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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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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.01 Par Value
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UVE
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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 4.1
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Exhibit 10.9
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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.
|
BUSINESS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the availability of sufficient and reliable data;
|
•
|
regulatory review periods or delays in approving filed rate changes or our failure to gain regulatory approval;
|
•
|
the uncertainties that inherently underlie estimates and assumptions;
|
•
|
the ability to anticipate unforeseen adverse market trends or other emerging costs in the rate making process;
|
•
|
changes in legal standards, claim resolution practices and restoration costs; and
|
•
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legislatively imposed consumer initiatives.
|
•
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engaging in rigorous underwriting;
|
•
|
carefully evaluating terms and conditions of our policies and binding guidelines; and
|
•
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ceding risk to reinsurers.
|
•
|
the accuracy of our adjusters as they make their assessments and submit their estimates of damages;
|
•
|
the training, background and experience of our claims representatives;
|
•
|
the ability of our claims professionals to ensure consistent claims handling;
|
•
|
the ability of our claims professionals to translate the information provided by adjusters into acceptable claims resolutions; and
|
•
|
the ability of our claims professionals to maintain and update our 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
|
ITEM 3.
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LEGAL PROCEEDINGS
|
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
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2019
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||||||||||
Universal Insurance Holdings, Inc.
|
|
$
|
116.49
|
|
|
$
|
147.39
|
|
|
$
|
146.09
|
|
|
$
|
206.63
|
|
|
$
|
156.55
|
|
S&P 500 Index
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
|||||
Russell 2000 Index
|
|
95.59
|
|
|
115.95
|
|
|
132.94
|
|
|
118.30
|
|
|
148.49
|
|
|||||
S&P Insurance Select Industry Index
|
|
106.38
|
|
|
129.59
|
|
|
146.81
|
|
|
138.64
|
|
|
176.97
|
|
|
|
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)
|
|||||
10/1/2019 - 10/31/2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
11/1/2019 - 11/30/2019
|
|
417,316
|
|
|
$
|
28.77
|
|
|
417,316
|
|
|
—
|
|
12/1/2019 - 12/31/2019
|
|
150,000
|
|
|
$
|
28.20
|
|
|
150,000
|
|
|
1,012,473
|
|
Total for the three months ended December 31, 2019
|
|
567,316
|
|
|
$
|
28.62
|
|
|
567,316
|
|
|
1,012,473
|
|
(1)
|
Average price paid per share does not reflect brokerage commissions paid to acquire shares in open market transactions.
|
(2)
|
Number of shares was calculated using a closing price at December 31, 2019 of $27.99 per share.
|
•
|
On December 12, 2018, we announced that our Board of Directors authorized the repurchase of up to $20 million of outstanding shares of our common stock through May 31, 2020 (the “May 2020 Share Repurchase Program”), pursuant to which we repurchased 606,342 shares of our common stock at an aggregate price of $20.0 million. We completed the May 2020 Share Repurchase Program in May 2019.
|
•
|
On May 6, 2019, we announced that our Board of Directors authorized the repurchase up to $40 million of outstanding shares of our common stock through December 31, 2020 (the “December 2020 Share Repurchase Program”), pursuant to which we repurchased 1,466,575 shares of our common stock at an aggregate price of $40 million. We completed the December 2020 Share Repurchase Program in November 2019.
|
•
|
On November 6, 2019, we announced that our Board of Directors authorized the repurchase of up to $40 million of outstanding shares of our common stock through December 31, 2021 (the “December 2021 Share Repurchase Program”). Under the December 2021 Share Repurchase Program, we repurchased 403,142 shares of our common stock from November 2019 through December 2019 at an aggregate cost of approximately $11.7 million.
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ITEM 6.
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SELECTED FINANCIAL DATA
|
|
|
Years Ended December 31,
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||||||||||||||||||
|
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2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
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|
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||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct premiums written
|
|
$
|
1,292,721
|
|
|
$
|
1,190,875
|
|
|
$
|
1,055,886
|
|
|
$
|
954,617
|
|
|
$
|
883,409
|
|
Change in unearned premium
|
|
(59,600
|
)
|
|
(69,235
|
)
|
|
(56,688
|
)
|
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(33,390
|
)
|
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(46,617
|
)
|
|||||
Direct premium earned
|
|
1,233,121
|
|
|
1,121,640
|
|
|
999,198
|
|
|
921,227
|
|
|
836,792
|
|
|||||
Ceded premium earned
|
|
(390,619
|
)
|
|
(353,258
|
)
|
|
(310,405
|
)
|
|
(288,811
|
)
|
|
(332,793
|
)
|
|||||
Premiums earned, net
|
|
842,502
|
|
|
768,382
|
|
|
688,793
|
|
|
632,416
|
|
|
503,999
|
|
|||||
Net investment income (1)
|
|
30,743
|
|
|
24,816
|
|
|
13,460
|
|
|
9,540
|
|
|
5,155
|
|
|||||
Other revenues (2)
|
|
55,633
|
|
|
49,876
|
|
|
47,093
|
|
|
41,039
|
|
|
36,330
|
|
|||||
Total revenue
|
|
939,351
|
|
|
823,816
|
|
|
751,916
|
|
|
685,289
|
|
|
546,544
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and loss adjustment expenses
|
|
603,406
|
|
|
414,455
|
|
|
350,428
|
|
|
301,229
|
|
|
187,739
|
|
|||||
Policy acquisition costs
|
|
177,530
|
|
|
157,327
|
|
|
138,846
|
|
|
125,979
|
|
|
88,218
|
|
|||||
Other operating costs
|
|
94,898
|
|
|
99,161
|
|
|
92,158
|
|
|
95,198
|
|
|
95,564
|
|
|||||
Total expenses
|
|
875,834
|
|
|
670,943
|
|
|
581,432
|
|
|
522,406
|
|
|
371,521
|
|
|||||
Income before income taxes
|
|
63,517
|
|
|
152,873
|
|
|
170,484
|
|
|
162,883
|
|
|
175,023
|
|
|||||
Income tax expense
|
|
17,003
|
|
|
35,822
|
|
|
63,549
|
|
|
63,473
|
|
|
68,539
|
|
|||||
Net income
|
|
$
|
46,514
|
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
|
$
|
99,410
|
|
|
$
|
106,484
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
|
$
|
1.37
|
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
|
$
|
2.85
|
|
|
$
|
3.06
|
|
Diluted earnings per common share
|
|
$
|
1.36
|
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
|
$
|
2.79
|
|
|
$
|
2.97
|
|
Dividends declared per common share
|
|
$
|
0.77
|
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total invested assets
|
|
$
|
914,586
|
|
|
$
|
908,154
|
|
|
$
|
730,023
|
|
|
$
|
651,601
|
|
|
$
|
489,435
|
|
Cash and cash equivalents
|
|
182,109
|
|
|
166,428
|
|
|
213,486
|
|
|
105,730
|
|
|
197,014
|
|
|||||
Total assets
|
|
1,719,852
|
|
|
1,858,390
|
|
|
1,454,999
|
|
|
1,060,007
|
|
|
993,548
|
|
|||||
Unpaid losses and loss adjustment expenses
|
|
267,760
|
|
|
472,829
|
|
|
248,425
|
|
|
58,494
|
|
|
98,840
|
|
|||||
Unearned premiums
|
|
661,279
|
|
|
601,679
|
|
|
532,444
|
|
|
475,756
|
|
|
442,366
|
|
|||||
Long-term debt
|
|
9,926
|
|
|
11,397
|
|
|
12,868
|
|
|
15,028
|
|
|
24,050
|
|
|||||
Total liabilities
|
|
1,225,951
|
|
|
1,356,757
|
|
|
1,015,011
|
|
|
688,817
|
|
|
700,456
|
|
|||||
Total stockholders’ equity
|
|
$
|
493,901
|
|
|
$
|
501,633
|
|
|
$
|
439,988
|
|
|
$
|
371,190
|
|
|
$
|
293,092
|
|
Shares outstanding end of period
|
|
32,638
|
|
|
34,783
|
|
|
34,735
|
|
|
35,052
|
|
|
35,110
|
|
|||||
Book value per share
|
|
$
|
15.13
|
|
|
$
|
14.42
|
|
|
$
|
12.67
|
|
|
$
|
10.59
|
|
|
$
|
8.35
|
|
Return on average equity (ROE)
|
|
9.2
|
%
|
|
24.1
|
%
|
|
25.7
|
%
|
|
29.4
|
%
|
|
41.8
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selected Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expense ratio (3)
|
|
71.6
|
%
|
|
53.9
|
%
|
|
50.9
|
%
|
|
47.6
|
%
|
|
37.2
|
%
|
|||||
General and administrative expense ratio (4)
|
|
32.3
|
%
|
|
33.4
|
%
|
|
33.5
|
%
|
|
34.9
|
%
|
|
36.3
|
%
|
|||||
Combined Ratio (5)
|
|
103.9
|
%
|
|
87.3
|
%
|
|
84.4
|
%
|
|
82.5
|
%
|
|
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 $248 thousand, $346 thousand, $348 thousand, $421 thousand and $963 thousand for the years ended December 31, 2019, 2018, 2017, 2016 and 2015, 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, 2019
|
|
December 31, 2018
|
|
|
|
|
|||||||||||||
State
|
|
Direct Premiums Written
|
|
%
|
|
Direct Premiums Written
|
|
%
|
|
$
|
|
%
|
|||||||||
Florida
|
|
$
|
1,066,112
|
|
|
82.5
|
%
|
|
$
|
1,013,290
|
|
|
85.1
|
%
|
|
$
|
52,822
|
|
|
5.2
|
%
|
Other states
|
|
226,609
|
|
|
17.5
|
%
|
|
177,585
|
|
|
14.9
|
%
|
|
49,024
|
|
|
27.6
|
%
|
|||
Grand total
|
|
$
|
1,292,721
|
|
|
100.0
|
%
|
|
$
|
1,190,875
|
|
|
100.0
|
%
|
|
$
|
101,846
|
|
|
8.6
|
%
|
|
|
As of December 31, 2019
|
||||||||||||||||||
|
|
|
|
|
|
Premium
|
|
|
|
Total Insured
|
|
|
||||||||
County
|
|
Policy Count
|
|
%
|
|
In Force
|
|
%
|
|
Value
|
|
%
|
||||||||
South Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Broward
|
|
104,535
|
|
|
15.8
|
%
|
|
$
|
227,526
|
|
|
21.3
|
%
|
|
$
|
27,799,324
|
|
|
16.9
|
%
|
Miami-Dade
|
|
95,904
|
|
|
14.5
|
%
|
|
208,466
|
|
|
19.5
|
%
|
|
21,671,891
|
|
|
13.1
|
%
|
||
Palm Beach
|
|
88,590
|
|
|
13.3
|
%
|
|
175,956
|
|
|
16.4
|
%
|
|
25,326,196
|
|
|
15.4
|
%
|
||
South Florida exposure
|
|
289,029
|
|
|
43.6
|
%
|
|
611,948
|
|
|
57.2
|
%
|
|
74,797,411
|
|
|
45.4
|
%
|
||
Other significant* Florida counties
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pinellas
|
|
44,940
|
|
|
6.8
|
%
|
|
51,162
|
|
|
4.8
|
%
|
|
8,726,553
|
|
|
5.3
|
%
|
||
Hillsborough
|
|
27,998
|
|
|
4.2
|
%
|
|
36,248
|
|
|
3.4
|
%
|
|
7,050,687
|
|
|
4.3
|
%
|
||
Pasco
|
|
25,506
|
|
|
3.9
|
%
|
|
29,742
|
|
|
2.8
|
%
|
|
8,585,067
|
|
|
5.2
|
%
|
||
Escambia
|
|
18,622
|
|
|
2.8
|
%
|
|
29,404
|
|
|
2.7
|
%
|
|
5,754,391
|
|
|
3.5
|
%
|
||
Collier
|
|
21,239
|
|
|
3.2
|
%
|
|
26,522
|
|
|
2.5
|
%
|
|
3,696,519
|
|
|
2.2
|
%
|
||
Total other significant* counties
|
|
138,305
|
|
|
20.9
|
%
|
|
173,078
|
|
|
16.2
|
%
|
|
33,813,217
|
|
|
20.5
|
%
|
||
|
|
|
|
|
|
Premium
|
|
|
|
Total Insured
|
|
|
||||||||
Summary for all of Florida
|
|
Policy Count
|
|
%
|
|
In Force
|
|
%
|
|
Value
|
|
%
|
||||||||
South Florida exposure
|
|
289,029
|
|
|
43.6
|
%
|
|
611,948
|
|
|
57.2
|
%
|
|
74,797,411
|
|
|
45.4
|
%
|
||
Total other significant* counties
|
|
138,305
|
|
|
20.9
|
%
|
|
173,078
|
|
|
16.2
|
%
|
|
33,813,217
|
|
|
20.5
|
%
|
||
Other Florida counties
|
|
235,009
|
|
|
35.5
|
%
|
|
285,008
|
|
|
26.6
|
%
|
|
56,044,220
|
|
|
34.1
|
%
|
||
Total Florida
|
|
662,343
|
|
|
100.0
|
%
|
|
$
|
1,070,034
|
|
|
100.0
|
%
|
|
$
|
164,654,848
|
|
|
100.0
|
%
|
*
|
Significant counties are defined as greater than 2.5% of total premium in force as of December 31, 2019.
