|
|
Delaware
|
|
75-3241967
|
|
|
(State of Incorporation)
|
|
(IRS Employer Identification Number)
|
|
Large accelerated filer
|
£
|
|
Accelerated filer
|
þ
|
Non-accelerated filer
|
£
|
|
Smaller reporting company
|
£
|
|
|
|
Emerging growth company
|
£
|
|
P
ART I. FINANCIAL INFORMATION
|
|
|
|
Item 1. Financial Statements
|
|
|
Unaudited Condensed Consolidated Balance Sheets
|
|
|
Unaudited Condensed Consolidated Statements of Comprehensive Income
|
|
|
Unaudited Condensed Consolidated Statements of Stockholders' Equity
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Item 4. Controls and Procedures
|
|
PART II. OTHER INFORMATION
|
|
|
|
Item 1. Legal Proceedings
|
|
|
Item 1A. Risk Factors
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Item 3. Defaults Upon Senior Securities
|
|
|
Item 4. Mine Safety Disclosures
|
|
|
Item 5. Other Information
|
|
|
Item 6. Exhibits
|
|
Signatures
|
•
|
our exposure to catastrophic events and severe weather conditions;
|
•
|
the regulatory, economic and weather conditions present in Florida, the state in which we are most concentrated;
|
•
|
the effectiveness of our diversification strategy;
|
•
|
our ability to cultivate and maintain agent relationships, particularly our relationship with AmRisc, LLC (AmRisc);
|
•
|
the possibility that actual claims incurred may exceed our loss reserves for claims;
|
•
|
assessments charged by various governmental agencies;
|
•
|
our ability to implement and maintain adequate internal controls over financial reporting;
|
•
|
our ability to maintain adequate technology, data security, and outsourcing relationships;
|
•
|
our reliance on key vendor relationships, and the ability of our vendors to protect the personal information of our customers;
|
•
|
our ability to attract and retain the services of senior management;
|
•
|
risks and uncertainties relating to our acquisitions, including our ability to successfully integrate the acquired companies:
|
•
|
our ability to increase or maintain our market share;
|
•
|
changes in the regulatory environment present in the states in which we operate;
|
•
|
the impact of new federal or state regulations that affect the property and casualty insurance market;
|
•
|
the cost, variability and availability of reinsurance;
|
•
|
our ability to collect from our reinsurers on our reinsurance claims;
|
•
|
dependence on investment income and the composition of our investment portfolio and related market risks;
|
•
|
the possibility of the pricing and terms for our products to decline due to the historically cyclical nature of the property and casualty insurance and reinsurance industry;
|
•
|
the outcome of litigation pending against us, including the terms of any settlements;
|
•
|
downgrades in our financial strength ratings;
|
•
|
the impact of future sales of substantial amounts of our common stock by us to our existing stockholders on our stock price;
|
•
|
our ability to pay dividends in the future;
|
•
|
the ability of R. Daniel Peed and his affiliates to exert significant control over us due to substantial ownership of our common stock, subject to certain restrictive covenants that may restrict our ability to pursue certain opportunities;
|
•
|
the ability of others to obtain control of us due to provisions in our charter documents; and
|
•
|
other risks and uncertainties described in the section entitled "
Risk Factors
" in Part I, Item 1A in our Annual Report on Form 10-K for the year ended
December 31, 2017
.
|
|
|
September 30,
2018 |
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
|
||||
Investments, at fair value:
|
|
|
|
|
||||
Fixed maturities, available-for-sale (amortized cost of $854,640 and $763,434, respectively)
|
|
$
|
836,390
|
|
|
$
|
762,855
|
|
Equity securities
|
|
93,092
|
|
|
63,295
|
|
||
Other investments (amortized cost of $8,069 and $8,057, respectively)
|
|
8,330
|
|
|
8,381
|
|
||
Portfolio loans
|
|
—
|
|
|
20,000
|
|
||
Total investments
|
|
$
|
937,812
|
|
|
$
|
854,531
|
|
Cash and cash equivalents
|
|
240,950
|
|
|
229,556
|
|
||
Restricted cash
|
|
65,131
|
|
|
46,719
|
|
||
Total cash, cash equivalents and restricted cash
|
|
$
|
306,081
|
|
|
$
|
276,275
|
|
Accrued investment income
|
|
5,771
|
|
|
5,577
|
|
||
Property and equipment, net
|
|
16,583
|
|
|
17,291
|
|
||
Premiums receivable, net
|
|
78,417
|
|
|
75,275
|
|
||
Reinsurance recoverable on paid and unpaid losses
|
|
433,554
|
|
|
395,774
|
|
||
Prepaid reinsurance premiums
|
|
319,916
|
|
|
201,904
|
|
||
Goodwill
|
|
73,045
|
|
|
73,045
|
|
||
Deferred policy acquisition costs
|
|
105,764
|
|
|
103,882
|
|
||
Intangible assets
|
|
32,716
|
|
|
45,271
|
|
||
Other assets
|
|
12,570
|
|
|
11,096
|
|
||
Total Assets
|
|
$
|
2,322,229
|
|
|
$
|
2,059,921
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
|
$
|
528,842
|
|
|
$
|
482,232
|
|
Unearned premiums
|
|
643,540
|
|
|
555,873
|
|
||
Reinsurance payable
|
|
297,173
|
|
|
149,117
|
|
||
Payments outstanding
|
|
50,789
|
|
|
41,786
|
|
||
Accounts payable and accrued expenses
|
|
52,100
|
|
|
46,594
|
|
||
Other liabilities
|
|
40,199
|
|
|
85,830
|
|
||
Notes payable
|
|
160,708
|
|
|
161,364
|
|
||
Total Liabilities
|
|
$
|
1,773,351
|
|
|
$
|
1,522,796
|
|
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, $0.0001 par value; 50,000,000 shares authorized; 43,034,270 and 42,965,137 issued, respectively; 42,910,579 and 42,753,054 outstanding, respectively
|
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
|
388,820
|
|
|
387,145
|
|
||
Treasury shares, at cost: 212,083 shares
|
|
(431
|
)
|
|
(431
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(13,702
|
)
|
|
9,221
|
|
||
Retained earnings
|
|
154,186
|
|
|
141,186
|
|
||
Total shareholders' equity attributable to United Insurance Holdings Corp. (UIHC) shareholders
|
|
$
|
528,877
|
|
|
$
|
537,125
|
|
Noncontrolling interests (NCI)
|
|
20,001
|
|
|
—
|
|
||
Total Stockholders' Equity
|
|
$
|
548,878
|
|
|
$
|
537,125
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
2,322,229
|
|
|
$
|
2,059,921
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
295,935
|
|
|
$
|
267,219
|
|
|
$
|
960,214
|
|
|
$
|
788,408
|
|
Change in gross unearned premiums
|
|
8,021
|
|
|
782
|
|
|
(87,667
|
)
|
|
(76,758
|
)
|
||||
Gross premiums earned
|
|
303,956
|
|
|
268,001
|
|
|
872,547
|
|
|
711,650
|
|
||||
Ceded premiums earned
|
|
(132,626
|
)
|
|
(115,507
|
)
|
|
(365,011
|
)
|
|
(292,355
|
)
|
||||
Net premiums earned
|
|
171,330
|
|
|
152,494
|
|
|
507,536
|
|
|
419,295
|
|
||||
Investment income
|
|
6,888
|
|
|
4,901
|
|
|
19,665
|
|
|
12,489
|
|
||||
Net realized investment losses
|
|
(447
|
)
|
|
(71
|
)
|
|
(674
|
)
|
|
(554
|
)
|
||||
Net unrealized gains on equity securities
