Cat and non-cat losses weigh on United Insurance Holdings' FY results

Increases in loss and loss adjustment expenses, driven by cat losses and higher fire and weather related losses as well as lower average premiums have driven down United Insurance Holdings’ (UPC Insurance) full year results.

The US property/casualty insurer reported net income for 2016 of $5.7 million compared $27.4 million in 2015. Loss and loss adjustment expenses increased 62.9 percent to $298.4 million over the period.

Loss and loss adjustment expenses expense as a percentage of net earned premiums increased 10.8 points to 65.3 percent for the year, compared to 54.5 percent for the same period in 2015.

Excluding catastrophe losses and reserve development, the company's gross underlying loss and loss adjustment expenses ratio for 2016 was 33.8 percent, an increase of 2.7 points from 31.1 percent during 2015, due primarily to an increase in fire and weather related losses as well as lower average premiums.

“Catastrophe losses from Hurricane Matthew and many other smaller events, coupled with a very difficult noncat loss environment in Florida, hurt our bottom line results for Q4 and the full year,” said John Forney, president & CEO of UPC Insurance.

The company’s combined ratio deteriorated by 10.9 percentage points to 104.9 percent in 2016.

UPC Insurance's total gross written premium increased by 24.3 percent to $708.2 million in 2016, primarily due to strong organic growth in new and renewal business generated in the company's Gulf and Northeast regions.

"2016 was a year of accomplishment and challenge for us," Forney commented.

"Continued robust organic growth, the strengthening of our claims team, and the pending merger with American Coastal all positioned us for a very bright future.

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