Universal Insurance Holdings has announced a net income of $35.4 million for the second quarter of 2024, an increase of 24% from the prior year quarter, as the company’s combined ratio strengthened by 3.2 percentage points to 95.9%.
At the same time, the company has reported Q2 2024 total revenues of $380.2 million, up 12.0% from the prior year quarter, as well as a core revenue of $379.2 million, which was up 12.5% from the prior year quarter.
Universal stated that the increase in core revenue mostly stems from higher net premiums earned and net investment income, partly offset by lower commission revenue.
In terms of growth, Universal has reported direct premiums written of $578.3 million, a 5.7% increase from the prior year quarter, driven by 0.9% growth in Florida and 30.1% growth in other states.
Additionally, the company’s ceded premium ratio fell from 34.5% in Q2 2023 to 29.7% in Q2 2024, which the firm says reflects efficiencies associated with the 2023-2024 reinsurance program, which was in place through May 31, 2024, including the benefits of the Reinsurance to Assist Policyholders (RAP) layer and multi-year reinsurance, partly offset by a modestly higher ceded premium ratio associated with the 2024-2025 reinsurance program, which incepted on June 1, 2024.
Net premiums earned rose by 13.7% to $345.0 million in Q2 2024, which Universal said was primarily attributable to higher direct premiums earned and a lower ceded premium ratio.
Then, in terms of investments, Universal posted a net investment income of $14.7 million, up from $11.3 million in the prior year quarter, which reflects higher fixed income reinvestment yields and higher yields on cash.
Stephen J. Donaghy, Chief Executive Officer, commented on the company’s Q2 results: “In the quarter, we delivered a solid 30.5% annualized adjusted return on common equity and 35.6% adjusted diluted EPS growth year-over-year.
“Results were driven by strong underwriting performance and we continue to see encouraging claims and litigation trends. Florida policies in force increased sequentially for the second quarter in a row and overall policies-in-force increased year-over-year for the first time since 2021. As we mentioned previously, we completed the placement of our 2024-2025 reinsurance renewal for our insurance entities.
“We’re very pleased with the outcome of the program and the support we received from our longstanding reinsurance partners and from new partners as well. Importantly, despite having substantially more demand for private market reinsurance following the expirations of the Reinsurance to Assist Policyholders (RAP) layer and our catastrophe bond, the overall cost of our program was only up modestly.”
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