|
|
6,109
|
|
|
—
|
|
|
5,046
|
|
|
—
|
|
||||
Other revenue
|
|
3,772
|
|
|
13,804
|
|
|
11,280
|
|
|
40,604
|
|
||||
Total revenue
|
|
187,652
|
|
|
171,128
|
|
|
542,853
|
|
|
471,834
|
|
||||
EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses
|
|
120,552
|
|
|
143,127
|
|
|
286,393
|
|
|
293,398
|
|
||||
Policy acquisition costs
|
|
54,200
|
|
|
46,546
|
|
|
153,716
|
|
|
125,302
|
|
||||
Operating expenses
|
|
10,976
|
|
|
6,891
|
|
|
28,976
|
|
|
19,020
|
|
||||
General and administrative expenses
|
|
15,358
|
|
|
19,316
|
|
|
51,326
|
|
|
58,825
|
|
||||
Interest expense
|
|
2,455
|
|
|
771
|
|
|
7,371
|
|
|
2,282
|
|
||||
Total expenses
|
|
203,541
|
|
|
216,651
|
|
|
527,782
|
|
|
498,827
|
|
||||
Income (loss) before other income
|
|
(15,889
|
)
|
|
(45,523
|
)
|
|
15,071
|
|
|
(26,993
|
)
|
||||
Other income
|
|
19
|
|
|
36
|
|
|
106
|
|
|
94
|
|
||||
Income (loss) before income taxes
|
|
(15,870
|
)
|
|
(45,487
|
)
|
|
15,177
|
|
|
(26,899
|
)
|
||||
Provision for income taxes
|
|
(4,163
|
)
|
|
(17,475
|
)
|
|
3,815
|
|
|
(10,043
|
)
|
||||
Net income (loss)
|
|
$
|
(11,707
|
)
|
|
$
|
(28,012
|
)
|
|
$
|
11,362
|
|
|
$
|
(16,856
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Net income (loss) attributable to UIHC
|
|
$
|
(11,708
|
)
|
|
$
|
(28,012
|
)
|
|
$
|
11,361
|
|
|
$
|
(16,856
|
)
|
OTHER COMPREHENSIVE INCOME:
|
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains (losses) on investments
|
|
(3,354
|
)
|
|
2,672
|
|
|
(30,706
|
)
|
|
10,509
|
|
||||
Reclassification adjustment for net realized investment losses
|
|
447
|
|
|
71
|
|
|
674
|
|
|
554
|
|
||||
Income tax benefit (expense) related to items of other comprehensive income
|
|
699
|
|
|
(1,050
|
)
|
|
7,110
|
|
|
(4,207
|
)
|
||||
Total comprehensive loss
|
|
$
|
(13,915
|
)
|
|
$
|
(26,319
|
)
|
|
$
|
(11,560
|
)
|
|
$
|
(10,000
|
)
|
Less: Comprehensive income attributable to NCI
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Comprehensive loss attributable to UIHC
|
|
$
|
(13,916
|
)
|
|
$
|
(26,319
|
)
|
|
$
|
(11,561
|
)
|
|
$
|
(10,000
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
42,677,893
|
|
|
42,524,400
|
|
|
42,636,515
|
|
|
35,341,994
|
|
||||
Diluted
|
|
42,677,893
|
|
|
42,741,004
|
|
|
42,791,208
|
|
|
35,563,032
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings available to UIHC common shareholders per share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.48
|
)
|
Diluted
|
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (loss)
|
|
Retained Earnings
|
|
Stockholders' Equity Attributable to UIHC
|
|
NCI
|
|
Total Stockholders’ Equity
|
|||||||||||||||||||
|
Number of Shares
|
|
Dollars
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
December 31, 2016
|
21,646,614
|
|
|
2
|
|
|
99,353
|
|
|
(431
|
)
|
|
822
|
|
|
141,581
|
|
|
241,327
|
|
|
—
|
|
|
241,327
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,856
|
)
|
|
(16,856
|
)
|
|
—
|
|
|
(16,856
|
)
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,856
|
|
|
—
|
|
|
6,856
|
|
|
—
|
|
|
6,856
|
|
||||||||
Stock Compensation
|
138,035
|
|
|
—
|
|
|
1,931
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,931
|
|
|
—
|
|
|
1,931
|
|
||||||||
Issuance of common stock
|
20,956,355
|
|
|
2
|
|
|
274,382
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
274,384
|
|
|
—
|
|
|
274,384
|
|
||||||||
Cash dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,426
|
)
|
|
(6,426
|
)
|
|
—
|
|
|
(6,426
|
)
|
||||||||
September 30, 2017
|
42,741,004
|
|
|
$
|
4
|
|
|
$
|
375,666
|
|
|
$
|
(431
|
)
|
|
$
|
7,678
|
|
|
$
|
118,299
|
|
|
$
|
501,216
|
|
|
$
|
—
|
|
|
$
|
501,216
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (loss)
|
|
Retained Earnings
|
|
Stockholders' Equity Attributable to UIHC
|
|
NCI
|
|
Total Stockholders’ Equity
|
|||||||||||||||||||
|
Number of Shares
|
|
Dollars
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
December 31, 2017
|
42,753,054
|
|
|
4
|
|
|
387,145
|
|
|
(431
|
)
|
|
9,221
|
|
|
141,186
|
|
|
537,125
|
|
|
—
|
|
|
537,125
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,361
|
|
|
11,361
|
|
|
1
|
|
|
11,362
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,923
|
)
|
|
—
|
|
|
(22,923
|
)
|
|
—
|
|
|
(22,923
|
)
|
||||||||
Reclassification due to adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,338
|
|
|
9,338
|
|
|
—
|
|
|
9,338
|
|
||||||||
Stock Compensation
|
157,525
|
|
|
—
|
|
|
1,675
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,675
|
|
|
—
|
|
|
1,675
|
|
||||||||
Cash dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,699
|
)
|
|
(7,699
|
)
|
|
—
|
|
|
(7,699
|
)
|
||||||||
Net increase due to new subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
20,000
|
|
||||||||
September 30, 2018
|
42,910,579
|
|
|
$
|
4
|
|
|
$
|
388,820
|
|
|
$
|
(431
|
)
|
|
$
|
(13,702
|
)
|
|
$
|
154,186
|
|
|
$
|
528,877
|
|
|
$
|
20,001
|
|
|
$
|
548,878
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
OPERATING ACTIVITIES
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
11,362
|
|
|
$
|
(16,856
|
)
|
Adjustments to reconcile net income to net cash used by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
16,192
|
|
|
24,206
|
|
||
Bond amortization and accretion
|
|
3,822
|
|
|
3,663
|
|
||
Net realized losses on investments
|
|
674
|
|
|
554
|
|
||
Net unrealized gains on equity securities
|
|
(5,046
|
)
|
|
—
|
|
||
Provision for uncollectable premiums
|
|
112
|
|
|
205
|
|
||
Deferred income taxes, net
|
|
3,232
|
|
|
380
|
|
||
Stock based compensation
|
|
1,675
|
|
|
1,931
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accrued investment income
|
|
(194
|
)
|
|
(183
|
)
|
||
Premiums receivable
|
|
(3,254
|
)
|
|
98
|
|
||
Reinsurance recoverable on paid and unpaid losses
|
|
(37,780
|
)
|
|
(445,090
|
)
|
||
Prepaid reinsurance premiums
|
|
(118,012
|
)
|
|
(130,013
|
)
|
||
Deferred policy acquisition costs, net
|
|
(1,882
|
)
|
|
(35,841
|
)
|
||
Other assets
|
|
(1,473
|
)
|
|
(12,354
|
)
|
||
Unpaid losses and loss adjustment expenses
|
|
46,610
|
|
|
480,777
|
|
||
Unearned premiums
|
|
87,667
|
|
|
76,758
|
|
||
Reinsurance payable
|
|
148,056
|
|
|
119,471
|
|
||
Payments outstanding
|
|
—
|
|
|
165
|
|
||
Accounts payable and accrued expenses
|
|
5,506
|
|
|
10,492
|
|
||
Other liabilities
|
|
(44,715
|
)
|
|
5,974
|
|
||
Net cash provided by operating activities
|
|
$
|
112,552
|
|
|
$
|
84,337
|
|
INVESTING ACTIVITIES
|
|
|
|
|
||||
Proceeds from sales, maturities and repayments of investments
|
|
176,019
|
|
|
106,150
|
|
||
Purchases of investments
|
|
(276,483
|
)
|
|
(136,319
|
)
|
||
Proceeds from acquisition
|
|
—
|
|
|
95,284
|
|
||
Cost of property, equipment and capitalized software acquired
