Delaware | 75-3241967 | |||||||||||||
(State or Other Jurisdiction of
Incorporation or Organization) |
(IRS Employer Identification Number) |
800 2nd Avenue S. | 33701 | ||||||||||||||||
St. Petersburg, | Florida | ||||||||||||||||
(Address of Principle Executive Offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Common Stock, $0.0001 par value per share | UIHC | Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☑ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
PART I. FINANCIAL INFORMATION
|
||||||||
Item 1. Financial Statements | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | ||||||||
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
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 |
September 30,
2020 |
December 31, 2019 | |||||||||||||
ASSETS | ||||||||||||||
Investments, at fair value: | ||||||||||||||
Fixed maturities, available-for-sale (amortized cost of $984,028 and $869,598, respectively) | $ | 1,026,438 | $ | 884,861 | ||||||||||
Equity securities | 36,470 | 116,610 | ||||||||||||
Other investments (amortized cost of $37,611 and $8,067, respectively) | 38,371 | 10,252 | ||||||||||||
Total investments | $ | 1,101,279 | $ | 1,011,723 | ||||||||||
Cash and cash equivalents | 323,314 | 215,469 | ||||||||||||
Restricted cash | 53,234 | 71,588 | ||||||||||||
Total cash, cash equivalents and restricted cash | $ | 376,548 | $ | 287,057 | ||||||||||
Accrued investment income | 5,691 | 5,901 | ||||||||||||
Property and equipment, net | 34,880 | 32,728 | ||||||||||||
Premiums receivable, net (credit allowance of $132 and $165, respectively) | 98,948 | 86,568 | ||||||||||||
Reinsurance recoverable on paid and unpaid losses, net (credit allowance of $368 and $256, respectively) | 780,298 | 550,136 | ||||||||||||
Ceded unearned premiums | 402,804 | 270,034 | ||||||||||||
Goodwill | 73,045 | 73,045 | ||||||||||||
Deferred policy acquisition costs, net | 119,089 | 104,572 | ||||||||||||
Intangible assets, net | 22,855 | 26,079 | ||||||||||||
Other assets, net (credit allowance of $51 and $141, respectively) | 49,350 | 19,375 | ||||||||||||
Total Assets | $ | 3,064,787 | $ | 2,467,218 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Liabilities: | ||||||||||||||
Unpaid losses and loss adjustment expenses | $ | 1,082,126 | $ | 760,357 | ||||||||||
Unearned premiums | 771,959 | 674,055 | ||||||||||||
Reinsurance payable on premiums | 347,711 | 166,131 | ||||||||||||
Payments outstanding | 68,505 | 57,555 | ||||||||||||
Accounts payable and accrued expenses | 89,657 | 78,592 | ||||||||||||
Operating lease liability | 2,242 | 324 | ||||||||||||
Other liabilities | 69,146 | 47,407 | ||||||||||||
Notes payable, net | 158,043 | 158,932 | ||||||||||||
Total Liabilities | $ | 2,589,389 | $ | 1,943,353 | ||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||
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; 43,255,798 and 43,056,310 issued, respectively; 43,080,410 and 43,028,074 outstanding, respectively | 4 | 4 | ||||||||||||
Additional paid-in capital | 392,754 | 391,852 | ||||||||||||
Treasury shares, at cost: 212,083 shares | (431) | (431) | ||||||||||||
Accumulated other comprehensive income | 31,732 | 11,319 | ||||||||||||
Retained earnings | 29,881 | 100,394 | ||||||||||||
Total stockholders' equity attributable to United Insurance Holdings Corp. (UIHC) stockholders | $ | 453,940 | $ | 503,138 | ||||||||||
Noncontrolling interests (NCI) | 21,458 | 20,727 | ||||||||||||
Total Stockholders' Equity | $ | 475,398 | $ | 523,865 | ||||||||||
Total Liabilities and Stockholders' Equity | $ | 3,064,787 | $ | 2,467,218 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
REVENUE: | ||||||||||||||||||||||||||
Gross premiums written | $ | 365,819 | $ | 317,184 | $ | 1,140,653 | $ | 1,085,505 | ||||||||||||||||||
Change in gross unearned premiums | (11,828) | 27,499 | (97,904) | (98,984) | ||||||||||||||||||||||
Gross premiums earned | 353,991 | 344,683 | 1,042,749 | 986,521 | ||||||||||||||||||||||
Ceded premiums earned | (165,250) | (151,763) | (476,930) | (422,475) | ||||||||||||||||||||||
Net premiums earned | 188,741 | 192,920 | 565,819 | 564,046 | ||||||||||||||||||||||
Net investment income | 6,010 | 7,803 | 18,834 | 22,668 | ||||||||||||||||||||||
Net realized investment gains | 24,968 | 18 | 24,959 | 186 | ||||||||||||||||||||||
Net unrealized gain (loss) on equity securities | (11,552) | 2,609 | (17,456) | 15,519 | ||||||||||||||||||||||
Other revenue | 4,566 | 4,248 | 13,278 | 12,276 | ||||||||||||||||||||||
Total revenue | 212,733 | 207,598 | 605,434 | 614,695 | ||||||||||||||||||||||
EXPENSES: | ||||||||||||||||||||||||||
Losses and loss adjustment expenses | 218,652 | 148,125 | 423,182 | 368,924 | ||||||||||||||||||||||
Policy acquisition costs | 58,735 | 61,849 | 170,183 | 178,717 | ||||||||||||||||||||||
Operating expenses | 14,483 | 12,167 | 38,164 | 33,577 | ||||||||||||||||||||||
General and administrative expenses | 19,224 | 19,105 | 53,646 | 53,488 | ||||||||||||||||||||||
Interest expense | 2,210 | 2,443 | 7,194 | 7,379 | ||||||||||||||||||||||
Total expenses | 313,304 | 243,689 | 692,369 | 642,085 | ||||||||||||||||||||||
Loss before other income | (100,571) | (36,091) | (86,935) | (27,390) | ||||||||||||||||||||||
Other income | 18 | 17 | 60 | 44 | ||||||||||||||||||||||
Loss before income taxes | (100,553) | (36,074) | (86,875) | (27,346) | ||||||||||||||||||||||
Benefit for income taxes | (26,685) | (7,859) | (24,933) | (5,912) | ||||||||||||||||||||||
Net Loss | $ | (73,868) | $ | (28,215) | $ | (61,942) | $ | (21,434) | ||||||||||||||||||
Less: Net income attributable to NCI | 204 | 65 | 579 | 280 | ||||||||||||||||||||||
Net loss attributable to UIHC | $ | (74,072) | $ | (28,280) | $ | (62,521) | $ | (21,714) | ||||||||||||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||||||||||||
Change in net unrealized gains on investments | 27,884 | 5,606 | 52,106 | 30,561 | ||||||||||||||||||||||
Reclassification adjustment for net realized investment gains | (24,968) | (18) | (24,959) | (186) | ||||||||||||||||||||||
Income tax expense related to items of other comprehensive income | (707) | (1,486) | (6,582) | (7,374) | ||||||||||||||||||||||