|
|
|
As of December 31, 2019
|
||||||||||||||||||
|
|
|
|
|
|
Premium
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
In Force
|
|
%
|
|
Value
|
|
%
|
||||||||
Florida
|
|
662,343
|
|
|
74.6
|
%
|
|
$
|
1,070,034
|
|
|
82.5
|
%
|
|
$
|
164,654,848
|
|
|
64.3
|
%
|
Georgia
|
|
42,637
|
|
|
4.8
|
%
|
|
49,615
|
|
|
3.8
|
%
|
|
17,536,031
|
|
|
6.9
|
%
|
||
North Carolina
|
|
58,283
|
|
|
6.6
|
%
|
|
49,420
|
|
|
3.8
|
%
|
|
19,150,001
|
|
|
7.5
|
%
|
||
Massachusetts
|
|
13,596
|
|
|
1.5
|
%
|
|
17,991
|
|
|
1.4
|
%
|
|
8,312,929
|
|
|
3.2
|
%
|
||
Indiana
|
|
18,291
|
|
|
2.1
|
%
|
|
16,643
|
|
|
1.3
|
%
|
|
6,458,310
|
|
|
2.5
|
%
|
||
Minnesota
|
|
12,466
|
|
|
1.4
|
%
|
|
16,035
|
|
|
1.2
|
%
|
|
5,881,338
|
|
|
2.3
|
%
|
||
South Carolina
|
|
16,682
|
|
|
1.9
|
%
|
|
15,705
|
|
|
1.2
|
%
|
|
5,575,934
|
|
|
2.2
|
%
|
||
Virginia
|
|
16,313
|
|
|
1.8
|
%
|
|
14,111
|
|
|
1.1
|
%
|
|
8,415,470
|
|
|
3.3
|
%
|
||
Pennsylvania
|
|
16,874
|
|
|
1.9
|
%
|
|
13,726
|
|
|
1.1
|
%
|
|
6,922,815
|
|
|
2.7
|
%
|
||
Alabama
|
|
11,186
|
|
|
1.3
|
%
|
|
12,998
|
|
|
1.0
|
%
|
|
3,923,446
|
|
|
1.5
|
%
|
||
New Jersey
|
|
7,145
|
|
|
0.8
|
%
|
|
7,554
|
|
|
0.6
|
%
|
|
3,824,506
|
|
|
1.5
|
%
|
||
Michigan
|
|
3,417
|
|
|
0.4
|
%
|
|
4,089
|
|
|
0.3
|
%
|
|
1,399,470
|
|
|
0.5
|
%
|
||
Maryland
|
|
4,181
|
|
|
0.5
|
%
|
|
3,474
|
|
|
0.3
|
%
|
|
1,600,113
|
|
|
0.6
|
%
|
||
Hawaii
|
|
2,090
|
|
|
0.2
|
%
|
|
1,930
|
|
|
0.2
|
%
|
|
881,476
|
|
|
0.3
|
%
|
||
Delaware
|
|
1,273
|
|
|
0.1
|
%
|
|
1,500
|
|
|
0.1
|
%
|
|
673,331
|
|
|
0.3
|
%
|
||
New York
|
|
1,183
|
|
|
0.1
|
%
|
|
1,244
|
|
|
0.1
|
%
|
|
646,130
|
|
|
0.3
|
%
|
||
New Hampshire
|
|
249
|
|
|
—
|
%
|
|
181
|
|
|
—
|
%
|
|
135,254
|
|
|
0.1
|
%
|
||
Illinois
|
|
152
|
|
|
—
|
%
|
|
166
|
|
|
—
|
%
|
|
65,006
|
|
|
—
|
%
|
||
Total
|
|
888,361
|
|
|
100.0
|
%
|
|
$
|
1,296,416
|
|
|
100.0
|
%
|
|
$
|
256,056,408
|
|
|
100.0
|
%
|
|
|
As of December 31, 2018
|
||||||||||||||||||
|
|
|
|
|
|
Premium
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
In Force
|
|
%
|
|
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
|
|
|
—
|
%
|
|
86
|
|
|
—
|
%
|
|
62,436
|
|
|
—
|
%
|
||
Total
|
|
828,653
|
|
|
100.0
|
%
|
|
$
|
1,193,019
|
|
|
100.0
|
%
|
|
$
|
228,707,022
|
|
|
100.0
|
%
|
|
|
As of December 31, 2017
|
||||||||||||||||||
|
|
|
|
|
|
Premium
|
|
|
|
Total Insured
|
|
|
||||||||
State
|
|
Policy Count
|
|
%
|
|
In Force
|
|
%
|
|
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
|
|
|
—
|
%
|
|
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
|
|
|
—
|
%
|
|
400,076
|
|
|
0.2
|
%
|
||
New York
|
|
54
|
|
|
—
|
%
|
|
52
|
|
|
—
|
%
|
|
27,191
|
|
|
—
|
%
|
||
Total
|
|
764,518
|
|
|
100.0
|
%
|
|
$
|
1,057,602
|
|
|
100.0
|
%
|
|
$
|
198,397,010
|
|
|
100.0
|
%
|
•
|
First event All States retention of $43 million; First event Non-Florida retention of $10 million.
|
•
|
All States first event tower expanded to $3.34 billion, an increase of $170 million over the final 2018-2019 program.
|
•
|
Assuming a first event completely exhausts the $3.34 billion tower, the second event exhaustion point would be $1.3 billion, an increase of $262 million over the final 2018-2019 program on the same assumptions.
|
•
|
Full reinstatement available for all private market first event catastrophe layers for guaranteed second event coverage. For all layers purchased below the FHCF, to the extent that all coverage or a portion thereof is exhausted in a catastrophic event and reinstatement premium is due, UPCIC has purchased reinstatement premium protection (“RPP”) to pay the premium necessary for the reinstatement of these coverages.
|
•
|
Private market reinsurance coverage continues to be structured into layers. This structure utilizes a cascading feature such that any layers above a $111 million attachment point are excess of loss over the immediately preceding layer. If the aggregate limit of the preceding layer is exhausted, the next layer cascades down in its place for future events.
|
•
|
Specific 3rd and 4th event private market catastrophe excess of loss coverage of $76 million in excess of $35 million provides robust frequency protection for a multiple event storm season.
|
•
|
For the FHCF Reimbursement Contracts effective June 1, 2019, UPCIC has continued the election of the 90% coverage level. The total mandatory FHCF layer is estimated to provide approximately $2.038 billion of coverage for UPCIC, which inures to the benefit of the open market coverage secured from private reinsurers.
|
Reinsurer
|
|
A.M. Best
|
|
S&P
|
Allianz Risk Transfer
|
|
A+
|
|
AA-
|
Arch Reinsurance Limited
|
|
A+
|
|
A+
|
Chubb Tempest Reinsurance Ltd.
|
|
A++
|
|
AA
|
Everest Reinsurance Company
|
|
A+
|
|
A+
|
Munich Re
|
|
A+
|
|
AA-
|
Renaissance Re
|
|
A+
|
|
A+
|
Various Lloyd’s of London Syndicates
|
|
A
|
|
A+
|
Florida Hurricane Catastrophe Fund
|
|
N/A
|
|
N/A
|
•
|
First event All States retention of $2 million.
|
•
|
All States first event tower of $30.7 million.
|
•
|
Full reinstatement available for all private market first event catastrophe layers for guaranteed second event coverage. For the layer purchased below the FHCF, to the extent that all coverage or a portion thereof is exhausted in a catastrophic event and reinstatement premium is due, APPCIC has purchased RPP to pay the premium necessary for the reinstatement of this coverage.
|
•
|
Private market reinsurance coverage continues to be structured into layers. This structure utilizes a cascading feature such that any layers above the $2 million attachment point are excess of loss over the immediately preceding layer. If the aggregate limit of the preceding layer is exhausted, the next layer cascades down in its place for future events.
|
•
|
APPCIC also purchases extensive multiple line excess per risk reinsurance with various reinsurers due to the high-value risks it insures in both the personal residential and commercial multiple peril lines of business. Under this multiple line excess per risk contract, APPCIC has coverage of $8.5 million in excess of $500 thousand ultimate net loss for each risk and each property loss, and $1 million in excess of $0.3 million for each casualty loss. A $19.5 million aggregate limit applies to the term of the contract for property-related losses and a $2.0 million aggregate limit applies to the term of the contract for casualty-related losses. This contract also contains a profit-sharing feature if specific performance measures are met.
|
•
|
For the FHCF Reimbursement Contracts effective June 1, 2019, APPCIC has continued the election of the 90% coverage level. The total mandatory FHCF layer is estimated to provide approximately $14.8 million of coverage for APPCIC, which inures to the benefit of the open market coverage secured from private reinsurers.
|
Reinsurer
|
|
A.M. Best
|
|
S&P
|
Everest Reinsurance Company
|
|
A+
|
|
A+
|
Chubb Tempest Reinsurance Ltd.
|
|
A++
|
|
AA
|
Various Lloyd’s of London Syndicates
|
|
A
|
|
A+
|
•
|
Direct premiums written overall grew by $101.8 million, or 8.6%, to $1,292.7 million.
|
•
|
In Florida, direct premiums written grew by $52.8 million, or 5.2%, and in our Other States, direct premiums written grew by $49.0 million, or 27.6%.
|
•
|
Premiums earned, net grew by $74.1 million, or 9.6%, to $842.5 million.
|
•
|
Total revenues increased by $115.5 million, or 14.0%, to $939.4 million.
|
•
|
Net loss ratio was 71.6% as compared to 53.9%, driven by the factors outlined below.
|
•
|
Expense ratio improved to 32.3% from 33.4%.
|
•
|
Net income decreased by $70.5 million, or 60.3%, to $46.5 million.
|
•
|
Diluted earnings per share (“EPS”) decreased by $1.91, or 58.4%, to $1.36 per common share.
|
•
|
Weighted average diluted common shares outstanding were lower by 4.3% to 34.2 million shares at December 31, 2019 from 35.8 million shares at December 31, 2018.
|
•
|
Book value per share increased by $0.71, or 4.9%, to $15.13 at December 31, 2019 from $14.42 at December 31, 2018.
|
•
|
Declared and paid dividends per common share of $0.77, including a $0.13 special dividend in December 2019.
|
•
|
Repurchased 2,337,825 shares in 2019 at an aggregate cost of $66.2 million.
|
•
|
Offered Universal DirectSM in all 18 states in which the Company writes policies as of December 31, 2019.
|
•
|
UPCIC commenced writing homeowners policies in Illinois.