|
|
(2,675
|
)
|
|
(4,243
|
)
|
||
Net cash provided by (used in) investing activities
|
|
$
|
(103,139
|
)
|
|
$
|
60,872
|
|
FINANCING ACTIVITIES
|
|
|
|
|
||||
Investment in subsidiary - NCI
|
|
20,000
|
|
|
—
|
|
||
Repayments of borrowings
|
|
(849
|
)
|
|
(1,142
|
)
|
||
Payments of debt issuance costs
|
|
(62
|
)
|
|
—
|
|
||
Dividends
|
|
(7,699
|
)
|
|
(6,426
|
)
|
||
Outstanding checks in excess of funds on deposit
|
|
9,003
|
|
|
(8,061
|
)
|
||
Net cash provided by (used in) financing activities
|
|
$
|
20,393
|
|
|
$
|
(15,629
|
)
|
Increase in cash, cash equivalents and restricted cash
|
|
29,806
|
|
|
129,580
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
276,275
|
|
|
150,688
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
306,081
|
|
|
$
|
280,268
|
|
Supplemental Cash Flows Information
|
|
|
|
|
||||
Interest paid
|
|
$
|
4,990
|
|
|
$
|
2,001
|
|
Income taxes paid
|
|
$
|
4,673
|
|
|
$
|
4,206
|
|
Non-cash transactions
|
|
|
|
|
||||
Issuance of common stock
|
|
$
|
—
|
|
|
$
|
274,384
|
|
|
Cost or Adjusted/Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
September 30, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency securities
|
$
|
104,822
|
|
|
$
|
—
|
|
|
$
|
2,093
|
|
|
$
|
102,729
|
|
Foreign government
|
2,998
|
|
|
—
|
|
|
32
|
|
|
2,966
|
|
||||
States, municipalities and political subdivisions
|
154,195
|
|
|
389
|
|
|
2,718
|
|
|
151,866
|
|
||||
Public utilities
|
24,898
|
|
|
19
|
|
|
775
|
|
|
24,142
|
|
||||
Corporate securities
|
296,009
|
|
|
197
|
|
|
6,610
|
|
|
289,596
|
|
||||
Mortgage-backed securities
|
211,288
|
|
|
—
|
|
|
6,298
|
|
|
204,990
|
|
||||
Asset backed securities
|
59,145
|
|
|
5
|
|
|
252
|
|
|
58,898
|
|
||||
Redeemable preferred stocks
|
1,285
|
|
|
3
|
|
|
85
|
|
|
1,203
|
|
||||
Total fixed maturities
|
$
|
854,640
|
|
|
$
|
613
|
|
|
$
|
18,863
|
|
|
$
|
836,390
|
|
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
$
|
44,589
|
|
|
$
|
6,506
|
|
|
$
|
—
|
|
|
$
|
51,095
|
|
Public utilities
|
2,045
|
|
|
331
|
|
|
19
|
|
|
2,357
|
|
||||
Other common stocks
|
27,016
|
|
|
10,893
|
|
|
341
|
|
|
37,568
|
|
||||
Non-redeemable preferred stocks
|
2,098
|
|
|
8
|
|
|
34
|
|
|
2,072
|
|
||||
Total equity securities
|
$
|
75,748
|
|
|
$
|
17,738
|
|
|
$
|
394
|
|
|
$
|
93,092
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency securities
|
$
|
93,827
|
|
|
$
|
40
|
|
|
$
|
1,241
|
|
|
$
|
92,626
|
|
Foreign government
|
2,022
|
|
|
14
|
|
|
—
|
|
|
2,036
|
|
||||
States, municipalities and political subdivisions
|
200,706
|
|
|
1,929
|
|
|
1,123
|
|
|
201,512
|
|
||||
Public utilities
|
20,215
|
|
|
127
|
|
|
85
|
|
|
20,257
|
|
||||
Corporate securities
|
287,025
|
|
|
1,746
|
|
|
1,209
|
|
|
287,562
|
|
||||
Mortgage-backed securities
|
143,982
|
|
|
235
|
|
|
952
|
|
|
143,265
|
|
||||
Asset-backed securities
|
14,902
|
|
|
23
|
|
|
20
|
|
|
14,905
|
|
||||
Redeemable preferred stocks
|
755
|
|
|
11
|
|
|
74
|
|
|
692
|
|
||||
Total fixed maturities
|
$
|
763,434
|
|
|
$
|
4,125
|
|
|
$
|
4,704
|
|
|
$
|
762,855
|
|
|
|
|
|
|
|
|
|
||||||||
Mutual fund
|
$
|
29,079
|
|
|
$
|
2,845
|
|
|
$
|
—
|
|
|
$
|
31,924
|
|
Public utilities
|
1,343
|
|
|
359
|
|
|
—
|
|
|
1,702
|
|
||||
Other common stocks
|
18,856
|
|
|
9,093
|
|
|
47
|
|
|
27,902
|
|
||||
Non-redeemable preferred stocks
|
1,718
|
|
|
53
|
|
|
4
|
|
|
1,767
|
|
||||
Total equity securities
|
$
|
50,996
|
|
|
$
|
12,350
|
|
|
$
|
51
|
|
|
$
|
63,295
|
|
|
2018
|
|
2017
|
||||||||||||
|
Gains
(Losses)
|
|
Fair Value at Sale
|
|
Gains
(Losses)
|
|
Fair Value at Sale
|
||||||||
Three Months Ended September 30,
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
12
|
|
|
$
|
4,864
|
|
|
$
|
123
|
|
|
$
|
11,368
|
|
Equity securities
|
8
|
|
|
411
|
|
|
1
|
|
|
156
|
|
||||
Total realized gains
|
20
|
|
|
5,275
|
|
|
124
|
|
|
11,524
|
|
||||
Fixed maturities
|
(441
|
)
|
|
46,268
|
|
|
(195
|
)
|
|
10,517
|
|
||||
Equity securities
|
(26
|
)
|
|
387
|
|
|
—
|
|
|
—
|
|
||||
Total realized losses
|
(467
|
)
|
|
46,655
|
|
|
(195
|
)
|
|
10,517
|
|
||||
Net realized investment gains (losses)
|
$
|
(447
|
)
|
|
$
|
51,930
|
|
|
$
|
(71
|
)
|
|
$
|
22,041
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
68
|
|
|
$
|
11,745
|
|
|
$
|
263
|
|
|
$
|
30,264
|
|
Equity securities
|
517
|
|
|
1,593
|
|
|
8
|
|
|
175
|
|
||||
Total realized gains
|
585
|
|
|
13,338
|
|
|
271
|
|
|
30,439
|
|
||||
Fixed maturities
|
(1,233
|
)
|
|
116,587
|
|
|
(815
|
)
|
|
47,913
|
|
||||
Equity securities
|
(26
|
)
|
|
387
|
|
|
(10
|
)
|
|
100
|
|
||||
Total realized losses
|
(1,259
|
)
|
|
116,974
|
|
|
(825
|
)
|
|
48,013
|
|
||||
Net realized investment gains (losses)
|
$
|
(674
|
)
|
|
$
|
130,312
|
|
|
$
|
(554
|
)
|
|
$
|
78,452
|
|
|
September 30, 2018
|
||||||||||||
|
Cost or Amortized Cost
|
|
Percent of Total
|
|
Fair Value
|
|
Percent of Total
|
||||||
Due in one year or less
|
$
|
70,131
|
|
|
8.2
|
%
|
|
$
|
69,785
|
|
|
8.3
|
%
|
Due after one year through five years
|
337,014
|
|
|
39.4
|
%
|
|
331,204
|
|
|
39.6
|
%
|
||
Due after five years through ten years
|
164,523
|
|
|
19.3
|
%
|
|
159,481
|
|
|
19.1
|
%
|
||
Due after ten years
|
12,539
|
|
|
1.5
|
%
|
|
12,032
|
|
|
1.4
|
%
|
||
Asset and mortgage backed securities
|
270,433
|
|
|
31.6
|
%
|
|
263,888
|
|
|
31.6
|
%
|
||
Total
|
$
|
854,640
|
|
|
100.0
|
%
|
|
$
|
836,390
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Fixed maturities
|
$
|
5,725
|
|
|
$
|
4,111
|
|
|
$
|
15,929
|
|
|
$
|
10,696
|
|
Equity securities
|
525
|
|
|
375
|
|
|
1,455
|
|
|
940
|
|
||||
Cash and cash equivalents
|
588
|
|
|
285
|
|
|
1,427
|
|
|
445
|
|
||||
Other investments
|
41
|
|
|
124
|
|
|
830
|
|
|
385
|
|
||||
Other assets
|
9
|
|
|
6
|
|
|
24
|
|
|
23
|
|
||||
Investment income
|
6,888
|
|
|
4,901
|
|
|
19,665
|
|
|
12,489
|
|
||||
Investment expenses
|
(267
|
)
|
|
(213
|
)
|
|
(756
|
)
|
|
(482
|
)
|
||||
Net investment income
|
$
|
6,621
|
|
|
$
|
4,688
|
|
|
$
|
18,909
|
|
|
$
|
12,007
|
|
|
Less Than Twelve Months
|
|
Twelve Months or More
|
||||||||||||||||||
|
Number of Securities
(1)
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Number of Securities
(1)
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency securities
|
83
|
|
|
$
|
580
|
|
|
$
|
48,600
|
|
|
56
|
|
|
$
|
1,513
|
|
|
$
|
54,114
|
|
Foreign governments
|
5
|
|
|
32
|
|
|
2,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
132
|
|
|
1,742
|
|
|
103,690
|
|
|
43
|
|
|
976
|
|
|
30,133
|
|
||||
Public utilities
|
41
|
|
|
672
|
|
|
19,812
|
|
|
6
|
|
|
103
|
|
|
1,976
|
|
||||
Corporate securities
|
481
|
|
|
4,752
|
|
|
217,405
|
|
|
90
|
|
|
1,858
|
|
|
49,688
|
|
||||
Mortgage-backed securities
|
180
|
|
|
4,683
|
|
|
173,692
|
|