Total comprehensive income (loss) | $ | (71,659) | $ | (24,113) | $ | (41,377) | $ | 1,567 | ||||||||||||||||||
Less: Comprehensive income attributable to NCI | 208 | 101 | 731 | 537 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to UIHC | $ | (71,867) | $ | (24,214) | $ | (42,108) | $ | 1,030 | ||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||||||||
Basic | 42,893,205 | 42,795,414 | 42,853,364 | 42,750,710 | ||||||||||||||||||||||
Diluted | 42,893,205 | 42,795,414 | 42,853,364 | 42,750,710 | ||||||||||||||||||||||
Earnings available to UIHC common stockholders per share | ||||||||||||||||||||||||||
Basic | $ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) | ||||||||||||||||||
Diluted | $ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Stockholders' Equity Attributable to UIHC | NCI | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Dollars | ||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | 43,231,184 | $ | 4 | $ | 390,719 | $ | (431) | $ | 9,648 | $ | 141,973 | $ | 541,913 | $ | 20,575 | $ | 562,488 | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | (28,280) | (28,280) | 65 | (28,215) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 4,066 | — | 4,066 | 36 | 4,102 | ||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | 3,304 | — | 714 | — | — | — | 714 | — | 714 | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock ($0.06 per common share) | — | — | — | — | — | (2,571) | (2,571) | — | (2,571) | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2019 | 43,234,488 | $ | 4 | $ | 391,433 | $ | (431) | $ | 13,714 | $ | 111,122 | $ | 515,842 | $ | 20,676 | $ | 536,518 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Stockholders' Equity Attributable to UIHC | NCI | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Dollars | ||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | 43,068,379 | $ | 4 | $ | 392,633 | $ | (431) | $ | 29,527 | $ | 106,534 | $ | 528,267 | $ | 21,250 | $ | 549,517 | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | (74,072) | (74,072) | 204 | (73,868) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 2,205 | — | 2,205 | 4 | 2,209 | ||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | 12,031 | — | 121 | — | — | — | 121 | — | 121 | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock ($0.06 per common share) | — | — | — | — | — | (2,581) | (2,581) | — | (2,581) | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | 43,080,410 | $ | 4 | $ | 392,754 | $ | (431) | $ | 31,732 | $ | 29,881 | $ | 453,940 | $ | 21,458 | $ | 475,398 |
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, 2018 | 42,984,578 | $ | 4 | $ | 389,141 | $ | (431) | $ | (9,030) | $ | 140,546 | $ | 520,230 | $ | 20,139 | $ | 540,369 | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | (21,714) | (21,714) | 280 | (21,434) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 22,744 | — | 22,744 | 257 | 23,001 | ||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | 249,910 | — | 2,292 | — | — | 2,292 | — | 2,292 | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock ($0.18 per common share) | — | — | — | — | — | (7,710) | (7,710) | — | (7,710) | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2019 | 43,234,488 | $ | 4 | $ | 391,433 | $ | (431) | $ | 13,714 | $ | 111,122 | $ | 515,842 | $ | 20,676 | $ | 536,518 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings | Stockholders' Equity Attributable to UIHC | NCI | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Dollars | ||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | 43,028,074 | $ | 4 | $ | 391,852 | $ | (431) | $ | 11,319 | $ | 100,394 | $ | 503,138 | $ | 20,727 | $ | 523,865 | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | (62,521) | (62,521) | 579 | (61,942) | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 20,413 | — | 20,413 | 152 | 20,565 | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification due to adoption of ASU 2016-13 | — | — | — | — | — | (262) | (262) | — | (262) | ||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | 52,336 | 902 | — | — | — | 902 | — | 902 | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividends on common stock ($0.18 per common share) | — | — | — | — | — | (7,730) | (7,730) | — | (7,730) | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2020 | 43,080,410 | $ | 4 | $ | 392,754 | $ | (431) | $ | 31,732 | $ | 29,881 | $ | 453,940 | $ | 21,458 | $ | 475,398 |
Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||
Net loss | $ | (61,942) | $ | (21,434) | ||||||||||
Adjustments to reconcile net losses to net cash used by operating activities: | ||||||||||||||
Depreciation and amortization | 7,875 | 8,984 | ||||||||||||
Bond amortization and accretion | 4,686 | 3,884 | ||||||||||||
Net realized gains on investments | (24,959) | (186) | ||||||||||||
Net unrealized losses (gains) on equity securities | 17,456 | (15,519) | ||||||||||||
Provision for uncollectable premiums | (132) | 186 | ||||||||||||
Provision for uncollectable reinsurance recoverables | (368) | — | ||||||||||||
Provision for uncollectable notes receivable | (51) | — | ||||||||||||
Deferred income taxes, net | (1,172) | (4,584) | ||||||||||||
Stock based compensation | 988 | 2,292 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accrued investment income | 210 | (20) | ||||||||||||
Premiums receivable | (12,113) | 9,265 | ||||||||||||
Reinsurance recoverable on paid and unpaid losses | (230,050) | (22,374) | ||||||||||||
Ceded unearned premiums | (132,770) | (149,665) | ||||||||||||
Deferred policy acquisition costs, net | (14,517) | (9,576) | ||||||||||||
Other assets | (30,065) | (8,031) | ||||||||||||
Unpaid losses and loss adjustment expenses | 321,769 | 162,944 | ||||||||||||
Unearned premiums | 97,904 | 98,984 | ||||||||||||
Reinsurance payable on premiums | 181,580 | 146,722 | ||||||||||||
Payments outstanding | 10,950 | 227 | ||||||||||||
Accounts payable and accrued expenses | 11,065 | 8,153 | ||||||||||||
Operating lease liability | 1,918 | 356 | ||||||||||||
Other liabilities | 16,330 | 17,513 | ||||||||||||
Net cash provided by operating activities | $ | 164,592 | $ | 228,121 | ||||||||||
INVESTING ACTIVITIES | ||||||||||||||
