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UNIVERSAL INSURANCE HOLDINGS, INC.

UNIVERSAL INSURANCE HOLDINGS, INC.UVE決算レポート

NYSE · 金融 · 火災、海上及び損害保険

New York Life Insurance Company (NYLIC), most commonly known as New York Life, is the second-largest life insurance company and the largest mutual life insurance company in the United States, and is ranked #69 on the 2025 Fortune 500 list of the largest U.S. corporations by total revenue. In 2025, NYLIC achieved the best possible ratings by the four independent rating companies. Other New York Life affiliates provide an array of securities products and services, as well as institutional and r...

What changed in UNIVERSAL INSURANCE HOLDINGS, INC.'s 10-K — 2024 vs 2025

Top changes in UNIVERSAL INSURANCE HOLDINGS, INC.'s 2025 10-K

477 paragraphs added · 539 removed · 352 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+7 added−12 removed78 unchanged
The Insurance Entities seek to produce an underwriting profit (defined as earned premium minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs) over the long term; maintain a conservative balance sheet to prepare for years in which the Insurance Entities are not able to achieve an underwriting profit; and generate investment income on assets.
The Insurance Entities seek to produce an underwriting profit (defined as earned premium minus losses, loss adjustment expense (“LAE”), policy acquisition costs and other operating costs and expenses) over the long term; maintain a conservative balance sheet to prepare for years in which the Insurance Entities are not able to achieve an underwriting profit; and generate investment income on assets.
The nature, size and experience of our primary competitors varies across the states in which we do business. Several states, including Florida, have insurance mechanisms that provide insurance to consumers who are not otherwise able to obtain coverage in the private insurance market. The largest such insurance mechanism is Florida’s Citizens Property Insurance Corporation (“Citizens”).
The nature, size and experience of our primary competitors varies across the states in which we do business. 6 Several states, including Florida, have insurance mechanisms that provide insurance to consumers who are not otherwise able to obtain coverage in the private insurance market. The largest such insurance mechanism is Florida’s Citizens Property Insurance Corporation (“Citizens”).
To that end, we provide extensive training and development sessions, strong benefits, and competitive pay to employees at all levels in the organization, including equity awards to key contributors. We continue our support of diversity to create an inclusive culture and deliver a sustainable talent model to enhance performance and broaden perspectives.
To that end, we provide extensive training and development sessions, strong benefits, and competitive pay to employees at all levels in the organization, including equity awards to key contributors. 10 We continue our support of diversity to create an inclusive culture and deliver a sustainable talent model to enhance performance and broaden perspectives.
Some state insurance laws require prior notification to state insurance regulators of an acquisition of control of a non-domiciliary insurance company doing business in that state. 9 Insurance holding company regulations also govern the amount any affiliate of the holding company may charge the Insurance Entities for services (e.g., claims adjustment, administration, management fees and commissions).
Some state insurance laws require prior notification to state insurance regulators of an acquisition of control of a non-domiciliary insurance company doing business in that state. Insurance holding company regulations also govern the amount any affiliate of the holding company may charge the Insurance Entities for services (e.g., claims adjustment, administration, management fees and commissions).
Through Alder, we have adopted initiatives to adjust and pay straightforward, meritorious claims as promptly as possible through timely analysis and on-site field adjusting. Alder also has increased its use of technology to inspect properties and adjust claims. In addition to our in-house claims operation, we assign some field inspections to third-party adjusters.
Through Alder, we have adopted initiatives to adjust and pay straightforward, meritorious claims as promptly as possible through timely analysis and on-site field adjusting. Alder also has increased its use of technology to inspect properties and facilitate adjusting claims. In addition to our in-house claims operation, we assign some field inspections to third-party adjusters.
For example, volatility and market dislocation were evident in Florida following Hurricane Andrew in 1992, the 2004 and 2005 hurricane seasons (during which eight hurricanes made landfall in coastal states), as well as following 2017 (Hurricane Irma), 2018 (Hurricanes Michael and Florence), 2022 (Hurricane Ian), 2023 (Hurricane Idalia) and 2024 (Hurricanes Helene and Milton).
For example, volatility and market dislocation were evident in Florida following Hurricane Andrew in 1992, the 2004 and 2005 hurricane seasons (during which eight hurricanes made landfall in coastal states), as well as following 2017 (Hurricane Irma), 2018 (Hurricanes Michael and Florence), 2022 (Hurricane Ian), 2023 (Hurricane Idalia) and 2024 (Hurricanes Debby, Helene and Milton).
Rates, which are not necessarily uniform for all insurers, vary by many factors including class of business, hazard covered, risk location and size of risk. Most states, including Florida, require licensure or insurance regulatory authority approval prior to the marketing of new insurance products.
Rates, which are not necessarily uniform for all insurers, vary by many factors including class of business, hazard covered, risk location and size of risk. Most states, including Florida, require licensure and insurance regulatory authority approval prior to the marketing of new insurance products.
Privacy and Information Security Regulation 10 Federal and state laws and regulations require certain business entities to protect the security and confidentiality of non-public personal information and to notify customers and other individuals about their policies and practices relating to their collection and disclosure of customer information and their practices relating to protecting the security and confidentiality of that information.
Privacy and Information Security Regulation Federal and state laws and regulations require certain business entities to protect the security and confidentiality of non-public personal information and to notify customers and other individuals about their policies and practices relating to their collection and disclosure of customer information and their practices relating to protecting the security and confidentiality of that information.
While weather-related volatility is an inherent part of property insurance, particularly in coastal markets such as Florida, our strategy includes generating non-risk bearing income that enhances returns in profitable underwriting periods, while serving as a buffer and potentially still allowing for consolidated profitability in challenging underwriting periods. We have more than 20 years of experience providing protection solutions.
While weather-related volatility is an inherent part of property insurance, particularly in coastal markets such as Florida, our strategy includes generating non-risk bearing income that enhances returns in profitable underwriting periods, while serving as a buffer and potentially still allowing for consolidated profitability in challenging underwriting periods. We have more than 25 years of experience providing protection solutions.
The degree to which these state-authorized insurance mechanisms compete with private insurers such as the Insurance Entities varies over time depending on market and public policy considerations beyond our control. Citizens’ rate changes are limited by law, and accordingly, in times of rising insurance rates such as in recent years, its premiums can significantly lag those of the authorized market.
The degree to which these state-authorized insurance mechanisms compete with private insurers such as the Insurance Entities varies over time depending on market and public policy considerations beyond our control. Citizens’ rate changes are limited by law, and accordingly, in times of rising insurance rates its premiums can significantly lag those of the authorized market.
See “Part II—Item 8—Note 3 (Investments)” for more information about our investments. Markets and Competition Markets We sell insurance products in the following 19 states: Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia and Wisconsin.
See “ Part II—Item 8—Note 3 (Investments) ” for more information about our investments. Markets and Competition Markets We sell insurance products in the following 19 states: Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia and Wisconsin.
Such regulations relate to authorized lines of business, capital and surplus requirements, allowable rates and forms, investment parameters, underwriting limitations, transactions with affiliates, dividend limitations, changes in control, market conduct, maximum amount allowable for premium financing service charges, and a variety of other financial and non-financial components of our business.
Such regulations relate to authorized lines of business, capital and surplus requirements, allowable rates and policy forms, investment parameters, underwriting requirements and guidelines, transactions with affiliates, dividend limitations, changes in control, market conduct, maximum amount allowable for premium financing service charges, and a variety of other financial and non-financial components of our business.
Most states, including Florida, have enacted the NAIC guidelines as statutory requirements, and insurers having less surplus than required by applicable statutes and ratios are subject to varying degrees of regulatory action depending on the level of capital inadequacy. As of December 31, 2024, the Insurance Entities’ RBC ratios exceed applicable statutory requirements.
Most states, including Florida, have enacted the NAIC guidelines as statutory requirements, and insurers having less surplus than required by applicable statutes and ratios are subject to varying degrees of regulatory action depending on the level of capital inadequacy. As of December 31, 2025, the Insurance Entities’ RBC ratios exceed applicable statutory requirements.
Products and Services Insurance Products UPCIC, our primary risk-bearing insurance entity, which accounts for the substantial majority of our Insurance Entities’ business, primarily distributes policies through our independent agency force and offers the following types of personal residential insurance: homeowners, renters/tenants, condo unit owners, and dwelling/fire.
Products and Services Insurance Products UPCIC, our primary risk-bearing insurance entity, which accounts for the substantial majority of our Insurance Entities’ business, primarily distributes policies through our independent agency network and offers the following types of personal residential insurance: homeowners, renters/tenants, condo unit owners, and dwelling/fire.
Developing and implementing our reinsurance strategy to adequately protect our balance sheet and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been a key strategic priority for UVE. For 2024, the Insurance Entities utilized excess of loss reinsurance in various forms.
Developing and implementing our reinsurance strategy to adequately protect our balance sheet and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been a key strategic priority for UVE. For 2025, the Insurance Entities utilized excess of loss reinsurance in various forms.
The Insurance Entities’ respective 2024-2025 reinsurance programs meet the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance programs that satisfy a series of stress test catastrophe loss scenarios based on past historical events.
The Insurance Entities’ respective 2025-2026 reinsurance programs meet the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance programs that satisfy a series of stress test catastrophe loss scenarios based on past historical events.
This in turn causes Citizens to increasingly become the low-cost option for many policyholders; in essence, Citizens has a statutorily-created, and ultimately consumer-subsidized, pricing advantage over authorized insurers operating in the state, including the Insurance Entities.
This in turn causes Citizens to increasingly become the low-cost option for many policyholders; in essence, in hard markets Citizens has a statutorily-created, and ultimately consumer-subsidized, pricing advantage over authorized insurers operating in the state, including the Insurance Entities.
Dividends paid by our subsidiaries other than the Insurance Entities are not subject to the statutory restrictions set forth in the Florida Insurance Code. Dividends paid by UVE to our shareholders in 2024 were paid from the earnings of UVE and our subsidiaries other than the Insurance Entities. State insurance laws govern the payment of dividends by insurance companies.
Dividends paid by our subsidiaries other than the Insurance Entities are not subject to the statutory restrictions set forth in the Florida Insurance Code. Dividends paid by UVE to our shareholders in 2025 were paid from the earnings of UVE and our subsidiaries other than the Insurance Entities. State insurance laws govern the payment of dividends by insurance companies.
The Company filed its most recent ORSA summary report in May 2024. Capital Requirements State insurance authorities monitor insurance companies’ solvency and capital requirements using various statutory requirements and industry ratios. Initially, states require minimum capital levels based on the lines of business written by a company and set requirements regarding the ongoing amount and composition of capital.
The Company filed its most recent ORSA summary report in May 2025. Capital Requirements State insurance authorities monitor insurance companies’ solvency and capital requirements using various statutory requirements and industry ratios. States require minimum capital levels based on the lines of business written by a company and set requirements regarding the ongoing amount and composition of capital.
Many factors influence the pricing environment, including, but not limited to, catastrophic events, loss experience, GDP growth/contraction, inflation, interest rates, legislation, primary insurance and reinsurance capacity and availability, share-of-wallet competition, the prevalence of litigation (including abuses with assignments of benefits, solicited claims and other first-party litigation), technological advancements in distribution, underwriting, claims management and overall operational efficiencies, and the risk appetite of competitors.
Many factors influence the pricing environment, including, but not limited to, catastrophic events, loss experience, GDP growth/contraction, inflation, interest rates, legislation, primary insurance and reinsurance capacity and availability, share-of-wallet competition, the prevalence of litigation (including claims representation abuses, solicited claims and other first-party litigation), technological advancements in distribution, underwriting, claims management and overall operational efficiencies, and the risk appetite of competitors.
Similarly, the Insurance Entities’ respective 2024-2025 reinsurance programs meet the stress test and review requirements of Demotech’s Financial Stability Rating® of “ A ” (Exceptional) and Kroll’s insurer financial strength rating of “ A- ”.
Similarly, the Insurance Entities’ respective 2025-2026 reinsurance programs meet the stress test and review requirements of Demotech’s Financial Stability Rating® of “ A ” (Exceptional) and Kroll’s insurer financial strength rating of “ A- ”.
