United Insurance Holdings Corp. (NASDAQ: UIHC) (UPC Insurance or the Company), a property and casualty insurance holding company, today reported its financial results for the fourth quarter and year ended December 31, 2012.
Financial and Operational Highlights
- Fourth quarter 2012 net income was $1.0 million, or $0.09 per diluted share
- Full year 2012 net income was $9.7 million, or $0.91 per diluted share
- Fourth quarter 2012 gross premiums written increased 37% to $59.5 million
- Full year gross premiums written increased 25% to $255 million
- Cash and investment holdings were $223.4 million at December 31, 2012
- Book value per share was $5.70 at December 31, 2012
- Full year return on average equity was 16.1% and combined ratio was 94.8%
|($ in thousands, except per share and ratios)||Three months ended||Twelve months ended|
|December 31,||December 31,|
|Gross premiums written||$||59,524||$||43,469||36.9||%||$||254,909||$||203,806||25.1||%|
|Earnings before income tax||$||1,846||$||5,192||(64.4||)%||$||15,714||$||13,015||20.7||%|
|Net income per diluted share||$||0.09||$||0.31||(71.0||)%||$||0.91||$||0.77||18.2||%|
|Book value per share||$||5.70||$||5.31||7.3||%|
|Return on average equity||16.1||%||16.1||%||—|
|Loss ratio, net 1||55.5||%||38.1||%||17.4 pts||47.9||%||43.1||%||4.8 pts|
|Expense ratio 2||51.8||%||47.5||%||4.3 pts||46.9||%||48.6||%||-1.7 pts|
|Combined ratio (CR) 3||107.3||%||85.6||%||21.7 pts||94.8||%||91.7||%||3.1 pts|
|Effect of current year catastrophe losses on CR||(2.1||)%||(0.1||)%||-2.0 pts||(2.8||)%||(0.8||)%||-2.0 pts|
|Effect of prior year development on CR||(10.1||)%||7.7||%||-17.8 pts||(0.6||)%||4.7||%||-5.3 pts|
|Effect of FIGA assessment on CR||(4.8||)%||—||-4.8 pts||(1.4||)%||—||-1.4 pts|
|Underlying combined ratio 4||90.3||%||93.2||%||-2.9 pts||90.0||%||95.6||%||-5.6 pts|
Loss ratio, net is losses and loss adjustment expenses relative to net premiums earned.
Expense ratio is calculated as the sum of all operating expenses less interest expense relative to net premiums earned.
Combined ratio is the sum of the loss ratio, net and the expense ratio.
Underlying Combined Ratio, a measure that is not based on accounting principles generally accepted in the United States of America (GAAP), is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this release is in the “Definitions of Non-GAAP Measures” section of this document.
2012 Fourth Quarter
UPC Insurance reported total revenues for the quarter ended December 31, 2012, of $37.9 million, a 43% increase from the $26.5 million reported in the prior year period. The strong growth was primarily due to an increase in net premiums earned to $34.2 million, from $24.8 million for the fourth quarter of 2011. The growth in net premiums earned for the quarter was driven by continued growth in new business in Florida and other states as well as exceptional retention of renewal business. Net investment income, realized gains and other revenues increased to $3.7 million for the quarter, compared to $1.6 million in the prior year quarter.
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