Proceeds from sales, maturities and repayments of: | ||||||||||||||
Fixed maturities
|
147,551 | 168,342 | ||||||||||||
Equity securities
|
114,575 | 1,978 | ||||||||||||
Other investments
|
2,928 | 5,461 | ||||||||||||
Purchases of: | ||||||||||||||
Fixed maturities
|
(265,685) | (200,208) | ||||||||||||
Equity securities
|
(26,497) | (11,011) | ||||||||||||
Other investments
|
(32,465) | (6,395) | ||||||||||||
Cost of property, equipment and capitalized software acquired | (9,463) | (16,437) | ||||||||||||
Disposal of property, equipment and capitalized software | 2,914 | — | ||||||||||||
Net cash used in investing activities | $ | (66,142) | $ | (58,270) | ||||||||||
FINANCING ACTIVITIES | ||||||||||||||
Repayments of borrowings | (1,143) | (849) | ||||||||||||
Dividends | (7,730) | (7,710) | ||||||||||||
Tax withholding payment related to net settlement of equity awards | (86) | — | ||||||||||||
Net cash used in financing activities | $ | (8,959) | $ | (8,559) | ||||||||||
Increase in cash, cash equivalents and restricted cash | 89,491 | 161,292 | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 287,057 | 184,120 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 376,548 | $ | 345,412 | ||||||||||
Supplemental Cash Flows Information | ||||||||||||||
Interest paid | $ | 4,828 | $ | 4,930 | ||||||||||
Income taxes paid | $ | 1,015 | $ | 284 | ||||||||||
December 31, 2019 | Provision for expected credit losses | Write-offs | September 30, 2020 | |||||||||||||||||||||||
Premiums Receivable | $ | 165 | $ | (235) | $ | 202 | $ | 132 | ||||||||||||||||||
Reinsurance Recoverables | 256 | 112 | — | 368 | ||||||||||||||||||||||
Note Receivable | 141 | (90) | — | 51 | ||||||||||||||||||||||
Total | $ | 562 | $ | (213) | $ | 202 | $ | 551 |
Cost or Adjusted/Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
U.S. government and agency securities | $ | 118,213 | $ | 4,942 | $ | 25 | $ | 123,130 | |||||||||||||||
Foreign government | 1,725 | 144 | — | 1,869 | |||||||||||||||||||
States, municipalities and political subdivisions | 157,280 | 5,521 | 120 | 162,681 | |||||||||||||||||||
Public utilities | 39,083 | 2,872 | — | 41,955 | |||||||||||||||||||
Corporate securities | 331,208 | 17,120 | 662 | 347,666 | |||||||||||||||||||
Mortgage-backed securities | 267,532 | 12,285 | 400 | 279,417 | |||||||||||||||||||
Asset-backed securities | 62,623 | 1,055 | 327 | 63,351 | |||||||||||||||||||
Redeemable preferred stocks | 6,364 | 66 | 61 | 6,369 | |||||||||||||||||||
Total fixed maturities | $ | 984,028 | $ | 44,005 | $ | 1,595 | $ | 1,026,438 | |||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
U.S. government and agency securities | $ | 120,260 | $ | 749 | $ | 193 | $ | 120,816 | |||||||||||||||
Foreign government | 3,975 | 97 | 1 | 4,071 | |||||||||||||||||||
States, municipalities and political subdivisions | 131,203 | 2,611 | 63 | 133,751 | |||||||||||||||||||
Public utilities | 24,660 | 700 | 26 | 25,334 | |||||||||||||||||||
Corporate securities | 281,892 | 7,123 | 143 | 288,872 | |||||||||||||||||||
Mortgage-backed securities | 248,206 | 4,174 | 477 | 251,903 | |||||||||||||||||||
Asset-backed securities | 56,487 | 683 | 41 | 57,129 | |||||||||||||||||||
Redeemable preferred stocks | 2,915 | 72 | 2 | 2,985 | |||||||||||||||||||
Total fixed maturities | $ | 869,598 | $ | 16,209 | $ | 946 | $ | 884,861 |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Estimated Fair Value | Percent of Total | Estimated Fair Value | Percent of Total | |||||||||||||||||||||||
Mutual funds | $ | 7,945 | 21.8 | % | $ | 65,453 | 56.1 | % | ||||||||||||||||||
Public utilities | — | — | 3,663 | 3.1 | ||||||||||||||||||||||
Other common stocks | 20,343 | 55.8 | 44,492 | 38.2 | ||||||||||||||||||||||
Nonredeemable preferred stocks | 8,182 | 22.4 | 3,002 | 2.6 | ||||||||||||||||||||||
Total equity securities | $ | 36,470 | 100.0 | % | $ | 116,610 | 100.0 | % |
2020 | 2019 | ||||||||||||||||||||||
Gains
(Losses) |
Fair Value at Sale |
Gains
(Losses) |
Fair Value at Sale | ||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||
Fixed maturities | $ | 708 | $ | 47,153 | $ | 66 | $ | 34,282 | |||||||||||||||
Equity securities | 26,724 | 97,725 | 3 | 272 | |||||||||||||||||||
Short-term investments
|
— | 1,275 | — | 2,511 | |||||||||||||||||||
Total realized gains | 27,432 | 146,153 | 69 | 37,065 | |||||||||||||||||||
Fixed maturities | (45) | 1,203 | (48) | 2,033 | |||||||||||||||||||
Equity securities | (2,419) | 9,509 | (3) | 14 | |||||||||||||||||||
Short-term investments
|
— | — | — | 10 | |||||||||||||||||||
Total realized losses | (2,464) | 10,712 | (51) | 2,057 | |||||||||||||||||||
Net realized investment gains | $ | 24,968 | $ | 156,865 | $ | 18 | $ | 39,122 | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
Fixed maturities | $ | 1,425 | $ | 139,609 | $ | 597 | $ | 129,364 | |||||||||||||||
Equity securities | 27,550 | 101,696 | 94 | 814 | |||||||||||||||||||
Short-term investments
|
— | 1,346 | — | 3,571 | |||||||||||||||||||
Total realized gains | 28,975 | 242,651 | 691 | 133,749 | |||||||||||||||||||
Fixed maturities | (439) | 7,942 | (287) | 36,661 | |||||||||||||||||||
Equity securities | (3,577) | 12,879 | (217) | 1,163 | |||||||||||||||||||
Short-term investments
|
— | 128 | (1) | 1,035 | |||||||||||||||||||
Total realized losses | (4,016) | 20,949 | (505) | 38,859 | |||||||||||||||||||
Net realized investment gains | $ | 24,959 | $ | 263,600 | $ | 186 | $ | 172,608 |
September 30, 2020 | |||||||||||||||||||||||
Cost or Amortized Cost | Percent of Total | Fair Value | Percent of Total | ||||||||||||||||||||
Due in one year or less | $ | 93,973 | 9.5 | % | $ | 94,650 | 9.2 | % | |||||||||||||||
Due after one year through five years | 264,627 | 26.9 | 276,916 | 27.0 | |||||||||||||||||||
Due after five years through ten years | 279,045 | 28.4 | 295,069 | 28.7 | |||||||||||||||||||
Due after ten years | 16,228 | 1.6 | 17,035 | 1.7 | |||||||||||||||||||
Asset and mortgage backed securities | 330,155 | 33.6 | 342,768 | 33.4 | |||||||||||||||||||
Total | $ | 984,028 | 100.0 | % | $ | 1,026,438 | 100.0 | % |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Fixed maturities | $ | 5,744 | $ | 5,757 | $ | 16,806 | $ | 17,379 | |||||||||||||||
