United Insurance Holdings reports 7.2% gross written premium increase in Q3 2019
Gross written premiums for property and casualty insurance holding company United Insurance Holdings have increased by $21.3 million, or 7.2 percent, to $317.2 million, for Q3 2019, from $295.9 million for Q3 2018. The company said this primarily reflected organic growth in new and renewal business generated in all regions.
Net loss attributable to the company was $28.3 million compared to $11.7 million for the third quarter of 2018. The company said the increase in net loss was primarily due to an increase in loss and loss adjustment expenses (LAE) during the third quarter of 2019 compared to the third quarter of 2018.
"We recorded solid improvements in our underlying loss and combined ratios during the quarter, while continuing to grow our book at an annualized rate of over 10 percent," said John Forney, president and CEO of UPC Insurance.
"However, we booked over $1.00 per share in after-tax CAT losses from a combination of current and prior year events, which explains our poor results. We're still in strong financial shape and I'm confident that the rate and underwriting actions working their way through our book will enable us to finish strong this year and into 2020."
Loss and loss adjustment expense (LAE) increased by $27.5 million, or 22.8 percent, to $148.1 million for the third quarter of 2019, from $120.6 million for the third quarter of 2018. Loss and LAE expense as a percentage of net earned premiums increased 6.4 points to 76.8 percent for the third quarter of 2019, compared to 70.4 percent for the third quarter of 2018. Excluding catastrophe losses and reserve development, the company's gross underlying loss and LAE ratio for the third quarter of 2019 would have been 24.9 percent, a decrease of 4.3 points from 29.2 percent during the third quarter of 2018.
Policy acquisition costs increased by $7.6 million, or 14.0 percent, to $61.8 million for the third quarter of 2019, from $54.2 million for the third quarter of 2018. The primary driver of the increase in costs was an increase in agent commissions which were generally consistent with the company's growth in premium production and higher average market commission rates outside of Florida.
Operating and underwriting expenses increased by $1.2 million, or 10.9 percent, to $12.2 million for the third quarter of 2019, from $11.0 million for the third quarter of 2018, primarily due to increased investments in technology.
General and administrative expenses increased by $3.7 million, or 24.0 percent, to $19.1 million for the third quarter of 2019, from $15.4 million for the third quarter of 2018, primarily due to an increase in salaries and related benefits as the number of personnel has increased and an increase in amortization expense related to our capitalized software.
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