefit)
|
|
(3,740
|
)
|
|
1,309
|
|
|
4,723
|
|
|||
Income tax expense
|
|
$
|
35,822
|
|
|
$
|
63,549
|
|
|
$
|
63,473
|
|
|
|
For the Years Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Expected provision at federal statutory tax rate
|
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increases (decreases) resulting from:
|
|
|
|
|
|
|
|||
State income tax, net of federal tax benefit
|
|
3.8
|
%
|
|
3.2
|
%
|
|
3.2
|
%
|
Effect of change in tax rate
|
|
—
|
%
|
|
2.8
|
%
|
|
—
|
%
|
Disallowed meals & entertainment
|
|
0.3
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
Disallowed compensation
|
|
1.3
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
Excess tax benefit
|
|
(3.5
|
)%
|
|
(3.4
|
)%
|
|
—
|
|
Other, net
|
|
0.5
|
%
|
|
(1.1
|
)%
|
|
0.1
|
%
|
Total income tax expense (benefit)
|
|
23.4
|
%
|
|
37.3
|
%
|
|
39.0
|
%
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Deferred income tax assets:
|
|
|
|
|
||||
Unearned premiums
|
|
$
|
22,700
|
|
|
$
|
19,916
|
|
Advanced premiums
|
|
1,269
|
|
|
1,275
|
|
||
Unpaid losses and LAE
|
|
820
|
|
|
385
|
|
||
Share-based compensation
|
|
3,237
|
|
|
3,894
|
|
||
Accrued wages
|
|
332
|
|
|
288
|
|
||
Allowance for uncollectible receivables
|
|
203
|
|
|
224
|
|
||
Additional tax basis of securities
|
|
33
|
|
|
33
|
|
||
Capital loss carryforwards
|
|
1,298
|
|
|
822
|
|
||
Unrealized gain/loss
|
|
4,246
|
|
|
—
|
|
||
Other comprehensive income
|
|
4,086
|
|
|
2,544
|
|
||
Other
|
|
9
|
|
|
84
|
|
||
Total deferred income tax assets
|
|
38,233
|
|
|
29,465
|
|
||
Valuation allowance
|
|
(781
|
)
|
|
(523
|
)
|
||
Deferred income tax assets, net of valuation allowance
|
|
37,452
|
|
|
28,942
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Deferred policy acquisition costs, net
|
|
(20,944
|
)
|
|
(18,205
|
)
|
||
Prepaid expenses
|
|
(677
|
)
|
|
(435
|
)
|
||
Fixed assets
|
|
(992
|
)
|
|
(881
|
)
|
||
Unpaid loss and LAE transition adjustment
|
|
(78
|
)
|
|
—
|
|
||
Other
|
|
(175
|
)
|
|
(135
|
)
|
||
Total deferred income tax liabilities
|
|
(22,866
|
)
|
|
(19,656
|
)
|
||
Net deferred income tax asset
|
|
$
|
14,586
|
|
|
$
|
9,286
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator for EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
Less: Preferred stock dividends
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Income available to common stockholders
|
|
$
|
117,041
|
|
|
$
|
106,925
|
|
|
$
|
99,400
|
|
Denominator for EPS:
|
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding
|
|
34,856
|
|
|
34,841
|
|
|
34,919
|
|
|||
Plus: Assumed conversion of share-based compensation (1)
|
|
905
|
|
|
943
|
|
|
706
|
|
|||
Assumed conversion of preferred stock
|
|
25
|
|
|
25
|
|
|
25
|
|
|||
Weighted average diluted common shares outstanding
|
|
35,786
|
|
|
35,809
|
|
|
35,650
|
|
|||
Basic earnings per common share
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
|
$
|
2.85
|
|
Diluted earnings per common share
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
|
$
|
2.79
|
|
Weighted average number of antidilutive shares
|
|
445
|
|
|
1,504
|
|
|
1,583
|
|
(1)
|
Represents the dilutive effect of unexercised Stock Options, unvested Performance Share Units and unvested Restricted Stock.