Equity securities | 467 | 614 | 1,966 | 1,728 | |||||||||||||||||||
Cash and cash equivalents | 30 | 1,611 | 767 | 3,407 | |||||||||||||||||||
Other investments | 62 | 83 | 17 | 847 | |||||||||||||||||||
Other assets | 12 | 11 | 114 | 108 | |||||||||||||||||||
Investment income | 6,315 | 8,076 | 19,670 | 23,469 | |||||||||||||||||||
Investment expenses | (305) | (273) | (836) | (801) | |||||||||||||||||||
Net investment income | $ | 6,010 | $ | 7,803 | $ | 18,834 | $ | 22,668 |
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, 2020 | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | 2 | $ | 1 | $ | 1,490 | 21 | $ | 24 | $ | 12,126 | |||||||||||||||||||||||||
States, municipalities and political subdivisions | 20 | 120 | 15,811 | — | — | — | |||||||||||||||||||||||||||||
Corporate securities | 45 | 659 | 20,229 | 4 | 3 | 1,004 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 51 | 298 | 27,677 | 7 | 102 | 3,495 | |||||||||||||||||||||||||||||
Asset-backed securities | 16 | 297 | 5,523 | 1 | 30 | 970 | |||||||||||||||||||||||||||||
Redeemable preferred stocks | 28 | 61 | 3,075 | — | — | — | |||||||||||||||||||||||||||||
Total fixed maturities | 162 | $ | 1,436 | $ | 73,805 | 33 | $ | 159 | $ | 17,595 | |||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | 37 | $ | 89 | $ | 26,372 | 39 | $ | 104 | $ | 31,364 | |||||||||||||||||||||||||
Foreign governments | — | — | — | 2 | 1 | 600 | |||||||||||||||||||||||||||||
States, municipalities and political subdivisions | 31 | 61 | 14,508 | 2 | 2 | 1,262 | |||||||||||||||||||||||||||||
Public utilities | 9 | 25 | 4,626 | 2 | 1 | 250 | |||||||||||||||||||||||||||||
Corporate securities | 42 | 124 | 22,435 | 27 | 19 | 9,605 | |||||||||||||||||||||||||||||
Mortgage-backed securities | 89 | 322 | 59,101 | 50 | 155 | 12,738 | |||||||||||||||||||||||||||||
Asset-backed securities | 15 | 34 | 8,447 | 5 | 7 | 1,259 | |||||||||||||||||||||||||||||
Redeemable preferred stocks | — | — | — | 1 | 2 | 97 | |||||||||||||||||||||||||||||
Total fixed maturities | 223 | $ | 655 | $ | 135,489 | 128 | $ | 291 | $ | 57,175 |
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
U.S. government and agency securities | $ | 123,130 | $ | — | $ | 123,130 | $ | — | |||||||||||||||
Foreign government | 1,869 | — | 1,869 | — | |||||||||||||||||||
States, municipalities and political subdivisions | 162,681 | — | 162,681 | — | |||||||||||||||||||
Public utilities | 41,955 | — | 41,955 | — | |||||||||||||||||||
Corporate securities | 347,666 | — | 347,666 | — | |||||||||||||||||||
Mortgage-backed securities | 279,417 | — | 279,417 | — | |||||||||||||||||||
Asset-backed securities | 63,351 | — | 63,351 | — | |||||||||||||||||||
Redeemable preferred stocks | 6,369 | 1,587 | 4,782 | — | |||||||||||||||||||
Total fixed maturities | 1,026,438 | 1,587 | 1,024,851 | — | |||||||||||||||||||
Mutual funds | 7,945 | 7,945 | — | — | |||||||||||||||||||
Other common stocks | 20,343 | 20,343 | — | — | |||||||||||||||||||
Non-redeemable preferred stocks | 8,182 | 8,182 | — | — | |||||||||||||||||||
Total equity securities | 36,470 | 36,470 | — | — | |||||||||||||||||||
Other investments (1)
|
28,100 | 300 | 27,800 | — | |||||||||||||||||||
Total investments | $ | 1,091,008 | $ | 38,357 | $ | 1,052,651 | $ | — | |||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
U.S. government and agency securities | $ | 120,816 | $ | — | $ | 120,816 | $ | — | |||||||||||||||
Foreign government | 4,071 | — | 4,071 | — | |||||||||||||||||||
States, municipalities and political subdivisions | 133,751 | — | 133,751 | — | |||||||||||||||||||
Public utilities | 25,334 | — | 25,334 | — | |||||||||||||||||||
Corporate securities | 288,872 | — | 288,872 | — | |||||||||||||||||||
Mortgage-backed securities | 251,903 | — | 251,903 | — | |||||||||||||||||||
Asset-backed securities | 57,129 | — | 57,129 | — | |||||||||||||||||||
Redeemable preferred stocks | 2,985 | 747 | 2,238 | — | |||||||||||||||||||
Total fixed maturities | 884,861 | 747 | 884,114 | — | |||||||||||||||||||
Mutual Funds | 65,453 | 65,453 | — | — | |||||||||||||||||||
Public utilities | 3,663 | 3,663 | — | — | |||||||||||||||||||
Other common stocks | 44,492 | 44,492 | — | — | |||||||||||||||||||
Non-redeemable preferred stocks | 3,002 | 3,002 | — | — | |||||||||||||||||||
Total equity securities | 116,610 | 116,610 | — | — | |||||||||||||||||||
Other investments (1)
|
499 | 300 | 199 | — | |||||||||||||||||||
Total investments | $ | 1,001,970 | $ | 117,657 | $ | 884,313 | $ | — |
Book Value | Unrealized Gain | Unrealized Loss | Fair Value | |||||||||||||||||||||||
Limited partnership investments (1)
|
$ | 9,510 | $ | 1,088 | $ | 327 | $ | 10,271 | ||||||||||||||||||
Certificates of deposit | 300 | — | — | 300 | ||||||||||||||||||||||
Short-term investments
|
27,801 | — | 1 | 27,800 | ||||||||||||||||||||||
Total other investments | $ | 37,611 | $ | 1,088 | $ | 328 | $ | 38,371 |
September 30, 2020 | December 31, 2019 | ||||||||||
Trust funds | $ | 52,301 | $ | 70,668 | |||||||
Cash on deposit (regulatory deposits) | 933 | 920 | |||||||||
Total restricted cash | $ | 53,234 | $ | 71,588 |
Three Months Ended September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Net losses attributable to UIHC common stockholders | $ | (74,072) | $ | (28,280) | $ | (62,521) | $ | (21,714) | ||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Weighted-average shares outstanding | 42,893,205 | 42,795,414 | 42,853,364 | 42,750,710 | ||||||||||||||||||||||
Effect of dilutive securities | — | — | — | — | ||||||||||||||||||||||
Weighted-average diluted shares | 42,893,205 | 42,795,414 | 42,853,364 | 42,750,710 | ||||||||||||||||||||||
Earnings available to UIHC common stockholders per share | ||||||||||||||||||||||||||
Basic
|
$ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) | ||||||||||||||||||
Diluted
|
$ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) |
September 30,
2020 |
December 31,
2019 |
|||||||||||||
Land | $ | 2,114 | $ | 2,114 | ||||||||||
Building and building improvements (construction in progress of $0 and $2,180, respectively) | 9,211 | 11,315 | ||||||||||||