Certain state regulators also require state deposits in their respective states. See “Part II—Item 8—Note 5 (Insurance Operations)” for more information about state deposits. As a company grows, additional capital measures and standards may be implemented by a regulator.
Certain state regulators also require deposits in their respective states. See “P art II—Item 8—Note 5 (Insurance Operations) ” for more information about state deposits. As a company grows, additional capital measures and standards may be implemented by a regulator.
In addition, UVE’s strong operating teams and streamlined in-house value-added services strive to provide value to consumers through operating efficiencies across the business. Our monthly weighted average renewal retention rate for the year ended December 31, 2024 was 92.0%. 7 Reinsurance Reinsurance enables the Insurance Entities to limit potential exposures to catastrophic events.
In addition, UVE’s strong operating teams and streamlined in-house value-added services strive to provide value to consumers through operating efficiencies across the business. Our monthly weighted average renewal retention rate for the year ended December 31, 2025 was 92.5%. Reinsurance Reinsurance enables the Insurance Entities to limit potential exposures to catastrophic events.
Due to our exposure to Florida’s residential property insurance market, we face risks associated with the adverse conditions that have affected the magnitude of both catastrophe and non-catastrophe losses and loss adjustment expenses in Florida in recent years.
Due to our exposure to Florida’s residential property insurance market, we face risks associated with the adverse conditions that have affected the magnitude of both catastrophe and non-catastrophe losses and LAE in Florida in recent years.
The Florida market as a whole tends to consistently be a top-three personal residential homeowners insurance market in the United States based on direct premiums written, due in large part to higher average pricing levels that are necessary to address the hurricane risk exposure in the state (from June 1 through November 30), the litigation environment, and other market conditions.
The Florida market as a whole tends to consistently be a top-three personal residential homeowners insurance market in the United States based on direct premiums written, due in large part to higher average pricing levels that are necessary to address the hurricane risk exposure in the state, the litigation environment, and other market conditions.
Human Capital Resources The Company is a vertically integrated insurance holding company with its employees performing substantially all insurance and support related services for our Insurance Entities, including policy underwriting, marketing, online distribution, risk management and claims management. As of December 31, 2024, we had 1,068 full-time employees, of whom 80% are based in Florida.
Human Capital Resources The Company is a vertically integrated insurance holding company with its employees performing substantially all insurance and support related services for our Insurance Entities, including policy underwriting, marketing, online distribution, risk management and claims management. As of December 31, 2025, we had 929 full-time employees, of whom 89% are based in Florida.
The benefits of the reinsurance strategy in 2024 and the specific programs are further discussed in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In order to limit our potential exposure to catastrophic events, the Insurance Entities purchase significant reinsurance from a variety of third-party reinsurers, including traditional reinsurers, alternative capital providers (e.g., via catastrophe bonds), and government entities such as the Florida Hurricane Catastrophe Fund (the “FHCF”).
The benefits of the reinsurance strategy in 2025 and the specific programs are further discussed in “ Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations. ” 7 In order to limit our potential exposure to catastrophic events, the Insurance Entities purchase significant reinsurance from a variety of third-party reinsurers, including traditional reinsurers, alternative capital providers, and government entities such as the Florida Hurricane Catastrophe Fund (the “FHCF”).
The benefits of UVE’s reinsurance strategy in 2024 and the specific programs are further discussed below and in “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 6 Competition The market for homeowners insurance typically is highly competitive.
The benefits of UVE’s reinsurance strategy in 2025 and the specific programs are further discussed below and in “ Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations. ” Competition The market for homeowners insurance typically is highly competitive.
We have made substantial efforts in recent years to innovate across all of our service businesses, including continued development of our digital agency Clovered.com, where we have more than 50 carrier partners, and utilization of digital applications where applicable to adjust claims.
We have made substantial efforts in recent years to innovate across all of our service businesses, including continued development of our digital agency Clovered.com, where we have 39 carrier partners, and utilization of digital applications where applicable to administer claims.
Investments Funds in excess of operating needs for the Insurance Entities and UVE are invested in accordance with our investment policy guidelines. The Investment Committee of our Board of Directors (the “Board of Directors” or the “Board”) oversees the investment portfolio and reports overall investment results to our Board, at least on a quarterly basis.
Investments Funds in excess of operating needs for the Insurance Entities and UVE are invested in accordance with our investment policy guidelines. The Investment Committee of our Board oversees the investment portfolio and reports overall investment results to our Board, on a quarterly basis.
These guaranty associations typically are funded by assets of the failed insurance companies and by assessments on insurance companies transacting business in the respective states. When the Insurance Entities are subject to assessments, in some instances they must remit the assessed amounts to the guaranty associations. The Insurance Entities subsequently seek to recover the assessed amounts through recoupments from policyholders.
These guaranty associations typically are funded by assets of the failed insurance companies and by assessments on insurance companies transacting business in the respective states. When the Insurance Entities are subject to assessments, in some instances they must promptly remit the assessed amounts to the guaranty associations.
Approximately 66% of our employees work in our claims management operations. Our in-house claims litigation team represents 41% of our full-time employees.
Approximately 54% of our employees work in our claims management operations. Our in-house claims litigation team represents 30% of our full-time employees.
Reflecting our efforts to improve and enhance our claims operations and to address emerging claims and litigation trends, approximately 66% of our employees work in our claims management operations. Of these employees, i comprise our in-house claims litigation team. Distribution We market and sell our products primarily through our network of approximately 9,600 licensed independent agents (4,000 in Florida).
Reflecting our efforts to improve and enhance our claims operations and to address emerging claims and litigation trends, approximately 54% of our employees work in our claims management operations. Of these employees, 56% comprise our in-house claims litigation team. Distribution We market and sell our products primarily through our network of approximately 9,500 licensed independent agents (3,900 in Florida).
In this capacity, ERA advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations. ERA’s underwriting service evaluates insurance risk and exposures on an individual and portfolio basis and assists the Insurance Entities with pricing risks.
(“ERA,” formerly Universal Risk Advisors, Inc.), is the managing general agent for the Insurance Entities. In this capacity, ERA advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations. ERA’s underwriting service evaluates insurance risk and exposures on an individual and portfolio basis and assists the Insurance Entities with pricing risks.
The Company is subject to comprehensive regulatory oversight and regulations, which include periodic reporting to regulators and regulatory examinations to assure the Company maintains compliance with statutory requirements, and the payment of fees, premium taxes, and assessments in order to maintain its licenses.
The Insurance Entities are subject to comprehensive regulatory oversight and regulations, which include periodic reporting to regulators and regulatory examinations to assure they maintain compliance with statutory requirements, and the payment of fees, premium taxes, and assessments in order to maintain their licenses.
While we cannot predict the amount or timing of future guaranty association assessments, we believe that any such assessments will not have a material effect on our financial position or results of operations.
Such unrecovered amounts can be credited against future assessments, or the remaining receivable may be written off. While we cannot predict the amount or timing of future guaranty association assessments, we believe that any such assessments will not have a material effect on our financial position or results of operations.
Although the Florida legislature passed law changes to address market abuses, including substantial reforms in December 2022, the benefits of these law changes may not be fully realized for several years.
Although the Florida legislature passed law changes to address market abuses, including substantial reforms in December 2022, the benefits of these law changes may not be fully realized for several years while the Company continues to settle and respond to claims that occurred prior to reforms taking full effect.
UPCIC also offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. APPCIC writes similar lines of insurance as UPCIC, but is only licensed in Florida and Georgia and primarily distributes policies through our digital platforms. Our Insurance Entities, UPCIC and APPCIC, are both currently rated “A” (“Exceptional”) by Demotech, Inc.
UPCIC also offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. APPCIC writes similar lines of insurance as UPCIC, but is only licensed in Florida and Georgia. APPCIC primarily distributes policies through our digital platforms, and beginning in the current year through our independent agency network.
(“Demotech”) and “A-” by Kroll Bond Rating Agency (“Kroll”), which are rating agencies specializing in evaluating insurer financial strength and stability. Our combined statutory capital surplus was approximately $413.5 million at December 31, 2024. 4 Risk Management Our subsidiary, Evolution Risk Advisors, Inc. (“ERA,” formerly Universal Risk Advisors, Inc.), is the managing general agent for the Insurance Entities.
Our Insurance Entities, UPCIC and APPCIC, are both currently rated “A” (“Exceptional”) by Demotech, Inc. (“Demotech”) and “A-” by Kroll Bond Rating Agency (“Kroll”), which are rating agencies specializing in evaluating insurer financial strength and stability. Our combined statutory capital and surplus was approximately $509.1 million at December 31, 2025. 4 Risk Management Our subsidiary, Evolution Risk Advisors, Inc.
Examinations As part of their regulatory oversight process, state insurance departments conduct periodic financial examinations of the books, records, accounts and operations of insurance companies that are authorized to transact business in their states.
Changes in laws and government regulations often apply only prospectively and can result in extended periods before their effects, whether favorable or unfavorable, are fully recognized. 8 Examinations As part of their regulatory oversight process, state insurance departments conduct periodic financial examinations of the books, records, accounts and operations of insurance companies that are authorized to transact business in their states.
Correspondingly, we have historically experienced a higher volume of claims submitted in the third and fourth quarters of our fiscal year during and immediately subsequent to the peak of hurricane season, and a lower volume of claims submitted in the first and second quarters of our fiscal year. 8 Government Regulation We are subject to extensive regulation in the markets we serve, primarily at the state level, and will become subject to the regulations of additional states in which we seek to conduct business in the future.
Correspondingly, we have historically experienced a higher volume of claims submitted in the third and fourth quarters of our fiscal year during and immediately subsequent to the peak of hurricane season, and a lower volume of claims submitted in the first and second quarters of our fiscal year.
The maximum dividend that may be paid by the Insurance Entities to their immediate parent company without prior approval is limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned surplus as of the preceding year end.
The maximum dividend that may be paid by the Insurance Entities to their immediate parent company without prior approval is limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned surplus as of the preceding year end. 9 Underwriting and Marketing Restrictions From time to time, regulatory and legislative bodies in Florida and in other states have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events, and insurance capacity and pricing.
In other instances, the Insurance Entities might be directed to collect assessments by adding a surcharge to their policies and remitting the collected amounts to the guaranty associations. This surcharge approach, which is currently in effect in Florida, does not result in out-of-pocket payments by the Insurance Entities that must be recovered through recoupments.
This surcharge approach, which is currently in effect in Florida, does not result in out-of-pocket payments by the Insurance Entities that must be recovered through recoupments. However, in the event the Insurance Entities are required to pay assessments up front and recover those amounts through recoupments, they might not be able to fully recoup the amounts of those assessments.
Our responsive claims team helps to restore our customers’ lives after catastrophic losses. Our enterprise risk management framework, overseen by senior management and the Board, models and assesses loss probabilities. We seek to mitigate catastrophe risk for our customers and shareholders through prudent exposure management, underwriting initiatives, and sensitivity to geographic concentrations as well as through reinsurance as noted above.
We seek to mitigate catastrophe risk for our customers and shareholders through prudent exposure management, underwriting initiatives, and sensitivity to geographic concentrations as well as through reinsurance as noted above.
Our strong relationships with our independent agents and their relationships with their customers are critical to our ability to identify, attract, and retain profitable business. We actively participate in the recruitment and training of our independent agents and provide each agency with training sessions on topics such as underwriting guidelines and submitting claims.
We actively participate in the recruitment and training of our independent agents and provide each agency with training sessions on topics such as underwriting guidelines and submitting claims. 5 We utilize an attractive commission-based compensation plan as an incentive for independent agents to place business with us.
We have an additional license to write in Tennessee and completed our non-renewal of policies in Hawaii as part of our strategy to exit the Hawaii market by 2024. During 2024, 77.2% of our overall direct premiums written were in Florida.
We have an additional license to write in Tennessee. During 2025, 72.6% of our overall direct premiums written were in Florida.
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We also engage a third-party market representative to assist in ongoing training and recruitment initiatives in all of the states in which we write business. 5 We utilize an attractive commission-based compensation plan as an incentive for independent agents to place business with us.
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Our responsive claims team helps to restore our customers’ lives after catastrophic losses. Our enterprise risk management framework, overseen by senior management and the Board of Directors (the “Board of Directors” or the “Board”), models and assesses loss probabilities.