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||||
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
||||||||||||||||||
Net changes related to
available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized holding gains (losses)
arising during the period
|
|
$
|
(9,111
|
)
|
|
$
|
(2,254
|
)
|
|
$
|
(6,857
|
)
|
|
$
|
2,773
|
|
|
$
|
1,058
|
|
|
$
|
1,715
|
|
|
$
|
(1,594
|
)
|
|
$
|
(609
|
)
|
|
$
|
(985
|
)
|
Less: Reclassification adjustments
(gains) losses realized in
net income
|
|
2,803
|
|
|
694
|
|
|
2,109
|
|
|
(2,570
|
)
|
|
(982
|
)
|
|
(1,588
|
)
|
|
(2,294
|
)
|
|
(877
|
)
|
|
(1,417
|
)
|
|||||||||
Other comprehensive income
(loss)
|
|
(6,308
|
)
|
|
(1,560
|
)
|
|
(4,748
|
)
|
|
203
|
|
|
76
|
|
|
127
|
|
|
(3,888
|
)
|
|
(1,486
|
)
|
|
(2,402
|
)
|
|||||||||
Reclassification adjustments to
retained earnings (1)
|
|
5,830
|
|
|
2,811
|
|
|
3,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Change in accumulated other
comprehensive income (loss)
|
|
$
|
(478
|
)
|
|
$
|
1,251
|
|
|
$
|
(1,729
|
)
|
|
$
|
203
|
|
|
$
|
76
|
|
|
$
|
127
|
|
|
$
|
(3,888
|
)
|
|
$
|
(1,486
|
)
|
|
$
|
(2,402
|
)
|
(1)
|
This amount represents reclassifications to retained earnings associated with the disproportional income tax effects of the Tax Act on items within AOCI and unrealized losses in AOCI relating to available-for-sale equity security investments. See “—Note 2 (Summary of Significant Accounting Policies — Recently Adopted Accounting Pronouncements)” for more information.
|
|
|
Amounts Reclassified from
Accumulated Other
Comprehensive Income
|
|
|
||||||||||
Details about Accumulated Other
|
|
Years Ended December 31,
|
|
Affected Line Item in the Statement
|
||||||||||
Comprehensive Income Components
|
|
2018
|
|
2017
|
|
2016
|
|
Where Net Income is Presented
|
||||||
Unrealized gains (losses) on
available-for-sale debt securities
|
|
|
|
|
|
|
|
|
||||||
|
|
$
|
(2,803
|
)
|
|
$
|
2,570
|
|
|
$
|
2,294
|
|
|
Net realized gains (losses) on sale of securities
|
|
|
694
|
|
|
(982
|
)
|
|
(877
|
)
|
|
Income taxes, current
|
|||
Total reclassification for the period
|
|
$
|
(2,109
|
)
|
|
$
|
1,588
|
|
|
$
|
1,417
|
|
|
Net of tax
|
•
|
Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data.
|
•
|
Level 3 – Unobservable inputs that are not corroborated by market data. These inputs reflect management’s best estimate of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability.
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
As of December 31, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Available-For-Sale Debt Securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
—
|
|
|
$
|
66,637
|
|
|
$
|
—
|
|
|
$
|
66,637
|
|
Corporate bonds
|
|
—
|
|
|
428,865
|
|
|
—
|
|
|
428,865
|
|
||||
Mortgage-backed and asset-backed securities
|
|
—
|
|
|
309,597
|
|
|
—
|
|
|
309,597
|
|
||||
Municipal bonds
|
|
—
|
|
|
3,362
|
|
|
—
|
|
|
3,362
|
|
||||
Redeemable preferred stock
|
|
—
|
|
|
11,977
|
|
|
—
|
|
|
11,977
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
15,564
|
|
|
—
|
|
|
—
|
|
|
15,564
|
|
||||
Mutual funds
|
|
47,713
|
|
|
—
|
|
|
—
|
|
|
47,713
|
|
||||
Total assets accounted for at fair value
|
|
$
|
63,277
|
|
|
$
|
820,438
|
|
|
$
|
—
|
|
|
$
|
883,715
|
|
|
|
Fair Value Measurements
|
||||||||||||||
|
|
As of December 31, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Available-For-Sale Debt Securities
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
—
|
|
|
$
|
59,604
|
|
|
$
|
—
|
|
|
$
|
59,604
|
|
Corporate bonds
|
|
—
|
|
|
227,504
|
|
|
—
|
|
|
227,504
|
|
||||
Mortgage-backed and asset-backed securities
|
|
—
|
|
|
219,452
|
|
|
—
|