|
|
|
For The Year Ended December 31, 2019
|
|||||||||||||||||||
|
|
Direct
|
|
Loss Ratio
|
|
Ceded
|
|
Loss Ratio
|
|
Net
|
|
Loss Ratio
|
|||||||||
Premiums earned
|
|
$
|
1,233,121
|
|
|
|
|
$
|
390,619
|
|
|
|
|
$
|
842,502
|
|
|
|
|||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weather events*
|
|
$
|
45,562
|
|
|
3.7
|
%
|
|
$
|
6,912
|
|
|
1.8
|
%
|
|
$
|
38,650
|
|
|
4.6
|
%
|
Prior year adverse/(favorable) reserve development
|
|
562,303
|
|
|
45.6
|
%
|
|
474,235
|
|
|
121.4
|
%
|
|
88,068
|
|
|
10.4
|
%
|
|||
All other losses and loss adjustment expenses
|
|
476,739
|
|
|
38.7
|
%
|
|
51
|
|
|
—
|
%
|
|
476,688
|
|
|
56.6
|
%
|
|||
Total losses and loss adjustment expenses
|
|
$
|
1,084,604
|
|
|
88.0
|
%
|
|
$
|
481,198
|
|
|
123.2
|
%
|
|
$
|
603,406
|
|
|
71.6
|
%
|
|
|
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
|
%
|
•
|
In the Florida market, claims understood to have been satisfactorily resolved and closed are being re-opened, sometimes years later, typically with representation from policyholder representatives or vendors who actively solicit policyholders for the purpose of filing claims.
|
•
|
Both the frequency (number of claims) and severity (cost of a claim) of claims in Florida have risen beyond anticipated levels, largely driven by consumer behavior responding to the industry that has arisen around profiting from such claims. This in turn is facilitated by Florida’s legal climate, including the one-way threat of attorneys’ fees against insurers and the relatively high cost of defending against inflated claims demands in relation to amounts in dispute.
|
•
|
We have reduced our estimate for subrogation recoveries due to changes in the Florida claims and legal environment. Subrogation reduces an insurer’s net losses and results in recoveries of policyholders’ deductibles. Historically, the subrogation process often has resulted in a straightforward apportionment of losses based upon parties’ respective responsibilities. However, adverse conditions and claims-related behaviors in Florida have led to a proliferation of represented claims, claims that are inflated or of questionable merit, and claims that are reported or re-opened well after the purported dates of loss. Losses and LAE patterns associated with these claims differ from historical patterns an from industry norms found in other states. Accordingly, we have reduced our estimate of subrogation recoveries to recognize that conditions in Florida likewise could impact the effectiveness of our subrogation efforts by reducing amounts otherwise owed to us and our policyholders and by increasing our subrogation costs. Losses are recorded, net of estimated subrogation recoveries in the financial statements. Estimated subrogation recoveries totaled $73.0 million at December 31, 2019 compared to $99.0 million at December 31, 2018. During 2019, we reduced our estimate of subrogation recoveries by $40.7 million.
|
•
|
Direct and ceded losses include prior year reserve development on major hurricanes where the settlement of claims and the re-estimation of expected costs for losses and LAE remaining to be settled exceed previously carried reserves. In 2019, for Hurricanes Irma, Florence, Michael and Matthew, we recorded adverse development of $469.9 million of gross losses and $465.4 million of ceded losses resulting in $4.5 million net impact. This compares to only one hurricane having adverse development in 2018 of $513 million of gross losses and $513 million of ceded losses, resulting in zero net losses in 2018 from Hurricane Irma. In addition, we recorded $2.6 million in 2019, compared to $20.7 million in 2018, of contractually based costs for reinstatement premiums as a result of adverse development of ceded losses for Hurricane Irma recorded during 2019 and 2018.
|
|
|
For the Years Ended December 31,
|
|
Change
|
|||||||||||||||||
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||||||
|
|
$
|
|
Ratio
|
|
$
|
|
Ratio
|
|
|
|
|
|||||||||
Premiums earned, net
|
|
$
|
842,502
|
|
|
|
|
$
|
768,382
|
|
|
|
|
$
|
74,120
|
|
|
9.6
|
%
|
||
General and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policy acquisition costs
|
|
177,530
|
|
|
21.1
|
%
|
|
157,327
|
|
|
20.5
|
%
|
|
20,203
|
|
|
12.8
|
%
|
|||
Other operating costs
|
|
94,898
|
|
|
11.2
|
%
|
|
99,161
|
|
|
12.9
|
%
|
|
(4,263
|
)
|
|
(4.3
|
)%
|
|||
Total general and administrative expenses
|
|
$
|
272,428
|
|
|
32.3
|
%
|
|
$
|
256,488
|
|
|
33.4
|
%
|
|
$
|
15,940
|
|
|
6.2
|
%
|
|
|
For the Year Ended December 31, 2018
|
|||||||||||||||||||
|
|
|
|
Loss
|
|
|
|
Loss
|
|
|
|
Loss
|
|||||||||
|
|
Direct
|
|
Ratio
|
|
Ceded
|
|
Ratio
|
|
Net
|
|
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
|
|||||||||||||||||||
|
|
|
|
Loss
|
|
|
|
Loss
|
|
|
|
Loss
|
|||||||||
|
|
Direct
|
|
Ratio
|
|
Ceded
|
|
Ratio
|
|
Net
|
|
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
|
|
|
78.0
|
%
|
|
$
|
428,694
|
|
|
138.1
|
%
|
|
$
|
350,428
|
|
|
50.9
|
%
|
*
|
Includes only weather events beyond expected. Items included in weather events for the year may differ from items included in quarterly reporting.
|
|
|
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
|
%
|
|
|
As of December 31,
|
||||||
Type of Investment
|
|
2019
|
|
2018
|
||||
Available-for-sale debt securities
|
|
$
|
855,284
|
|
|
$
|
820,438
|
|
Equity securities
|
|
43,717
|
|
|
63,277
|
|
||
Investment real estate, net
|
|
15,585
|
|
|
24,439
|
|
||
Total
|
|
$
|
914,586
|
|
|
$
|
908,154
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Stockholders’ equity
|
|
$
|
493,901
|
|
|
$
|
501,633
|
|
Total long-term debt
|
|
9,926
|
|
|
11,397
|
|
||
Total capital
|
|
$
|
503,827
|
|
|
$
|
513,030
|
|
|
|
|
|
|
||||
Debt-to-total capital ratio
|
|
2.0
|
%
|
|
2.2
|
%
|
||
Debt-to-equity ratio
|
|
2.0
|
%
|
|
2.3
|
%
|
|
|
Dividend
|
|
Shareholders
|
|
Dividend
|
|
Cash Dividend
|
||
2019
|
|
Declared Date
|
|
Record Date
|
|
Payable Date
|
|
Per Share Amount
|
||
First Quarter
|
|
January 31, 2019
|
|
March 11, 2019
|
|
March 25, 2019
|
|
$
|
0.16
|
|
Second Quarter
|
|
April 10, 2019
|
|
May 3, 2019
|
|
May 10, 2019
|
|
$
|
0.16
|
|
Third Quarter
|
|
June 5, 2019
|
|
July 3, 2019
|
|
July 17, 2019
|
|
$
|
0.16
|
|
Fourth Quarter
|
|
November 14, 2019
|
|
December 13, 2019
|
|
December 20, 2019
|
|
$
|
0.29
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Unpaid loss and LAE, net
|
|
$
|
54,156
|
|
|
$
|
55,765
|
|
IBNR loss and LAE, net
|
|
90,383
|
|
|
23,699
|
|
||
Total unpaid loss and LAE, net
|
|
$
|
144,539
|
|
|
$
|
79,464
|
|
|
|
|
|
|
||||
Reinsurance recoverable on unpaid loss and LAE
|
|
$
|
9,119
|
|
|
$
|
47,103
|
|
Reinsurance recoverable on IBNR loss and LAE
|
|
114,102
|
|
|
346,262
|
|
||
Total reinsurance recoverable on unpaid loss and LAE
|
|
$
|
123,221
|
|
|
$
|
393,365
|
|
|
|
Years Ended December 31,
|
||||
|
|
2019
|
|
2018
|
||
Loss and LAE Ratio (1)
|
|
|
|
|
||
UPCIC
|
|
72
|
%
|
|
63
|
%
|
APPCIC
|
|
26
|
%
|
|
63
|
%
|
Expense Ratio (1)
|
|
|
|
|
|
|
UPCIC
|
|
36
|
%
|
|
35
|
%
|
APPCIC
|
|
53
|
%
|
|
70
|
%
|
Combined Ratio (1)
|
|
|
|
|
|
|
UPCIC
|
|
108
|
%
|
|
98
|
%
|
APPCIC
|
|
79
|
%
|
|
133
|
%
|
(1)
|
The ratios are net of ceded premiums and losses and LAE, including premiums ceded to our catastrophe reinsurers which comprise a significant cost, and losses and LAE ceded to reinsurers. The expense ratio includes management fees and commissions, which are based on market rates, paid to an affiliate of the Insurance Entities in the amount of $104.6 million and $95.1 million for UPCIC for the years ended December 31, 2019 and 2018, respectively, and $0.6 million for each of the years ended December 31, 2019 and 2018 for APPCIC. The management fees and commissions paid to the affiliate are eliminated in consolidation.
|
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over 5
years
|
||||||||||
Reinsurance payable and multi-year commitments (1)
|
|
$
|
325,743
|
|
|
$
|
122,581
|
|
|
$
|
203,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unpaid losses and LAE, direct (2)
|
|
267,760
|
|
|
163,601
|
|
|
77,918
|
|
|
19,279
|
|
|
6,962
|
|
|||||
Long-term debt
|
|
10,514
|
|
|
1,629
|
|
|
4,738
|
|
|
3,035
|
|
|
1,112
|
|
|||||
Total contractual obligations
|
|
$
|
604,017
|
|
|
$
|
287,811
|
|
|
$
|
285,818
|
|
|
$
|
22,314
|
|
|
$
|
8,074
|
|
(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, 2019. Unpaid losses and LAE are net of estimated subrogation recoveries. In addition, these balances exclude amounts recoverable from our reinsurance program. See “Item 8—Note 4 (Reinsurance).”
|
•
|
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.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Fair Value
|
|
Percent
|
|
Fair Value
|
|
Percent
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||
Common stock
|
|
$
|
2,377
|
|
|
5.4
|
%
|
|
$
|
15,564
|
|
|
24.6
|
%
|
Mutual funds
|
|
41,340
|
|
|
94.6
|
%
|
|
47,713
|
|
|
75.4
|
%
|
||
Total equity securities
|
|
$
|
43,717
|
|
|
100.0
|
%
|
|
$
|
63,277
|
|
|
100.0
|
%
|
Item 8.
|
Financial Statements and supplementary data
|
|
PAGE
|
•
|
Obtaining an understanding, evaluating the design and testing the operating effectiveness of key controls over the process and data used by management to estimate the liability for unpaid losses and LAE including those controls related to the estimation of and management’s review of the estimated liability of unpaid losses and LAE.
|
•
|
Testing the completeness, integrity and accuracy of the underlying data used by the Company’s actuary such as paid loss data, case reserve data, loss adjustment expense data and loss development tables;
|
•
|
Verifying the consistency of the estimation process between years, management’s selection of its estimate for unpaid losses and LAE, reviewing historical estimates and reported loss ratios;
|
•
|
Obtaining and reviewing the independent actuarial report and gaining an understanding from the actuary of the objectives and scope of their work, consistency of methods and assumptions used in the current year as compared to previous years;
|
•
|
Assessing the adverse development of prior estimates of the liability for unpaid losses and LAE and requesting explanations of changes in these estimates to understand significant factors on the development of prior estimates. We held discussions with the external independent actuary, internal actuary, and members of the executive management team and obtained corroborating evidence in order to draw a conclusion about the assumptions and judgment used by management in the current year.