Computer hardware and software (software in progress of $1,542 and $6,317, respectively)
|
40,676 | 33,219 | ||||||||||||
Office furniture and equipment | 3,204 | 3,260 | ||||||||||||
Leasehold improvements | 749 | 20 | ||||||||||||
Leased vehicles(1)
|
2,216 | 1,693 | ||||||||||||
Total, at cost | 58,170 | 51,621 | ||||||||||||
Less: accumulated depreciation and amortization | (23,290) | (18,893) | ||||||||||||
Property and equipment, net | $ | 34,880 | $ | 32,728 |
September 30, 2020 | December 31, 2019 | |||||||||||||
Intangible assets subject to amortization | $ | 19,216 | $ | 22,440 | ||||||||||
Indefinite-lived intangible assets(1)
|
3,639 | 3,639 | ||||||||||||
Total | $ | 22,855 | $ | 26,079 |
Weighted-average remaining amortization period (in years) | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||
Value of business acquired | — | $ | 42,788 | $ | (42,788) | $ | — | |||||||||||||||||||
Agency agreements acquired | 6.3 | 34,661 | (18,275) | 16,386 | ||||||||||||||||||||||
Trade names acquired | 3.5 | 6,381 | (3,551) | 2,830 | ||||||||||||||||||||||
Total | $ | 83,830 | $ | (64,614) | $ | 19,216 | ||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Value of business acquired | — | $ | 42,788 | $ | (42,788) | $ | — | |||||||||||||||||||
Agency agreements acquired | 6.8 | 34,661 | (15,658) | 19,003 | ||||||||||||||||||||||
Trade names acquired | 4.3 | 6,381 | (2,944) | 3,437 | ||||||||||||||||||||||
Total | $ | 83,830 | $ | (61,390) | $ | 22,440 |
Year ending December 31, | Estimated Amortization Expense | |||||||
Remaining in 2020 | $ | 1,043 | ||||||
2021 | 3,555 | |||||||
2022 | 3,246 | |||||||
2023 | 3,246 | |||||||
2024 | 2,640 | |||||||
2025 | 2,438 |
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Reinsurance recoverable on unpaid losses and loss adjustment expenses | $ | 701,715 | $ | 482,315 | |||||||
Reinsurance recoverable on paid losses and loss adjustment expenses | 78,583 | 67,821 | |||||||||
Reinsurance recoverable
|
$ | 780,298 | $ | 550,136 |
September 30, | |||||||||||
2020 | 2019 | ||||||||||
Balance at January 1 | $ | 760,357 | $ | 661,203 | |||||||
Less: reinsurance recoverable on unpaid losses | 482,315 | 477,870 | |||||||||
Net balance at January 1 | $ | 278,042 | $ | 183,333 | |||||||
Incurred related to: | |||||||||||
Current year | 429,347 | 335,708 | |||||||||
Prior years | (6,165) | 33,216 | |||||||||
Total incurred | $ | 423,182 | $ | 368,924 | |||||||
Paid related to: | |||||||||||
Current year | 195,728 | 185,257 | |||||||||
Prior years | 125,085 | 115,890 | |||||||||
Total paid | $ | 320,813 | $ | 301,147 | |||||||
Net balance at September 30 | $ | 380,411 | $ | 251,110 | |||||||
Plus: reinsurance recoverable on unpaid losses | 701,715 | 573,037 | |||||||||
Balance at September 30 | $ | 1,082,126 | $ | 824,147 | |||||||
Composition of reserve for unpaid losses and LAE:
|
|||||||||||
Case reserves | $ | 361,672 | $ | 271,073 | |||||||
IBNR reserves | 720,454 | 553,074 | |||||||||
Balance at September 30 | $ | 1,082,126 | $ | 824,147 |
Effective Interest Rate | Carrying Value at | ||||||||||||||||||||||
Maturity | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||
Senior Notes Payable | December 15, 2027 | 6.25% | $ | 150,000 | $ | 150,000 | |||||||||||||||||
Florida State Board of Administration Note Payable | July 1, 2026 | 0.64% | 6,764 | 7,647 | |||||||||||||||||||
Truist Term Note Payable | May 26, 2031 | 1.88% | 3,698 | 3,958 | |||||||||||||||||||
Total long-term debt | $ | 160,462 | $ | 161,605 |
2020 | 2019 | ||||||||||
Balance at January 1, | $ | 2,673 | $ | 3,010 | |||||||
Additions | — | — | |||||||||
Amortization | (254) | (254) | |||||||||
Balance at September 30, | $ | 2,419 | $ | 2,756 |
Financial Statement Line | September 30, 2020 | December 31, 2019 | ||||||||||||||||||
Assets | ||||||||||||||||||||
Operating lease assets
|
Other assets | $ | 2,095 | $ | 335 | |||||||||||||||
Financing lease assets
|
Property and equipment, net | 1,275 | 1,263 | |||||||||||||||||
Total lease assets
|
$ | 3,370 | $ | 1,598 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Operating lease liabilities
|
Operating lease liability | $ | 2,242 | $ | 324 | |||||||||||||||
Financing lease liabilities
|
Other liabilities | 36 | 34 | |||||||||||||||||
Total lease liabilities
|
$ | 2,278 | $ | 358 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||
Operating lease expense | $ | 174 | $ | 46 | $ | 469 | $ | 137 | ||||||||||||||||||
Financing lease expense: | ||||||||||||||||||||||||||
Amortization of leased assets
|
184 | 115 | 511 | 261 | ||||||||||||||||||||||
Interest on lease liabilities
|
— | 1 | 1 | 1 | 1 | |||||||||||||||||||||
Short-term lease expense | — | 9 | — | 133 | ||||||||||||||||||||||
Net lease expense
|
$ | 358 | $ | 171 | $ | 981 | $ | 532 |
Operating Leases | Finance Leases | Total | ||||||||||||||||||
Remaining in 2020 | $ | 162 | $ | 6 | $ | 168 | ||||||||||||||
2021 | 619 | 22 | 641 | |||||||||||||||||
2022 | 532 | 12 | 544 | |||||||||||||||||
2023 | 517 | 2 | 519 | |||||||||||||||||
2024 | 528 | — | 528 | |||||||||||||||||
Thereafter | 1,373 | — | 1,373 | |||||||||||||||||
Total undiscounted future minimum lease payments
|
3,731 | 42 | 3,773 | |||||||||||||||||
Less: Imputed interest | (1,489) | (6) | (1,495) | |||||||||||||||||
Present value of lease liabilities
|
$ | 2,242 | $ | 36 | $ | 2,278 |
September 30, 2020 | December 31, 2019 | |||||||||||||
Weighted average remaining lease term (months) | ||||||||||||||
Operating leases
|
69 | 176 | ||||||||||||
Financing leases
|
24 | 28 | ||||||||||||
Weighted average discount rate | ||||||||||||||
Operating leases
|
3.58 | % | 4.00 | % | ||||||||||
Financing leases
|
3.27 | % | 3.27 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||||||||
Investing cash flows from financing leases
|
$ | 27 | $ | 414 | $ | 505 | $ | 891 | ||||||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | — | — | 2,136 | — | ||||||||||||||||||||||
Right-of-use assets obtained in exchange for new financing lease liabilities | 28 | 425 | 522 | 915 |
Pre-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | |||||||||||||||
December 31, 2019 | $ | 14,962 | $ | (3,643) | $ | 11,319 | |||||||||||