|
|
219,452
|
|
||||
Municipal bonds
|
|
—
|
|
|
120,295
|
|
|
—
|
|
|
120,295
|
|
||||
Redeemable preferred stock
|
|
—
|
|
|
12,479
|
|
|
—
|
|
|
12,479
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
18,811
|
|
|
—
|
|
|
—
|
|
|
18,811
|
|
||||
Mutual funds
|
|
43,404
|
|
|
—
|
|
|
—
|
|
|
43,404
|
|
||||
Short-term investments
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
||||
Total assets accounted for at fair value
|
|
$
|
62,215
|
|
|
$
|
649,334
|
|
|
$
|
—
|
|
|
$
|
711,549
|
|
|
|
As of December 31,
|
||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||
|
|
Carrying
Value
|
|
(Level 3)
Estimated
Fair Value
|
|
Carrying
Value
|
|
(Level 3)
Estimated
Fair Value
|
||||||||
Liabilities (debt):
|
|
|
|
|
|
|
|
|
||||||||
Surplus note
|
|
$
|
11,397
|
|
|
$
|
10,125
|
|
|
$
|
12,868
|
|
|
$
|
11,630
|
|
|
|
As of
December 31, 2018 |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Total of Incurred-but-Not-
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reported Liabilities
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Plus Expected
|
|
|
|||||||||||||
Incurred Loss and Defense & Cost Containment Expenses, Net of Reinsurance
|
|
Development (Redundancy)
|
|
Cumulative Number
|
|||||||||||||||||||||||
For the Years Ended December 31,
|
|
on Reported Claims
|
|
of Reported Claims
|
|||||||||||||||||||||||
Accident Year
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
|
|
|
|||||||||||||
|
|
(Unaudited)
|
|
|
|
|
|
|
|||||||||||||||||||
2014
|
|
$
|
111,739
|
|
|
$
|
118,289
|
|
|
$
|
112,251
|
|
|
$
|
112,278
|
|
|
$
|
119,028
|
|
|
$
|
(5,850
|
)
|
|
22,442
|
|
2015
|
|
|
|
170,381
|
|
|
187,431
|
|
|
194,600
|
|
|
213,860
|
|
|
(6,744
|
)
|
|
26,760
|
|
|||||||
2016
|
|
|
|
|
|
269,814
|
|
|
286,252
|
|
|
324,577
|
|
|
(6,380
|
)
|
|
40,354
|
|
||||||||
2017
|
|
|
|
|
|
|
|
303,944
|
|
|
334,734
|
|
|
(12,950
|
)
|
|
119,465
|
|
|||||||||
2018
|
|
|
|
|
|
|
|
|
|
334,368
|
|
|
48,915
|
|
|
50,021
|
|
||||||||||
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
1,326,567
|
|
|
|
|
|
|
|
||
|
December 31, 2018
|
||
Liabilities for unpaid claims and claim
adjustment expenses, net of reinsurance
|
$
|
67,382
|
|
Reinsurance recoverable on unpaid claims
|
393,365
|
|
|
Liabilities for adjusting and other claim payments
|
12,082
|
|
|
Total gross liability for unpaid claims and claim
adjustment expense
|
$
|
472,829
|
|
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
|
|||||||||||||||
Years
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|||||
|
|
61.9
|
%
|
|
18.8
|
%
|
|
9.1
|
%
|
|
5.3
|
%
|
|
2.4
|
%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
|
$
|
248,425
|
|
|
$
|
58,494
|
|
|
$
|
98,840
|
|
Less: Reinsurance recoverable
|
|
(182,405
|
)
|
|
(106
|
)
|
|
(13,540
|
)
|
|||
Net balance at beginning of period
|
|
66,020
|
|
|
58,388
|
|
|
85,300
|
|
|||
Incurred (recovered) related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
314,933
|
|
|
322,929
|
|
|
305,919
|
|
|||
Prior years
|
|
99,522
|
|
|
27,499
|
|
|
(4,690
|
)
|
|||
Total incurred
|
|
414,455
|
|
|
350,428
|
|
|
301,229
|
|
|||
Paid related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
221,708
|
|
|
215,274
|
|
|
229,761
|
|
|||
Prior years
|
|
179,303
|
|
|
127,522
|
|
|
98,380
|
|
|||
Total paid
|
|
401,011
|
|
|
342,796
|
|
|
328,141
|
|
|||
Net balance at end of period
|
|
79,464
|
|
|
66,020
|
|
|
58,388
|
|
|||
Plus: Reinsurance recoverable
|
|
393,365
|
|
|
182,405
|
|
|
106
|
|
|||
Balance at end of year
|
|
$
|
472,829
|
|
|
$
|
248,425
|
|
|
$
|
58,494
|
|
•
|
Case reserves, which are the reserves established by the claims examiner on reported claims.