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Available-for-sale debt securities, at fair value (amortized cost: $828,336 and $831,127)
|
|
$
|
855,284
|
|
|
$
|
820,438
|
|
Equity securities, at fair value (cost: $43,523 and $86,271)
|
|
43,717
|
|
|
63,277
|
|
||
Investment real estate, net
|
|
15,585
|
|
|
24,439
|
|
||
Total invested assets
|
|
914,586
|
|
|
908,154
|
|
||
Cash and cash equivalents
|
|
182,109
|
|
|
166,428
|
|
||
Restricted cash and cash equivalents
|
|
2,635
|
|
|
2,635
|
|
||
Prepaid reinsurance premiums
|
|
175,208
|
|
|
142,750
|
|
||
Reinsurance recoverable
|
|
193,236
|
|
|
418,603
|
|
||
Premiums receivable, net
|
|
63,883
|
|
|
59,858
|
|
||
Property and equipment, net
|
|
41,351
|
|
|
34,991
|
|
||
Deferred policy acquisition costs
|
|
91,882
|
|
|
84,686
|
|
||
Income taxes recoverable
|
|
34,283
|
|
|
11,159
|
|
||
Deferred income tax asset, net
|
|
3,351
|
|
|
14,586
|
|
||
Other assets
|
|
17,328
|
|
|
14,540
|
|
||
Total assets
|
|
$
|
1,719,852
|
|
|
$
|
1,858,390
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
|
$
|
267,760
|
|
|
$
|
472,829
|
|
Unearned premiums
|
|
661,279
|
|
|
601,679
|
|
||
Advance premium
|
|
30,975
|
|
|
26,222
|
|
||
Accounts payable
|
|
2,099
|
|
|
3,059
|
|
||
Book overdraft
|
|
90,401
|
|
|
102,843
|
|
||
Reinsurance payable, net
|
|
122,581
|
|
|
93,306
|
|
||
Other liabilities and accrued expenses
|
|
40,930
|
|
|
45,422
|
|
||
Long-term debt
|
|
9,926
|
|
|
11,397
|
|
||
Total liabilities
|
|
1,225,951
|
|
|
1,356,757
|
|
||
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
|
|
467
|
|
|
465
|
|
||
Authorized shares - 55,000
|
|
|
|
|
||||
Issued shares - 46,707 and 46,514
|
|
|
|
|
||||
Outstanding shares - 32,638 and 34,783
|
|
|
|
|
||||
Treasury shares, at cost - 14,069 and 11,731
|
|
(196,585
|
)
|
|
(130,399
|
)
|
||
Additional paid-in capital
|
|
96,036
|
|
|
86,353
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
20,364
|
|
|
(8,010
|
)
|
||
Retained earnings
|
|
573,619
|
|
|
553,224
|
|
||
Total stockholders’ equity
|
|
493,901
|
|
|
501,633
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,719,852
|
|
|
$
|
1,858,390
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
PREMIUMS EARNED AND OTHER REVENUES
|
|
|
|
|
|
|
||||||
Direct premiums written
|
|
$
|
1,292,721
|
|
|
$
|
1,190,875
|
|
|
$
|
1,055,886
|
|
Change in unearned premium
|
|
(59,600
|
)
|
|
(69,235
|
)
|
|
(56,688
|
)
|
|||
Direct premium earned
|
|
1,233,121
|
|
|
1,121,640
|
|
|
999,198
|
|
|||
Ceded premium earned
|
|
(390,619
|
)
|
|
(353,258
|
)
|
|
(310,405
|
)
|
|||
Premiums earned, net
|
|
842,502
|
|
|
768,382
|
|
|
688,793
|
|
|||
Net investment income
|
|
30,743
|
|
|
24,816
|
|
|
13,460
|
|
|||
Net realized gains (losses) on investments
|
|
(12,715
|
)
|
|
(2,089
|
)
|
|
2,570
|
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
23,188
|
|
|
(17,169
|
)
|
|
—
|
|
|||
Commission revenue
|
|
26,101
|
|
|
22,438
|
|
|
21,253
|
|
|||
Policy fees
|
|
21,560
|
|
|
20,275
|
|
|
18,838
|
|
|||
Other revenue
|
|
7,972
|
|
|
7,163
|
|
|
7,002
|
|
|||
Total premiums earned and other revenues
|
|
939,351
|
|
|
823,816
|
|
|
751,916
|
|
|||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
||||||
Losses and loss adjustment expenses
|
|
603,406
|
|
|
414,455
|
|
|
350,428
|
|
|||
General and administrative expenses
|
|
272,428
|
|
|
256,488
|
|
|
231,004
|
|
|||
Total operating costs and expenses
|
|
875,834
|
|
|
670,943
|
|
|
581,432
|
|
|||
INCOME BEFORE INCOME TAXES
|
|
63,517
|
|
|
152,873
|
|
|
170,484
|
|
|||
Income tax expense
|
|
17,003
|
|
|
35,822
|
|
|
63,549
|
|
|||
NET INCOME
|
|
$
|
46,514
|
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
Basic earnings per common share
|
|
$
|
1.37
|
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
Weighted average common shares outstanding - Basic
|
|
33,893
|
|
|
34,856
|
|
|
34,841
|
|
|||
Diluted earnings per common share
|
|
$
|
1.36
|
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
Weighted average common shares outstanding - Diluted
|
|
34,233
|
|
|
35,786
|
|
|
35,809
|
|
|||
Cash dividend declared per common share
|
|
$
|
0.77
|
|
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
46,514
|
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
Other comprehensive income (loss)
|
|
28,374
|
|
|
(4,748
|
)
|
|
127
|
|
|||
Comprehensive income (loss)
|
|
$
|
74,888
|
|
|
$
|
112,303
|
|
|
$
|
107,062
|
|
|
|
Treasury Shares
|
|
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, 2016
|
|
(10,272
|
)
|
|
45,324
|
|
|
10
|
|
|
$
|
453
|
|
|
$
|
—
|
|
|
$
|
82,263
|
|
|
$
|
381,864
|
|
|
$
|
(6,408
|
)
|
|
$
|
(86,982
|
)
|
|
$
|
371,190
|
|
|
Vesting of performance share units
|
|
(41
|
)
|
(1
|
)
|
115
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,183
|
)
|
|
(1,183
|
)
|
|||||||
Stock option exercises
|
|
(450
|
)
|
(1
|
)
|
804
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
5,578
|
|
|
—
|
|
|
—
|
|
|
(11,625
|
)
|
|
(6,039
|
)
|
|||||||
Common stock issued
|
|
—
|
|
|
26
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
634
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
||||||||
Retirement of treasury shares
|
|
491
|
|
(1
|
)
|
(491
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(12,803
|
)
|
|
—
|
|
|
—
|
|
|
12,808
|
|
|
—
|
|
|||||||
Purchases of treasury stock
|
|
(771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,141
|
)
|
|
(18,141
|
)
|
||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,515
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106,935
|
|
|
—
|
|
|
—
|
|
|
106,935
|
|
||||||||
Change in net unrealized gains (losses), net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
127
|
|
||||||||
Declaration of dividends
($0.69 per common share and $1.00 per preferred share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,051
|
)
|
|
—
|
|
|
—
|
|
|
(24,051
|
)
|
||||||||
Balance, December 31, 2017
|
|
(11,043
|
)
|
|
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
|
|
(11,043
|
)
|
|
45,778
|
|
|
10
|
|
|
458
|
|
|
—
|
|
|
86,186
|
|
|
461,147
|
|
|
(2,680
|
)
|
|
(105,123
|
)
|
|
439,988
|
|
||||||||
Vesting of performance share units
|
|
(43
|
)
|
(1
|
)
|
127
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1,273
|
)
|
|
(1,273
|
)
|
|||||||
Grants and vesting of restricted stock
|
|
(4
|
)
|
(1
|
)
|
80
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
(154
|
)
|
|||||||
Stock option exercises
|
|
(1,314
|
)
|
(1
|
)
|
1,890
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
36,568
|
|
|
—
|
|
|
—
|
|
|
(47,772
|
)
|
|
(11,185
|
)
|
|||||||
Retirement of treasury shares
|
|
1,361
|
|
(1
|
)
|
(1,361
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(49,185
|
)
|
|
—
|
|
|
—
|
|
|
49,199
|
|
|
—
|
|
|||||||
Purchases of treasury stock
|
|
(688
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,276
|
)
|
|
(25,276
|
)
|
||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,786
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,786
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,051
|
|
|
—
|
|
|
—
|
|
|
117,051
|
|
||||||||
Other comprehensive income (loss), net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(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
|
|
(11,731
|
)
|
|
46,514
|
|
|
10
|
|
|
465
|
|
|
—
|
|
|
86,353
|
|
|
553,224
|
|
|
(8,010
|
)
|
|
(130,399
|
)
|
|
501,633
|
|
||||||||
Vesting of performance share units
|
|
(56
|
)
|
(1
|
)
|
148
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2,069
|
)
|
|
(2,069
|
)
|
|||||||
Grants and vesting of restricted stock
|
|
(41
|
)
|
(1
|
)
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,183
|
)
|
|
(1,183
|
)
|
|||||||
Vesting of restricted stock units
|
|
(10
|
)
|
(1
|
)
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(259
|
)
|
|
(259
|
)
|
|||||||
Stock option exercises
|
|
(79
|
)
|
(1
|
)
|
151
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2,661
|
|
|
—
|
|
|
—
|
|
|
(2,622
|
)
|
|
41
|
|
|||||||
Common stock issued
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147
|
|
||||||||
Retirement of treasury shares
|
|
186
|
|
(1
|
)
|
(186
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(6,131
|
)
|
|
—
|
|
|
—
|
|
|
6,133
|
|
|
—
|
|
|||||||
Purchases of treasury stock
|
|
(2,338
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,186
|
)
|
|
(66,186
|
)
|
||||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,008
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,514
|
|
|
—
|
|
|
—
|
|
|
46,514
|
|
||||||||
Other comprehensive income (loss), net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,374
|
|
|
—
|
|
|
28,374
|
|
||||||||
Declaration of dividends
($0.77 per common share and $1.00 per preferred share) |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,119
|
)
|
|
—
|
|
|
—
|
|
|
(26,119
|
)
|
||||||||
Balance, December 31, 2019
|
|
(14,069
|
)
|
|
46,707
|
|
|
10
|
|
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
96,036
|
|
|
$
|
573,619
|
|
|
$
|
20,364
|
|
|
$
|
(196,585
|
)
|
|
$
|
493,901
|
|
(1
|
)
|
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of stock options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.
|
|
The accompanying notes to consolidated financial statements are an integral part of these statements.
