Investor Presentation

First Quarter 2023

Company Overview

UIHC is a specialty underwriter of catastrophe exposed property insurance.

United Insurance Holding Corp. (Nasdaq: UIHC) was founded in

1999 and is the insurance holding company for two P&C carriers: American Coastal Insurance Company (ACIC) and Interboro Insurance Company (IIC) along with other operating affiliates.

ACIC has the #1 market share of commercial residential

property insurance (commercial lines) in Florida with roughly 5,100 policies and $563 million of premium in-force.

IIC's homeowners & fire insurance products (personal lines) are written exclusively in New York with roughly 18,000 policies and

$31 million of premium in-force.

UIHC as of March 31, 2023

Total Assets:

$1.4 billion

Total Equity:

$83.5 million

Annualized Revenue:

$416.2 million

Employees:

110

Headquarters:

St. Petersburg, FL

Credit Rating:

BB+ (Kroll)

Specialty Commercial Property

Specialty Homeowners

2

Executive Summary

  • Q1-23Results
    • GAAP net income of $260.9m included a $230.3m gain from discontinued operations from de-consolidating our former affiliate United Property & Casualty Insurance Company (UPC). The prior year was recast to conform to the presentation of discontinued operations.
    • GAAP net income from continuing operations of $30.5m improved 563% from $4.6m last year driven by strong underwriting performance in commercial lines from ACIC. UIHC's combined ratio of 70.5% was also a significant improvement from the prior year.
    • Current accident year catastrophe losses of $3.1m compared favorably to $6.6m last year, and favorable prior year reserve development of $3.2m primarily in commercial lines was also a positive contribution and consistent with the prior year.
    • Stockholders' equity attributable to UIHC as of March 31, 2023, was $83.5m or $1.93 per share and $2.52 per share excluding unrealized losses in accumulated other comprehensive income.
  • Other Highlights
    • On April 19, 2023, we obtained a memorandum of understanding from the Florida Department of Financial Services (DFS) ratifying and accepting a reinsurance allocation agreement covering the 2022 core catastrophe reinsurance program previously approved by the Office of Insurance Regulation. This action provided critical clarity regarding future reinsurance recoverable for ACIC related to Hurricane Ian but did not settle reinsurance recovered by UPC on behalf of ACIC. We are working diligently with the DFS to resolve this.
    • We have secured 100% of the capacity needed for our new 2023-24 catastrophe reinsurance program for ACIC and are also nearing completion of IIC's program renewal to be effective 6/1/23 and expect to announce the key details once the programs are finalized.
    • The Company believes these two highlights above along with other actions being taken to resolve all amounts due to and from UPC will ultimately rectify the two primary reasons identified by our independent auditor for their going concern opinion issued on April 17, 2023.

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Q1-23 Summary Results

UIHC's solid results were fueled by our leading commercial residential business in Florida.

$ in thousands, except per share amounts

Q1-23

Q1-22 ¹

Change

Net income (loss)

$

260,878

$

(33,172)

n/m

per diluted share (EPS)

$

5.99

$

(0.77)

Reconciliation to core income (loss):

Investment gains (losses)

$

309

$

(580)

Amortization of intangible assets

$

(641)

$

(641)

Gain (loss) from discontinued operations

$

230,305

$

(37,904)

Total adjustments

$

229,973

$

(39,126)

Net loss & LAE ratio

21.9%

56.3%

Net expense ratio

48.6%

135.4%

Combined ratio

70.5%

191.7%

(121.2) pts

Less: Net current year catastrophe loss & LAE

3.5%

11.4%

Less: Net (favorable) unfavorable reserve development

-3.6%

-5.3%

Underlying combined ratio

70.6%

185.6%

(115.0) pts

4

¹ 2022 amounts recast for discontinued operations

Q1-23 Detailed Results

Pre-tax earnings from continuing operations of $40.4m soared +619% y/y.

$ in millions

Gross Premiums Earned

Ceded Premiums Earned

Net Premiums Earned

Investment & Other Income

Unrealized G(L) on Equities

Total Revenue

Underlying Loss & LAE

Current year CAT Loss & LAE

Prior year development (F)/U

Net Loss & LAE

Operating Expense

Total Expenses (excluding interest)

Earnings from continuing operations before tax

Net income from continuing operations

Direct Loss Ratio - Non-catastrophe

Direct Loss Ratio - Current year catastrophe

Direct Expense ratio

Net Loss Ratio

Net Expense Ratio

Combined Ratio

Less: Current year catastrophe loss & LAE

Less: Prior year reserve development (F)/U

Underlying Combined Ratio

¹ 2022 amounts recast for discontinued operations

Q1-23

Q1-22 ¹

Change

% Chg

$

144.4

$

122.7

21.7

17.7%

(57.1)

(65.0)

7.9

-12.2%

87.3

57.7

29.6

51.3%

16.2

60.5

(44.3)

-73.2%

0.5

(0.8)

1.3

-162.5%

104.0

117.4

(13.4)

-11.4%

19.2

29.0

(9.8)

-33.8%

3.1

6.6

(3.5)

-53.0%

(3.2)

(3.1)

(0.1)

3.2%

19.1

32.5

(13.4)

-41.2%

42.4

78.2

(35.8)

-45.8%

61.5

110.7

(49.2)

-44.4%

$

40.4

$

5.6

$

34.8

618.5%

$

30.5

$

4.6

$

25.9

563.0%

9.1%

21.1%

-12.1 pts

2.1%

5.3%

-3.2 pts

31.7%

63.7%

-32.1 pts

21.9%

56.3%

-34.4 pts

48.6%

135.4%

-86.8 pts

70.5%

191.7%

-121.2 pts

3.5%

11.4%

-7.9 pts

-3.6%

-5.3%

1.7 pts

70.6%

185.6%

-115 pts

Includes non-recurring management fee income and operating expenses related to UPC that no longer eliminate in consolidation.

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Disclaimer

United Insurance Holdings Corp. published this content on 15 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2023 20:26:12 UTC.