|
•
|
Incurred but not reported (“IBNR”), which are anticipated losses expected to be reported to the Company and development of reported claims, including anticipated recoveries from either subrogation or ceded reinsurance.
|
•
|
LAE, which are the estimated expenses associated with the settlement of case reserves, and IBNR.
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Premiums earned, net
|
|
$
|
182,577
|
|
|
$
|
192,272
|
|
|
$
|
188,938
|
|
|
$
|
204,595
|
|
Net investment income
|
|
4,785
|
|
|
5,786
|
|
|
6,642
|
|
|
7,603
|
|
||||
Total revenues
|
|
191,500
|
|
|
209,788
|
|
|
206,155
|
|
|
216,373
|
|
||||
Total expenses
|
|
139,801
|
|
|
148,540
|
|
|
154,988
|
|
|
227,614
|
|
||||
Net income (loss)
|
|
40,055
|
|
|
46,084
|
|
|
37,380
|
|
|
(6,468
|
)
|
||||
Basic earnings (loss) per share
|
|
$
|
1.15
|
|
|
$
|
1.32
|
|
|
$
|
1.07
|
|
|
$
|
(0.19
|
)
|
Diluted earnings (loss) per share
|
|
$
|
1.12
|
|
|
$
|
1.29
|
|
|
$
|
1.04
|
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Premiums earned, net
|
|
$
|
161,559
|
|
|
$
|
169,009
|
|
|
$
|
174,517
|
|
|
$
|
183,708
|
|
Investment income
|
|
2,704
|
|
|
3,223
|
|
|
3,085
|
|
|
4,448
|
|
||||
Total revenues
|
|
174,874
|
|
|
185,487
|
|
|
190,243
|
|
|
201,312
|
|
||||
Total expenses
|
|
127,503
|
|
|
137,564
|
|
|
173,644
|
|
|
142,721
|
|
||||
Net income (loss)
|
|
31,199
|
|
|
29,376
|
|
|
9,964
|
|
|
36,396
|
|
||||
Basic earnings per share
|
|
$
|
0.89
|
|
|
$
|
0.84
|
|
|
$
|
0.29
|
|
|
$
|
1.05
|
|
Diluted earnings per share
|
|
$
|
0.86
|
|
|
$
|
0.82
|
|
|
$
|
0.28
|
|
|
$
|
1.03
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
|
Page
|
Schedules required to be filed under the provisions of Regulation S-X Article 7:
|
|
Schedule VI Supplemental Information Concerning Consolidated Property-Casualty Insurance Operations
|
|
(3)
|
Exhibits
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the Company’s Annual Report on Form 10‑K filed on March 26, 2012 and incorporated herein by reference)
|
3.2
|
|
|
Amended and Restated Bylaws of Universal Insurance Holdings, Inc. (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on June 19, 2017 and incorporated herein by reference)
|
10.1
|
|
|
Florida Insurance Capital Build-Up Incentive Program Surplus Note (“Surplus Note”) between the Company and the State Board of Administration of Florida (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2009 and incorporated herein by reference)
|
10.2
|
|
|
Addendum No. 1 to the Surplus Note between the Company and the State Board of Administration of Florida (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 10, 2009 and incorporated herein by reference)
|
10.3
|
|
|
Multiple Line Quota Share Reinsurance Contract between the Company and Everest Reinsurance Company (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 10, 2009 and incorporated herein by reference)
|
10.4
|
|
|
Universal Insurance Holdings, Inc. Second Amended and Restated 2009 Omnibus Incentive Plan, as amended through June 8, 2012 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 14, 2012 and incorporated herein by reference)†
|
10.5
|
|
|
Amendment to Second Amended and Restated 2009 Omnibus Incentive Plan (filed as Exhibit 4.12 to the Company’s Registration Statement on Form S-8 filed on June 6, 2013 and incorporated herein by reference) †
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
Employment Agreement, dated January 12, 2016, by and between the Company and Sean P. Downes (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 19, 2016 and incorporated herein by reference) †