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
46,514
|
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Bad debt expense
|
|
453
|
|
|
467
|
|
|
501
|
|
|||
Depreciation and amortization
|
|
4,957
|
|
|
4,820
|
|
|
4,058
|
|
|||
Amortization of share-based compensation
|
|
13,008
|
|
|
12,786
|
|
|
10,515
|
|
|||
Amortization of original issue discount on debt
|
|
—
|
|
|
—
|
|
|
10
|
|
|||
Book overdraft increase (decrease)
|
|
(12,442
|
)
|
|
66,128
|
|
|
36,715
|
|
|||
Net realized (gains) losses sale on investments
|
|
12,715
|
|
|
2,089
|
|
|
(2,570
|
)
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
(23,188
|
)
|
|
17,169
|
|
|
—
|
|
|||
Amortization of premium/accretion of discount, net
|
|
1,663
|
|
|
1,482
|
|
|
3,994
|
|
|||
Deferred income taxes
|
|
1,972
|
|
|
(3,740
|
)
|
|
1,309
|
|
|||
Excess tax (benefit) shortfall from share-based compensation
|
|
(641
|
)
|
|
(5,427
|
)
|
|
(5,793
|
)
|
|||
Other
|
|
411
|
|
|
196
|
|
|
35
|
|
|||
Issuance of common stock
|
|
147
|
|
|
—
|
|
|
634
|
|
|||
Net change in assets and liabilities relating to operating activities:
|
|
|
|
|
|
|
||||||
Prepaid reinsurance premiums
|
|
(32,458
|
)
|
|
(9,944
|
)
|
|
(8,421
|
)
|
|||
Reinsurance recoverable
|
|
225,367
|
|
|
(236,198
|
)
|
|
(182,299
|
)
|
|||
Reinsurance receivable, net
|
|
—
|
|
|
—
|
|
|
186
|
|
|||
Premiums receivable, net
|
|
(4,475
|
)
|
|
(3,823
|
)
|
|
(3,162
|
)
|
|||
Accrued investment income
|
|
(330
|
)
|
|
(1,149
|
)
|
|
(708
|
)
|
|||
Income taxes recoverable
|
|
(22,483
|
)
|
|
3,741
|
|
|
(417
|
)
|
|||
Deferred policy acquisition costs, net
|
|
(7,196
|
)
|
|
(11,627
|
)
|
|
(8,147
|
)
|
|||
Other assets
|
|
(2,498
|
)
|
|
(968
|
)
|
|
(1,860
|
)
|
|||
Unpaid losses and loss adjustment expenses
|
|
(205,069
|
)
|
|
224,404
|
|
|
189,931
|
|
|||
Unearned premiums
|
|
59,600
|
|
|
69,235
|
|
|
56,688
|
|
|||
Accounts payable
|
|
(960
|
)
|
|
193
|
|
|
(321
|
)
|
|||
Reinsurance payable, net
|
|
29,275
|
|
|
(17,075
|
)
|
|
29,490
|
|
|||
Other liabilities and accrued expenses
|
|
(4,497
|
)
|
|
289
|
|
|
9,287
|
|
|||
Advance premium
|
|
4,753
|
|
|
6
|
|
|
8,420
|
|
|||
Net cash provided by (used in) operating activities
|
|
84,598
|
|
|
230,105
|
|
|
245,010
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
38
|
|
|
35
|
|
|
23
|
|
|||
Purchases of property and equipment
|
|
(11,314
|
)
|
|
(6,731
|
)
|
|
(4,618
|
)
|
|||
Purchases of equity securities
|
|
(1,351
|
)
|
|
(25,803
|
)
|
|
(89,302
|
)
|
|||
Purchases of available-for-sale debt securities
|
|
(221,647
|
)
|
|
(437,635
|
)
|
|
(180,604
|
)
|
|||
Purchases of short-term investments
|
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
|||
Purchases of investment real estate, net
|
|
(883
|
)
|
|
(6,375
|
)
|
|
(7,218
|
)
|
|||
Proceeds from sales of equity securities
|
|
29,680
|
|
|
8,285
|
|
|
77,640
|
|
|||
Proceeds from sales of available-for-sale debt securities
|
|
77,790
|
|
|
134,591
|
|
|
26,179
|
|
|||
Proceeds from sales of investment real estate
|
|
10,537
|
|
|
—
|
|
|
—
|
|
|||
Maturities of available-for-sale debt securities
|
|
145,476
|
|
|
111,347
|
|
|
97,191
|
|
|||
Maturities of short-term investments
|
|
—
|
|
|
10,000
|
|
|
5,000
|
|
|||
Net cash provided by (used in) investing activities
|
|
28,326
|
|
|
(212,286
|
)
|
|
(85,709
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Preferred stock dividend
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Common stock dividend
|
|
(26,106
|
)
|
|
(25,508
|
)
|
|
(24,001
|
)
|
|||
Issuance of common stock for stock option exercises
|
|
239
|
|
|
102
|
|
|
—
|
|
|||
Purchase of treasury stock
|
|
(66,186
|
)
|
|
(25,276
|
)
|
|
(18,141
|
)
|
|||
Payments related to tax withholding for share-based compensation
|
|
(3,709
|
)
|
|
(12,714
|
)
|
|
(7,223
|
)
|
|||
Repayment of debt
|
|
(1,471
|
)
|
|
(1,471
|
)
|
|
(2,170
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(97,243
|
)
|
|
(64,877
|
)
|
|
(51,545
|
)
|
|||
Cash and cash equivalents, and restricted cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Net increase (decrease) during the period
|
|
15,681
|
|
|
(47,058
|
)
|
|
107,756
|
|
|||
Balance, beginning of period
|
|
169,063
|
|
|
216,121
|
|
|
108,365
|
|
|||
Balance, end of period
|
|
$
|
184,744
|
|
|
$
|
169,063
|
|
|
$
|
216,121
|
|
Supplemental cash and non-cash flow disclosures:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
248
|
|
|
$
|
346
|
|
|
$
|
348
|
|
Income taxes paid
|
|
$
|
38,945
|
|
|
$
|
41,996
|
|
|
$
|
68,883
|
|
Income tax refund
|
|
$
|
789
|
|
|
$
|
747
|
|
|
$
|
434
|
|
|
|
As of December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
|
$
|
182,109
|
|
|
$
|
166,428
|
|
|
$
|
213,486
|
|
Restricted cash and cash equivalents (1)
|
|
2,635
|
|
|
2,635
|
|
|
2,635
|
|
|||
Total cash and cash equivalents and restricted cash and cash equivalents
|
|
$
|
184,744
|
|
|
$
|
169,063
|
|
|
$
|
216,121
|
|
|
|
December 31, 2019
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Debt Securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
53,688
|
|
|
$
|
864
|
|
|
$
|
(188
|
)
|
|
$
|
54,364
|
|
Corporate bonds
|
|
457,180
|
|
|
19,179
|
|
|
(141
|
)
|
|
476,218
|
|
||||
Mortgage-backed and asset-backed securities
|
|
304,285
|
|
|
7,400
|
|
|
(606
|
)
|
|
311,079
|
|
||||
Municipal bonds
|
|
3,397
|
|
|
103
|
|
|
(4
|
)
|
|
3,496
|
|
||||
Redeemable preferred stock
|
|
9,786
|
|
|
427
|
|
|
(86
|
)
|
|
10,127
|
|
||||
Total
|
|
$
|
828,336
|
|
|
$
|
27,973
|
|
|
$
|
(1,025
|
)
|
|
$
|
855,284
|
|
|
|
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, 2019
|
|
December 31, 2018
|
||||||||||
|
|
|
|
% of Total
|
|
|
|
% of Total
|
||||||
Average Credit Ratings
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
|
Fair Value
|
||||||
AAA
|
|
$
|
372,442
|
|
|
43.6
|
%
|
|
$
|
388,672
|
|
|
47.4
|
%
|
AA
|
|
99,103
|
|
|
11.6
|
%
|
|
100,791
|
|
|
12.3
|
%
|
||
A
|
|
238,766
|
|
|
27.9
|
%
|
|
214,503
|
|
|
26.1
|
%
|
||
BBB
|
|
143,889
|
|
|
16.8
|
%
|
|
112,613
|
|
|
13.7
|
%
|
||
BB and Below
|
|
—
|
|
|
—
|
|
|
494
|
|
|
0.1
|
%
|
||
No Rating Available
|
|
1,084
|
|
|
0.1
|
%
|
|
3,365
|
|
|
0.4
|
%
|
||
Total
|
|
$
|
855,284
|
|
|
100.0
|
%
|
|
$
|
820,438
|
|
|
100.0
|
%
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
|
Fair Value
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
|
$
|
143,723
|
|
|
$
|
144,729
|
|
|
$
|
139,418
|
|
|
$
|
136,291
|
|
Non-agency
|
|
71,140
|
|
|
75,896
|
|
|
61,689
|
|
|
61,933
|
|
||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Auto loan receivables
|
|
42,767
|
|
|
43,127
|
|
|
53,449
|
|
|
53,341
|
|
||||
Credit card receivables
|
|
21,145
|
|
|
21,487
|
|
|
29,594
|
|
|
29,366
|
|
||||
Other receivables
|
|
25,510
|
|
|
25,840
|
|
|
28,690
|
|
|
28,666
|
|
||||
Total
|
|
$
|
304,285
|
|
|
$
|
311,079
|
|
|
$
|
312,840
|
|
|
$
|
309,597
|
|
|
|
December 31, 2019
|
||||||||||||||||||||
|
|
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
|
|
2
|
|
|
$
|
3,836
|
|
|
$
|
(108
|
)
|
|
4
|
|
|
$
|
23,186
|
|
|
$
|
(80
|
)
|
Corporate bonds
|
|
18
|
|
|
16,808
|
|
|
(107
|
)
|
|
7
|
|
|
5,866
|
|
|
(34
|
)
|
||||
Mortgage-backed and asset-backed securities
|
|
42
|
|
|
58,023
|
|
|
(245
|
)
|
|
26
|
|
|
34,985
|
|
|
(361
|
)
|
||||
Municipal bonds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
276
|
|
|
(4
|
)
|
||||
Redeemable preferred stock
|
|
6
|
|
|
630
|
|
|
(8
|
)
|
|
4
|
|
|
1,489
|
|
|
(78
|
)
|
||||
Total
|
|
68
|
|
|
$
|
79,297
|
|
|
$
|
(468
|
)
|
|
42
|
|
|
$
|
65,802
|
|
|
$
|
(557
|
)
|
|
|
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, 2019
|
||||||
|
|
Amortized
Cost
|
|
Fair Value
|
||||
Due in one year or less
|
|
$
|
106,961
|
|
|
$
|
107,259
|
|
Due after one year through five years
|
|
390,128
|
|
|
398,565
|
|
||
Due after five years through ten years
|
|
313,951
|
|
|
332,068
|
|
||
Due after ten years
|
|
17,131
|
|
|
17,191
|
|
||
Perpetual maturity securities
|
|
165
|
|
|
201
|
|
||
Total
|
|
$
|
828,336
|
|
|
$
|
855,284
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Proceeds from sales and maturities (fair value)
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
223,266
|
|
|
$
|
255,938
|
|
|
$
|
128,370
|
|
Equity securities
|
|
$
|
29,680
|
|
|
$
|
8,285
|
|
|
$
|
77,640
|
|
Gross realized gains on sale of securities:
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
790
|
|
|
$
|
326
|
|
|
$
|
458
|
|
Equity securities
|
|
$
|
367
|
|
|
$
|
714
|
|
|
$
|
2,415
|
|
Gross realized losses on sale of securities:
|
|
|
|
|
|
|
|
|
||||
Available-for-sale debt securities
|
|
$
|
(298
|
)
|
|
$
|
(3,129
|
)
|
|
$
|
(150
|
)
|
Equity securities
|
|
$
|
(14,787
|
)
|
|
$
|
—
|
|
|
$
|
(153
|
)
|
Realized gains on sales of investment real estate
|
|
$
|
1,213
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Available-for-sale debt securities
|
|
$
|
24,989
|
|
|
$
|
18,198
|
|
|
$
|
12,375
|
|
Equity securities
|
|
2,648
|
|
|
2,978
|
|
|
1,799
|
|
|||
Available-for-sale short-term investments
|
|
—
|
|
|
145
|
|
|
22
|
|
|||
Cash and cash equivalents (1)
|
|
5,176
|
|
|
5,540
|
|
|
1,043
|
|
|||
Other (2)
|
|
1,008
|
|
|
915
|
|
|
416
|
|
|||
Total investment income
|
|
33,821
|
|
|
27,776
|
|
|
15,655
|
|
|||
Less: Investment expenses (3)
|
|
(3,078
|
)
|
|
(2,960
|
)
|
|
(2,195
|
)
|
|||
Net investment income
|
|
$
|
30,743
|
|
|
$
|
24,816
|
|
|
$
|
13,460
|
|
(1
|
)
|
Includes interest earned on restricted cash and cash equivalents.
|
(2
|
)
|
Includes investment income earned on real estate investments.
|
(3
|
)
|
Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Unrealized gains and (losses) recognized during the reported period
on equity securities still held at the end of the reporting period
|
|
$
|
4,163
|
|
|
$
|
(17,169
|
)
|
|
$
|
—
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Income Producing:
|
|
|
|
|
||||
Investment real estate
|
|
$
|
14,679
|
|
|
$
|
14,619
|
|
Less: Accumulated depreciation
|
|
(1,284
|
)
|
|
(870
|
)
|
||
|
|
13,395
|
|
|
13,749
|
|
||
Non-Income Producing:
|
|
|
|
|
||||
Investment real estate
|
|
2,190
|
|
|
10,690
|
|
||
Investment real estate, net
|
|
$
|
15,585
|
|
|
$
|
24,439
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation expense on investment real estate
|
|
$
|
414
|
|
|
$
|
410
|
|
|
$
|
179
|
|
|
|
Ratings as of December 31, 2019
|
|
|
||||||||||
|
|
|
|
Standard
|
|
|
|
|
|
|
||||
|
|
AM Best
|
|
and Poor’s
Rating
|
|
Moody’s
Investors
|
|
Due from as of
December 31,
|
||||||
Reinsurer
|
|
Company
|
|
Services, Inc.
|
|
Service, Inc.
