FORT LAUDERDALE, FL — (Marketwire) — 11/09/12 — (NYSE MKT: UVE) a vertically integrated insurance holding company, reported net income of $8.3 million, or $0.20 per diluted share, an increase of $0.18, for the third quarter of 2012, compared to net income of $1.0 million, or $0.02 per diluted share, for the same period in 2011.
Net income during the third quarter of 2012 increased $7.3 million, or $0.18 per diluted share, as a result of an increase in net earned premiums and improved performance in the Company-s investment trading portfolio.
Direct premiums written collectively by Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), Universal-s wholly-owned insurance company subsidiaries, rose 12.6 percent during the third quarter of 2012. Net premiums earned grew $9.9 million, or 19.9 percent, in the third quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, the most recent of which were in January and February of 2012, and a reduction in the quota-share cession rate from 50 percent for the 2011-2012 reinsurance program to 45 percent for the 2012-2013 reinsurance program.
Third-quarter 2012 operating costs increased compared to the same quarter last year, as net losses and loss adjustment expenses (LAE) increased $7.0 million, or 23.7 percent, while general and administrative expenses increased $5.4 million, or 28.9 percent. Also in the third quarter, the Company decided to forego efforts to collect $5.4 million from a reinsurer because the tangible and intangible costs associated with the collection effort appeared likely to exceed the amount claimed.
At September 30, 2012, stockholders- equity was $166.0 million compared to $161.8 million at June 30, 2012, and $156.9 million at September 30, 2011.
On September 10, 2012, UIH announced that its board of directors declared a cash dividend of $0.08 per share, which was paid on October 9, 2012, to shareholders of record on September 26, 2012. At that time, the board further indicated that it expects to declare an additional dividend of the same amount to shareholders of record in the fourth quarter, which would bring this year-s aggregate declared annual dividend to $0.34 for each share of common stock. Declaration and payment of future dividends is subject to the discretion of UIH-s board and will be dependent on future earnings, cash flows, financial requirements and other factors.
For the first nine months of 2012, the Company-s net income and diluted earnings per share grew by 15.5 percent and 16.4 percent, respectively, compared to the same period of 2011.
Net premiums earned increased 11.3 percent for the first nine months of 2012 compared to the same period of 2011, primarily as a result of the previously mentioned rate increases, which have had a positive effect on premium generated by renewal policies.
The Company has received few claims from Tropical Storm/Hurricane Sandy, which recently affected the eastern United States. The insurance company subsidiaries write most of their policies in Florida, which was not severely affected.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the three leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at .
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company-s operations and future results, refer to the Company-s reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2011 and the Form 10-Q for the quarter ended September 30, 2012.
Philip Kranz
Dresner Corporate Services
312-780-7240