|
10.11
|
|
|
Employment Agreement, dated February 22, 2018, between Frank C. Wilcox and the Company (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 27, 2018 and incorporated herein by reference) †
|
10.12
|
|
|
Employment Agreement, dated December 17, 2018, between Jon W. Springer and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2018 and incorporated herein by reference) †
|
10.13
|
|
|
Employment Agreement, dated April 11, 2018, between Jon W. Springer and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2018 and incorporated herein by reference) †
|
10.14
|
|
|
Employment Agreement, dated February 22, 2018, between Stephen J. Donaghy and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 27, 2018 and incorporated herein by reference) †
|
10.15
|
|
|
Employment Agreement, dated February 22, 2018, between Kimberly D. Cooper and the Company (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 27, 2018 and incorporated herein by reference) †
|
10.16
|
|
|
Director Services Agreement, dated June 6, 2013, by and between the Company and Scott P. Callahan (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 6, 2013 and incorporated herein by reference) †
|
10.17
|
|
|
Director Services Agreement, dated June 5, 2014, by and between the Company and Ralph J. Palmieri (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 6, 2014 and incorporated herein by reference) †
|
10.18
|
|
|
Director Services Agreement, dated June 5, 2014, by and between the Company and Richard D. Peterson (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on June 6, 2014 and incorporated herein by reference) †
|
10.19
|
|
|
Director Services Agreement, dated July 12, 2007, by and between the Company and Ozzie A. Schindler (filed as Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on August 10, 2007 and incorporated herein by reference) †
|
10.20
|
|
|
Director Services Agreement, dated July 12, 2007, by and between the Company and Joel M. Wilentz (filed as Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on August 10, 2007 and incorporated herein by reference) †
|
10.21
|
|
|
Form of Indemnification Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 15, 2012 and incorporated herein by reference) †
|
21
|
|
|
|
23.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101.1
|
|
|
The following materials from Universal Insurance Holdings, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2018, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements.
|
------------------
|
|
|
|
|
|
† Indicates managment contract or compensatory plan or arrangement.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
Date: March 1, 2019
|
|
By:
|
/s/ Sean P. Downes
|
|
|
|
Sean P. Downes, Chief Executive Officer and Principal Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ Frank C. Wilcox
|
|
|
|
Frank C. Wilcox, Chief Financial Officer and Principal Accounting Officer
|
/s/ Sean P. Downes
|
|
Chief Executive Officer and Director (Principal
|
|
March 1, 2019
|
Sean P. Downes
|
|
Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jon W. Springer
|
|
President, Chief Risk Officer and Director
|
|
March 1, 2019
|
Jon W. Springer
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Donaghy
|
|
Chief Operating Officer and Secretary
|
|
March 1, 2019
|
Stephen J. Donaghy
|
|
|
|
|
|
|
|
|
|
/s/ Frank C. Wilcox
|
|
Chief Financial Officer (Principal Accounting Officer)
|
|
March 1, 2019
|
Frank C. Wilcox
|
|
|
|
|
|
|
|
|
|
/s/ Kimberly D. Campos
|
|
Chief Information Officer, Chief Administrative Officer and
|
|
March 1, 2019