|
89
|
|
|
1,615
|
|
|
29,984
|
|
||||
Asset backed securities
|
83
|
|
|
250
|
|
|
51,428
|
|
|
7
|
|
|
2
|
|
|
1,362
|
|
||||
Redeemable preferred stocks
|
8
|
|
|
25
|
|
|
749
|
|
|
2
|
|
|
60
|
|
|
200
|
|
||||
Total fixed maturities
|
1,013
|
|
|
12,736
|
|
|
618,342
|
|
|
293
|
|
|
6,127
|
|
|
167,457
|
|
||||
Mutual Fund
|
1
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Public utilities
|
8
|
|
|
19
|
|
|
672
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other common stocks
|
70
|
|
|
305
|
|
|
4,103
|
|
|
1
|
|
|
36
|
|
|
91
|
|
||||
Non-redeemable preferred stocks
|
18
|
|
|
32
|
|
|
1,506
|
|
|
3
|
|
|
2
|
|
|
19
|
|
||||
Total equity securities
|
97
|
|
|
356
|
|
|
6,337
|
|
|
4
|
|
|
38
|
|
|
110
|
|
||||
Total
|
1,110
|
|
|
$
|
13,092
|
|
|
$
|
624,679
|
|
|
297
|
|
|
$
|
6,165
|
|
|
$
|
167,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency securities
|
40
|
|
|
$
|
166
|
|
|
$
|
26,979
|
|
|
73
|
|
|
$
|
1,075
|
|
|
$
|
58,980
|
|
States, municipalities and political subdivisions
|
106
|
|
|
734
|
|
|
91,245
|
|
|
31
|
|
|
389
|
|
|
19,718
|
|
||||
Public utilities
|
16
|
|
|
44
|
|
|
7,052
|
|
|
5
|
|
|
41
|
|
|
1,016
|
|
||||
Corporate securities
|
263
|
|
|
871
|
|
|
134,755
|
|
|
52
|
|
|
338
|
|
|
16,476
|
|
||||
Mortgage-backed securities
|
89
|
|
|
475
|
|
|
76,349
|
|
|
50
|
|
|
477
|
|
|
15,210
|
|
||||
Asset-backed securities
|
18
|
|
|
20
|
|
|
11,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
74
|
|
|
303
|
|
||||
Total fixed maturities
|
532
|
|
|
2,310
|
|
|
348,062
|
|
|
214
|
|
|
2,394
|
|
|
111,703
|
|
||||
Mutual Funds
|
1
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other common stocks
|
5
|
|
|
47
|
|
|
748
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Non-redeemable preferred stocks
|
4
|
|
|
4
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
10
|
|
|
51
|
|
|
966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
542
|
|
|
$
|
2,361
|
|
|
$
|
349,028
|
|
|
214
|
|
|
$
|
2,394
|
|
|
$
|
111,703
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
September 30, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency securities
|
$
|
102,729
|
|
|
$
|
—
|
|
|
$
|
102,729
|
|
|
$
|
—
|
|
Foreign government
|
2,966
|
|
|
—
|
|
|
2,966
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
151,866
|
|
|
—
|
|
|
151,866
|
|
|
—
|
|
||||
Public utilities
|
24,142
|
|
|
—
|
|
|
24,142
|
|
|
—
|
|
||||
Corporate securities
|
289,596
|
|
|
—
|
|
|
289,596
|
|
|
—
|
|
||||
Mortgage-backed securities
|
204,990
|
|
|
—
|
|
|
204,990
|
|
|
—
|
|
||||
Asset-backed securities
|
58,898
|
|
|
—
|
|
|
58,898
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
1,203
|
|
|
821
|
|
|
382
|
|
|
—
|
|
||||
Total fixed maturities
|
836,390
|
|
|
821
|
|
|
835,569
|
|
|
—
|
|
||||
Mutual funds
|
51,095
|
|
|
51,095
|
|
|
—
|
|
|
—
|
|
||||
Public utilities
|
2,357
|
|
|
2,357
|
|
|
—
|
|
|
—
|
|
||||
Other common stocks
|
37,568
|
|
|
37,568
|
|
|
—
|
|
|
—
|
|
||||
Non-redeemable preferred stocks
|
2,072
|
|
|
2,072
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
93,092
|
|
|
93,092
|
|
|
—
|
|
|
—
|
|
||||
Other long-term investments
|
8,330
|
|
|
300
|
|
|
2,173
|
|
|
5,857
|
|
||||
Total investments
|
$
|
937,812
|
|
|
$
|
94,213
|
|
|
$
|
837,742
|
|
|
$
|
5,857
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency securities
|
$
|
92,626
|
|
|
$
|
—
|
|
|
$
|
92,626
|
|
|
$
|
—
|
|
Foreign government
|
2,036
|
|
|
—
|
|
|
2,036
|
|
|
—
|
|
||||
States, municipalities and political subdivisions
|
201,512
|
|
|
—
|
|
|
201,512
|
|
|
—
|
|
||||
Public utilities
|
20,257
|
|
|
—
|
|
|
20,257
|
|
|
—
|
|
||||
Corporate securities
|
287,562
|
|
|
—
|
|
|
287,562
|
|
|
—
|
|
||||
Mortgage-backed securities
|
143,265
|
|
|
—
|
|
|
143,265
|
|
|
—
|
|
||||
Asset-backed securities
|
14,905
|
|
|
—
|
|
|
14,905
|
|
|
—
|
|
||||
Redeemable preferred stocks
|
692
|
|
|
692
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturities
|
762,855
|
|
|
692
|
|
|
762,163
|
|
|
—
|
|
||||
Mutual Funds
|
31,924
|
|
|
31,924
|
|
|
—
|
|
|
—
|
|
||||
Public utilities
|
1,702
|
|
|
1,702
|
|
|
—
|
|
|
—
|
|
||||
Other common stocks
|
27,902
|
|
|
27,902
|
|
|
—
|
|
|
—
|
|
||||
Non-redeemable preferred stocks
|
1,767
|
|
|
1,767
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
63,295
|
|
|
63,295
|
|
|
—
|
|
|
—
|
|
||||
Other long-term investments
|
8,381
|
|
|
300
|
|
|
7,447
|
|
|
634
|
|
||||
Total investments
|
$
|
834,531
|
|
|
$
|
64,287
|
|
|
$
|
769,610
|
|
|
$
|
634
|
|
|
|
Other Investments
|
||
December 31, 2017
|
|
$
|
634
|
|
Transfers in
|
|
5,507
|
|
|
Partnership income
|
|
261
|
|
|
Return of capital
|
|
(482
|
)
|
|
Unrealized gains in accumulated other comprehensive income
|
|
(63
|
)
|
|
September 30, 2018
|
|
$
|
5,857
|
|
|
|
Book Value
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Fair Value
|
||||||||
Limited partnership investments
|
|
$
|
7,769
|
|
|
$
|
260
|
|
|
$
|
—
|
|
|
$
|
8,029
|
|
Certificates of deposit
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||
Total other investments
|
|
$
|
8,069
|
|
|
$
|
260
|
|
|
$
|
—
|
|
|
$
|
8,329
|
|
4)
|
ACQUISITIONS
|
Cash and cash equivalents
|
$
|
95,284
|
|
Investments
|
222,920
|
|
|
Premium and agents' receivable
|
31,439
|
|
|
Reinsurance recoverable
|
20,230
|
|
|
Prepaid reinsurance premiums
|
22,544
|
|
|
Intangible assets
|
30,286
|
|
|
Insurance contract asset
|
33,812
|
|
|
Goodwill
|
59,475
|
|
|
Other assets
|
4,591
|
|
|
Unpaid losses and loss adjustment expenses
|
(60,529
|
)
|
|
Unearned premiums
|
(128,824
|
)
|
|
Reinsurance payable
|
(22,406
|
)
|
|
Deferred taxes
|
(17,093
|
)
|
|
Other liabilities
|
(6,261
|
)
|
|
Total purchase price
|
$
|
285,468
|
|
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
||||||||||
|
As
|
|
Pro Forma
|
|
|
||||||
|
Reported
|
|
Adjustments
|
|
Pro Forma
|
||||||
Revenues
|
$
|
471,834
|
|
|
$
|
38,096
|
|
|
$
|
509,930
|
|
Net income (loss)
|
(16,856
|
)
|
|
6,712
|
|
|
(10,144
|
)
|
|||
Diluted earnings per share
|
(0.47
|
)
|
|
—
|
|
|
(0.24
|
)
|
|
January 1, 2018 to September 30, 2018
|
|
April 3, 2017 to September 30, 2017
|
||||
Revenues
|
$
|
146,301
|
|
|
$
|
93,269
|
|
Net income
|
25,605
|
|
|
1,122
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to UIHC common stockholders
|
|
$
|
(11,708
|
)
|
|
$
|
(28,012
|
)
|
|
$
|
11,361
|
|
|
$
|
(16,856
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
|
42,677,893
|
|
|
42,524,400
|
|
|
42,636,515
|
|
|
35,341,994
|
|
||||
Effect of dilutive securities
|
|
—
|
|
|
216,604
|
|
|
154,693
|
|
|
221,038
|
|
||||
Weighted-average diluted shares
|
|
42,677,893
|
|
|
42,741,004
|
|
|
42,791,208
|
|
|
35,563,032