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In hard market cycles, the availability of homeowners insurance can be negatively affected by insurers’ available capacity to absorb risks, their rate levels in relation to anticipated losses, loss adjustment expenses and reinsurance costs, and uncertainties regarding the future effectiveness of reforms designed to combat abuses.
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Our strong relationships with our independent agents and their relationships with their customers are critical to our ability to identify, attract, and retain profitable business.
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This is evidenced by Citizens’ policy count, which began to grow rapidly in late 2019 and remains elevated in the current market even as some other insurers have showed interest in offering coverage to Citizens’ policyholder with attractively-priced policies. Price Pricing has generally been defined by “hard” and “soft” cyclical markets.
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Although the gap between Citizens’ premiums and admitted market premiums typically narrows as market conditions improve, its premium can remain competitive with those in the admitted market for several years due to cumulative effects of the statutory caps and public policy decisions. Price Pricing has generally been defined by “hard” and “soft” cyclical markets.
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In 2022, the Florida legislature authorized additional reinsurance support through a no-cost program called Reinsurance to Assist Policyholders (“RAP”), in which the Insurance Entities were required to participate in either 2022 or 2023. The Insurance Entities deferred their participation until the contract year beginning June 1, 2023. The RAP program expired on May 31, 2024.
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Government Regulation We are subject to extensive regulation in the markets we serve, primarily at the state level, and will become subject to the regulations of additional states in which we seek to conduct business in the future.
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The Florida residential property insurance market, which comprises the largest portion of our business, has been characterized for many years by increasing losses and loss adjustment expenses due largely to statutes and judicial interpretations allowing policyholders to assign post-loss claims benefits to third-party vendors, providing for plaintiffs suing insurers to recover attorneys’ fees against insurers without providing a corresponding right to insurers, establishing exceedingly long periods for policyholders to file claims even following catastrophic events, and otherwise fostering a favorable environment for inflated and questionable claims.
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For example, the Insurance Entities experienced significant increases in losses and LAE in the years prior to 2022 as Florida laws in effect at the time led to a proliferation of solicited, represented and litigated claims.
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Although these conditions had persisted for several years and previously had been identified as growing concerns, the Florida legislature first attempted to adopt meaningful reforms in 2019. These changes, followed by additional changes in 2021 and early 2022, were intended to address symptoms of Florida’s deteriorating residential property insurance market.
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The market has improved in the years that have followed as the Florida legislature passed reforms to address the key underlying drivers of the insurance market’s deterioration. The Florida market therefore has experienced both the unfavorable effects of the pre-reform laws and the evolving favorable effects of the law changes.
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However, in each case, these reforms either were not effective or merely served to slow the pace of the market’s deterioration but did not address the underlying causes and therefore did not stem the adverse loss and loss adjustment expense environment that plagued the market.
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The Insurance Entities subsequently seek to recover the remitted assessment amounts through recoupments from policyholders. In other instances, the Insurance Entities might be directed to collect assessments by adding a surcharge to their policies and remitting the collected amounts to the guaranty associations.
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In December 2022, the Florida legislature convened in special session to pass another reform bill, this time purporting to more definitively address the key underlying drivers of the insurance market’s deterioration.
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The December 2022 reforms included eliminating policyholders’ statutory one-way right to attorneys’ fees; prohibiting the assignment of post-loss benefits under residential property insurance policies; establishing a clearer standard by which policyholders must substantiate bad faith actions; and improving the usefulness of Florida’s offer of judgment statute in resolving disputes.
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The long-term effectiveness of these changes will depend on many factors, including, but not limited to, the manner in which the reforms are interpreted by courts and applied by regulatory authorities, our effectiveness in implementing operational and procedural changes to account for the reforms, the impact of the changes on policyholders, public adjusters, vendors and attorneys, and the impact of economic conditions such as inflation on claims costs and related expenses.
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Underwriting and Marketing Restrictions From time to time, regulatory and legislative bodies in Florida and in other states have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events, and insurance capacity and pricing.
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However, in the event the Insurance Entities are required to pay assessments up front and recover those amounts through recoupments, they might not be able to fully recoup the amounts of those assessments. Such unrecovered amounts can be credited against future assessments, or the remaining receivable may be written off.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

94 edited+36 added−40 removed100 unchanged
The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including (i) our reinsurers’ financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract or (ii) whether insured losses meet the qualifying conditions and are recoverable under our reinsurance contracts for covered events or are excluded.
The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including (i) our reinsurers’ financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract and (ii) whether insured losses meet the qualifying conditions and are recoverable under our reinsurance contracts for covered events or are excluded.
We also are subject to litigation or administrative actions arising from the conduct of our business and the regulatory authority of state insurance departments or other agencies having oversight or enforcement authority over the various aspects of our business.
We also are subject to litigation and administrative actions arising from the conduct of our business and the regulatory authority of state insurance departments or other agencies having oversight or enforcement authority over the various aspects of our business.
Our business and operations rely on the secure and efficient processing, storage and transmission of customer and company data, including policyholders’ nonpublic personal information, including financial information, and proprietary business information, on our computer systems and networks. Unauthorized access to personally identifiable information, even if not financial information, could be damaging to all affected parties.
Our business and operations rely on the secure and efficient processing, storage and transmission of customer and company data, including policyholders’ nonpublic personal information, financial information, and proprietary business information, on our computer systems and networks. Unauthorized access to personally identifiable information, even if not financial information, could be damaging to all affected parties.
It is possible that a regulatory authority would refuse to approve or a court could nullify or void an exclusion or limitation or interpret existing coverages more broadly than we anticipate, that legislation could be enacted modifying or barring the use of these exclusions or limitations, or that legislation purporting to implement limitations or exclusions will be determined by courts to be ineffective or less effective than anticipated.
It is possible that a regulatory authority would refuse to approve an exclusion or a court could nullify or void an exclusion or limitation or interpret existing coverages more broadly than we anticipate, that legislation could be enacted modifying or barring the use of these exclusions or limitations, or that legislation purporting to implement limitations or exclusions will be determined by courts to be ineffective or less effective than anticipated.
In many respects, these laws and regulations limit our ability to grow and improve the profitability of our business or effectively respond to changing market conditions, and may place constraints on our ability to meet our revenue and net profit goals. 20 The Insurance Entities are each domiciled in Florida and are highly regulated by state insurance authorities in Florida.
In many respects, these laws and regulations limit our ability to grow and improve the profitability of our 20 business or effectively respond to changing market conditions, and may place constraints on our ability to meet our revenue and net profit goals. The Insurance Entities are each domiciled in Florida and are highly regulated by state insurance authorities in Florida.
Third parties may seek to gain access to our systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers, or other users of our systems. These threat actors have grown increasingly sophisticated, and have begun using tools like AI to facilitate cyberattacks, leaving us increasingly vulnerable to these kinds of attacks.
Third parties may seek to gain access to our or our vendors’ systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers, or other users of our systems. These threat actors have grown increasingly sophisticated and have begun using tools like AI to facilitate cyberattacks, leaving us increasingly vulnerable to these kinds of attacks.
Our computer systems are vulnerable to unauthorized access and hackers, computer viruses and other scenarios in which our data may be exposed or compromised. Cyberattacks can originate from a variety of sources, including third parties who are affiliated with foreign governments or employees acting negligently or in a manner adverse to our interests.
Our computer systems and our vendors’ computer systems are vulnerable to unauthorized access and hackers, computer viruses and other scenarios in which our data may be exposed or compromised. Cyberattacks can originate from a variety of sources, including third parties who are affiliated with foreign governments or employees acting negligently or in a manner adverse to our interests.
Further, although we use widely recognized and commercially available models to estimate our exposure to loss and LAE from hurricanes and certain other catastrophes, other models exist that might produce a wider or more narrow range of loss estimates, or loss estimates from perils considered less significant to our insured risks, such as wildfires.
Although we use widely recognized and commercially available models to estimate our exposure to loss and LAE from hurricanes and certain other catastrophes, other models exist that might produce a wider or more narrow range of loss estimates, or loss estimates from perils considered less significant to our insured risks, such as wildfires.
In addition, the models are not necessarily reflective of company or state-specific policy language, demand surge for labor and materials, consumer behavior, prevailing or changing claims, legal and litigation 15 environments, or loss settlement expenses, all of which are subject to wide variation by catastrophe.
In addition, the models are not necessarily reflective of company or state-specific policy language, demand surge for labor and materials, consumer behavior, prevailing or changing claims, legal and litigation environments, or loss settlement expenses, all of which are subject to wide variation by catastrophe.
Catastrophic claim severity is impacted by the effects of continued, high levels of inflation and increases in insured value and factors such as the overall claims, legal and litigation environments in affected areas, in addition to the geographic concentration of insured property.
Catastrophic claim severity is also impacted by the effects of continued, high levels of inflation and increases in insured value and factors such as the overall claims, legal and litigation environments in affected areas, in addition to the geographic concentration of insured property.
This exposure, and the costs of protracted litigation, can result in decisions to settle litigation notwithstanding our belief that meritorious defenses exist or that we ultimately would prevail at trial or on appeal.
This exposure, and the costs of protracted litigation, can result in decisions to settle litigation notwithstanding our belief that meritorious defenses exist or that we 17 ultimately would prevail at trial or on appeal.
A downgrade to or loss of a rating also might cause reputational damage to us among customers, insurance agents, reinsurers, creditors, regulators or others that could affect our ability to write and retain business.
A downgrade to or loss of a rating also might cause reputational damage to us among customers, insurance agents, reinsurers, creditors, regulators or others that could affect our 18 ability to write and retain business.
Litigation or regulatory matters have negatively affected and may in the future negatively affect us by resulting in the payment of substantial awards or settlements, increasing legal and compliance costs, requiring us to change certain aspects of our business operations, diverting management attention from other business issues, harming our reputation with agents, customers, reinsurers, creditors, regulators or others, or making it more difficult to retain current customers and to recruit and retain employees or agents.
Litigation or regulatory matters have negatively affected and may in the future negatively affect us by resulting in the payment of substantial awards or settlements, increasing legal and compliance costs, requiring us to change certain aspects of our business operations, diverting management attention from other business issues, harming our reputation with agents, customers, reinsurers, creditors, regulators or others, or making it more difficult to attract or retain customers and to recruit and retain employees or agents.
External factors, such as compliance with state regulations, especially when different than the regulations of other states in which we do business, obtaining new licenses, competitive alternatives, processes, and time periods associated with adjusting product forms and rates, and shifting customer preferences, may also affect the successful implementation of our geographic growth strategy.
External factors, such as costs of compliance with state regulations, especially when different than the regulations of other states in which we do business, obtaining new licenses, competitive alternatives, time periods associated with adjusting product forms and rates and shifting customer preferences may also affect the successful implementation of our geographic growth strategy.
In addition, our failure to maintain at least one financial strength or stability rating acceptable in the secondary mortgage market would adversely affect our ability to write new and renewal business. Further, a downgrade to or reduction of our financial strength or stability ratings below acceptable levels could constitute a default under credit obligations of UVE.
In addition, our failure to maintain at least one financial strength or stability rating acceptable in the secondary mortgage market would adversely affect our ability to write new and renewal business. Further, a downgrade to or reduction of our financial strength or stability ratings below acceptable levels could constitute a default under the Company’s credit obligations.
The ability of the Insurance Entities to make such payments is limited by applicable law, as set forth in “Item 1—Business—Government Regulation—Restrictions on Dividends and Distributions.” For more details on our cash flows, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” 21 Regulations limiting rate changes and requiring us to participate in loss sharing or assessments may decrease our profitability.
The ability of the Insurance Entities to make such payments is limited by applicable law, as set forth in “ Item 1—Business—Government Regulation—Restrictions on Dividends and Distributions. ” For more details on our cash flows, see “ Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources. ” 21 Regulations limiting rate changes and requiring us to participate in loss sharing or assessments may decrease our profitability.
If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices and terms that we consider acceptable, we would have to either accept an increase in our exposure risk, reduce our insurance writings, seek rate adjustments at levels that might not be approved or might adversely affect policy retention, or develop or seek other alternatives, which could have an adverse effect on our profitability and results of operations.