|
|
2019
|
|
2018
|
||||
Florida Hurricane Catastrophe Fund (1)
|
|
n/a
|
|
n/a
|
|
n/a
|
|
$
|
199,647
|
|
|
$
|
165,022
|
|
Allianz Risk Transfer
|
|
A+
|
|
AA
|
|
Aa3
|
|
19,269
|
|
|
139,565
|
|
||
Renaissance Reinsurance Ltd
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
39,459
|
|
||
Chubb Tempest Reinsurance Ltd
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
16,208
|
|
||
Total (2)
|
|
|
|
|
|
|
|
$
|
218,916
|
|
|
$
|
360,254
|
|
(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,
|
||||||
|
|
2019
|
|
2018
|
||||
Prepaid reinsurance premiums
|
|
$
|
175,208
|
|
|
$
|
142,750
|
|
Reinsurance recoverable on paid losses and LAE
|
|
$
|
70,015
|
|
|
$
|
25,238
|
|
Reinsurance recoverable on unpaid losses and LAE
|
|
123,221
|
|
|
393,365
|
|
||
Reinsurance recoverable
|
|
$
|
193,236
|
|
|
$
|
418,603
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
DPAC, beginning of year
|
|
$
|
84,686
|
|
|
$
|
73,059
|
|
|
$
|
64,912
|
|
Capitalized Costs
|
|
184,039
|
|
|
174,814
|
|
|
144,849
|
|
|||
Amortization of DPAC
|
|
(176,843
|
)
|
|
(163,187
|
)
|
|
(136,702
|
)
|
|||
DPAC, end of year
|
|
$
|
91,882
|
|
|
$
|
84,686
|
|
|
$
|
73,059
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Ten percent of total liabilities
|
|
|
|
|
||||
UPCIC
|
|
$
|
99,228
|
|
|
$
|
90,610
|
|
APPCIC
|
|
$
|
621
|
|
|
$
|
489
|
|
Statutory capital and surplus
|
|
|
|
|
||||
UPCIC
|
|
$
|
301,120
|
|
|
$
|
291,438
|
|
APPCIC
|
|
$
|
16,433
|
|
|
$
|
15,973
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Combined net income (loss)
|
|
$
|
(49,917
|
)
|
|
$
|
3,118
|
|
|
$
|
35,650
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Capital Contributions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Restricted cash and cash equivalents
|
|
$
|
2,635
|
|
|
$
|
2,635
|
|
Investments
|
|
$
|
3,419
|
|
|
$
|
3,876
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
5,344
|
|
|
$
|
4,489
|
|
Building
|
|
24,091
|
|
|
24,027
|
|
||
Computers
|
|
7,885
|
|
|
7,390
|
|
||
Furniture
|
|
2,002
|
|
|
2,142
|
|
||
Automobiles and other vehicles
|
|
9,481
|
|
|
8,348
|
|
||
Software
|
|
2,835
|
|
|
2,689
|
|
||
Total
|
|
51,638
|
|
|
49,085
|
|
||
Less: Accumulated depreciation and amortization
|
|
(17,074
|
)
|
|
(14,094
|
)
|
||
Net of accumulated depreciation and amortization
|
|
34,564
|
|
|
34,991
|
|
||
Construction in progress
|
|
6,787
|
|
|
—
|
|
||
Property and equipment, net
|
|
$
|
41,351
|
|
|
$
|
34,991
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Surplus note
|
|
$
|
9,926
|
|
|
$
|
11,397
|
|
2020
|
$
|
1,471
|
|
2021
|
1,471
|
|
|
2022
|
1,471
|
|
|
2023
|
1,471
|
|
|
2024
|
1,471
|
|
|
Thereafter
|
2,571
|
|
|
Total
|
$
|
9,926
|
|
|
|
As of December 31,
|
||||
|
|
2019
|
|
2018
|
||
Shares issued and outstanding
|
|
10
|
|
|
10
|
|
Conversion factor
|
|
2.50
|
|
|
2.50
|
|
Common shares resulting if converted
|
|
25
|
|
|
25
|
|
|
|
|
|
|
Total Number of Shares
|
|
|
|
Average
|
|
|
||||||||||
|
|
|
|
Dollar
|
Repurchased During the Year
|
|
Aggregate
|
|
Price per
|
|
|
||||||||||
|
|
Expiration
|
|
Amount
|
Ended December 31,
|
|
Purchase
|
|
Share
|
|
Plan
|
||||||||||
Date Authorized
|
|
Date
|
|
Authorized
|
2019
|
|
2018
|
|
Price
|
|
Repurchased
|
|
Completed
|
||||||||
November 6, 2019
|
|
December 31, 2021
|
|
$
|
40,000
|
|
403,142
|
|
|
—
|
|
|
$
|
11,673
|
|
|
$
|
28.96
|
|
|
|
May 6, 2019
|
|
December 31, 2020
|
|
$
|
40,000
|
|
1,466,575
|
|
|
—
|
|
|
$
|
40,000
|
|
|
$
|
27.27
|
|
|
November 2019
|
December 12, 2018
|
|
May 31, 2020
|
|
$
|
20,000
|
|
468,108
|
|
|
138,234
|
|
|
$
|
20,000
|
|
|
$
|
32.98
|
|
|
May 2019
|
September 5, 2017
|
|
December 31, 2018
|
|
$
|
20,000
|
|
—
|
|
|
550,455
|
|
|
$
|
19,789
|
|
|
$
|
35.95
|
|
|
December 2018
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
|
Per Share
Amount
|
|
Aggregate
Amount (1)
|
|
Per Share
Amount
|
|
Aggregate
Amount (1)
|
|
Per Share
Amount
|
|
Aggregate
Amount (1)
|
||||||||||||
First Quarter
|
|
$
|
0.16
|
|
|
$
|
5,572
|
|
|
$
|
0.14
|
|
|
$
|
4,904
|
|
|
$
|
0.14
|
|
|
$
|
4,932
|
|
Second Quarter
|
|
$
|
0.16
|
|
|
$
|
5,545
|
|
|
$
|
0.14
|
|
|
$
|
4,920
|
|
|
$
|
0.14
|
|
|
$
|
4,887
|
|
Third Quarter
|
|
$
|
0.16
|
|
|
$
|
5,476
|
|
|
$
|
0.16
|
|
|
$
|
5,592
|
|
|
$
|
0.14
|
|
|
$
|
4,830
|
|
Fourth Quarter
|
|
$
|
0.29
|
|
|
$
|
9,516
|
|
|
$
|
0.29
|
|
|
$
|
10,130
|
|
|
$
|
0.27
|
|
|
$
|
9,392
|
|
(1)
|
Includes dividend equivalents due to certain employees who hold performance share units or restricted share units which are subject to time-vesting conditions.
|
|
|
For the Year Ended December 31, 2019
|
||||||||||||||||||||||||||||||||
|
|
Stock Options
|
|
Restricted Stock
|
|
Performance
Share Units
|
|
Restricted
Stock 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 Units (1)
|
|
Number of Share Units (2)
|
|
Weighted Average Grant Date Fair Value per Share Units (1)
|
||||||||||||||
Outstanding as of
December 31, 2018
|
|
1,776
|
|
|
$
|
25.51
|
|
|
|
|
|
|
63
|
|
|
$
|
34.38
|
|
|
220
|
|
|
$
|
30.10
|
|
|
—
|
|
|
$
|
—
|
|
||
Granted
|
|
400
|
|
|
31.52
|
|
|
|
|
|
|
50
|
|
|
30.73
|
|
|
77
|
|
|
33.47
|
|
|
50
|
|
|
26.47
|
|
||||||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||||
Exercised
|
|
(151
|
)
|
|
17.67
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||||
Vested
|
|
n/a
|
|
|
n/a
|
|
|
|
|
|
|
(97
|
)
|
|
33.10
|
|
|
(148
|
)
|
|
29.81
|
|
|
(25
|
)
|
|
26.47
|
|
||||||
Expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||||
Outstanding as of
December 31, 2019
|
|
2,025
|
|
|
$
|
27.28
|
|
|
$
|
5,076
|
|
|
6.73
|
|
16
|
|
|
$
|
30.85
|
|
|
149
|
|
|
$
|
32.13
|
|
|
25
|
|
|
$
|
26.47
|
|
Exercisable as of
December 31, 2019
|
|
1,051
|
|
|
$
|
24.07
|
|
|
$
|
4,866
|
|
|
5.90
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2019, are expected to vest.
|
n/a
|
Not applicable
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Compensation expense:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
6,516
|
|
|
$
|
7,579
|
|
|
$
|
6,907
|
|
Restricted stock
|
|
3,104
|
|
|
609
|
|
|
—
|
|
|||
Performance share units
|
|
2,508
|
|
|
4,598
|
|
|
3,608
|
|
|||
Restricted stock units
|
|
880
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
13,008
|
|
|
$
|
12,786
|
|
|
$
|
10,515
|
|
Deferred tax benefits:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
1,522
|
|
|
$
|
1,877
|
|
|
$
|
2,640
|
|
Restricted stock
|
|
47
|
|
|
8
|
|
|
—
|
|
|||
Performance share units
|
|
185
|
|
|
945
|
|
|
1,379
|
|
|||
Restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
1,754
|
|
|
$
|
2,830
|
|
|
$
|
4,019
|
|
Realized tax benefits:
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
577
|
|
|
$
|
7,957
|
|
|
$
|
5,831
|
|
Restricted stock
|
|
37
|
|
|
—
|
|
|
—
|
|
|||
Performance share units
|
|
1,163
|
|
|
920
|
|
|
1,264
|
|
|||
Restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
1,777
|
|
|
$
|
8,877
|
|
|
$
|
7,095
|
|
Excess tax benefits (shortfall):
|
|
|
|
|
|
|
||||||
Stock options
|
|
$
|
415
|
|
|
$
|
5,330
|
|
|
$
|
5,548
|
|
Restricted stock
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||
Performance share units
|
|
244
|
|
|
97
|
|
|
245
|
|
|||
Restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
641
|
|
|
$
|
5,427
|
|
|
$
|
5,793
|
|
Weighted average fair value per option or share:
|
|
|
|
|
|
|
||||||
Stock option grants
|
|
$
|
9.82
|
|
|
$
|
11.74
|
|
|
$
|
10.18
|
|
Restricted stock grants
|
|
$
|
30.73
|
|
|
$
|
33.64
|
|
|
$
|
—
|
|
Performance share unit grants
|
|
$
|
33.47
|
|
|
$
|
32.51
|
|
|
$
|
27.20
|
|
Restricted stock unit grants
|
|
$
|
26.47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Intrinsic value of options exercised
|
|
$
|
2,343
|
|
|
$
|
32,217
|
|
|
$
|
15,256
|
|
Fair value of restricted stock vested
|
|
$
|
2,783
|
|
|
$
|
632
|
|
|
$
|
—
|
|
Fair value of performance share units vested
|
|
$
|
5,520
|
|
|
$
|
3,726
|
|
|
$
|
3,307
|
|
Fair value of restricted stock units vested
|
|
$
|
657
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash received for strike price and tax withholdings
|
|
$
|
238
|
|
|
$
|
120
|
|
|
$
|
—
|
|
Shares acquired through cashless exercise (1)
|
|
186
|
|
|
1,361
|
|
|
491
|
|
|||
Value of shares acquired through cashless exercise (1)
|
|
$
|
6,133
|
|
|
$
|
49,199
|
|
|
$
|
12,808
|
|
(1)
|
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of Stock Options exercised, Restricted Stock vested, PSUs vested or RSUs vested. These shares have been canceled by the Company.