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings available to UIHC common shareholders per share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.48
|
)
|
Diluted
|
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.47
|
)
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Land
|
|
$
|
2,114
|
|
|
$
|
2,114
|
|
Building and building improvements
|
|
6,553
|
|
|
5,695
|
|
||
Computer hardware and software
|
|
16,980
|
|
|
18,985
|
|
||
Office furniture and equipment
|
|
3,024
|
|
|
3,413
|
|
||
Leasehold improvements
|
|
20
|
|
|
—
|
|
||
Total, at cost
|
|
28,691
|
|
|
30,207
|
|
||
Less: accumulated depreciation and amortization
|
|
(12,108
|
)
|
|
(12,916
|
)
|
||
Property and equipment, net
|
|
$
|
16,583
|
|
|
$
|
17,291
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Intangible assets subject to amortization
|
|
$
|
29,160
|
|
|
$
|
41,715
|
|
Indefinite-lived intangible assets
(1)
|
|
3,556
|
|
|
3,556
|
|
||
Total
|
|
$
|
32,716
|
|
|
$
|
45,271
|
|
|
|
Weighted-average remaining amortization period (in years)
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||
September 30, 2018
|
|
|
|
|
|
|
|
|
||||||
Value of business acquired
|
|
—
|
|
$
|
42,788
|
|
|
$
|
(42,788
|
)
|
|
$
|
—
|
|
Agency agreements acquired
|
|
7.5
|
|
34,661
|
|
|
(10,040
|
)
|
|
24,621
|
|
|||
Trade names acquired
|
|
5.4
|
|
6,381
|
|
|
(1,842
|
)
|
|
4,539
|
|
|||
Total
|
|
|
|
$
|
83,830
|
|
|
$
|
(54,670
|
)
|
|
$
|
29,160
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||
Value of business acquired
|
|
0.3
|
|
$
|
42,788
|
|
|
$
|
(34,335
|
)
|
|
$
|
8,453
|
|
Agency agreements acquired
|
|
8.0
|
|
34,661
|
|
|
(6,669
|
)
|
|
27,992
|
|
|||
Trade names acquired
|
|
6.0
|
|
6,381
|
|
|
(1,111
|
)
|
|
5,270
|
|
|||
Total
|
|
|
|
$
|
83,830
|
|
|
$
|
(42,115
|
)
|
|
$
|
41,715
|
|
Year ending December 31,
|
|
Estimated Amortization Expense
|
||
Remaining 2018
|
|
$
|
1,365
|
|
2019
|
|
5,355
|
|
|
2020
|
|
4,267
|
|
|
2021
|
|
3,555
|
|
|
2022
|
|
3,246
|
|
|
2023
|
|
3,246
|
|
•
|
Increased frequency and severity protection, with an overall program exhaustion point excess of
$3,100,000,000
;
|
◦
|
Sufficient coverage for approximately a single 1-in-400 year event;
|
◦
|
Sufficient coverage for a 1-in-100 year event followed by a 1-in-50 year event in the same season;
|
•
|
Lower per occurrence retention levels which include all BlueLine business;
|
◦
|
First event retention of
$60,000,000
in Florida and
$25,000,000
outside of Florida which, as a percentage of the group equity, represents approximately
11%
and
4.6%
, respectively;
|
◦
|
$25,000,000
for second event in all states;
|
•
|
Successful completion of Armor Re II CAT Bond providing
$100,000,000
of limit on a multi-year basis;
|
•
|
Coverage from
41
reinsurers with
93%
of the open market limit placed on a fully collateralized basis or with reinsurers having an A+ or better A.M. Best financial strength rating; and
|
•
|
Up to
$262,500,000
of multi-year limit including the CAT Bond limit.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Quota share
|
$
|
(24,852
|
)
|
|
$
|
(24,768
|
)
|
|
$
|
(72,824
|
)
|
|
$
|
(71,549
|
)
|
Excess-of-loss
|
(28,450
|
)
|
|
(3,538
|
)
|
|
(392,541
|
)
|
|
(329,224
|
)
|
||||
Equipment & identity theft
|
(2,375
|
)
|
|
(2,606
|
)
|
|
(7,126
|
)
|
|
(7,275
|
)
|
||||
Flood
|
(5,897
|
)
|
|
(5,559
|
)
|
|
(15,136
|
)
|
|
(14,319
|
)
|
||||
Ceded premiums written
|
$
|
(61,574
|
)
|
|
$
|
(36,471
|
)
|
|
$
|
(487,627
|
)
|
|
$
|
(422,367
|
)
|
Increase (decrease) in ceded unearned premiums
|
(71,052
|
)
|
|
(79,036
|
)
|
|
122,616
|
|
|
130,012
|
|
||||
Ceded premiums earned
|
$
|
(132,626
|
)
|
|
$
|
(115,507
|
)
|
|
$
|
(365,011
|
)
|
|
$
|
(292,355
|
)
|
|
|
2018
|
|
2017
|
||||||||||||||||
|
|
Number of Events
|
|
Incurred Loss and LAE
(1)
|
|
Combined Ratio Impact
|
|
Number of Events
|
|
Incurred Loss and LAE
(1)
|
|
Combined Ratio Impact
|
||||||||
Three Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current period catastrophe losses incurred
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Named and numbered storms
|
|
3
|
|
|
$
|
25,019
|
|
|
14.6
|
%
|
|
4
|
|
|
$
|
83,460
|
|
|
54.7
|
%
|
All other catastrophe loss events
|
|
6
|
|
|
9,574
|
|
|
5.6
|
%
|
|
15
|
|
|
(845
|
)
|
|
(0.6
|
)%
|
||
Total
|
|
9
|
|
|
$
|
34,593
|
|
|
20.2
|
%
|
|
19
|
|
|
$
|
82,615
|
|
|
54.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current period catastrophe losses incurred
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Named and numbered storms
|
|
4
|
|
|
$
|
26,233
|
|
|
5.2
|
%
|
|
4
|
|
|
$
|
83,724
|
|
|
20.0
|
%
|
All other catastrophe loss events
|
|
22
|
|
|
32,017
|
|
|
6.3
|
%
|
|
15
|
|
|
31,301
|
|
|
7.5
|
%
|
||
Total
|
|
26
|
|
|
$
|
58,250
|
|
|
11.5
|
%
|
|
19
|
|
|
$
|
115,025
|
|
|
27.5
|
%
|
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Balance at January 1
|
$
|
482,232
|
|
|
$
|
140,855
|
|
Less: reinsurance recoverable on unpaid losses
|
305,673
|
|
|
18,724
|
|
||
Net balance at January 1
|
$
|
176,559
|
|
|
$
|
122,131
|
|
|
|
|
|
||||
Acquisition of AmCo reserves (net of reinsurance recoverables of $19,945)
|
—
|
|
|
40,583
|
|
||
|
|
|
|
||||
Incurred related to:
|
|
|
|
||||
Current year
|
290,600
|
|
|
296,217
|
|
||
Prior years
|
(4,207
|
)
|
|
(2,819
|
)
|
||
Total incurred
|
$
|
286,393
|
|
|
$
|
293,398
|
|
Paid related to:
|
|
|
|
||||
Current year
|
163,589
|
|
|
160,952
|
|
||
Prior years
|
102,750
|
|
|
84,497
|
|
||
Total paid
|
$
|
266,339
|
|
|
$
|
245,449
|
|
|
|
|
|
||||
Net balance at September 30
|
$
|
196,613
|
|
|
$
|
210,663
|
|
Plus: reinsurance recoverable on unpaid losses
|
332,229
|
|
|
471,498
|
|
||
Balance at September 30
|
$
|
528,842
|
|
|
$
|
682,161
|
|
|
|
|
|
||||
Composition of reserve for unpaid losses and LAE:
|
|
|
|
||||
Case reserves
|
$
|
259,678
|
|
|
$
|
289,938
|
|
IBNR reserves
|
269,164
|
|
|
392,223
|
|
||
Balance at September 30
|
$
|
528,842
|
|
|
$
|
682,161
|
|
|
|
|
Effective Interest Rate
|
|
Carrying Value at
|
||||||
|
Maturity
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|||||
$150M Senior Notes Payable
|
December 15, 2027
|
|
6.25%
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Florida State Board of Administration Note Payable
|
July 1, 2026
|
|
2.84%
|
|
9,412
|
|
|
10,000
|
|
||
BB&T Term Note Payable
|
May 26, 2031
|
|
3.75%
|
|
4,391
|
|
|
4,651
|
|
||
Total long-term debt
|
|
|
|
|
$
|
163,803
|
|
|
$
|
164,651
|
|
|
2018
|
|
2017
|
||||
Balance at January 1,
|
$
|
3,287
|
|
|
$
|
549
|
|
Additions
|
63
|
|
|
—
|
|
||
Amortization
|
(255
|
)
|
|
(86
|
)
|
||
Balance at September 30,
|
$
|
3,095
|
|
|
$
|
463
|
|
•
|
Statutory accounting requires that we exclude certain assets, called non-admitted assets, from the balance sheet.