If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices and terms that we consider acceptable, we would have to either accept an increase in our exposure to catastrophe losses, reduce our insurance writings, seek rate adjustments at levels that might not be approved or might adversely affect policy retention, or develop or seek other alternatives, which could have an adverse effect on our profitability and results of operations.
Our ability to adequately price our products, anticipate market response, and generate underwriting profits is subject to a number of risks and uncertainties, some of which are outside our control, including: • the availability of sufficient and reliable data; • regulatory review periods or delays in reviewing and approving filed rate changes or our failure to gain regulatory approval; • the uncertainties that inherently underlie estimates and assumptions; • our ability to timely identify or anticipate unforeseen adverse trends or other emerging costs in the rate making process; • our ability to stay competitive as evolving technologies emerge such as artificial intelligence (“AI”) and machine learning to make pricing, underwriting, or other decisions; • inflationary pressures on labor and materials, including supply chain disruptions; • the effect of climate change on frequency and severity of insured events from severe weather; • uncertainties regarding the impact of law changes and their interpretations, including the near-term and long-term effects, if any, of the law changes on claims handling and resolution practices, repair and restoration costs, consumer behaviors, activities by public adjusters and policyholders’ attorneys, and judicial decisions; and • adverse changes to statutes, rules, or judicial precedent that are not contemplated in existing rate levels and are not addressed or mitigated by current underwriting criteria or policy forms.
Our ability to adequately price our products, anticipate market response, and generate underwriting profits is subject to a number of risks and uncertainties, some of which are outside our control, including: • the availability of sufficient and reliable data; 13 • regulatory review periods or delays in reviewing and approving filed rate changes or our failure to gain regulatory approval; • the uncertainties that inherently underlie estimates and assumptions; • our ability to timely identify or anticipate unforeseen adverse trends or other emerging costs in the rate making process; • our ability to stay competitive as evolving technologies such as artificial intelligence (“AI”) and machine learning emerge and are increasingly used by our competitors to make pricing, underwriting, or other decisions; • inflationary pressures on labor and materials, including supply chain disruptions; • the effect of climate change or global or localized weather patterns on the frequency and severity of insured events from severe weather; • uncertainties regarding the impact of law changes and their interpretations, including the near - term and long-term effects, if any, of the law changes on claims handling and resolution practices, repair and restoration costs, consumer behaviors, activities by public adjusters and policyholders’ attorneys, and judicial decisions; and • adverse changes to statutes, rules, or judicial precedent that are not contemplated in existing rate levels and are not addressed or mitigated by current underwriting criteria or policy forms.
On an ongoing basis, rating agencies review the financial performance and condition of insurers and could downgrade or change the outlook on an insurer’s ratings due to, for example, a change in an insurer’s statutory capital; a change in a rating agency’s determination of the amount of risk-adjusted capital required to maintain a particular rating; a change in the perceived adequacy of an insurer’s reinsurance program; an increase in the perceived risk of an insurer’s investment portfolio; a reduced confidence in management or a host of other considerations that may or may not be within an insurer’s knowledge or control.
Rating agencies review the financial performance and condition of insurers on an ongoing basis and can downgrade or change the outlook on an insurer’s ratings due to, for example, a reduction in an insurer’s statutory capital; a change in a rating agency’s determination of the amount of risk-adjusted capital required to maintain a particular rating; a change in the perceived adequacy of an insurer’s reinsurance program; an increase in the perceived risk of an insurer’s investment portfolio; reduced confidence in management or a host of other considerations that may or may not be within an insurer’s knowledge or control.
Breaches can involve attacks intended to obtain unauthorized access to nonpublic personal information, destroy data, disrupt or degrade service, sabotage systems or cause other damage, including through the introduction of computer viruses or malware, cyberattacks and other means; breaches can also involve human error, such as employees falling victim to phishing schemes or computer coding errors that may inadvertently leave data exposed.
Breaches can involve attacks intended to obtain unauthorized access to nonpublic personal information, destroy data, disrupt or degrade service, sabotage systems or cause other damage, including through the introduction of computer viruses or malware, cyberattacks and other means; breaches can also be caused by human error, such as employees falling victim to phishing schemes or computer coding errors that may inadvertently leave data exposed.
The property and casualty insurance market is cyclical and has experienced periods characterized by relatively high levels of price competition, less restrictive underwriting standards and relatively low premium rates, followed by periods of relatively lower levels of competition, more selective underwriting standards, and relatively high premium rates.
The property and casualty insurance market is cyclical and has experienced periods of significant price competition, less restrictive underwriting standards and relatively low premium rates, followed by periods of lower levels of competition, more selective underwriting standards, and relatively high premium rates.
Financial strength and stability ratings are primarily directed towards policyholders of the Insurance Entities, and are not evaluations directed toward the protection of our shareholders, and are not recommendations to buy, sell or hold securities. 18 Breaches of our information systems or denial of service on our website could have an adverse impact on our business and reputation.
Financial strength and stability ratings are primarily directed towards policyholders of the Insurance Entities, are not evaluations directed toward the protection of our shareholders and are not recommendations to buy, sell or hold securities. Breaches or other failures of our information systems or denial of service on our website could have an adverse impact on our business and reputation.
For example, insurance companies are beginning to use AI in a number of applications, including risk assessment, claims processing, customer service, fraud detection, and predictive analytics and modeling.
For example, insurance companies are beginning to use AI in a number of applications, including risk assessment, administrative aspects of claims processing, customer service, fraud detection, and predictive analytics and modeling.
Although we strive to pay meritorious claims in a fair and prompt manner, civil litigation can result when we do not pay insurance claims in the amounts or at the times demanded by policyholders or their representatives or assignees.
Although we strive to pay meritorious claims in a fair and prompt manner, civil litigation can result when we do not pay insurance claims in the amounts or at the times demanded by policyholders or their representative.
Additionally, some law changes intended to alleviate abuses in the property insurance market are interpreted as applying only prospectively to policies issued or renewed after the new laws’ effective dates, potentially creating competitive advantages for insurers that enter markets or expand writings after the laws’ effective dates as compared to insurers like the Insurance Entities, which continue to have certain policy and claims servicing obligations on previously issued policies.
Also, some law changes intended to alleviate abuses in the property insurance market apply only prospectively to policies issued or renewed after the new laws’ effective dates, potentially creating competitive advantages for insurers that enter markets or expand writings after the laws’ effective dates as compared to insurers like the Insurance Entities, which continue to have certain policy and claims servicing obligations on previously issued policies.
Such limitations lead to questionable predictive capability and post-event measurements that have not been well understood or proven to be sufficiently reliable.
Such limitations lead to questionable predictive capability and post-event measurements that have not been well understood or proven in some cases to be sufficiently reliable.
See “Part II—Item 8—Note 7 (Long-term debt).” Our ability to make payments on or to refinance our indebtedness, including our ability to meet our obligations under the Notes, and to fund our operations depends on our ability to generate cash.
See “ Part II—Item 8—Note 7 (Debt). ” Our ability to make payments on or to refinance our indebtedness, including our ability to meet our obligations under the Notes, and to fund our operations depends on our ability to generate cash.
We endeavor to price our products adequately by collecting and analyzing a substantial amount of data; developing, testing, and applying relevant ratings formulas and methodologies; closely monitoring and seeking to timely recognize changes in cost trends; and projecting both severity and frequency of losses and other costs including loss adjustment expenses, reinsurance costs and other underwriting costs.
We endeavor to price our products adequately by collecting and analyzing a substantial amount of data; developing, testing, and applying relevant rating formulas and methodologies; closely monitoring and seeking to timely recognize changes in cost trends; and projecting both severity and frequency of losses and other costs including LAE, reinsurance costs and other underwriting costs.
We utilize a number of strategies to mitigate our risk exposure, such as: • engaging in rigorous underwriting; • carefully evaluating terms and conditions of our policies and binding guidelines; and • ceding risk to reinsurers.
We utilize a number of strategies to mitigate our risk exposure, such as: • engaging in rigorous underwriting; • monitoring and managing geographic risk concentration; • carefully evaluating terms and conditions of our policies and binding guidelines; and • ceding risk to reinsurers.
We currently market our policies to a broad range of prospective policyholders through approximately 4,000 independent insurance agents in Florida as well as approximately 5,600 independent insurance agents outside of Florida.
We currently market our policies to a broad range of prospective policyholders through approximately 3,900 independent insurance agents in Florida as well as approximately 5,600 independent insurance agents outside of Florida.
However, there are inherent limitations in all of these strategies, and no assurance can be given that an event or series of events will not result in loss levels in excess of our probable maximum loss models, or that our non-catastrophe forecasts or modeling is accurate, which could have a material adverse effect on our financial condition or results of operations.
However, there are inherent limitations in all of these strategies, and no assurance can be given that an event or series of events will not result in loss levels in excess of those considered in our modeling, pricing or reinsurance placement, or that our non - catastrophe forecasts or modeling is accurate, which could have a material adverse effect on our financial condition or results of operations.
Examples of these limitations are significant variations in estimates between models and modelers and material increases and decreases in model results due to changes and refinements of the underlying data elements and assumptions, including with respect to the risks arising from climate change.
Examples of these limitations are significant variations in estimates between models, and material increases and decreases in model results across editions due to changes and refinements of the underlying data elements and assumptions, including with respect to the risks arising from weather patterns or climate change.
Competition for these individuals is intense and our ability to operate successfully may be impaired if we are not effective in filling critical leadership positions, in developing the talent and skills of our human resources, in assimilating new executive talent into our organization, or in deploying human resource talent consistent with our business goals.
Competition for these individuals is intense, especially as new and existing insurers seek to expand their businesses, and our ability to operate successfully may be impaired if we are not effective in filling critical leadership positions, developing the talent and skills of our human resources, assimilating new executive talent into our organization, or deploying human resource talent consistent with our business goals.
We have not determined the amount of resources and the time that this development and implementation may require, which may result in short-term, unexpected interruptions to our business, as we endeavor to develop or implement new technologies.
We have not determined the amount of resources and the time that this development and implementation may require, which may result in short-term, unexpected interruptions to our business as we endeavor to 19 develop or implement new technologies. Any development of new technologies, including AI, may introduce new risks.
In addition, our ability to afford reinsurance to reduce our catastrophe risk may be dependent upon our ability to adequately and timely adjust premium rates for our costs, and there are no assurances that the terms and rates for our current reinsurance program will continue to be available next year or that we will be able to adjust our premiums.
In addition, our ability to afford reinsurance to reduce our catastrophe risk is dependent upon our ability to adequately and timely adjust rates for our costs, and there are no assurances that the terms and rates for our current reinsurance program will continue to be available next year or that we will be able to adjust our premiums commensurate with any changes.
It is also possible that losses could manifest themselves in ways that we do not anticipate and that our risk mitigation strategies are not designed to address. Such a manifestation of losses could have a material adverse effect on our financial condition and results of operations.
It is also possible that losses could manifest themselves in ways that we do not anticipate and that our risk mitigation strategies are not designed to address. Such a manifestation of losses could have a material adverse effect on our financial condition and results of operations. 14 Pandemics and macroeconomic conditions could impact our business, financial results and growth.
The reserve for losses and LAE is reported net of receivables for subrogation. Recorded claim reserves in the property and casualty business and amounts recoverable through subrogation are based on our best estimates of what the ultimate settlement and administration of claims will cost, both reported and incurred but not reported (“IBNR”).
Recorded claim reserves in the property and casualty business and amounts recoverable through subrogation are based on our best estimates of what the ultimate settlement and administration of claims will cost, both reported and incurred but not reported (“IBNR”).
Independent agents typically represent other insurance companies in addition to representing us, and such agents are not obligated to sell or promote our products. Other insurance companies may pay higher commissions than we do, provide services to the agents that we do not provide, or may be more attractive to the agents than we are.
Independent agents typically represent other insurance companies in addition to representing us, and such agents are not obligated to sell or promote our products. Other insurance companies may pay higher commissions than we do, provide services to the agents that we do not provide or adapt to evolving technologies faster than we do.
Other state regulations require insurance companies to file insurance rates and policy forms for review, restrict our ability to cancel or non-renew policies and determine the accounting standards we use in preparation of our consolidated financial statements. These regulations also affect many other aspects of the Insurance Entities’ businesses.