Changes in net unrealized gains on investments | 51,847 | (12,758) | 39,089 | ||||||||||||||
Reclassification adjustment for realized gains | (24,901) | 6,225 | (18,676) | ||||||||||||||
September 30, 2020 | $ | 41,908 | $ | (10,176) | $ | 31,732 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||
Per Share Amount | Aggregate Amount | Per Share Amount | Aggregate Amount | |||||||||||||||||||||||
First Quarter | $ | 0.06 | $ | 2,571 | $ | 0.06 | $ | 2,569 | ||||||||||||||||||
Second Quarter | $ | 0.06 | $ | 2,578 | $ | 0.06 | $ | 2,570 | ||||||||||||||||||
Third Quarter | $ | 0.06 | $ | 2,581 | $ | 0.06 | $ | 2,571 | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Employee stock-based compensation expense | |||||||||||||||||||||||
Pre-tax (1)
|
$ | 108 | $ | 536 | $ | 582 | $ | 1,482 | |||||||||||||||
Post-tax (2)
|
86 | 424 | 460 | 1,171 | |||||||||||||||||||
Director stock-based compensation expense | |||||||||||||||||||||||
Pre-tax (1)
|
99 | 178 | 406 | 810 | |||||||||||||||||||
Post-tax (2)
|
78 | 141 | 321 | 640 |
Number of Restricted Shares | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding as of December 31, 2019 | 214,495 | $ | 17.49 | ||||||||
Granted (1)
|
384,572 | 9.35 | |||||||||
Less: Forfeited | 232,323 | 12.61 | |||||||||
Less: Vested (1)
|
109,267 | 16.63 | |||||||||
Outstanding as of September 30, 2020 | 257,477 | $ | 10.10 |
2020 | |||||
Expected annual dividend yield | 1.70 | % | |||
Expected volatility | 41.59 | % | |||
Risk-free interest rate | 2.35 | % | |||
Expected term | 6 Years |
Number of Stock Options | Weighted Average Exercise Prices | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding as of December 31, 2019 | 207,069 | $ | 18.69 | 9.00 | $ | — | |||||||||||||||||
Granted | 221,541 | 8.77 | — | — | |||||||||||||||||||
Less: Forfeited | 234,472 | 12.76 | — | — | |||||||||||||||||||
Less: Expired | 32,098 | 18.87 | — | — | |||||||||||||||||||
Less: Exercised
|
— | — | — | — | |||||||||||||||||||
Outstanding as of September 30, 2020 | 162,040 | $ | 13.67 | 8.03 | $ | — | |||||||||||||||||
Vested as of September 30, 2020 | 73,956 | $ | 18.81 | 2.69 | $ | — | |||||||||||||||||
Exercisable as of September 30, 2020 | 41,858 | $ | 18.77 | 4.76 | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Gross premiums written | $ | 365,819 | $ | 317,184 | $ | 1,140,653 | $ | 1,085,505 | |||||||||||||||
Gross premiums earned | 353,991 | 344,683 | 1,042,749 | 986,521 | |||||||||||||||||||
Net premiums earned | 188,741 | 192,920 | 565,819 | 564,046 | |||||||||||||||||||
Total revenues | 212,733 | 207,598 | 605,434 | 614,695 | |||||||||||||||||||
Loss before income tax | (100,553) | (36,074) | (86,875) | (27,346) | |||||||||||||||||||
Loss attributable to UIHC | (74,072) | (28,280) | (62,521) | (21,714) | |||||||||||||||||||
Net loss available to UIHC stockholders per diluted share | $ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) | |||||||||||||||
Reconciliation of net loss to core loss: | |||||||||||||||||||||||
Plus: Non-cash amortization of intangible assets | $ | 1,043 | $ | 1,326 | $ | 3,224 | $ | 4,030 | |||||||||||||||
Less: Realized gains on investment portfolio | 24,968 | 18 | 24,959 | 186 | |||||||||||||||||||
Less: Unrealized gains (losses) on equity securities | (11,552) | 2,609 | (17,456) | 15,519 | |||||||||||||||||||
Less: Net tax impact (1)
|
(2,598) | (359) | (898) | (3,220) | |||||||||||||||||||
Core loss (2)
|
(83,847) | (29,222) | (65,902) | (30,169) | |||||||||||||||||||
Core loss per diluted share(2)
|
$ | (1.95) | $ | (0.68) | $ | (1.54) | $ | (0.71) | |||||||||||||||
Book value per share | $ | 10.54 | $ | 11.93 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
REVENUE: | ||||||||||||||||||||||||||
Gross premiums written | $ | 365,819 | $ | 317,184 | $ | 1,140,653 | $ | 1,085,505 | ||||||||||||||||||
Change in gross unearned premiums | (11,828) | 27,499 | (97,904) | (98,984) | ||||||||||||||||||||||
Gross premiums earned | 353,991 | 344,683 | 1,042,749 | 986,521 | ||||||||||||||||||||||
Ceded premiums earned | (165,250) | (151,763) | (476,930) | (422,475) | ||||||||||||||||||||||
Net premiums earned | 188,741 | 192,920 | 565,819 | 564,046 | ||||||||||||||||||||||
Net investment income | 6,010 | 7,803 | 18,834 | 22,668 | ||||||||||||||||||||||
Net realized investment gains | 24,968 | 18 | 24,959 | 186 | ||||||||||||||||||||||
Net unrealized gain (loss) on equity securities | (11,552) | 2,609 | (17,456) | 15,519 | ||||||||||||||||||||||
Other revenue | 4,566 | 4,248 | 13,278 | 12,276 | ||||||||||||||||||||||
Total revenue | 212,733 | 207,598 | 605,434 | 614,695 | ||||||||||||||||||||||
EXPENSES: | ||||||||||||||||||||||||||
Losses and loss adjustment expenses | 218,652 | 148,125 | 423,182 | 368,924 | ||||||||||||||||||||||
Policy acquisition costs | 58,735 | 61,849 | 170,183 | 178,717 | ||||||||||||||||||||||
Operating expenses | 14,483 | 12,167 | 38,164 | 33,577 | ||||||||||||||||||||||
General and administrative expenses | 19,224 | 19,105 | 53,646 | 53,488 | ||||||||||||||||||||||
Interest expense | 2,210 | 2,443 | 7,194 | 7,379 | ||||||||||||||||||||||
Total expenses | 313,304 | 243,689 | 692,369 | 642,085 | ||||||||||||||||||||||
Loss before other income | (100,571) | (36,091) | (86,935) | (27,390) | ||||||||||||||||||||||
Other income | 18 | 17 | 60 | 44 | ||||||||||||||||||||||
Loss before income taxes | (100,553) | (36,074) | (86,875) | (27,346) | ||||||||||||||||||||||
Benefit for income taxes | (26,685) | (7,859) | (24,933) | (5,912) | ||||||||||||||||||||||
Net loss | $ | (73,868) | $ | (28,215) | $ | (61,942) | $ | (21,434) | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 204 | 65 | 579 | 280 | ||||||||||||||||||||||
Net loss attributable to UIHC | $ | (74,072) | $ | (28,280) | $ | (62,521) | $ | (21,714) | ||||||||||||||||||
Earnings available to UIHC common stockholders per diluted share | $ | (1.73) | $ | (0.66) | $ | (1.46) | $ | (0.51) | ||||||||||||||||||
Book value per share | $ | 10.54 | $ | 11.93 | ||||||||||||||||||||||
Return on equity based on GAAP net loss | (16.5) | % | (5.5) | % | ||||||||||||||||||||||
Loss ratio, net (1)
|
115.8 | % | 76.8 | % | 74.8 | % | 65.4 | % | ||||||||||||||||||
Expense ratio (2)
|
49.0 | % | 48.3 | % | 46.3 | % | 47.1 | % | ||||||||||||||||||