|
•
|
Statutory accounting requires us to expense policy acquisition costs when incurred, while GAAP allows us to defer to the extent realizable, and amortize policy acquisition costs over the estimated life of the policies.
|
•
|
Statutory accounting requires that surplus notes, also known as surplus debentures, be recorded in statutory surplus, while GAAP requires us to record surplus notes as a liability.
|
•
|
Statutory accounting allows certain investments to be carried at amortized cost or fair value based on the rating received from the Securities Valuation Office of the NAIC, while they are recorded at fair value for GAAP because the investments are held as available for sale.
|
•
|
Statutory accounting allows ceding commission income to be recognized when written if the cost of acquiring and renewing the associated business exceeds the ceding commissions, but under GAAP such income is deferred and recognized over the coverage period.
|
•
|
Statutory accounting requires that unearned premiums and loss reserves are presented net of related reinsurance rather than on a gross basis under GAAP.
|
•
|
Statutory accounting requires that a provision for reinsurance liability be established for reinsurance recoverable on paid losses aged over 90 days and for unsecured amounts recoverable from unauthorized reinsurers. Under GAAP there is no charge for uncollateralized amounts ceded to a company not licensed in the insurance subsidiary's domiciliary state and a reserve for uncollectable reinsurance is charged through earnings rather than surplus or equity.
|
•
|
Statutory accounting requires an additional admissibility test and the change in deferred income tax is reported directly in capital and surplus, rather than being reported as a component of income tax expense under GAAP.
|
|
Pre-Tax Amount
|
|
Tax (Expense) Benefit
|
|
Net-of-Tax Amount
|
||||||
December 31, 2017
|
$
|
12,044
|
|
|
$
|
(2,823
|
)
|
|
$
|
9,221
|
|
Reclassification adjustment for adoption of ASU 2016-01
(1)
|
(12,300
|
)
|
|
2,962
|
|
|
(9,338
|
)
|
|||
Adjusted balance at January 1, 2018
|
(256
|
)
|
|
139
|
|
|
(117
|
)
|
|||
|
|
|
|
|
|
||||||
Changes in net unrealized gains on investments
|
(18,407
|
)
|
|
4,316
|
|
|
(14,091
|
)
|
|||
Reclassification adjustment for realized gains
|
674
|
|
|
(168
|
)
|
|
506
|
|
|||
September 30, 2018
|
$
|
(17,989
|
)
|
|
$
|
4,287
|
|
|
$
|
(13,702
|
)
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||
|
|
Per Share Amount
|
|
Aggregate Amount
|
|
Per Share Amount
|
|
Aggregate Amount
|
||||||||
First Quarter
|
|
$
|
0.06
|
|
|
$
|
2,565
|
|
|
$
|
0.06
|
|
|
$
|
1,301
|
|
Second Quarter
|
|
$
|
0.06
|
|
|
$
|
2,565
|
|
|
$
|
0.06
|
|
|
$
|
2,561
|
|
Third Quarter
|
|
$
|
0.06
|
|
|
$
|
2,569
|
|
|
$
|
0.06
|
|
|
$
|
2,564
|
|
|
Three Months Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Employee stock-based compensation expense
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
$
|
248
|
|
|
$
|
393
|
|
|
$
|
736
|
|
|
$
|
1,179
|
|
Post-tax
(1)
|
196
|
|
|
310
|
|
|
581
|
|
|
931
|
|
||||
Director stock-based compensation expense
|
|
|
|
|
|
|
|
||||||||
Pre-tax
|
379
|
|
|
244
|
|
|
940
|
|
|
752
|
|
||||
Post-tax
(1)
|
299
|
|
|
193
|
|
|
743
|
|
|
594
|
|
|
Number of Restricted Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding as of December 31, 2017
|
212,094
|
|
|
$
|
16.44
|
|
Granted
|
174,602
|
|
|
20.07
|
|
|
Less: Forfeited
|
17,077
|
|
|
18.07
|
|
|
Less: Vested
|
139,183
|
|
|
16.38
|
|
|
Outstanding as of September 30, 2018
|
230,436
|
|
|
$
|
19.11
|
|
|
2018
|
|
Expected annual dividend yield
|
1.17
|
%
|
Expected volatility
|
41.31
|
%
|
Risk-free interest rate
|
2.98
|
%
|
Expected term
|
6
|
years
|
|
Number of Stock Options
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Exercise Prices
|
|||||
Outstanding as of December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
29,464
|
|
|
8.01
|
|
|
20.44
|
|
||
Less: Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Less: Vested
|
—
|
|
|
—
|
|
|
—
|
|
||
Outstanding as of September 30, 2018
|
29,464
|
|
|
$
|
8.01
|
|
|
$
|
20.44
|
|
Exercisable as of September 30, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
($ in thousands, except per share)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
295,935
|
|
|
$
|
267,219
|
|
|
$
|
960,214
|
|
|
$
|
788,408
|
|
Gross premiums earned
|
303,956
|
|
|
268,001
|
|
|
872,547
|
|
|
711,650
|
|
||||
Net premiums earned
|
171,330
|
|
|
152,494
|
|
|
507,536
|
|
|
419,295
|
|
||||
Total revenues
|
187,652
|
|
|
171,128
|
|
|
542,853
|
|
|
471,834
|
|
||||
Earnings before income tax
|
(15,870
|
)
|
|
(45,487
|
)
|
|
15,177
|
|
|
(26,899
|
)
|
||||
Consolidated net income (loss) attributable to UIHC
|
(11,708
|
)
|
|
(28,012
|
)
|
|
11,361
|
|
|
(16,856
|
)
|
||||
Net income (loss) available to UIHC shareholders per diluted share
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income to core income:
|
|
|
|
|
|
|
|
||||||||
Plus: Merger expenses
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
6,906
|
|
Plus: Non-cash amortization of intangible assets
|
1,365
|
|
|
10,363
|
|
|
12,555
|
|
|
23,552
|
|
||||
Less: Realized losses on investment portfolio
|
(447
|
)
|
|
(71
|
)
|
|
(674
|
)
|
|
(554
|
)
|
||||
Less: Unrealized gains (losses) on equity securities
|
6,109
|
|
|
—
|
|
|
5,046
|
|
|
—
|
|
||||
Less: Net tax impact
(1)
|
(1,074
|
)
|
|
3,656
|
|
|
2,046
|
|
|
10,854
|
|
||||
Core income (loss)
(2)
|
(14,931
|
)
|
|
(21,222
|
)
|
|
17,498
|
|
|
3,302
|
|
||||
Core income (loss) per diluted share
(2)
|
$
|
(0.35
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.41
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
||||||||
Book value per share
|
|
|
|
|
$
|
12.33
|
|
|
11.73
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
295,935
|
|
|
$
|
267,219
|
|
|
$
|
960,214
|
|
|
$
|
788,408
|
|
Change in gross unearned premiums
|
|
8,021
|
|
|
782
|
|
|
(87,667
|
)
|
|
(76,758
|
)
|
||||
Gross premiums earned
|
|
303,956
|
|
|
268,001
|
|
|
872,547
|
|
|
711,650
|
|
||||
Ceded premiums earned
|
|
(132,626
|
)
|
|
(115,507
|
)
|
|
(365,011
|
)
|
|
(292,355
|
)
|
||||
Net premiums earned
|
|
171,330
|
|
|
152,494
|
|
|
507,536
|
|
|
419,295
|
|
||||
Investment income
|
|
6,888
|
|
|
4,901
|
|
|
19,665
|
|
|
12,489
|
|
||||
Net realized investment losses
|
|
(447
|
)
|
|
(71
|
)
|
|
(674
|
)
|
|
(554
|
)
|
||||
Net unrealized gains on equity securities
|
|
6,109