|
|
|
As of December 31, 2019
|
||||||||||||||
|
|
Stock
Options
|
|
Restricted Stock
|
|
Performance
Share Units
|
|
Restricted
Stock Units
|
||||||||
Unrecognized expense
|
|
$
|
4,309
|
|
|
$
|
514
|
|
|
$
|
1,242
|
|
|
$
|
443
|
|
Weighted average remaining years
|
|
1.53
|
|
|
1.00
|
|
|
1.40
|
|
|
0.67
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average risk-free interest rate
|
|
2.44
|
%
|
|
2.69
|
%
|
|
1.94
|
%
|
|||
Expected term of option in years
|
|
6.00
|
|
|
6.00
|
|
|
5.84
|
|
|||
Weighted-average volatility
|
|
38.1
|
%
|
|
40.2
|
%
|
|
45.1
|
%
|
|||
Dividend yield
|
|
2.4
|
%
|
|
1.7
|
%
|
|
2.0
|
%
|
|||
Weighted average grant date fair value per share
|
|
$
|
9.82
|
|
|
$
|
11.74
|
|
|
$
|
10.18
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
12,328
|
|
|
$
|
31,981
|
|
|
$
|
53,962
|
|
State and local
|
|
2,703
|
|
|
7,581
|
|
|
8,278
|
|
|||
Total current expense
|
|
15,031
|
|
|
39,562
|
|
|
62,240
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
1,622
|
|
|
(3,487
|
)
|
|
851
|
|
|||
State and local
|
|
350
|
|
|
(253
|
)
|
|
458
|
|
|||
Total deferred expense (benefit)
|
|
1,972
|
|
|
(3,740
|
)
|
|
1,309
|
|
|||
Income tax expense
|
|
$
|
17,003
|
|
|
$
|
35,822
|
|
|
$
|
63,549
|
|
|
|
For the Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Expected provision at federal statutory tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
Increases (decreases) resulting from:
|
|
|
|
|
|
|
|||
State income tax, net of federal tax benefit
|
|
3.7
|
%
|
|
3.8
|
%
|
|
3.2
|
%
|
Effect of change in tax rate
|
|
0.3
|
%
|
|
—
|
|
|
2.8
|
%
|
Disallowed meals & expenses
|
|
0.7
|
%
|
|
0.3
|
%
|
|
0.4
|
%
|
Disallowed compensation
|
|
3.2
|
%
|
|
1.3
|
%
|
|
0.4
|
%
|
Excess tax benefit
|
|
(1.0
|
)%
|
|
(3.5
|
)%
|
|
(3.4
|
)%
|
Other, net
|
|
(1.1
|
)%
|
|
0.5
|
%
|
|
(1.1
|
)%
|
Total income tax expense (benefit)
|
|
26.8
|
%
|
|
23.4
|
%
|
|
37.3
|
%
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred income tax assets:
|
|
|
|
|
||||
Unearned premiums
|
|
$
|
23,925
|
|
|
$
|
22,700
|
|
Advanced premiums
|
|
1,493
|
|
|
1,269
|
|
||
Unpaid losses and LAE
|
|
1,660
|
|
|
820
|
|
||
Share-based compensation
|
|
3,837
|
|
|
3,237
|
|
||
Accrued wages
|
|
189
|
|
|
332
|
|
||
Allowance for uncollectible receivables
|
|
212
|
|
|
203
|
|
||
Additional tax basis of securities
|
|
33
|
|
|
33
|
|
||
Capital loss carryforwards
|
|
3,143
|
|
|
1,298
|
|
||
Unrealized gain/loss
|
|
—
|
|
|
4,246
|
|
||
Other comprehensive income
|
|
—
|
|
|
4,086
|
|
||
Other
|
|
—
|
|
|
9
|
|
||
Total deferred income tax assets
|
|
34,492
|
|
|
38,233
|
|
||
Valuation allowance
|
|
—
|
|
|
(781
|
)
|
||
Deferred income tax assets, net of valuation allowance
|
|
34,492
|
|
|
37,452
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Deferred policy acquisition costs, net
|
|
(22,613
|
)
|
|
(20,944
|
)
|
||
Prepaid expenses
|
|
—
|
|
|
(677
|
)
|
||
Fixed assets
|
|
(959
|
)
|
|
(992
|
)
|
||
Unrealized gain/loss
|
|
(1,480
|
)
|
|
—
|
|
||
Other comprehensive income
|
|
(5,197
|
)
|
|
—
|
|
||
Unpaid loss and LAE transition adjustment
|
|
(563
|
)
|
|
(78
|
)
|
||
Other
|
|
(329
|
)
|
|
(175
|
)
|
||
Total deferred income tax liabilities
|
|
(31,141
|
)
|
|
(22,866
|
)
|
||
Net deferred income tax asset
|
|
$
|
3,351
|
|
|
$
|
14,586
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator for EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
46,514
|
|
|
$
|
117,051
|
|
|
$
|
106,935
|
|
Less: Preferred stock dividends
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Income available to common stockholders
|
|
$
|
46,504
|
|
|
$
|
117,041
|
|
|
$
|
106,925
|
|
Denominator for EPS:
|
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding
|
|
33,893
|
|
|
34,856
|
|
|
34,841
|
|
|||
Plus: Assumed conversion of share-based compensation (1)
|
|
315
|
|
|
905
|
|
|
943
|
|
|||
Assumed conversion of preferred stock
|
|
25
|
|
|
25
|
|
|
25
|
|
|||
Weighted average diluted common shares outstanding
|
|
34,233
|
|
|
35,786
|
|
|
35,809
|
|
|||
Basic earnings per common share
|
|
$
|
1.37
|
|
|
$
|
3.36
|
|
|
$
|
3.07
|
|
Diluted earnings per common share
|
|
$
|
1.36
|
|
|
$
|
3.27
|
|
|
$
|
2.99
|
|
Weighted average number of antidilutive shares
|
|
773
|
|
|
445
|
|
|
1,504
|
|
(1)
|
Represents the dilutive effect of unexercised stock options, unvested performance share units, unvested restricted stock units and unvested restricted stock.
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
38,129
|
|
|
$
|
9,384
|
|
|
$
|
28,745
|
|
|
$
|
(9,111
|
)
|
|
$
|
(2,254
|
)
|
|
$
|
(6,857
|
)
|
|
$
|
2,773
|
|
|
$
|
1,058
|
|
|
$
|
1,715
|
|
Less: Reclassification adjustments
(gains) losses realized in
net income
|
|
(492
|
)
|
|
(121
|
)
|
|
(371
|
)
|
|
2,803
|
|
|
694
|
|
|
2,109
|
|
|
(2,570
|
)
|
|
(982
|
)
|
|
(1,588
|
)
|
|||||||||
Other comprehensive income
(loss)
|
|
37,637
|
|
|
9,263
|
|
|
28,374
|
|
|
(6,308
|
)
|
|
(1,560
|
)
|
|
(4,748
|
)
|
|
203
|
|
|
76
|
|
|
127
|
|
|||||||||
Reclassification adjustments to
retained earnings (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,830
|
|
|
2,811
|
|
|
3,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Change in accumulated other
comprehensive income (loss)
|
|
$
|
37,637
|
|
|
$
|
9,263
|
|
|
$
|
28,374
|
|
|
$
|
(478
|
)
|
|
$
|
1,251
|
|
|
$
|
(1,729
|
)
|
|
$
|
203
|
|
|
$
|
76
|
|
|
$
|
127
|
|
|
|
Amounts Reclassified from
Accumulated Other
Comprehensive Income
|
|
|
||||||||||
Details about Accumulated Other
|
|
Years Ended December 31,
|
|
Affected Line Item in the Statement
|
||||||||||
Comprehensive Income Components
|
|
2019
|
|
2018
|
|
2017
|
|
Where Net Income is Presented
|
||||||
Unrealized gains (losses) on
available-for-sale debt securities
|
|
|
|
|
|
|
|
|
||||||
|
|
$
|
492
|
|
|
$
|
(2,803
|
)
|
|
$
|
2,570
|
|
|
Net realized gains (losses) on investments
|
|
|
(121
|
)
|
|
694
|
|
|
(982
|
)
|
|
Income taxes, current
|
|||
Total reclassification for the period
|
|
$
|
371
|
|
|
$
|
(2,109
|
)
|
|
$
|
1,588
|
|
|
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, 2019
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Available-For-Sale Debt Securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations and agencies
|
|
$
|
—
|
|
|
$
|
54,364
|
|
|
$
|
—
|
|
|
$
|
54,364
|
|
Corporate bonds
|
|
—
|
|
|
476,218
|
|
|
—
|
|
|
476,218
|
|
||||
Mortgage-backed and asset-backed securities
|
|
—
|
|
|
311,079
|
|
|
—
|
|
|
311,079
|
|
||||
Municipal bonds
|
|
—
|
|
|
3,496
|
|
|
—
|
|
|
3,496
|
|
||||
Redeemable preferred stock
|
|
—
|
|
|
10,127
|
|
|
—
|
|
|
10,127
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
2,377
|
|
|
—
|
|
|
—
|
|
|
2,377
|
|
||||
Mutual funds
|
|
41,340
|
|
|
—
|
|
|
—
|
|
|
41,340
|
|
||||
Total assets accounted for at fair value
|
|
$
|
43,717
|
|
|
$
|
855,284
|
|
|
$
|
—
|
|
|
$
|
899,001
|
|
|
|
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
|
|
|
|
As of December 31,
|
||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||
|
|
Carrying
Value
|
|
(Level 3)
Estimated
Fair Value
|
|
Carrying
Value
|
|
(Level 3)
Estimated
Fair Value
|
||||||||
Liabilities (debt):
|
|
|
|
|
|
|
|
|
||||||||
Surplus note
|
|
$
|
9,926
|
|
|
$
|
9,365
|
|
|
$
|
11,397
|
|
|
$
|
10,125
|
|
|
|
As of
December 31, 2019 |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
|
|
|
|||||||||||||
|
|
(Unaudited)
|
|
|
|
|
|
|
|||||||||||||||||||
2015
|
|
$
|
170,381
|
|
|
$
|
187,431
|
|
|
$
|
194,600
|
|
|
$
|
213,860
|
|
|
$
|
225,964
|
|
|
$
|
(763
|
)
|
|
26,785
|
|
2016
|
|
|
|
269,814
|
|
|
286,252
|
|
|
324,577
|
|
|
351,487
|
|
|
719
|
|
|
40,504
|
|
|||||||
2017
|
|
|
|
|
|
303,944
|
|
|
334,734
|
|
|
375,123
|
|
|
5,547
|
|
|
127,129
|
|
||||||||
2018
|
|
|
|
|
|
|
|
334,368
|
|
|
335,946
|
|
|
2,546
|
|
|
53,899
|
|
|||||||||
2019
|
|
|
|
|
|
|
|
|
|
446,419
|
|
|
67,638
|
|
|
46,079
|
|
||||||||||
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
1,734,939
|
|
|
|
|
|
|
December 31, 2019
|
||
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance
|
$
|
129,455
|
|
Reinsurance recoverable on unpaid claims
|
123,221
|
|
|
Liabilities for adjusting and other claim payments
|
15,084
|
|
|
Total gross liability for unpaid claims and claim adjustment expense
|
$
|
267,760
|
|
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
|
|||||||||||||||
Years
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|||||
|
|
61.1
|
%
|
|
19.4
|
%
|
|
9.7
|
%
|
|
4.7
|
%
|
|
2.5
|
%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of year
|
|
$
|
472,829
|
|
|
$
|
248,425
|
|
|
$
|
58,494
|
|
Less: Reinsurance recoverable
|
|
(393,365
|
)
|
|
(182,405
|
)
|
|
(106
|
)
|
|||
Net balance at beginning of period
|
|
79,464
|
|
|
66,020
|
|
|
58,388
|
|
|||
Incurred (recovered) related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
515,338
|
|
|
314,933
|
|
|
322,929
|
|
|||
Prior years
|
|
88,068
|
|
|
99,522
|
|
|
27,499
|
|
|||
Total incurred
|
|
603,406
|
|
|
414,455
|
|
|
350,428
|
|
|||
Paid related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
391,161
|
|
|
221,708
|
|
|
215,274
|
|
|||
Prior years
|
|
147,170
|
|
|
179,303
|
|
|
127,522
|
|
|||
Total paid
|
|
538,331
|
|
|
401,011
|
|
|
342,796
|
|
|||
Net balance at end of period
|
|
144,539
|
|
|
79,464
|
|
|
66,020
|
|
|||
Plus: Reinsurance recoverable
|
|
123,221
|
|
|
393,365
|
|
|
182,405
|
|
|||
Balance at end of year
|
|
$
|
267,760
|
|
|
$
|
472,829
|
|
|
$
|
248,425
|
|
•
|
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 and ceded reinsurance. Ceded reinsurance is reported separately as reinsurance recoverable.