Combined ratio (3)
|
164.8 | % | 125.1 | % | 121.1 | % | 112.5 | % | ||||||||||||||||||
Effect of current year catastrophe losses on combined ratio | 74.2 | % | 26.0 | % | 33.0 | % | 13.8 | % | ||||||||||||||||||
Effect of prior year development on combined ratio | (2.2) | % | 6.3 | % | (1.1) | % | 5.9 | % | ||||||||||||||||||
Underlying combined ratio (4)
|
92.8 | % | 92.8 | % | 89.2 | % | 92.8 | % |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Estimated Fair Value | Percent of Total | Estimated Fair Value | Percent of Total | ||||||||||||||||||||
U.S. government and agency securities | $ | 123,130 | 8.3% | $ | 120,816 | 9.3% | |||||||||||||||||
Foreign government | 1,869 | 0.1% | 4,071 | 0.3% | |||||||||||||||||||
States, municipalities and political subdivisions | 162,681 | 11.0% | 133,751 | 10.3% | |||||||||||||||||||
Public utilities | 41,955 | 2.8% | 25,334 | 2.0% | |||||||||||||||||||
Corporate securities | 347,666 | 23.6% | 288,872 | 22.3% | |||||||||||||||||||
Mortgage-backed securities | 279,417 | 18.9% | 251,903 | 19.4% | |||||||||||||||||||
Asset-backed securities | 63,351 | 4.3% | 57,129 | 4.4% | |||||||||||||||||||
Redeemable preferred stocks | 6,369 | 0.4% | 2,985 | 0.2% | |||||||||||||||||||
Total fixed maturities | 1,026,438 | 69.4 | % | 884,861 | 68.2 | % | |||||||||||||||||
Mutual funds | 7,945 | 0.5% | 65,453 | 5.0% | |||||||||||||||||||
Public utilities | — | —% | 3,663 | 0.3% | |||||||||||||||||||
Other common stocks | 20,343 | 1.4% | 44,492 | 3.4% | |||||||||||||||||||
Non-redeemable preferred stocks | 8,182 | 0.6% | 3,002 | 0.2% | |||||||||||||||||||
Total equity securities | 36,470 | 2.5 | % | 116,610 | 8.9 | % | |||||||||||||||||
Other investments | 38,371 | 2.6 | % | 10,252 | 0.8 | % | |||||||||||||||||
Total investments | 1,101,279 | 74.5% | 1,011,723 | 77.9% | |||||||||||||||||||
Cash and cash equivalents | 323,314 | 21.9 | % | 215,469 | 16.6 | % | |||||||||||||||||
Restricted cash | 53,234 | 3.6% | 71,588 | 5.5% | |||||||||||||||||||
Total cash, cash equivalents, restricted cash and investments | $ | 1,477,827 | 100.0 | % | $ | 1,298,780 | 100.0 | % |
2020 | 2019 | |||||||||||||
Three Months Ended September 30, | ||||||||||||||
Non-at-Risk | (2.2) | % | (2.3) | % | ||||||||||
Quota Share | (13.6) | % | (12.2) | % | ||||||||||
All Other | (30.9) | % | (29.5) | % | ||||||||||
Total Ceding Ratio | (46.7) | % | (44.0) | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
Non-at-Risk | (2.2) | % | (2.3) | % | ||||||||||
Quota Share | (13.0) | % | (9.7) | % | ||||||||||
All Other | (30.5) | % | (30.8) | % | ||||||||||
Total Ceding Ratio | (45.7) | % | (42.8) | % |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Quota Share | $ | (56,006) | $ | (45,352) | $ | (156,234) | $ | (136,254) | |||||||||||||||
Excess-of-loss | (2,295) | (4,611) | (424,680) | (411,413) | |||||||||||||||||||
Equipment, identity theft, and cyber security (1)
|
(3,938) | (2,714) | (10,360) | (7,700) | |||||||||||||||||||
Flood and inland flood (1)
|
(6,978) | (6,489) | (18,427) | (16,773) | |||||||||||||||||||
Ceded premiums written | $ | (69,217) | $ | (59,166) | $ | (609,701) | $ | (572,140) | |||||||||||||||
Change in ceded unearned premiums | (96,033) | (92,597) | 132,771 | 149,665 | |||||||||||||||||||
Ceded premiums earned | $ | (165,250) | $ | (151,763) | $ | (476,930) | $ | (422,475) |
2020 | 2019 | |||||||||||||||||||||||||||||||||||||
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 | 7 | $ | 125,122 | 66.3 | % | 3 | $ | 31,295 | 16.2 | % | ||||||||||||||||||||||||||||
All other catastrophe loss events | 6 | 14,880 | 7.9 | % | 2 | 18,873 | 9.8 | % | ||||||||||||||||||||||||||||||
Total | 13 | $ | 140,002 | 74.2 | % | 5 | $ | 50,168 | 26.0 | % | ||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
Current period catastrophe losses incurred | ||||||||||||||||||||||||||||||||||||||
Named and numbered storms | 10 | $ | 130,446 | 23.0 | % | 3 | $ | 31,295 | 5.6 | % | ||||||||||||||||||||||||||||
All other catastrophe loss events | 29 | 56,473 | 10.0 | % | 26 | 46,332 | 8.2 | % | ||||||||||||||||||||||||||||||
Total | 39 | $ | 186,919 | 33.0 | % | 29 | $ | 77,627 | 13.8 | % |
($ in thousands) | Three Months Ended September 30, | |||||||||||||||||||
2020 | 2019 | Change | ||||||||||||||||||
Direct Written and Assumed Premium by Region (1)
|
||||||||||||||||||||
Florida | $ | 191,858 | $ | 157,278 | $ | 34,580 | ||||||||||||||
Gulf | 73,804 | 62,970 | 10,834 | |||||||||||||||||
Northeast | 55,871 | 55,665 | 206 | |||||||||||||||||
Southeast | 36,496 | 32,047 | 4,449 | |||||||||||||||||
Total direct written premium by region | 358,029 | 307,960 | 50,069 | |||||||||||||||||
Assumed premium (2)
|
7,790 | 9,224 | (1,434) | |||||||||||||||||
Total gross written premium by region | $ | 365,819 | $ | 317,184 | $ | 48,635 | ||||||||||||||
Gross Written Premium by Line of Business | ||||||||||||||||||||
Personal property | $ | 302,078 | $ | 259,187 | $ | 42,891 | ||||||||||||||
Commercial property | 63,741 | 57,997 | 5,744 | |||||||||||||||||
Total gross written premium by line of business | $ | 365,819 | $ | 317,184 | $ | 48,635 |
Three Months Ended September 30, | |||||||||||||||||
New and Renewal Policies by Region (1)
|
2020 | 2019 | Change | ||||||||||||||
Florida | 72,268 | 65,589 | 6,679 | ||||||||||||||
Gulf | 42,734 | 38,303 | 4,431 | ||||||||||||||
Northeast | 40,896 | 41,949 | (1,053) | ||||||||||||||
Southeast | 28,154 | 26,014 | 2,140 | ||||||||||||||
Total | 184,052 | 171,855 | 12,197 |
Three Months Ended September 30, | |||||||||||||||||
2020 | 2019 | Change | |||||||||||||||
Net loss and LAE | $ | 218,652 | $ | 148,125 | $ | 70,527 | |||||||||||
% of Gross earned premiums | 61.8 | % | 43.0 | % | 18.8 pts | ||||||||||||
% of Net earned premiums | 115.8 | % | 76.8 | % | 39.0 pts | ||||||||||||
Less: | |||||||||||||||||
Current year catastrophe losses | $ | 140,002 | $ | 50,168 | $ | 89,834 | |||||||||||
Prior year reserve (favorable) development | (4,213) | 12,249 | (16,462) | ||||||||||||||
Underlying loss and LAE (1)
|
$ | 82,863 | $ | 85,708 | $ | (2,845) | |||||||||||
% of Gross earned premiums | 23.4 | % | 24.9 | % | (1.5) pts | ||||||||||||