|
|
|
—
|
|
|
5,046
|
|
|
—
|
|
||||
Other revenue
|
|
3,772
|
|
|
13,804
|
|
|
11,280
|
|
|
40,604
|
|
||||
Total revenue
|
|
187,652
|
|
|
171,128
|
|
|
542,853
|
|
|
471,834
|
|
||||
EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses
|
|
120,552
|
|
|
143,127
|
|
|
286,393
|
|
|
293,398
|
|
||||
Policy acquisition costs
|
|
54,200
|
|
|
46,546
|
|
|
153,716
|
|
|
125,302
|
|
||||
Operating expenses
|
|
10,976
|
|
|
6,891
|
|
|
28,976
|
|
|
19,020
|
|
||||
General and administrative expenses
|
|
15,358
|
|
|
19,316
|
|
|
51,326
|
|
|
58,825
|
|
||||
Interest expense
|
|
2,455
|
|
|
771
|
|
|
7,371
|
|
|
2,282
|
|
||||
Total expenses
|
|
203,541
|
|
|
216,651
|
|
|
527,782
|
|
|
498,827
|
|
||||
Income (loss) before other income
|
|
(15,889
|
)
|
|
(45,523
|
)
|
|
15,071
|
|
|
(26,993
|
)
|
||||
Other income
|
|
19
|
|
|
36
|
|
|
106
|
|
|
94
|
|
||||
Income (loss) before income taxes
|
|
(15,870
|
)
|
|
(45,487
|
)
|
|
15,177
|
|
|
(26,899
|
)
|
||||
Provision (benefit) for income taxes
|
|
(4,163
|
)
|
|
(17,475
|
)
|
|
3,815
|
|
|
(10,043
|
)
|
||||
Net income (loss)
|
|
$
|
(11,707
|
)
|
|
$
|
(28,012
|
)
|
|
$
|
11,362
|
|
|
$
|
(16,856
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Net income (loss) attributable to UIHC
|
|
$
|
(11,708
|
)
|
|
$
|
(28,012
|
)
|
|
$
|
11,361
|
|
|
$
|
(16,856
|
)
|
Earnings available to UIHC common shareholders per diluted share
|
|
$
|
(0.27
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.27
|
|
|
$
|
(0.47
|
)
|
Book value per share
|
|
|
|
|
|
$
|
12.33
|
|
|
$
|
11.73
|
|
||||
Return on equity based on trailing twelve months
GAAP net income
|
|
|
|
|
|
4.2
|
%
|
|
3.5
|
%
|
||||||
Loss ratio, net
(1)
|
|
70.4
|
%
|
|
93.9
|
%
|
|
56.4
|
%
|
|
70.0
|
%
|
||||
Expense ratio
(2)
|
|
47.0
|
%
|
|
47.7
|
%
|
|
46.1
|
%
|
|
48.4
|
%
|
||||
Combined ratio (CR)
(3)
|
|
117.4
|
%
|
|
141.6
|
%
|
|
102.5
|
%
|
|
118.4
|
%
|
||||
Effect of current year catastrophe losses on CR
|
|
20.2
|
%
|
|
54.2
|
%
|
|
11.5
|
%
|
|
27.4
|
%
|
||||
Effect of prior year development on CR
|
|
(1.6
|
)%
|
|
(0.7
|
)%
|
|
(0.8
|
)%
|
|
(0.7
|
)%
|
||||
Effect of ceding commission income on CR
(4)
|
|
—
|
%
|
|
6.6
|
%
|
|
—
|
%
|
|
7.2
|
%
|
||||
Underlying combined ratio
(5)
|
|
98.8
|
%
|
|
81.5
|
%
|
|
91.8
|
%
|
|
84.5
|
%
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
|
Estimated Fair Value
|
|
Percent of Total
|
|
Estimated Fair Value
|
|
Percent of Total
|
||||||
U.S. government and agency securities
|
$
|
102,729
|
|
|
8.3
|
%
|
|
$
|
92,626
|
|
|
8.2
|
%
|
Foreign government
|
2,966
|
|
|
0.2
|
%
|
|
2,036
|
|
|
0.2
|
%
|
||
States, municipalities and political subdivisions
|
151,866
|
|
|
12.2
|
%
|
|
201,512
|
|
|
17.8
|
%
|
||
Public utilities
|
24,142
|
|
|
1.9
|
%
|
|
20,257
|
|
|
1.8
|
%
|
||
Corporate securities
|
289,596
|
|
|
23.2
|
%
|
|
287,562
|
|
|
25.4
|
%
|
||
Mortgage-backed securities
|
204,990
|
|
|
16.5
|
%
|
|
143,265
|
|
|
12.7
|
%
|
||
Asset-backed securities
|
58,898
|
|
|
4.7
|
%
|
|
14,905
|
|
|
1.3
|
%
|
||
Redeemable preferred stocks
|
1,203
|
|
|
0.1
|
%
|
|
692
|
|
|
0.1
|
%
|
||
Total fixed maturities
|
836,390
|
|
|
67.1
|
%
|
|
762,855
|
|
|
67.5
|
%
|
||
Mutual funds
|
51,095
|
|
|
4.1
|
%
|
|
31,924
|
|
|
2.8
|
%
|
||
Public utilities
|
2,357
|
|
|
0.2
|
%
|
|
1,702
|
|
|
0.2
|
%
|
||
Other common stocks
|
37,568
|
|
|
3.0
|
%
|
|
27,902
|
|
|
2.5
|
%
|
||
Non-redeemable preferred stocks
|
2,072
|
|
|
0.2
|
%
|
|
1,767
|
|
|
0.2
|
%
|
||
Total equity securities
|
93,092
|
|
|
7.5
|
%
|
|
63,295
|
|
|
5.7
|
%
|
||
Other long-term investments
|
8,330
|
|
|
0.7
|
%
|
|
8,381
|
|
|
0.7
|
%
|
||
Portfolio loans
|
—
|
|
|
—
|
%
|
|
20,000
|
|
|
1.8
|
%
|
||
Total investments
|
937,812
|
|
|
75.3
|
%
|
|
854,531
|
|
|
75.7
|
%
|
||
Cash and cash equivalents
|
240,950
|
|
|
19.5
|
%
|
|
229,556
|
|
|
20.2
|
%
|
||
Restricted cash
|
65,131
|
|
|
5.2
|
%
|
|
46,719
|
|
|
4.0
|
%
|
||
Total cash, cash equivalents, restricted cash and investments
|
$
|
1,243,893
|
|
|
100.0
|
%
|
|
$
|
1,130,806
|
|
|
100.0
|
%
|
($ in thousands)
|
|
Three Months Ended September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
Change
|
||||||
Direct Written and Assumed Premium by Region
(1)
|
|
|
|
|
|
|
||||||
Florida
|
|
$
|
141,524
|
|
|
$
|
130,309
|
|
|
$
|
11,215
|
|
Gulf
|
|
58,632
|
|
|
58,240
|
|
|
392
|
|
|||
Northeast
|
|
50,695
|
|
|
43,652
|
|
|
7,043
|
|
|||
Southeast
|
|
27,854
|
|
|
25,431
|
|
|
2,423
|
|
|||
Total direct written premium by region
|
|
278,705
|
|
|
257,632
|
|
|
21,073
|
|
|||
Assumed premium
(2)
|
|
17,230
|
|
|
9,587
|
|
|
7,643
|
|
|||
Total gross written premium by region
|
|
$
|
295,935
|
|
|
$
|
267,219
|
|
|
$
|
28,716
|
|
|
|
|
|
|
|
|
||||||
Gross Written Premium by Line of Business
|
|
|
|
|
|
|
||||||
Personal property
|
|
$
|
240,456
|
|
|
$
|
217,970
|
|
|
$
|
22,486
|
|
Commercial property
|
|
55,479
|
|
|
49,249
|
|
|
6,230
|
|
|||
Total gross written premium by line of business
|
|
$
|
295,935
|
|
|
$
|
267,219
|
|
|
$
|
28,716
|
|
|
Three Months Ended September 30,
|
|||||||
New and Renewal Policies by Region
(1)
|
2018
|
|
2017
|
|
Change
|
|||
Florida
|
63,616
|
|
|
59,298
|
|
|
4,318
|
|
Gulf
|
35,549
|
|
|
37,600
|
|
|
(2,051
|
)
|
Northeast
|
37,624
|
|
|
32,202
|
|
|
5,422
|
|
Southeast
|
24,207
|
|
|
21,686
|
|
|
2,521
|
|
Total
|
160,996
|
|
|
150,786
|
|
|
10,210
|
|
|
Three Months Ended September 30,
|
||||||||||
2018
|
|
2017
|
|
Change
|
|||||||
Net loss and LAE
|
$
|
120,552
|
|
|
$
|
143,127
|
|
|
$
|
(22,575
|
)
|
% of Gross earned premiums
|
39.7
|
%
|
|
53.4
|
%
|
|
(13.7) pts
|
|
|||
% of Net earned premiums
|
70.4
|
%
|
|
93.9
|
%
|
|
(23.5) pts
|
|
|||
Less:
|
|
|
|
|
|
||||||
Current year catastrophe losses
|
$
|
34,593
|
|
|
$
|
82,615
|
|
|
$
|
(48,022
|
)
|
Prior year reserve (favorable) development
|
(2,656
|
)
|
|
(1,029
|
)
|
|
(1,627
|
)
|
|||
Underlying loss and LAE
(1)
|
$
|
88,615
|
|
|
$
|
61,541
|
|
|
$
|
27,074
|
|
% of Gross earned premiums
|
29.2
|
%
|
|
23.0
|
%
|
|
6.2 pts
|
|
|||
% of Net earned premiums
|
51.7
|
%
|
|
40.4
|
%
|
|
11.3 pts
|
|
|
Three Months Ended September 30,
|
||||||||||
2018
|
|
2017
|
|
Change
|
|||||||
Policy acquisition costs
|
$
|
54,200
|
|
|
$
|
46,546
|
|
|
$
|
7,654
|
|
Operating and underwriting
|
10,976
|
|
|
6,891
|
|
|
4,085
|
|
|||
General and administrative
|
15,358
|
|
|
19,316
|
|
|
(3,958
|
)
|
|||
Total Operating Expenses
|
$
|
80,534
|
|
|
$
|
72,753