Other state regulations require insurance companies to file insurance rates and policy forms for review, restrict our ability to cancel or non-renew policies and determine statutory accounting standards.. These regulations also affect many other aspects of the Insurance Entities’ businesses.
Additionally, due to statutorily-imposed limits on rate increases, Florida’s residual property insurance market, Citizens, often charges lower premiums in hard insurance markets than what the Insurance Entities are able to charge in accordance with applicable regulatory filings, actuarial standards and prudent financial management.
Additionally, due to statutorily-imposed limits on rate increases, Florida’s residual property insurance market, Citizens, charges lower premiums in some areas or for some policy types than what the Insurance Entities are able to charge in accordance with applicable regulatory filings, actuarial standards and prudent financial management.
Because we conduct the majority of our business in Florida, our financial results are affected by the regulatory, economic, and weather conditions in Florida. Although we are licensed to transact insurance business in other states, we write a majority of our policies in Florida.
Because we have significant exposure to the Florida market, our financial results are affected by the regulatory, economic and weather conditions in Florida. Although we are licensed to transact insurance business in other states, we write a significant portion of our policies in Florida.
As industry practices and legal, judicial, social, and other environmental conditions change, unexpected and unintended issues related to claims and coverage have arisen and may in the future arise, including judicial expansion of policy coverage and the impact of 17 new theories of liability, plaintiffs targeting property and casualty insurers in purported class-action litigation or other forms of litigation relating to claims-handling, and other practices, and adverse changes in loss cost trends, including inflationary pressures in home repair costs or other legal or regulatory conditions incentivizing increases in disputed or litigated claims.
As industry practices and legal, judicial, social, and other environmental conditions change, unexpected and unintended issues related to claims and coverage have arisen and may in the future arise, including judicial expansion of policy coverage and the impact of new theories of liability, plaintiffs targeting property and casualty insurers in purported class-action litigation, litigation financing or other forms of litigation relating to claims-handling and other practices incentivizing increases in disputed or litigated claims.
The success of our business depends, in part, on the leadership and performance of our executive management team and key employees and on our ability to attract, retain, and motivate talented employees.
The success of our business depends, in part, on the leadership and performance of our executive management team and key employees and on our ability to attract, retain, develop and motivate talented employees in a rapidly changing technological environment.
All of the policies we issue include exclusions or other conditions that define and limit coverage. These exclusions and conditions are designed to manage our exposure to certain risk types or risk characteristics and expanding theories of legal liability. In addition, applicable law limits the time period during which a policyholder may bring a claim under the policy.
These exclusions and conditions are designed to manage our exposure to certain risk types or risk characteristics and to expanding theories of legal liability. In addition, applicable law limits the time period during which a policyholder may bring a claim under the policy.
Changes in homeowners’ claim severity can be and have been driven by inflation in the construction industry, in building materials, and in home furnishings, as well as by other economic and environmental factors, including increased demand for services and supplies in areas affected by catastrophes, supply chain disruptions, labor shortages, and prevailing attitudes towards insurers and the claims process, including the prevalence of litigated claims or claims involving representation as well as continuing efforts by policyholder representatives to seek larger settlements on pre-reform claims in recognition that the elimination of the statutory right to attorneys’ fees and other law changes will apply to future claims.
Changes in homeowners’ claim severity can be and have been driven by inflation in the construction industry, in building materials, and in home furnishings, as well as by other economic and environmental factors, including increased demand for services and supplies in areas affected by catastrophes, supply chain disruptions, tariffs, labor shortages, and prevailing attitudes towards insurers and the claims process as reflected through litigated claims or claims involving representation including continuing efforts by policyholder representatives to seek large settlements on pre-reform claims.
Competitors also might adopt more prompt or more effective solutions to adverse market conditions than we are able to implement, providing those competitors with a competitive advantage through lower losses and loss adjustment expenses, more competitive premium levels, or the ability to expand their businesses.
Competitors also might adopt more prompt or more effective solutions to adverse market conditions than we are able to implement, including through the use of AI or machine learning, providing those competitors with a competitive advantage through lower losses and LAE, more competitive premium levels, or a greater ability to expand their businesses.
Because we rely on independent insurance agents, the loss of these independent agent relationships and the business they control or our ability to attract new independent agents could have an adverse impact on our business.
Any one or combination of these conditions may materially impact our business, results of operations or financial condition. Because we rely on independent insurance agents, the loss of these independent agent relationships and the business they control or our ability to attract new independent agents could have an adverse impact on our business.
We compete against large national carriers that have greater capital resources and longer operating histories, regional carriers, and managing general agencies, as well as newly formed and less-capitalized companies that might have more aggressive underwriting or pricing strategies. Many of these entities may also be affiliated with other entities that have greater financial and other resources than we have.
We compete against large national carriers that have greater capital resources and longer operating histories, regional carriers, and managing general agencies, as well as newly formed and less - capitalized companies that might have more aggressive underwriting or pricing strategies.
Our liquidity could also be constrained by a catastrophe, or multiple catastrophes, which could have a negative impact on our business. Catastrophes have eroded and in the future may erode our statutory surplus or ability to obtain adequate reinsurance which could negatively affect our ability to write new or renewal business.
Catastrophes have eroded, and in the future may erode, our statutory surplus or ability to obtain adequate reinsurance which could negatively affect our ability to write new or renewal business.
Claim frequency can be influenced by natural conditions such as the number and types of severe weather events affecting areas where we write policies as well as by factors such as the prevalence of solicited and represented claims, including efforts by policyholder representatives to encourage claims activity related to policy periods predating law changes.
Claim frequency can be influenced by natural conditions such as the number and types of severe weather events affecting areas where we write policies as well as by factors such as the prevalence of solicited and represented claims.
Our Insurance Entities maintain Financial Stability Ratings® of “A” (“Exceptional”) by Demotech and insurance financial strength ratings of “A-” by Kroll. These and similar ratings are important factors in establishing the competitive position of insurance companies and generally have an effect on an insurance company’s business.
Our Insurance Entities maintain Financial Stability Ratings® of “A” (“Exceptional”) by Demotech and insurance financial strength ratings of “A-” by Kroll. In addition, these and similar ratings contribute to customers’ and agents’ perceptions of the competitive position of insurance companies and therefore can have an effect on an insurance company’s business.
In addition, certain law changes take effect only with respect to new or renewal policies issued after the changes are adopted, which can favor new entrants to the market over insurers like the Insurance Entities that continue to service policies issued before the law changes and claims received under those policies.
In addition, certain law changes take effect only with respect to new or renewal policies issued after the changes are adopted, which can favor new entrants to the market over insurers like the Insurance Entities that continue to service claims received under pre-reform policies. These conditions can have a material adverse effect on our results of operations and cash flows.
If we fail to adequately price the risks we underwrite, or if emerging trends outpace our ability to adjust prices timely, or if we lose desirable exposures to competitors by overpricing our risks, we may experience underwriting losses depleting surplus at the Insurance Entities and capital at the holding company. 13 Our results of operations and financial condition depend on our ability to underwrite and set premiums adequately for a variety of risks while remaining competitive.
If we fail to adequately price the risks we underwrite, if emerging trends outpace our ability to adjust prices in a timely manner, or if we lose desirable exposures to competitors by overpricing our risks, we may experience underwriting losses, thereby depleting surplus at the Insurance Entities and capital at the holding company.
This is especially the case in hard markets such as the current Florida market, where many insurers are submitting filings for significant rate increases and thereby adding to the FLOIR’s workload and affecting its ability to timely review filings.
This is especially the case in hard markets, where insurers typically are submitting filings for rate increases and thereby adding to regulators’ workload and affecting their ability to timely review filings.
As we saw with the COVID-19 pandemic, outbreaks of disease can cause governments, public institutions, and other organizations to impose or recommend, and businesses and individuals to implement restrictions on various activities or take other actions to combat the disease’s spread, such as warnings, restrictions, and bans on travel, transportation, or in-person gatherings; and local or regional closures or lockdowns.
As we saw with the COVID - 19 pandemic, outbreaks of disease can cause governments, public institutions, and other organizations to impose or recommend, and businesses and individuals to implement restrictions on, various activities or take other actions to combat the disease’s spread, such as warnings, restrictions, and bans on travel, transportation, or in-person gatherings, which could materially negatively impact our workforce as well as our business, operations, and financial results in many ways, both directly and indirectly.
We also could overprice our risks, thereby making our products relatively less attractive than other alternatives, thereby negatively impacting our competitive position and potentially leading to a reduction in demand for our products and in our market share. In either event, our profitability could be materially and adversely affected.
We also could overprice our risks, thereby making our products relatively less attractive than other alternatives, thereby negatively impacting our competitive position and potentially leading to a reduction in demand for our products and in our market share. Unanticipated increases in the severity or frequency of claims adversely affect our profitability and financial condition.
When competitors attempt to increase market share by lowering rates, we can experience reductions in our underwriting margins, or a decline in sales of our insurance policies as customers purchase lower-priced products from our competitors.
Many of these entities may also be affiliated with other entities that have greater financial and other resources than we have. When competitors attempt to increase market share by lowering rates, we can experience reductions in our underwriting margins or a decline in sales of our insurance policies as customers purchase lower-priced products from our competitors.
Although we pursue various loss management initiatives in order to mitigate future increases in claim severity and frequency, there can be no assurances that these initiatives will successfully identify or reduce the effect of future increases in claim severity and frequency. 14 The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial condition or results of operations.
Although we pursue various loss management initiatives in order to mitigate future increases in claim severity and frequency, there can be no assurances that these initiatives will successfully identify or reduce the effect of future increases in claim severity and frequency.
Initial timetables for expansion may not be achieved, and price and profitability targets may not be feasible. Because our business and experience are based substantially on the Florida insurance market, we may not understand all of the risks associated with entering into an unfamiliar market.
Initial timetables for expansion may not be achieved, and price and profitability targets may not be feasible. As a new entrant, we may not understand all of the risks associated with entering into an unfamiliar market.
We cannot provide assurance that we will retain our current relationships, or be able to establish new relationships, with independent agents. The loss of these marketing relationships could adversely affect our ability to attract new agents, retain our agency network, or write new or renewal insurance policies, which could materially adversely affect our business, financial condition, and results of operations.
The loss or decline in effectiveness of these marketing relationships could adversely affect our ability to attract new agents, retain our agency network, or more generally write new or renewal insurance policies, which could materially adversely affect our business, financial condition, and results of operations.
The absence of regulations or conflicts in regulations may further limit our ability to implement new technology in an effective and timely manner. 19 Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we write or changes in laws and/or potential regulatory approaches relating to them could have a material adverse effect on our financial condition or our results of operations.
Lack of effectiveness of exclusions and other loss limitation methods in the insurance policies we write or changes in laws and/or potential regulatory approaches relating to them could have a material adverse effect on our financial condition or results of operations. All of the policies we issue include exclusions or other conditions that define and limit coverage.
We have incurred and may in the future incur catastrophe losses in Florida or elsewhere in excess of those experienced in prior years; those estimated by catastrophe models we use; the average expected level used in pricing; and our current reinsurance coverage limits.
We have incurred, and may in the future incur, catastrophe losses in Florida in excess of those experienced in prior years, those estimated by catastrophe models we use, the average expected level used in pricing, and our current reinsurance coverage limits. We are also subject to claims arising from non-catastrophic weather events such as rain, hail, and high winds.
Further, a single catastrophic event, or a series of such events, specifically affecting Florida, particularly in the more densely populated areas of the state, have had and could in the future have a disproportionately adverse impact on our business, financial condition, and results of operations.
Further, a single catastrophic event, or a series of such events, specifically affecting Florida, particularly in the more densely populated areas of the state, have had and could in the future have a disproportionately adverse impact on our business, financial condition, and results of operations. 12 We have entered new markets and expect that we will continue to do so, but there can be no assurance that our diversification and growth strategy will be effective.
Failure to manage these risks successfully could have a material adverse effect on our business, results of operations, and financial condition. Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our operations.
Our success depends, in part, on our ability to attract, retain, and develop talented employees, and the loss of any one of our key personnel could adversely impact our operations.
Our systems also may inadvertently expose, through a computer programming error or otherwise, confidential information as well as that of our customers and third parties with whom we interact. Our computer systems have been, and likely will continue to be, subject to cyber hacking activities, computer viruses, other malicious codes, or other computer-related penetrations.