|
•
|
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, 2019
|
|
|
|
|
|
|
|
|
||||||||
Premiums earned, net
|
|
$
|
209,727
|
|
|
$
|
210,357
|
|
|
$
|
206,599
|
|
|
$
|
215,819
|
|
Net investment income
|
|
8,142
|
|
|
7,410
|
|
|
7,613
|
|
|
7,578
|
|
||||
Total revenues
|
|
236,586
|
|
|
233,722
|
|
|
229,641
|
|
|
239,402
|
|
||||
Total expenses
|
|
182,842
|
|
|
182,792
|
|
|
201,745
|
|
|
308,455
|
|
||||
Net income (loss)
|
|
40,148
|
|
|
37,293
|
|
|
20,146
|
|
|
(51,073
|
)
|
||||
Basic earnings (loss) per share
|
|
$
|
1.16
|
|
|
$
|
1.09
|
|
|
$
|
0.60
|
|
|
$
|
(1.55
|
)
|
Diluted earnings (loss) per share
|
|
$
|
1.14
|
|
|
$
|
1.08
|
|
|
$
|
0.59
|
|
|
$
|
(1.55
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
$
|
(0.19
|
)
|
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:
|
|
(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 February 24, 2017 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)
|
4.1
|
|
|
|
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
|
|
|
Form of Non-qualified Stock Option Agreement (filed as Exhibit 10.6 to the Company’s Annual Report on Form 10‑K filed on March 1, 2019 and incorporated herein by reference)
|
10.7
|
|
|
Form of Performance Share Award (filed as Exhibit 10.7 to the Company’s Annual Report on Form 10‑K filed on March 1, 2019 and incorporated herein by reference)
|
10.8
|
|
|
Form of Restricted Stock Agreement (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10‑K filed on March 1, 2019 and incorporated herein by reference)
|
10.9
|
|
|
|
10.10
|
|
|
Form of Non-Employee Director Option Grant (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10‑K filed on March 1, 2019 and incorporated herein by reference)
|
10.11
|
|
|
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) †
|
10.12
|
|
|
Employment Agreement, dated February 27, 2019, 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 March 4, 2019 and incorporated herein by reference) †
|
10.13
|
|
|
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) †
|
10.14
|
|
|
Employment Agreement, dated February 12, 2020, 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 18, 2020 and incorporated herein by reference) †
|
10.15
|
|
|
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) †
|
10.16
|
|
|
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) †
|
10.17
|
|
|
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) †
|
10.18
|
|
|
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) †
|
10.19
|
|
|
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) †
|
10.20
|
|
|
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) †
|
10.21
|
|
|
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) †
|
10.22
|
|
|
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) †
|
10.23
|
|
|
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) †
|
10.24
|
|
|
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) †
|
10.25
|
|
|
Restricted Share Unit Award Agreement, dated August 5, 2019, by and between Stephen J. Donaghy and the Company (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019 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, 2019, 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 management contract or compensatory plan or arrangement.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
Date: March 2, 2020
|
|
By:
|
/s/ Stephen J. Donaghy
|
|
|
|
Stephen J. Donaghy, 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
|
|
Executive Chairman and Director
|
|
March 2, 2020
|
Sean P. Downes
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Donaghy
|
|
Chief Executive Officer (Principal Executive Officer) and
|
|
March 2, 2020
|
Stephen J. Donaghy
|
|
Director
|
|
|
|
|
|
|
|
/s/ Jon W. Springer
|
|
President, Chief Risk Officer and Director
|
|
March 2, 2020
|
Jon W. Springer
|
|
|
|
|
|
|
|
|
|
/s/ Frank C. Wilcox
|
|
Chief Financial Officer (Principal Accounting Officer)
|
|
March 2, 2020
|
Frank C. Wilcox
|
|
|
|
|
|
|
|
|
|
/s/ Kimberly D. Campos
|
|
Chief Information Officer, Chief Administrative Officer and
|
|
March 2, 2020
|
Kimberly D. Campos
|
|
Director
|
|
|
|
|
|
|
|
/s/ Scott P. Callahan
|
|
Director
|
|
March 2, 2020
|
Scott P. Callahan
|
|
|
|
|
|
|
|
|
|
/s/ Ralph J. Palmieri
|
|
Director
|
|
March 2, 2020
|
Ralph J. Palmieri
|
|
|
|
|
|
|
|
|
|
/s/ Richard D. Peterson
|
|
Director
|
|
March 2, 2020
|
Richard D. Peterson
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Pietrangelo
|
|
Director
|
|
March 2, 2020
|
Michael A. Pietrangelo
|
|
|
|
|
|
|
|
|
|
/s/ Ozzie A. Schindler
|
|
Director
|
|
March 2, 2020
|
Ozzie A. Schindler
|
|
|
|
|
|
|
|
|
|
/s/ Joel M. Wilentz
|
|
Director
|
|
March 2, 2020
|
Joel M. Wilentz
|
|
|
|
|
|
|
As of December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
86,508
|
|
|
$
|
91,374
|
|
Investments in subsidiaries and undistributed earnings
|
|
378,906
|
|
|
401,296
|
|
||
Available-for-sale debt securities, at fair value
|
|
808
|
|
|
2,986
|
|
||
Equity securities, at fair value
|
|
—
|
|
|
2,626
|
|
||
Income taxes recoverable
|
|
34,253
|
|
|
11,136
|
|
||
Deferred income tax asset, net
|
|
—
|
|
|
6,512
|
|
||
Other assets
|
|
149
|
|
|
261
|
|
||
Total assets
|
|
$
|
500,624
|
|
|
$
|
516,191
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
LIABILITIES:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
20
|
|
|
$
|
29
|
|
Deferred income tax liability, net
|
|
2,602
|
|
|
—
|
|
||
Dividends payable
|
|
80
|
|
|
77
|
|
||
Other accrued expenses
|
|
3,587
|
|
|
14,001
|
|
||
Total liabilities
|
|
6,289
|
|
|
14,107
|
|
||
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
|
|
467
|
|
|
465
|
|
||
Authorized shares - 55,000
|
|
|
|
|
||||
Issued shares - 46,707 and 46,514
|
|
|
|
|
||||
Outstanding shares - 32,638 and 34,783
|
|
|
|
|
||||
Treasury shares, at cost - 14,069 and 11,731
|
|
(196,585
|
)
|
|
(130,399
|
)
|
||
Additional paid-in capital
|
|
96,036
|
|
|
86,353
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
20,364
|
|
|
(8,010
|
)
|
||
Retained earnings
|
|
574,053
|
|
|
553,675
|
|
||
Total stockholders’ equity
|
|
494,335
|
|
|
502,084
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
500,624
|
|
|
$
|
516,191
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
REVENUES
|
|
|
|
|
|
|
||||||
Net investment income
|
|
$
|
2,249
|
|
|
$
|
1,635
|
|
|
$
|
259
|
|
Net realized gains (losses) on investments
|
|
(1,908
|
)
|
|
—
|
|
|
255
|
|
|||
Net change in unrealized gains (losses) of equity securities
|
|
3,186
|
|
|
(2,648
|
)
|
|
—
|
|
|||
Management fee
|
|
166
|
|
|
157
|
|
|
151
|
|
|||
Other revenue
|
|
10
|
|
|
—
|
|
|
12
|
|
|||
Total revenues
|
|
3,703
|
|
|
(856
|
)
|
|
677
|
|
|||
OPERATING COSTS AND EXPENSES
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
21,526
|
|
|
32,063
|
|
|
30,819
|
|
|||
Total operating cost and expenses
|
|
21,526
|
|
|
32,063
|
|
|
30,819
|
|
|||
LOSS BEFORE INCOME TAXES AND EQUITY IN NET
EARNINGS OF SUBSIDIARIES
|
|
(17,823
|
)
|
|
(32,919
|
)
|
|
(30,142
|
)
|
|||
Benefit from income taxes
|
|
(2,984
|
)
|
|
(10,434
|
)
|
|
(18,296
|
)
|
|||
LOSS BEFORE EQUITY IN NET EARNINGS OF SUBSIDIARIES
|
|
(14,839
|
)
|
|
(22,485
|
)
|
|
(11,846
|
)
|
|||
Equity in net income of subsidiaries
|
|
61,336
|
|
|
139,987
|
|
|
118,781
|
|
|||
CONSOLIDATED NET INCOME
|
|
$
|
46,497
|
|
|
$
|
117,502
|
|
|
$
|
106,935
|
|
|
|
For the Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
84,752
|
|
|
$
|
87,306
|
|
|
$
|
117,668
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of equity securities
|
|
(107
|
)
|
|
(35
|
)
|
|
(4,990
|
)
|
|||
Purchase of available-for-sale debt securities
|
|
(3,750
|
)
|
|
—
|
|
|
(3,000
|
)
|
|||
Proceeds from sales of equity securities
|
|
3,481
|
|
|
—
|
|
|
3,255
|
|
|||
Proceeds from sales of available-for-sale debt securities
|
|
6,530
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
|
6,154
|
|
|
(35
|
)
|
|
(4,735
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Preferred stock dividend
|
|
(10
|
)
|
|
(10
|
)
|
|
(10
|
)
|
|||
Common stock dividend
|
|
(26,106
|
)
|
|
(25,508
|
)
|
|
(24,001
|
)
|
|||
Issuance of common stock for stock option exercises
|
|
239
|
|
|
102
|
|
|
—
|
|
|||
Purchase of treasury stock
|
|
(66,186
|
)
|
|
(25,276
|
)
|
|
(18,141
|
)
|
|||
Payments related to tax withholding for share-based compensation
|
|
(3,709
|
)
|
|
(12,714
|
)
|
|
(7,223
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(95,772
|
)
|
|
(63,406
|
)
|
|
(49,375
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(4,866
|
)
|
|
23,865
|
|
|
63,558
|
|
|||
Cash and cash equivalents at beginning of period
|
|
91,374
|
|
|
67,509
|
|
|
3,951
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
86,508
|
|
|
$
|
91,374
|
|
|
$
|
67,509
|
|
|
|
|
|
Additions
|
|
|
|
|
|||||||||
|
|
Beginning
Balance
|
|
Charges to
Earnings
|
|
Charges to
Other
Accounts
|
|
Deductions
|
|
Ending
Balance
|
|||||||
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
|
$
|
711
|
|
|
456
|
|
|
—
|
|
|
418
|
|
|
$
|
749
|
|
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
|
|
|
|
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
|
||||||||||
2019
|
|
$
|
267,760
|
|
|
$
|
515,338
|
|
|
$
|
88,068
|
|
|
$
|
538,331
|
|
|
$
|
30,743
|
|
2018
|
|
$
|
472,829
|
|
|
$
|
314,933
|
|
|
$
|
99,522
|
|
|
$
|
401,011
|
|
|
$
|
24,816
|
|
2017
|
|
$
|
248,425
|
|
|
$
|
322,929
|
|
|
$
|
27,499
|
|
|
$
|
342,796
|
|
|
$
|
13,460
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
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
|
||||||||||
2019
|
|
$
|
91,882
|
|
|
$
|
(176,843
|
)
|
|
$
|
869,645
|
|
|
$
|
842,502
|
|
|
$
|
661,279
|
|
2018
|
|
$
|
84,686
|
|
|
$
|
(163,187
|
)
|
|
$
|
827,674
|
|
|
$
|
768,382
|
|
|
$
|
601,679
|
|
2017
|
|
$
|
73,059
|
|
|
$
|
(136,702
|
)
|
|
$
|
737,060
|
|
|
$
|
688,793
|
|
|
$
|
532,444
|
|
A.
|
Award Specifics
|
|
|
|
Participant:
|
|
|
Date of Grant:
|
|
Number of RSUs:
|
B.
|
Vesting
|
|
|
|
|
|
|
|
Participant
|
|
|
|
UNIVERSAL INSURANCE HOLDINGS, INC.
a Delaware corporation
|
||
|
|
|
|
By:
|
|
|
Signature
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Name:
|
|
|
Print Name
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
Its:
|
|
|
|
|
|
|
|
|
|
Address
|
|
|
|
|
|
|
1.
|
General Provisions.
|
2.
|
Payment.
|
3.
|
Dividend Equivalents.
|
4.
|
Effect of Termination of Service on Vesting.
|
5.
|
No Rights as a Stockholder.
|
6.
|
Compliance with Law.
|
7.
|
Non-Transferability of Award.
|
8.
|
Withholding.
|
9.
|
Participant Representations.
|
10.
|
Miscellaneous.
|
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)(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, 2019 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 2, 2020
|
|
/s/ Stephen J. Donaghy
|
|
|
Stephen J. Donaghy
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, 2019 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 2, 2020
|
|
/s/ Frank C. Wilcox
|
|
|
Frank C. Wilcox
Chief Financial Officer and Principal Accounting Officer
|
1
|
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2
|
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
Date: March 2, 2020
|
|
By:
|
/s/ Stephen J. Donaghy
|
|
|
|
Name: Stephen J. Donaghy
Title: Chief Executive Officer and Principal Executive Officer
|
|
|
|
|
Date: March 2, 2020
|
|
By:
|
/s/ Frank C. Wilcox
|
|
|
|
Name: Frank C. Wilcox
Title: Chief Financial Officer and Principal Accounting Officer
|