|
Kimberly D. Campos
|
|
Director
|
|
|
|
|
|
|
|
/s/ Scott P. Callahan
|
|
Director
|
|
March 1, 2019
|
Scott P. Callahan
|
|
|
|
|
|
|
|
|
|
/s/ Ralph J. Palmieri
|
|
Director
|
|
March 1, 2019
|
Ralph J. Palmieri
|
|
|
|
|
|
|
|
|
|
/s/ Richard D. Peterson
|
|
Director
|
|
March 1, 2019
|
Richard D. Peterson
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Pietrangelo
|
|
Director
|
|
March 1, 2019
|
Michael A. Pietrangelo
|
|
|
|
|
|
|
|
|
|
/s/ Ozzie A. Schindler
|
|
Director
|
|
March 1, 2019
|
Ozzie A. Schindler
|
|
|
|
|
|
|
|
|
|
/s/ Joel M. Wilentz
|
|
Director
|
|
March 1, 2019
|
Joel M. Wilentz
|
|
|
|
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
91,374
|
|
|
$
|
67,509
|
|
Investments in subsidiaries and undistributed earnings
|
|
401,296
|
|
|
359,847
|
|
||
Available-for-sale debt securities, at fair value
|
|
2,986
|
|
|
3,111
|
|
||
Equity securities, at fair value
|
|
2,626
|
|
|
5,238
|
|
||
Income taxes recoverable
|
|
11,136
|
|
|
9,472
|
|
||
Deferred income taxes
|
|
6,512
|
|
|
9,286
|
|
||
Other assets
|
|
261
|
|
|
431
|
|
||
Total assets
|
|
$
|
516,191
|
|
|
$
|
454,894
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
29
|
|
|
$
|
4
|
|
Dividends payable
|
|
77
|
|
|
40
|
|
||
Other accrued expenses
|
|
14,001
|
|
|
14,862
|
|
||
Total liabilities
|
|
14,107
|
|
|
14,906
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
||||
Cumulative convertible preferred stock, $.01 par value
|
|
—
|
|
|
—
|
|
||
Authorized shares - 1,000
|
|
|
|
|
||||
Issued shares - 10 and 10
|
|
|
|
|
||||
Outstanding shares - 10 and 10
|
|
|
|
|
||||
Minimum liquidation preference - $9.99 and $9.99 per share
|
|
|
|
|
||||
Common stock, $.01 par value
|
|
465
|
|
|
458
|
|
||
Authorized shares - 55,000
|
|
|
|
|
||||
Issued shares - 46,514 and 45,778
|
|
|
|
|
||||
Outstanding shares - 34,783 and 34,735
|
|
|
|
|
||||
Treasury shares, at cost - 11,731 and 11,043
|
|
(130,399
|
)
|
|
(105,123
|
)
|
||
Additional paid-in capital
|
|
86,353
|
|
|
86,186
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
(8,010
|
)
|
|
(6,281
|
)
|
||
Retained earnings
|
|
553,675
|
|
|
464,748
|
|
||
Total stockholders’ equity
|
|
502,084
|
|
|
439,988
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
516,191
|
|
|
$
|
454,894
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
REVENUES
|
|
|
|
|
|
|
||||||
Net investment income (expense)
|
|
$
|
1,635
|
|
|
$
|
259
|
|
|
$
|
(35
|
)
|
Net realized gains (losses) on sale of securities
|
|
—
|
|
|
255
|
|
|
667
|
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
(2,648
|
)
|
|
—
|
|
|
—
|
|
|||
Management fee
|
|
157
|
|
|
151
|
|
|
138
|
|
|||
Other revenue
|
|
—
|
|
|
12
|
|
|
80
|
|
|||
Total revenues
|
|
(856
|
)
|
|
677
|
|
|
850
|
|
|||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
32,063
|
|
|
30,819
|
|
|
35,342
|
|
|||
Total operating cost and expenses
|
|
32,063
|
|
|
30,819
|
|
|
35,342
|
|
|||
LOSS BEFORE INCOME TAXES AND EQUITY IN NET
EARNINGS OF SUBSIDIARIES
|
|
(32,919
|
)
|
|
(30,142
|
)
|
|
(34,492
|
)
|
|||
Benefit from income taxes
|
|
(10,434
|
)
|
|
(18,296
|
)
|
|
(12,055
|
)
|
|||
LOSS BEFORE EQUITY IN NET EARNINGS OF
SUBSIDIARIES
|
|
(22,485
|
)
|
|
(11,846
|
)
|
|
(22,437
|
)
|
|||
Equity in net income of subsidiaries
|
|
139,987
|
|
|
118,781
|
|
|
121,847
|
|
|||
CONSOLIDATED NET INCOME
|
|
$
|
117,502
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
117,502
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
||||||
Equity in net income of subsidiaries
|
|
(139,987
|
)
|
|
(118,781
|
)
|
|
(121,847
|
)
|
|||
