• Diluted GAAP earnings per share (“EPS”) of $0.56, non-GAAP adjusted EPS¹ of $0.64
• Annualized return on average equity (“ROE”) of 16.9%
• Direct premiums written of $396.5 million, up 8.5% from the prior year quarter
• Direct premiums earned up 10.4% from the prior year quarter
• Net combined ratio of 97.9%, up 4.8 points from the prior year quarter
• Repurchased 320,528 shares for $3.9 million. Total capital returned to shareholders of $8.9 million, including $0.16 per share regular quarterly dividend.

Universal Insurance Holdings (NYSE: UVE) (“Universal” or the “Company”) reported 2022 first quarter diluted EPS of $0.56 on a GAAP basis and $0.64 on a non-GAAP¹ adjusted basis.

¹ Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

“We reported a 16.9% annualized ROE despite the challenging external environment, which is a testament to the strength and resilience of our business,” said Stephen J. Donaghy, Chief Executive Officer. “Direct premiums written were up 8.5% from the prior year quarter, significantly outpacing a 6.1% policies in force decline, as meaningful rate increases benefited premium volumes. We are laser focused on improving underwriting profitability, as we prioritize combined ratio improvement over top line growth. In addition to raising rates across Florida and our broader footprint, we’ve reduced exposure to less profitable geographies, tightened underwriting criteria, renegotiated commission rates with our agency partners and exercised prudent expense management. Lastly, rising yields are benefiting our investment income results, and should continue to serve as a tailwind moving forward. Given our strong capital position, the profitability of our business and the steps we continue to take to improve results, we believe we stand out favorably as reinsurers increasingly differentiate amongst cedants in the current market.”

Quarterly Financial Results

Summary Financial Results

Net Income and Adjusted Net Income

Net income was $17.5 million, down from $26.4 million in the prior year quarter, and adjusted net income was $20.1 million, down from $26.4 million in the prior year quarter. The decline in adjusted net income primarily stems from a higher net combined ratio, partly offset by higher net premiums earned, commission revenue, net investment income and a lower effective tax rate.

Revenues

Overall revenue was $287.5 million, up 9.4% from the prior year quarter. The increase in revenue primarily stems from higher direct premiums earned associated with rate increases in the Florida homeowners book of business, partly offset by unrealized losses on equity securities.

Direct premiums written were $396.5 million, up 8.5% from the prior year quarter. The increase stems from 8.9% growth in Florida and 6.4% growth in other states. Overall growth primarily reflects rate increases, partly offset by lower policies in force.

Direct premiums earned were $414.6 million, up 10.4% from the prior year quarter. The increase stems from direct premiums written growth over the past twelve months.

The ceded premium ratio was 35.1%, basically in line with 35.2% in the prior year quarter.

Net premiums earned were $269.1 million, up 10.6% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, as described above.

Net investment income was $4.0 million, up from $3.0 million in the prior year quarter. The increase stems from higher fixed income reinvestment yields.

Commissions, policy fees and other revenue were $17.7 million, up 7.9% from the prior year quarter. The increase primarily reflects higher commission revenue, which benefited from higher ceded premiums, partly offset by policy fee and other revenue declines associated with lower policies in force.

Margins

The income before income taxes margin was 7.8%, down 6.0 points from the prior year quarter, with the decrease stemming from a higher net combined ratio and unrealized losses on equity securities, partly offset by higher commission revenues.

The net loss ratio was 68.8%, up 9.6 points compared to the prior year quarter. The increase primarily reflects a higher initial accident year attritional loss pick associated with the challenging Florida claims environment, higher weather above plan and a smaller benefit from our claims adjusting affiliate.

The net expense ratio (excludes interest expense) was 29.1%, down 4.8 points compared to the prior year quarter. The reduction primarily reflects lower renewal commission rates paid to our agents, lower employee compensation and benefits expense and economies of scale.

The net combined ratio was 97.9%, up 4.8 points compared to the prior year quarter. The increase reflects a higher net loss ratio, partly offset by a lower net expense ratio, as described above.

Capital Deployment

During the first quarter, the Company repurchased approximately 321 thousand shares at an aggregate cost of $3.9 million. The Company’s current share repurchase authorization program has $13.9 million remaining as of March 31, 2022 and runs through November 3, 2022.

On April 20, 2022, the Board of Directors declared a quarterly cash dividend of 16 cents per share of common stock, payable on May 20, 2022, to shareholders of record as of the close of business on May 13, 2022.

Guidance

The Company is maintaining its guidance for 2022 (assuming no further extraordinary weather events and no realized or unrealized gains in 2022):

• GAAP and Non-GAAP Adjusted EPS in a range of $1.80 - $2.20
• Annualized return on average equity in a range of 12.5% - 15.0%

Conference Call and Webcast

• Friday, April 29, 2022 at 10:00 a.m. ET
• U.S. Dial-in Number: (855) 752-6647
• International: (503) 343-6667
• Participant code: 9789558
• Listen to live webcast: UniversalInsuranceHoldings.com/investors
• Replay of the call will be available on the UVE website and by phone at (855) 859-2056 or internationally at (404) 537-3406 using the participant code: 3793583 through May 13, 2022

About Universal

Universal Insurance Holdings, Inc. (NYSE: UVE) is a holding company offering property and casualty insurance and value-added insurance services. We develop, market, and write insurance products for consumers predominantly in the personal residential homeowners lines of business and perform substantially all other insurance-related services for our primary insurance entities, including risk management, claims management and distribution. We sell insurance products through both our appointed independent agents and through our direct online distribution channels in the United States across 19 states (primarily Florida). Learn more at UniversalInsuranceHoldings.com.

Non-GAAP Financial Measures and Key Performance Indicators

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission (“SEC”), including adjusted net income and adjusted earnings per share, which exclude the impact of the net realized and unrealized gains and losses on investments as well as extraordinary reinstatement premiums and associated commissions. Extraordinary reinstatement premiums are not covered by reinstatement premium protection and attach just below the Florida Hurricane Catastrophe Fund (“FHCF”) reinsurance layer. Adjusted operating income excludes the impact of the net realized and unrealized gains and losses on investments, extraordinary reinstatement premiums and associated commissions and interest expense. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). UVE management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. UVE management also believes that these non-GAAP financial measures enhance the ability of investors to analyze UVE’s business trends and to understand UVE’s performance. UVE’s management utilizes these non-GAAP financial measures as guides in long-term planning. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures presented in accordance with GAAP. For more information regarding our key performance indicators, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” in our forthcoming Quarterly Report on Form 10-Q for the year ended March 31, 2022.

Forward-Looking Statements

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,” “will,” “plan,” 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, including those risks and uncertainties described under the heading “Risk Factors” and “Liquidity and Capital Resources” in our 2021 Annual Report on Form 10-K, and supplemented in our subsequent Quarterly Reports on Form 10-Q. Future results could differ materially from those described, and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 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 Company’s Annual Report on Form 10-K and the most recent quarterly reports on Form 10-Q.

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