Our systems also may inadvertently expose, through a computer programming error or otherwise, confidential information as well as that of our customers and third parties with whom we interact.
For these reasons and other factors that might not be known to us, the accuracy of models in estimating insured losses from prior storms has varied considerably by catastrophe when compared to actual results from those catastrophes.
For these reasons and other factors that might not be known to us, the accuracy of models in estimating insured losses from prior storms has varied considerably by catastrophe when compared to actual results from those catastrophes. 15 Reinsurance may be unavailable in the future at reasonable levels and prices or on reasonable terms, which may limit our ability to write new business or to adequately mitigate our exposure to loss.
Market conditions and public policy decisions beyond our control determine the availability and cost of the reinsurance we purchase, the ability of the FHCF to reimburse insurers at levels contemplated by their reimbursement contracts, and the expiration of time-limited governmental programs such as RAP, which expired on May 31, 2024.
Our reinsurance program is designed to mitigate our exposure to catastrophes. Market conditions and public policy decisions beyond our control determine the availability and cost of the reinsurance we purchase and the ability of the FHCF to reimburse insurers at levels contemplated by their reimbursement contracts.
Compliance with these laws and regulations may increase the costs of running our business and may even slow our ability to respond effectively and quickly to operational opportunities. Moreover, these laws and regulations are administered and enforced by a number of different governmental authorities, including state insurance regulators, the U.S.
Compliance with these laws and regulations may increase the costs of running our business and may even slow our ability to respond effectively and quickly to operational opportunities.
In addition, increased catastrophic events could result in increased credit exposure to the reinsurers with which we transact business. Our actual losses from catastrophic events might exceed levels protected against by the Insurance Entities’ respective reinsurance programs or might be larger than anticipated if one or more of our reinsurers fail to meet their obligations.
Our actual losses from catastrophic events might exceed levels protected against by the Insurance Entities’ respective reinsurance programs or might be larger than anticipated if one or more of our reinsurers fail to meet their obligations. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for homeowners insurance may be affected.
If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our business both directly and potentially indirectly through reputational damage.
Regulatory authorities have relatively broad discretion to deny or revoke licenses for various reasons, including the violation of regulations. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us.
We rely on models as a tool to evaluate risk, and those models are inherently uncertain and may not accurately predict existing or future losses.
We rely on models as a tool to evaluate risk, and those models are inherently uncertain and may not accurately predict existing or future losses. We use models developed by third-party vendors in assessing our exposure to catastrophe losses, and these models assume various conditions and probability scenarios.
As premium levels increase, and competitors perceive an increased opportunity for profitability, new entrants to the market or expansion by existing participants lead to increased competition, a reduction in premium rates, less favorable policy terms, and fewer opportunities to underwrite insurance risks.
As premium levels increase in relation to anticipated losses and competitors perceive an increased opportunity for profitability such as in Florida’s current post-reform property insurance market, competition increases from new entrants to the market and expansion by existing participants. This leads to reductions in rate levels, broadening policy terms, and fewer opportunities to underwrite insurance risks.
Increases in the equities markets might increase returns on our existing portfolio but reduce the attractiveness of future investments. In addition, high inflation, such as what we are seeing in the current economic environment, could also adversely impact our business and financial results. Our overall financial performance depends in part on the returns on our investment portfolio.
Increases in the equities markets might increase returns on our existing portfolio but reduce the attractiveness of future investments. Our overall financial performance depends in part on the returns on our investment portfolio.
Actual claims incurred have exceeded, and in the future may exceed, reserves established for claims, adversely affecting our operating results and financial condition. We maintain loss reserves to cover our estimated ultimate liability for unpaid losses and LAE for reported and unreported claims as of the end of each accounting period.
We maintain loss reserves to cover our estimated ultimate liability for unpaid losses and LAE for reported and unreported claims as of the end of each accounting period. The reserve for losses and LAE is reported net of receivables for subrogation.
Negative market conditions can impair our ability to write insurance at rates that we consider adequate and appropriate relative to the risk written. To the extent that we cannot write insurance at appropriate rates, our business would be materially and adversely affected. We cannot predict whether market conditions will improve, remain constant or deteriorate.
To the extent that we cannot write insurance at rates we consider appropriate, our business is materially and adversely affected. We cannot predict whether market conditions will improve, remain constant or deteriorate. An extended period of negative market conditions could have a material adverse effect on our business, financial condition and results of operations.
Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE, reinsurance costs, and underwriting expenses and to earn a reasonable profit.
Our results of operations and financial condition depend on our ability to underwrite and set premiums adequately for a variety of risks while remaining competitive. Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE, reinsurance costs, and underwriting expenses and to earn a reasonable profit.
There is a risk that our competitors may utilize these technologies more effectively than us, which may result in a competitive disadvantage in price and/or efficiency.
AI algorithms and the data used to train them may be incomplete or inadequate, and any disruption or failure of AI product offerings may result in adverse impacts to our business operations or reputation. There is a risk that our competitors may utilize these technologies more effectively than us, which may result in a competitive disadvantage in price and/or efficiency.
State legislatures and insurance regulators regularly re-examine existing laws and regulations applicable to insurance companies and their products.
This could adversely affect our ability to operate our business both directly and potentially indirectly through reputational damage. State legislatures and insurance regulators regularly re-examine existing laws and regulations applicable to insurance companies and their products.
The frequency and severity of property insurance claims generally increase when catastrophic events and severe weather conditions occur.
The frequency and severity of property insurance claims generally increase when catastrophic events and severe weather conditions occur. Over the years, notable changes in long-term weather patterns have been observed, including an increase in both the frequency and intensity of severe convective events.
The current Florida homeowners’ insurance market is adversely impacted by changes in claimant behaviors resulting in losses and LAE exceeding historical trends, amounts experienced in other states, and amounts we previously estimated.
Prevailing regulatory, consumer behavior, legal, economic, political, demographic, competitive, weather, and other conditions in Florida disproportionately affect our revenues and profitability. For an extended period, the Florida homeowners’ insurance market was adversely impacted by claimant behaviors resulting in losses and LAE exceeding historical trends, losses experienced in other states, and losses we previously estimated.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The Company assesses cybersecurity risks, along with other key risks through its comprehensive Enterprise Risk Management (“ERM”) framework. This framework mandates the compilation of a quarterly risk packet, which includes the results of KPIs for the designated risks and determinations as to where the results fell within the predefined tolerance threshold.
The Company assesses cybersecurity risks, along with other key risks through its comprehensive Enterprise Risk Management (“ERM”) framework. This framework mandates the compilation of a quarterly risk packet, which includes the results of Key Performance Indicators (“KPIs”) for the designated risks and determinations as to where the results fell within the predefined tolerance threshold.
IT Department The Company has appointed our CIO to establish, implement, and carryout our cybersecurity risk management policies and processes, including the Incident Management and Information Security Plan, and to facilitate the communication of such matters to the Risk Committee and the Board.
IT Department The Company has appointed our CIO to establish, implement, and carry out our cybersecurity risk management policies and processes, including the Incident Management and Information Security Plan, and to facilitate the communication of such matters to the Risk Committee and the Board.
The Committee reports to and receives direction from the Board as part of its oversight function. 23 Risk Management and Strategy The Company’s process for assessing, identifying, evaluating and managing cybersecurity risks as part of its broader ERM program includes: • Risk Identification and Prioritization : The Company employs various methods to assess and identify cybersecurity risks, which methods may, from time to time, include tabletop exercises to test our preparedness and incident response process, business unit assessments, control gap analyses, threat modeling, impact analyses, internal audits, external audits, penetration tests, and engaging third parties to conduct analyses of our information security program.
Risk Management and Strategy The Company’s process for assessing, identifying, evaluating and managing cybersecurity risks as part of its broader ERM program includes: • Risk Identification and Prioritization : The Company employs various methods to assess and identify cybersecurity risks, which methods may, from time to time, include tabletop exercises to test our preparedness and incident response process, business unit assessments, control gap analyses, threat modeling, impact analyses, internal audits, external audits, penetration tests, and engaging third parties to conduct analyses of our information security program.
Significant fluctuations in the prevalence or impact of such risks are reported to the Risk Committee on a quarterly basis. • Mitigation Strategies : While continuous backups to a warm failover site are performed, the Company’s Incident Management and Information Security Plan is designed to identify and respond to security incidents and threats in a timely manner to minimize the loss or compromise of information assets and to facilitate incident resolution.
Significant fluctuations in the prevalence or impact of such risks are reported to the Risk Committee on a quarterly basis. • Mitigation Strategies : The Company’s Incident Management and Information Security Plan is designed to identify and respond to security incidents and threats in a timely manner to minimize the loss or compromise of information assets and to facilitate incident resolution.
Internal Audit Periodic audits are performed by our Internal Audit team as part of the Company’s compliance with the Incident Management and Information Security Plan and the overall ERM framework.
Our CIO and Security Team have over 30 years of experience in information technology and cybersecurity positions. Internal Audit Periodic audits are performed by our Internal Audit team as part of the Company’s compliance with the Incident Management and Information Security Plan and the overall ERM framework.
The Risk Committee is tasked with developing and overseeing risk management processes and systems of internal controls. These are intended to ensure that management and the Company’s Board of Directors have identified, and evaluated key enterprise risks and implemented mitigating controls. This includes the groups Incident Management and Information Security Plan, which assesses, identifies, and manages cybersecurity risks.
These are intended to ensure that management and the Company’s Board of Directors have identified, and evaluated key enterprise risks and implemented mitigating controls. This includes the groups Incident Management and Information Security Plan, which assesses, identifies, and manages cybersecurity risks. The Risk Committee reports to and receives direction from the Board as part of its oversight function.
Cybersecurity risks and threats are managed by a dedicated team within the Information Technology (“IT”) Department, as well as a Security Operations Center (“SOC”) managed by a third-party provider, under the leadership of the Chief Information Officer (“CIO”). This team collaborates with various departments across the Company, including legal, compliance, and human resources, to ensure a comprehensive approach to cybersecurity.
Cybersecurity risks and threats are managed by a dedicated team within the Information Technology (“IT”) Department, as well as a Security Operations Center (“SOC”) managed by a third-party provider, under the leadership of the Chief Information Officer (“CIO”).
Our CIO and other IT senior members of management responsible for our cybersecurity program have extensive experience assessing and managing cybersecurity risks. Our CIO and Security Team have over 30 years of experience in information technology and cybersecurity positions.
Our CIO has over 20 years of NIST experience auditing, creating and complying with controls in support of the Sarbanes-Oxley Act of 2002, and holds several information security and data privacy certifications. Other IT senior members of management responsible for our cybersecurity program also have extensive experience assessing and managing cybersecurity risks.
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This team collaborates with various departments across the Company, including legal, compliance, and human resources, to ensure a comprehensive approach to cybersecurity. 23 The Risk Committee is tasked with developing and overseeing risk management processes and systems of internal controls.

Item 2. Properties

Properties — owned and leased real estate

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There are no mortgage or lease arrangements for our real estate owned property.
The current facilities are expected to be adequate for our operations for the near future. There are no mortgage or lease arrangements for our real estate owned property.
The majority of our operations is conducted from these three facilities. We believe that our facilities and equipment are generally well maintained, in good operating condition and suitable and adequate for our present operations. The current facilities are expected to be adequate for our operations for the near future.
ITEM 2. PROPERTIES We conduct our insurance operations primarily from office buildings, which we own, in three locations: Fort Lauderdale, Florida; Altamonte Springs, Florida; and Eagan, Minnesota. The majority of our operations is conducted from these facilities. We believe that our facilities and equipment are generally well maintained, in good operating condition and suitable and adequate for our present operations.
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PROPERTIES We conduct our insurance operations primarily from three locations, which we own: our general corporate offices located at 1110 West Commercial Boulevard, Fort Lauderdale, Florida 33309; an office building located at 5341 Northwest 33rd Avenue, Fort Lauderdale, Florida 33309; and an office building located at 491 Montgomery Place, Altamonte Springs, FL 32714, which was acquired in November 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Many of these legal proceedings involve disputes as to coverage or the scope and amount of damage arising from direct claims or recoveries from assigned claims under contracts or policies that the Company underwrites. The Company establishes reserves for its anticipated claims obligations net of expected reinsurance.