Distribution of income from subsidiaries
|
|
96,561
|
|
|
122,156
|
|
|
46,914
|
|
|||
Depreciation
|
|
11
|
|
|
3
|
|
|
2
|
|
|||
Amortization of share-based compensation
|
|
12,786
|
|
|
10,515
|
|
|
10,288
|
|
|||
Amortization of original issue discount on debt
|
|
—
|
|
|
10
|
|
|
149
|
|
|||
Accretion of deferred credit
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|||
Net realized (gains) losses on sale of securities
|
|
—
|
|
|
(255
|
)
|
|
(667
|
)
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
2,648
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
|
115
|
|
|
1,309
|
|
|
4,724
|
|
|||
Excess tax (benefits) shortfall from share-based compensation
|
|
(5,427
|
)
|
|
(5,793
|
)
|
|
1,154
|
|
|||
Issuance of common stock
|
|
—
|
|
|
634
|
|
|
—
|
|
|||
Net changes in assets and liabilities relating to operating activities:
|
|
|
|
|
|
|
||||||
Income taxes recoverable
|
|
3,763
|
|
|
(417
|
)
|
|
1,004
|
|
|||
Other operating assets and liabilities
|
|
169
|
|
|
574
|
|
|
(596
|
)
|
|||
Other liabilities and accrued expenses
|
|
(835
|
)
|
|
778
|
|
|
(2,896
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
87,306
|
|
|
117,668
|
|
|
37,490
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of equity securities
|
|
(35
|
)
|
|
(4,990
|
)
|
|
(2,037
|
)
|
|||
Purchase of available-for-sale debt securities
|
|
—
|
|
|
(3,000
|
)
|
|
(3,000
|
)
|
|||
Proceeds from sales of equity securities
|
|
—
|
|
|
3,255
|
|
|
2,456
|
|
|||
Proceeds from sales of available-for-sale debt securities
|
|
—
|
|
|
—
|
|
|
3,229
|
|
|||
Net cash provided by (used in) investing activities
|
|
(35
|
)
|
|
(4,735
|
)
|
|
648
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Repayment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Preferred stock dividend
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Common stock dividend
|
|
(25,508
|
)
|
|
(24,001
|
)
|
|
(24,192
|
)
|
|||
Issuance of common stock for stock option exercises
|
|
102
|
|
|
—
|
|
|
119
|
|
|||
Purchase of treasury stock
|
|
(25,276
|
)
|
|
(18,141
|
)
|
|
(8,510
|
)
|
|||
Sale of treasury stock
|
|
—
|
|
|
—
|
|
|
2,965
|
|
|||
Payments related to tax withholding for share-based compensation
|
|
(12,714
|
)
|
|
(7,223
|
)
|
|
(5,451
|
)
|
|||
Excess tax benefits (shortfall) from share-based compensation
|
|
—
|
|
|
—
|
|
|
(1,154
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(63,406
|
)
|
|
(49,375
|
)
|
|
(36,233
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
23,865
|
|
|
63,558
|
|
|
1,905
|
|
|||
Cash and cash equivalents at beginning of period
|
|
67,509
|
|
|
3,951
|
|
|
2,046
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
91,374
|
|
|
$
|
67,509
|
|
|
$
|
3,951
|
|
|
|
|
|
Additions
|
|
|
|
|
|||||||||
|
|
Beginning
Balance
|
|
Charges to
Earnings
|
|
Charges to
Other
Accounts
|
|
Deductions
|
|
Ending
Balance
|
|||||||
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
|
$
|
680
|
|
|
470
|
|
|
—
|
|
|
439
|
|
|
$
|
711
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
|
$
|
527
|
|
|
505
|
|
|
—
|
|
|
352
|
|
|
$
|
680
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
|
$
|
344
|
|
|
397
|
|
|
—
|
|
|
214
|
|
|
$
|
527
|
|
|
|
As of
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31,
|
|
For the Year Ended December 31,
|
||||||||||||||||
|
|
Reserves
for Unpaid
Losses and
LAE
|
|
Incurred
Loss and
LAE Current
Year
|
|
Incurred
Loss and
LAE Prior
Years
|
|
Paid Losses
and LAE
|
|
Net
Investment
Income
|
||||||||||
2018
|
|
$
|
472,829
|
|
|
$
|
314,933
|
|
|
$
|
99,522
|
|
|
$
|
401,011
|
|
|
$
|
24,816