|
|
|
$
|
7,781
|
|
% of Gross earned premiums
|
26.5
|
%
|
|
27.1
|
%
|
|
(0.6) pts
|
|
|||
% of Net earned premiums
|
47.0
|
%
|
|
47.7
|
%
|
|
(0.7) pts
|
|
|||
Less:
|
|
|
|
|
|
||||||
Ceding commission income
|
$
|
—
|
|
|
$
|
10,091
|
|
|
(10,091
|
)
|
|
Underlying expense
(1)
|
$
|
80,534
|
|
|
$
|
62,662
|
|
|
$
|
17,872
|
|
% of Gross earned premiums
|
26.5
|
%
|
|
23.4
|
%
|
|
3.1 pts
|
|
|||
% of Net earned premiums
|
47.0
|
%
|
|
41.1
|
%
|
|
5.9 pts
|
|
($ in thousands)
|
|
Nine Months Ended September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
Change
|
||||||
Direct Written and Assumed Premium by Region
(1)
|
|
|
|
|
|
|
||||||
Florida
|
|
$
|
504,362
|
|
|
$
|
405,409
|
|
|
$
|
98,953
|
|
Gulf
|
|
162,451
|
|
|
155,640
|
|
|
6,811
|
|
|||
Northeast
|
|
132,932
|
|
|
115,631
|
|
|
17,301
|
|
|||
Southeast
|
|
79,174
|
|
|
70,711
|
|
|
8,463
|
|
|||
Total direct written premium by region
|
|
878,919
|
|
|
747,391
|
|
|
131,528
|
|
|||
Assumed premium
(2)
|
|
81,295
|
|
|
41,017
|
|
|
40,278
|
|
|||
Total gross written premium by region
|
|
$
|
960,214
|
|
|
$
|
788,408
|
|
|
$
|
171,806
|
|
|
|
|
|
|
|
|
||||||
Gross Written Premium by Line of Business
|
|
|
|
|
|
|
||||||
Personal property
|
|
$
|
682,991
|
|
|
$
|
617,974
|
|
|
$
|
65,017
|
|
Commercial property
|
|
277,223
|
|
|
170,434
|
|
|
106,789
|
|
|||
Total gross written premium by line of business
|
|
$
|
960,214
|
|
|
$
|
788,408
|
|
|
$
|
171,806
|
|
|
Nine Months Ended September 30,
|
|||||||
New and Renewal Policies By Region
(1)
|
2018
|
|
2017
|
|
Change
|
|||
Florida
|
191,668
|
|
|
174,750
|
|
|
16,918
|
|
Gulf
|
102,429
|
|
|
100,231
|
|
|
2,198
|
|
Northeast
|
100,959
|
|
|
86,421
|
|
|
14,538
|
|
Southeast
|
69,037
|
|
|
59,875
|
|
|
9,162
|
|
Total
|
464,093
|
|
|
421,277
|
|
|
42,816
|
|
|
Nine Months Ended September 30,
|
||||||||||
2018
|
|
2017
|
|
Change
|
|||||||
Net Loss and LAE
|
$
|
286,393
|
|
|
$
|
293,398
|
|
|
$
|
(7,005
|
)
|
% of Gross earned premiums
|
32.8
|
%
|
|
41.2
|
%
|
|
(8.4) pts
|
|
|||
% of Net earned premiums
|
56.4
|
%
|
|
70.0
|
%
|
|
(13.6) pts
|
|
|||
Less:
|
|
|
|
|
|
||||||
Current year catastrophe losses
|
$
|
58,250
|
|
|
$
|
115,025
|
|
|
$
|
(56,775
|
)
|
Prior year reserve (favorable) development
|
(4,207
|
)
|
|
(2,819
|
)
|
|
(1,388
|
)
|
|||
Underlying loss and LAE
(1)
|
$
|
232,350
|
|
|
$
|
181,192
|
|
|
$
|
51,158
|
|
% of Gross earned premiums
|
26.6
|
%
|
|
25.5
|
%
|
|
1.1 pts
|
|
|||
% of Net earned premiums
|
45.8
|
%
|
|
43.2
|
%
|
|
2.6 pts
|
|
|
Nine Months Ended September 30,
|
||||||||||
2018
|
|
2017
|
|
Change
|
|||||||
Policy acquisition costs
|
$
|
153,716
|
|
|
$
|
125,302
|
|
|
$
|
28,414
|
|
Operating and underwriting
|
28,976
|
|
|
19,020
|
|
|
9,956
|
|
|||
General and administrative
|
51,326
|
|
|
58,825
|
|
|
(7,499
|
)
|
|||
Total Operating Expenses
|
$
|
234,018
|
|
|
$
|
203,147
|
|
|
$
|
30,871
|
|
% of Gross earned premiums
|
26.8
|
%
|
|
28.5
|
%
|
|
(1.7) pts
|
|
|||
% of Net earned premiums
|
46.1
|
%
|
|
48.4
|
%
|
|
(2.3) pts
|
|
|||
Less:
|
|
|
|
|
|
||||||
Ceding commission income
(1)
|
$
|
—
|
|
|
$
|
30,185
|
|
|
$
|
(30,185
|
)
|
Underlying expense
(2)
|
$
|
234,018
|
|
|
$
|
172,962
|
|
|
$
|
61,056
|
|
% of Gross earned premiums
|
26.8
|
%
|
|
24.3
|
%
|
|
2.5 pts
|
|
|||
% of Net earned premiums
|
46.1
|
%
|
|
41.3
|
%
|
|
4.8 pts
|
|
•
|
A failure of the operating effectiveness of a monitoring control designed to ensure that the Company obtains evidence of the design and operating effectiveness of the general information technology controls intended to prevent unauthorized system access and inappropriate change management to two third-party service organization's professional services systems and information contained within.
|
•
|
We did not maintain effective accounting policies and procedural controls over the financial reporting for income taxes, acquisition purchase accounting and investments to ensure accurate and consistent financial reporting in accordance with GAAP.
|
Exhibit
|
|
Description
|
|
|
|
|
Form of Stock Option Award under the United Insurance Holdings Corp. 2013 Omnibus Incentive Plan
|
|
|
|
|
|
Form of Restricted Stock Unit Award under the United Insurance Holdings Corp. 2013 Omnibus Incentive Plan
|
|
|
|
|
|
Form of Performance Stock Unit Award under the United Insurance Holdings Corp. 2013 Omnibus Incentive Plan
|
|
|
|
|
|
Amendment to Employment Agreement, dated October 10, 2018, between United Insurance Holdings Corp. and John Forney (included as Exhibit 10.1 to the Form 8-K filed on October 16, 2018, and incorporated herein by reference)
|
|
|
|
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
|
|
|
|
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
|
|
|
|
|
|
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
|
|
|
|
|
|
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
UNITED INSURANCE HOLDINGS CORP.
|
|
|
|
November 7, 2018
|
By:
|
/s/ John Forney
|
|
|
John Forney, Chief Executive Officer
(principal executive officer and duly authorized officer)
|
November 7, 2018
|
By:
|
/s/ B. Bradford Martz
|
|
|
B. Bradford Martz, Chief Financial Officer
(principal financial officer and principal accounting officer)
|
1.
|
Option Subject to Acceptance of Agreement
. The Option shall be null and void unless Optionee shall accept this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Optionee’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect).
|
Performance Conditions
|
Peer Companies
|
Evaluation and Scoring of Performance Conditions
|
Scoring of the Performance Condition for any Partial Performance Period
|
Committee Discretion
|
/s/ John Forney
|
|
|
|
John Forney
President and Chief Executive Officer
(principal executive officer)
|
|
|
|
November 7, 2018
|
|
/s/ B. Bradford Martz
|
|
|
|
B. Bradford Martz
Chief Financial Officer
(principal financial officer and principal accounting officer)
|
|
|
|
November 7, 2018
|
|
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 operations of United Insurance Holdings Corp.
|
By:
|
/s/ John Forney
|
|
|
|
|
John Forney
President and Chief Executive Officer
(principal executive officer)
|
November 7, 2018
|
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 operations of United Insurance Holdings Corp.
|
By:
|
/s/ B. Bradford Martz
|
|
|
|
|
B. Bradford Martz
Chief Financial Officer
(principal financial officer and
principal accounting officer)
|
November 7, 2018
|