% of Net earned premiums | 43.9 | % | 44.4 | % | (0.5) pts |
Three Months Ended September 30, | |||||||||||||||||
2020 | 2019 | Change | |||||||||||||||
Policy acquisition costs | $ | 58,735 | $ | 61,849 | $ | (3,114) | |||||||||||
Operating and underwriting | 14,483 | 12,167 | 2,316 | ||||||||||||||
General and administrative | 19,224 | 19,105 | 119 | ||||||||||||||
Total Operating Expenses | $ | 92,442 | $ | 93,121 | $ | (679) | |||||||||||
% of Gross earned premiums | 26.1 | % | 27.0 | % | (0.9) pts | ||||||||||||
% of Net earned premiums | 49.0 | % | 48.3 | % | 0.7 pts |
($ in thousands) | Nine Months Ended September 30, | |||||||||||||||||||
2020 | 2019 | Change | ||||||||||||||||||
Direct Written and Assumed Premium by Region (1)
|
||||||||||||||||||||
Florida | $ | 648,662 | $ | 576,028 | $ | 72,634 | ||||||||||||||
Gulf | 200,603 | 174,070 | 26,533 | |||||||||||||||||
Northeast | 153,857 | 153,234 | 623 | |||||||||||||||||
Southeast | 98,574 | 89,059 | 9,515 | |||||||||||||||||
Total direct written premium by region | 1,101,696 | 992,391 | 109,305 | |||||||||||||||||
Assumed premium (2)
|
38,957 | 93,114 | (54,157) | |||||||||||||||||
Total gross written premium by region | $ | 1,140,653 | $ | 1,085,505 | $ | 55,148 | ||||||||||||||
Gross Written Premium by Line of Business | ||||||||||||||||||||
Personal property | $ | 834,659 | $ | 755,974 | $ | 78,685 | ||||||||||||||
Commercial property | 305,994 | 329,531 | (23,537) | |||||||||||||||||
Total gross written premium by line of business | $ | 1,140,653 | $ | 1,085,505 | $ | 55,148 |
Nine Months Ended September 30, | |||||||||||||||||
New and Renewal Policies By Region (1)
|
2020 | 2019 | Change | ||||||||||||||
Florida | 208,432 | 209,580 | (1,148) | ||||||||||||||
Gulf | 119,280 | 106,762 | 12,518 | ||||||||||||||
Northeast | 115,135 | 117,485 | (2,350) | ||||||||||||||
Southeast | 77,807 | 72,880 | 4,927 | ||||||||||||||
Total | 520,654 | 506,707 | 13,947 |
Nine Months Ended September 30, | |||||||||||||||||
2020 | 2019 | Change | |||||||||||||||
Net loss and LAE | $ | 423,182 | $ | 368,924 | $ | 54,258 | |||||||||||
% of Gross earned premiums | 40.6 | % | 37.4 | % | 3.2 pts | ||||||||||||
% of Net earned premiums | 74.8 | % | 65.4 | % | 9.4 pts | ||||||||||||
Less: | |||||||||||||||||
Current year catastrophe losses | $ | 186,919 | $ | 77,627 | $ | 109,292 | |||||||||||
Prior year reserve (favorable) development | (6,165) | 33,216 | (39,381) | ||||||||||||||
Underlying loss and LAE (1)
|
$ | 242,428 | $ | 258,081 | $ | (15,653) | |||||||||||
% of Gross earned premiums | 23.2 | % | 26.2 | % | (3.0) pts | ||||||||||||
% of Net earned premiums | 42.8 | % | 45.8 | % | (3.0) pts |
Nine Months Ended September 30, | |||||||||||||||||
2020 | 2019 | Change | |||||||||||||||
Policy acquisition costs | $ | 170,183 | $ | 178,717 | $ | (8,534) | |||||||||||
Operating and underwriting | 38,164 | 33,577 | 4,587 | ||||||||||||||
General and administrative | 53,646 | 53,488 | 158 | ||||||||||||||
Total operating expenses | $ | 261,993 | $ | 265,782 | $ | (3,789) | |||||||||||
% of Gross earned premiums | 25.1 | % | 26.9 | % | (1.8) pts | ||||||||||||
% of Net earned premiums | 46.3 | % | 47.1 | % | (0.8) pts |
Stocks by Sector | Fair Value | % of Total Fair Value | ||||||||||||
September 30, 2020 | ||||||||||||||
Funds | $ | 7,945 | 21.7 | % | ||||||||||
Financial | 7,900 | 21.7 | ||||||||||||
Communications | 6,044 | 16.6 | ||||||||||||
Consumer, Non-cyclical | 4,794 | 13.1 | ||||||||||||
Technology | 3,686 | 10.1 | ||||||||||||
Industrial | 3,017 | 8.3 | ||||||||||||
Consumer, Cyclical | 1,711 | 4.7 | ||||||||||||
Utilities | 1,373 | 3.8 | ||||||||||||
Total | $ | 36,470 | 100.0 | % | ||||||||||
December 31, 2019 | ||||||||||||||
Funds | $ | 65,453 | 56.0 | % | ||||||||||
Industrial | 11,491 | 9.9 | ||||||||||||
Consumer, Non-cyclical | 10,928 | 9.4 | ||||||||||||
Financial | 8,438 | 7.2 | ||||||||||||
Technology | 5,555 | 4.8 | ||||||||||||
Utilities | 4,002 | 3.4 | ||||||||||||
Communications | 3,690 | 3.2 | ||||||||||||
Consumer, Cyclical | 3,597 | 3.1 | ||||||||||||
Energy | 2,094 | 1.8 | ||||||||||||
Basic Materials | 1,362 | 1.2 | ||||||||||||
Total | $ | 116,610 | 100.0 | % |
Exhibit | Description | |||||||
Release Agreement, dated as of September 29, 2020, by and between United Insurance Holdings Corp. and Deepak Menon (included as Exhibit 10.1 to the Form 8-K/A filed on October 1, 2020, and incorporated herein by reference). | ||||||||
Form of Indemnification Agreement, dated as of September 1, 2020, by and between United Insurance Holdings Corp. and the members of the Board of Directors. | ||||||||
Second Amended and Restated Employment Agreement, dated as of October 23, 2020, by and between United Insurance Holdings Corp. and Bennett Bradford Martz (included as Exhibit 10.1 to the Form 8-K filed on October 28, 2020, and incorporated herein by reference). | ||||||||
Second Amended and Restated Employment Agreement, dated as of October 23, 2020, by and between United Insurance Holdings Corp. and Scott St. John (included as Exhibit 10.2 to the Form 8-K filed on October 28, 2020, 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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). |
UNITED INSURANCE HOLDINGS CORP. | ||||||||
November 6, 2020 | By: | /s/ R. Daniel Peed | ||||||
R. Daniel Peed, Chief Executive Officer
(principal executive officer and duly authorized officer) |
November 6, 2020 | By: | /s/ B. Bradford Martz | ||||||
B. Bradford Martz, Chief Financial Officer and President
(principal financial officer and principal accounting officer) |
/s/ R. Daniel Peed
|
|||||
R. Daniel Peed
Chief Executive Officer (principal executive officer) |
|||||
November 6, 2020 |
/s/ B. Bradford Martz
|
|||||
B. Bradford Martz
President and Chief Financial Officer (principal financial officer and principal accounting officer) |
|||||
November 6, 2020 |
By: | /s/ R. Daniel Peed | |||||||
R. Daniel Peed
Chief Executive Officer (principal executive officer) |
November 6, 2020 |
By: | /s/ B. Bradford Martz | |||||||
B. Bradford Martz
President and Chief Financial Officer (principal financial officer and principal accounting officer) |
November 6, 2020 |