|
|
2017
|
|
$
|
248,425
|
|
|
$
|
322,929
|
|
|
$
|
27,499
|
|
|
$
|
342,796
|
|
|
$
|
13,460
|
|
2016
|
|
$
|
58,494
|
|
|
$
|
305,919
|
|
|
$
|
(4,690
|
)
|
|
$
|
328,141
|
|
|
$
|
9,540
|
|
|
|
As of
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31,
|
|
For the Year Ended December 31,
|
||||||||||||||||
|
|
Deferred
Policy
Acquisition
Cost (“DPAC”)
|
|
Amortization
of DPAC, Net
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|
Unearned
Premiums
|
||||||||||
2018
|
|
$
|
84,686
|
|
|
$
|
(163,187
|
)
|
|
$
|
827,674
|
|
|
$
|
768,382
|
|
|
$
|
601,679
|
|
2017
|
|
$
|
73,059
|
|
|
$
|
(136,702
|
)
|
|
$
|
737,060
|
|
|
$
|
688,793
|
|
|
$
|
532,444
|
|
2016
|
|
$
|
64,912
|
|
|
$
|
(125,350
|
)
|
|
$
|
656,094
|
|
|
$
|
632,416
|
|
|
$
|
475,756
|
|
Optionee:
|
Type of Option: Non-Qualified Stock Option
|
Exercise Price per Share:
|
Date of Grant:
|
Total Number of Shares:
|
Expiration Date/Time:
|
Participant:
|
Performance Year:
|
Date of Grant:
|
Number of PSUs:
|
1.
|
Coastal Homeowners Insurance Specialists, Inc. (Florida)
|
2.
|
Tigerquote.com Insurance Solutions of Ohio, Inc. (Ohio)
|
3.
|
Tigerquote.com Insurance Solutions of Pennsylvania, Inc. (Pennsylvania)
|
4.
|
Universal Adjusting Corporation (d/b/a Alder Adjusting Corporation)(Florida)
|
5.
|
Assurance Systems, Inc. (Florida)
|
6.
|
Universal Inspection Corporation (d/b/a Wicklow Inspection Corporation)(Florida)
|
7.
|
Protection Solutions, Inc. (Florida)
|
8.
|
Universal Property & Casualty Insurance Company (Florida)
|
9.
|
Evolution Risk Advisors, Inc. (Florida)
|
10.
|
Oak90 Capital, Inc. (Florida)
|
11.
|
Grand Palm Development Group, Inc. (Florida)
|
12.
|
Atlas Premium Finance Company (Florida)
|
13.
|
Blue Atlantic Reinsurance Corporation (Florida)
|
14.
|
American Platinum Property and Casualty Insurance Company) (Florida)
|
15.
|
Universal Logistics Corporation (Florida)
|
16.
|
Financial & Insurance Management Resources, Inc. (Florida)
|
17.
|
Universal Protection Plans, Inc. (Florida)
|
18.
|
Universal Real Estate Bella Villaggio, LLC
|
19.
|
URE 224 Inlet Way, LLC
|
20.
|
Core Risk Solutions, Inc.
|
21.
|
Clovered, Inc.
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2018 of Universal Insurance Holdings, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: March 1, 2019
|
|
/s/ Sean P. Downes
|
|
|
Sean P. Downes
Chief Executive Officer and Principal Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2018 of Universal Insurance Holdings, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: March 1, 2019
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/s/ Frank C. Wilcox
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Frank C. Wilcox
Chief Financial Officer and Principal Accounting Officer
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1
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
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Date: March 1, 2019
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By:
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/s/ Sean P. Downes
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Name: Sean P. Downes
Title: Chief Executive Officer and Principal Executive Officer
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Date: March 1, 2019
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By:
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/s/ Frank C. Wilcox
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Name: Frank C. Wilcox
Title: Chief Financial Officer and Principal Accounting Officer
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