Universal Insurance Holdings, Inc. of Ft. Lauderdale reported net income of $7.5 million, or $0.19 per diluted share, in the second quarter of 2011, compared to net income of $10.8 million, or $0.27 per diluted share, for the same period in 2010. For the first six months of 2011, the company reported net income of $21.4 million, or $0.53 per diluted share, compared to $17.7 million, or $0.44 per diluted share, for the same period of 2010.
Second quarter 2011 results net income and diluted earnings per share declined approximately 29.9 percent and 29.6 percent, respectively, in the 2011 second quarter compared to the same period last year. Notwithstanding higher net premiums earned, the company’s profitability decreased primarily due to net unrealized losses on investments and lower net realized gains on investments during the 2011 second quarter. The company’s profitability was further moderated by state-mandated wind mitigation credits within Florida.
However, homeowners’ and dwelling fire insurance policies serviced by Universal Property & Casualty Insurance Co. (UPCIC), the company’s wholly owned insurance company subsidiary, and the related direct premiums written increased during the second quarter of 2011 compared to the same period of 2010. The fourth-quarter 2009 premium rate increases in Florida, which were 14.6 percent statewide for UPCIC’s homeowners’ program and 14.8 percent statewide for its dwelling fire policies, increased direct premiums written and net premiums earned while contributing to profitability in the second quarter of 2011.
Additionally, the premium rate increase of 14.9 percent statewide for UPCIC’s homeowners’ insurance program within Florida announced in February 2011 continues to flow through UPCIC’s book of business. The effective dates for the most recent rate increase were February 7 for new business and March 28 for renewal business. UPCIC expects the approved premium rate increase to have a favorable effect on premiums written and earned in future months, as new and renewal policies are written at the higher rates.
During the 2011 second quarter, UPCIC’s policy count continued to grow on a year-over-year basis. At June 30, UPCIC serviced approximately 591,000 homeowners’ and dwelling fire insurance policies, a nominal decline from approximately 593,000 policies at March 31, and an increase from approximately 566,000 policies at June 30, 2010. Within South Carolina, North Carolina, and Hawaii, UPCIC had approximately 11,800 policies totaling approximately $14.8 million of in-force premiums at June 30.
Net premiums earned increased 19.7 percent in the second quarter of 2011 compared to the same quarter in 2010, primarily as a result of an increase in the number of policies written generated by UPCIC’s agent network and rate increases which became effective in February 2011 as well as those that became effective in the latter part of 2009.
UPCIC is one of the three leading writers of homeowners’ insurance in Florida and is now fully licensed and operating in Hawaii, North Carolina and South Carolina.