Many of these legal proceedings involve disputes as to coverage or the scope and amount of damage arising from claims under contracts or policies that the Company underwrites. The Company establishes reserves for its anticipated claims obligations and records an estimate for expected reinsurance recoveries.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions. As of December 31, 2024 and 2023, there was one shareholder of our Series A Cumulative Convertible Preferred Stock (“Series A Preferred Stock”).
A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions. As of December 31, 2025 and 2024, there was one shareholder of our Series A Cumulative Convertible Preferred Stock (“Series A Preferred Stock”).
We declared and paid aggregate dividends to this holder of record of the company’s Series A Preferred Stock of $10,000 for each of the years ended December 31, 2024 and 2023.
We declared and paid aggregate dividends to this holder of record of the Company’s Series A Preferred Stock of $10,000 for each of the years ended December 31, 2025 and 2024.
Stock Performance Graph The following graph and table compare the cumulative total stockholder return of our common stock from December 31, 2019 through December 31, 2024 with the performance of: (i) Standard & Poor’s (“S&P”) 500 Index, (ii) Russell 2000 Index and (iii) S&P Insurance Select Industry Index.
Stock Performance Graph The following graph and table compare the cumulative total stockholder return of our common stock from December 31, 2020 through December 31, 2025 with the performance of: (i) Standard & Poor’s (“S&P”) 500 Index, (ii) Russell 2000 Index and (iii) S&P Insurance Select Industry Index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock, par value $0.01 per share, is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “UVE.” As of February 24, 2025, there were 57 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock, par value $0.01 per share, is listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “UVE.” As of February 23, 2026, there were 54 shareholders of record of our common stock.
(2) Number of shares was calculated using a closing price at December 31, 2024 of $21.06 per share. We may repurchase shares from time to time at our discretion, based on ongoing assessments of our capital needs, the market price of our common stock and general market conditions. We will fund the share repurchase program with cash from operations.
(2) Number of shares was calculated using a closing price at December 31, 2025 of $33.80 per share. We may repurchase shares from time to time at our discretion, based on ongoing assessments of our capital needs, the market price of our common stock and general market conditions. We will fund the share repurchase program with cash from operations.
The graph and table assume an investment of $100 in our common stock and in each of the three indices on December 31, 2019 with all dividends being reinvested on the ex-dividend date. The closing price of our common stock as of December 31, 2024 (the last trading day of the year) was $21.06 per share.
The graph and table assume an investment of $100 in our common stock and in each of the three indices on December 31, 2020 with all dividends being reinvested on the ex-dividend date. The closing price of our common stock as of December 31, 2025 (the last trading day of the year) was $33.80 per share.
The stock price performance in the graph and table are not intended to forecast the future performance of our common stock and may not be indicative of future price performance. 26 Dividend Policy Future cash dividend payments are subject to business conditions, our financial position and requirements for working capital and other corporate purposes, as well as to compliance with the applicable provisions of the Delaware General Corporation Law and, of course, the business judgment of our Board of Directors.
Dividend Policy Future cash dividend payments are subject to business conditions, our financial position and requirements for working capital and other corporate purposes, as well as to compliance with the applicable provisions of the Delaware General Corporation Law and, of course, the business judgment of our Board of Directors.
During 2024, there were two authorized repurchase plans in effect: • On June 12, 2023, our Board of Directors authorized the repurchase of up to $20.0 million of our common stock through June 10, 2025 (the “June 2025 Share Repurchase Program”), pursuant to which we repurchased 1,320,675 shares of our common stock at an aggregate cost of approximately $20.0 million.
During 2025, there were two authorized repurchase plans in effect: • On March 11, 2024, our Board of Directors authorized the repurchase of up to $20.0 million of our common stock through March 11, 2026 (the “March 2026 Share Repurchase Program”) pursuant to which we repurchased 977,616 shares of our common stock at an aggregate cost of approximately $20.0 million.
As of December 31, 2024, we have the ability to purchase up to approximately $2.6 million of our common stock under the March 2026 Share Repurchase Program.
As of December 31, 2025 we have the ability to purchase approximately $0.2 million of our common stock under the May 2027 Share Repurchase Program.
See “Part I—Business—Government Regulation—Restrictions on Dividends and Distributions” and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Registrant Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs (2) 10/1/2024 - 10/31/2024 40,000 $ 20.27 40,000 — 11/1/2024 - 11/30/2024 90,000 $ 20.03 90,000 — 12/1/2024 - 12/31/2024 240,321 $ 21.06 240,321 122,784 Total for the three months ended December 31, 2024 370,321 $ 20.68 370,321 122,784 (1) Average price paid per share does not reflect brokerage commissions paid to acquire shares in open market transactions.
See “ Part I—Business—Government Regulation—Restrictions on Dividends and Distributions ” and “ Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations. ” Registrant Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs (2) 10/1/2025 - 10/31/2025 70,000 $ 31.34 70,000 — 11/1/2025 - 11/30/2025 62,946 $ 32.89 62,946 — 12/1/2025 - 12/31/2025 76,783 $ 33.78 76,783 6,378 Total for the three months ended December 31, 2025 209,729 $ 32.73 209,729 6,378 (1) Average price paid per share does not reflect brokerage commissions paid to acquire shares in open market transactions.
As of December 31, 2024, we have repurchased all authorized common stock under the June 2025 Share Repurchase Program. • On March 11, 2024, our Board of Directors authorized the repurchase of up to $20.0 million of our common stock through March 11, 2026 (the “March 2026 Share Repurchase Program”) pursuant to which we repurchased 871,427 shares of our common stock at an aggregate cost of approximately $17.4 million.
As of December 31, 2025, we have repurchased all common stock under the March 2026 Share Repurchase Program. • On May 1, 2025, our Board of Directors authorized the repurchase of up to $20.0 million of our common stock through May 1, 2027 (the “May 2027 Share Repurchase Program”), pursuant to which we have repurchased 737,462 shares of our common stock at an aggregate cost of approximately $19.8 million from program inception through December 31, 2025.
In total, during the year ended December 31, 2024, we repurchased an aggregate of 1,079,149 shares of our common stock pursuant to the March 2026 Share Repurchase Program and the June 2025 Share Repurchase Program at an aggregate price of approximately $21.5 million. ITEM 6. RESERVED
In total, during the year ended December 31, 2025, we repurchased an aggregate of 843,651 shares of our common stock pursuant to the March 2026 Share Repurchase Program and the May 2027 Share Repurchase Program at an aggregate price of approximately $22.4 million.
Period Ended Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Universal Insurance Holdings, Inc. $ 56.51 $ 66.88 $ 44.50 $ 70.35 $ 96.21 S&P 500 Index 118.40 152.39 124.79 157.59 197.02 Russell 2000 Index 119.96 137.74 109.59 128.14 142.93 S&P Insurance Select Industry Index 97.21 119.69 124.27 139.85 178.32 We have generated these comparisons using data supplied by S&P Global Market Intelligence (Centennial, Colorado).
Period Ended Index 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Universal Insurance Holdings, Inc. $ 118.39 $ 78.71 $ 124.47 $ 170.27 $ 281.48 S&P 500 Index 128.71 105.40 133.10 166.40 196.16 Russell 2000 Index 114.82 91.35 106.82 119.14 134.40 S&P Insurance Select Industry Index 123.13 127.84 143.87 183.44 198.91 26 We have generated these comparisons using data supplied by S&P Global Market Intelligence (Centennial, Colorado).
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The stock price performance in the graph and table are not intended to forecast the future performance of our common stock and may not be indicative of future price performance.
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On January 7, 2026, our Board of Directors authorized the repurchase of an additional $20.0 million of our common stock through January 8, 2028 (the “January 2028 Share Repurchase Program”). As of February 23, 2026 we have the ability to purchase approximately $20 million of our common stock under the January 2028 Share Repurchase Program. ITEM 6. RESERVED 27

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The primary factors contributing to the increase in written premiums were new and previous rate changes earned in during 2024, increased policies in force during 2024 and policy inflation adjustments. There was an increase in policies in force across 16 states.
The primary factors contributing to the increase in written premiums were new and previous rate changes earned during 2024, increased policies in force during 2024, and policy inflation adjustments. There was an increase in policies in force across 16 states.
Additionally, the lower level of reinsurance commissions and an increased level of agent bonus commissions impacted 2024. • The increase in other operating costs of $12.6 million was largely driven by employee related expenses including stock based compensation, and employee benefits.
Additionally, the lower level of reinsurance commissions and an increased level of agent bonus commissions impacted 2024. • The increase in other operating costs and expenses of $12.6 million was largely driven by employee related expenses including stock based compensation, and employee benefits.
The other operating cost ratio was 7.9% for the year ended year ended December 31, 2024 compared to 7.7% for the year ended December 31, 2023.
The other operating cost ratio was 7.9% for the year ended December 31, 2024 compared to 7.7% for the year ended December 31, 2023.
This metric informs management of factors impacting overall current year profitability. 34 REINSURANCE Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events. Developing and implementing our reinsurance strategy to adequately protect our policyholders, balance sheet, and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been our key strategic priority.
This metric informs management of factors impacting overall current year profitability. REINSURANCE Reinsurance enables our Insurance Entities to limit potential exposures to catastrophic events. Developing and implementing our reinsurance strategy to adequately protect our policyholders, balance sheet, and Insurance Entities in the event of one or more catastrophes while maintaining efficient reinsurance costs has been our key strategic priority.
In addition to the funds liquidity generated from our operations, we maintain a prudent investment portfolio, mainly consisting of high-grade fixed income securities. Our primary goal is to safeguard capital and ensure sufficient liquidity for potential claims and other financial requirements. The portfolio also aims to achieve a comprehensive return, with a focus on investment income.
In addition to liquidity generated from our operations, we maintain a prudent investment portfolio, mainly consisting of high-grade fixed income securities. Our primary goal is to safeguard capital and ensure sufficient liquidity for potential claims and other financial requirements. The portfolio also aims to achieve a comprehensive return, with a focus on investment income.
Direct premiums written continue to increase across the majority of states in which we conduct business. We have policies in force in 19 states on December 31, 2024. In 2024 UPCIC wrote its first policy in Wisconsin. In addition, we are authorized to do business in Tennessee and are in the process of submitting our rate filing.
Direct premiums written continue to increase across the majority of states in which we conduct business. We have policies in force in 19 states on December 31, 2025. In 2024 UPCIC wrote its first policy in Wisconsin. In addition, we are authorized to do business in Tennessee and are in the process of submitting our rate filing.
Subject to such accumulated unassigned funds, the maximum dividend that may be paid by the Insurance Entities to PSI without prior approval (an “ordinary dividend”) is further limited to the lesser of statutory net income from operations of the preceding calendar year or statutory unassigned surplus as of the preceding year end.
Subject to such accumulated unassigned funds, the maximum dividend that may be paid by the Insurance Entities to PSI without prior approval (an “ordinary dividend”) is further limited to the lesser of statutory net income from operations of 46 the preceding calendar year or statutory unassigned surplus as of the preceding year end.
The increase of $0.6 million, or 3.2%, was the result of an increase in the combined total number of new and renewal policies written during the year ended December 31, 2024 compared to the year ended December 31, 2023 in states in which we are permitted to charge this fee.
The decrease of $0.6 million, or 3.2%, was the result of an increase in the combined total number of new and renewal policies written during the year ended December 31, 2024 compared to the year ended December 31, 2023 in states in which we are permitted to charge this fee.
However, investment income, federal income taxes and other non-underwriting income or expense are not reflected in the combined ratio. The profitability of property and casualty insurance companies depends on income from underwriting, investment and service operations. Underwriting results are considered profitable when the combined ratio is under 100% and unprofitable when the combined ratio is over 100%.
However, investment income, federal income taxes and other non-underwriting income or expense are not reflected in the combined ratio. The profitability of property and casualty insurance 49 companies depends on income from underwriting, investment and service operations. Underwriting results are considered profitable when the combined ratio is under 100% and unprofitable when the combined ratio is over 100%.
We revise our reserve for unpaid losses as additional information becomes available, and reflect adjustments, if any, in our earnings in the periods in which we determine the adjustments are necessary. We estimate and accrue our right to subrogate reported or estimated claims against other parties.
We revise our reserve for unpaid losses as additional information becomes available, and reflect adjustments, if any, in our earnings in the periods in which we determine the adjustments are necessary. Additionally, we estimate and accrue our right to subrogate reported or estimated claims against other parties.
Overall, ceded premium earned increased by $3.5 million, or 0.6%, for the year ended December 31, 2024, compared to the previous year. As a percentage of direct earned premiums, ceded earned premiums declined to 31.3% in 2024 from 33.2% in 2023.
Overall, ceded premium earned increased $3.5 million, or 0.6%, for the year ended December 31, 2024, compared to the previous year. As a percentage of direct earned premiums, ceded earned premiums declined to 31.3% in 2024 from 33.2% in 2023.
For example, if a change in law is expected to have a significant impact on the development of claim severity, actuarial judgment is applied to determine appropriate development factors that will most 56 accurately reflect the expected impact on that specific estimate.
For example, if a change in law is expected to have a significant impact on the development of claim severity, actuarial judgment is applied to determine appropriate development factors that will most accurately reflect the expected impact on that specific estimate.
According to Kroll, its category of “A” ratings, inclusive of A+, A, and A- ratings, indicates an insurer’s financial condition is strong and it is very likely to meet its policy obligations under difficult economic, 54 financial, and business conditions.
According to Kroll, its category of “A” ratings, inclusive of A+, A, and A- ratings, indicates an insurer’s financial condition is strong and it is very likely to meet its policy obligations under difficult economic, financial, and business conditions.
Management believes that these indicators are helpful in understanding the underlying trends in the Company’s businesses. Some of these indicators are reported on a quarterly basis and others on an annual basis. Please also refer to “Part II—Item 8—Note 2 (Summary of Significant Accounting Policies)” for definitions of certain other terms we use when describing our financial results.
Management believes that these indicators are helpful in understanding the underlying trends in the Company’s businesses. Some of these indicators are reported on a quarterly basis and others on an annual basis. Please also refer to “ Part II—Item 8—Note 2 (Summary of Significant Accounting Policies) ” for definitions of certain other terms we use when describing our financial results.
The maximum amount of dividends that can be paid by Florida insurance companies without prior approval of the FLOIR is subject to restrictions as referenced below and in “Part II—Item 8—Note 5 (Insurance Operations).” Dividends from the Insurance Entities can only be paid from accumulated unassigned funds derived from net operating profits and net realized capital gains.
The maximum amount of dividends that can be paid by Florida insurance companies without prior approval of the FLOIR is subject to restrictions as referenced below and in “ Part II—Item 8—Note 5 (Insurance Operations) ”. Dividends from the Insurance Entities can only be paid from accumulated unassigned funds derived from net operating profits and net realized capital gains.
In selecting development factors and averages described in “Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses)” to the consolidated financial statements, due consideration is given to how the historical experience patterns change from one year to the next over the course of several consecutive years of recent history.
In selecting development factors and averages described in “ Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses) ” to the consolidated financial statements, due consideration is given to how the historical experience patterns change from one year to the next over the course of several consecutive years of recent history.
See “Part II—Item 8—Note 15 (Commitments and Contingencies).” (2) There are generally no notional or stated amounts related to unpaid losses and LAE. Both the amounts and timing of future loss and LAE payments are estimates and subject to the inherent variability of legal and market conditions affecting the obligations and make the timing of cash outflows uncertain.
See “ Part II—Item 8—Note 15 (Commitments and Contingencies) ”. (2) There are generally no notional or stated amounts related to unpaid losses and LAE. Both the amounts and timing of future loss and LAE payments are estimates and subject to the inherent variability of legal and market conditions affecting the obligations and make the timing of cash outflows uncertain.
The $2.3 million decrease in commission revenue, or 4.2%, for the year ended December 31, 2024 was primarily due to the impact of Florida’s Reinsurance to Assist Policyholders (RAP) program, which reduced reinsurance brokerage commissions expiring in 2024. Additionally, there were higher levels of commissions earned from the previous year’s reinsurance program expiring in 2023.
The $2.3 million decrease in commission revenue, or 4.2%, for the year ended December 31, 2024 was primarily due to the impact of Florida’s Reinsurance to Assist Policyholders (RAP) program, which reduced reinsurance brokerage commissions and expired in 2024. Additionally, there were higher levels of commissions earned from the previous year’s reinsurance program expiring in 2023.
There was a $9.9 million net unrealized gain on investments during the year ended December 31, 2024, largely driven by portfolio optimization efforts in the private and public equity markets, coupled with the overall domestic equity market appreciation tailwind during 2024, compared to a $12.0 million net unrealized gain on investments for the year ended 40 December 31, 2023.
There was a $9.9 million net unrealized gain on investments during the year ended December 31, 2024, largely driven by our portfolio optimization efforts in the private and public equity markets, coupled with the overall domestic equity market appreciation tailwind during 2024, compared to a $12.0 million net unrealized gain on investments for the year ended December 31, 2023.
This is due to rising claims costs, inflation, and increased costs associated with litigated claims. Refer to “—Overview—Florida Trends” above for more details. During the year ended December 31, 2024, net prior year development was $29.1 million, compared to unfavorable prior year development of $110.6 million for 2023.
This is due to rising claims costs, inflation, and increased costs associated with litigated claims. Refer to “— Overview—Florida Trends ” above for more details. During the year ended December 31, 2024, net prior year development was $29.1 million, compared to unfavorable prior year development of $110.6 million for 2023.
See “Item 1—Note 5 (Insurance Operations)” for a roll-forward in the balance of our DPAC. Income taxes payable/recoverable represents the amounts due to/from taxing jurisdictions within one year. An income tax payable arises when current income tax liabilities exceed tax payments, and an income tax recoverable occurs when tax payments exceed current income tax liabilities.
See “ Item 1—Note 5 (Insurance Operations) ” for a roll-forward in the balance of our DPAC. Income taxes payable/recoverable represents the amounts due to/from taxing jurisdictions within one year. An income tax payable arises when current income tax liabilities exceed tax payments, and an income tax recoverable occurs when tax payments exceed current income tax liabilities.
The average credit rating on our available-for-sale securities was A+ as of December 31, 2024 and December 31, 2023. Credit ratings are a measure of collection risk on invested assets. Credit ratings are provided by third party nationally recognized rating agencies and are periodically updated. Management establishes guidelines for minimum credit rating and overall credit rating for all investments.
The average credit rating on our available-for-sale securities was A+ as of December 31, 2025 and December 31, 2024. Credit ratings are a measure of collection risk on invested assets. Credit ratings are provided by third party nationally recognized rating agencies and are periodically updated. Management establishes guidelines for minimum credit rating and overall credit rating for all investments.
As of December 31, 2024, we were in compliance with all applicable covenants. We will also continue to evaluate opportunities to access the debt capital markets to raise additional capital. We anticipate any proceeds would be used for general corporate purposes, including investing in the capital and surplus of the Insurance Entities.
As of December 31, 2025, we were in compliance with all applicable covenants. We will also continue to evaluate opportunities to access the debt capital markets to raise additional capital. We anticipate any proceeds would be used for general corporate purposes, including investing in the capital and surplus of the Insurance Entities.
The ultimate amount and timing of unpaid losses and LAE could differ materially from the amounts in the table above. Further, the unpaid losses and LAE do not represent all the obligations that will arise under the contracts, but rather only the estimated liability incurred through December 31, 2024. Unpaid losses and LAE are net of estimated subrogation recoveries.
The ultimate amount and timing of unpaid losses and LAE could differ materially from the amounts in the table above. Further, the unpaid losses and LAE do not represent all the obligations that will arise under the contracts, but rather only the estimated liability incurred through December 31, 2025. Unpaid losses and LAE are net of estimated subrogation recoveries.
As an example, the Company considered and included the effects of the enacted legislation in developing its ultimate loss projections and reserve estimates as of December 31, 2023, as noted in “Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses)” to the consolidated financial statements.
As an example, the Company considered and included the effects of the enacted legislation in developing its ultimate loss projections and reserve estimates as of December 31, 2023, as noted in “ Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses) ” to the consolidated financial statements.
We seek to produce an underwriting profit (defined as earned premium-net minus losses, LAE, policy acquisition costs and other operating costs) over the long term, along with growing our Other Revenue Sources. Revenues We generate revenue primarily from the collection of insurance premiums.
We seek to produce an underwriting profit (defined as net premiums earned minus losses, LAE, policy acquisition costs and other operating costs and expenses) over the long term, along with growing our Other Revenue Sources. Revenues We generate revenue primarily from the collection of insurance premiums.
Net losses and LAE for the current accident year, excluding hurricanes and prior year development were $902.3 million for 2024, compared to $836.4 million in 2023. 41 Consolidated net losses and LAE also reflect the net results from activities performed by the adjusting company within our holding company system.
Net losses and LAE for the current accident year, excluding hurricanes and prior year development were $902.3 million for 2024, compared to $836.4 million in 2023. 44 Consolidated net losses and LAE also reflect the net results from activities performed by the adjusting company within our holding company system.
The Insurance Entities’ 2024-2025 catastrophic reinsurance program meets the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance coverages that protect the policyholders of our Insurance Entities under a series of stress test catastrophe loss scenarios.
The Insurance Entities’ 2025-2026 catastrophic reinsurance program meets the FLOIR’s requirements, which are based on, among other things, successfully demonstrating cohesive and comprehensive reinsurance coverages that protect the policyholders of our Insurance Entities under a series of stress test catastrophe loss scenarios.
During the years ended December 31, 2024 and 2023 the Insurance Entities did not pay dividends to PSI. As of December 31, 2024, the Insurance Entities did not have the capacity to pay ordinary dividends. On November 23, 2021, we issued $100.0 million of 5.625% Senior Unsecured Notes due 2026.
During the years ended December 31, 2025 and 2024 the Insurance Entities did not pay dividends to PSI. As of December 31, 2025, the Insurance Entities did not have the capacity to pay ordinary dividends. On November 23, 2021, we issued $100.0 million of 5.625% Senior Unsecured Notes due 2026.
A book overdraft occurs when aggregating the book balance of all accounts at a financial institution for accounts which have the right of offset, and if the aggregation results in a net negative book balance, that balance is reclassified from cash and cash equivalents in our Consolidated Balance Sheet to book overdraft.
A book overdraft occurs when aggregating the book balance of all accounts at a financial institution for accounts which have the right of offset, and if the aggregation results in a net negative book balance, that balance is reclassified from cash and cash equivalents in our Consolidated Balance Sheets to book overdraft.
As discussed in “Part II—Item 8—Note 5 (Insurance Operations),” there are limitations on the dividends the Insurance Entities may pay to their immediate parent company, Protection Solutions, Inc. (“PSI,” formerly known as Universal Insurance Holding Company of Florida).
As discussed in “ Part II—Item 8—Note 5 (Insurance Operations) ”, there are limitations on the dividends the Insurance Entities may pay to their immediate parent company, Protection Solutions, Inc. (“PSI,” formerly known as Universal Insurance Holding Company of Florida).
At December 31, 2024, UPCIC was in compliance with the terms of the surplus note and with each of the loan’s covenants as implemented by rules promulgated by the SBA. Total adjusted capital and surplus, which includes the surplus note, was in excess of regulatory requirements for both UPCIC and APPCIC.
At December 31, 2025, UPCIC was in compliance with the terms of the surplus note and with each of the loan’s covenants as implemented by rules promulgated by the SBA. Total adjusted capital and surplus, which includes the surplus note, was in excess of regulatory requirements for both UPCIC and APPCIC.
In 2023, UPCIC received approval from its regulators in Hawaii to withdraw from the state and non-renew all policies in Hawaii. At December 31, 2024, no policies are in force in Hawaii, and UPCIC is in the process of completing its remaining administrative tasks to finalize its withdrawal from the state.
In 2023, UPCIC received approval from its regulators in Hawaii to withdraw from the state and non-renew all policies in Hawaii. At December 31, 2025, no policies are in force in Hawaii, and UPCIC is in the process of completing its remaining administrative tasks to finalize its withdrawal from the state.
The Insurance Entities currently maintain acceptable ratings from two rating agencies recognized by Freddie Mac and Fannie Mae. In 2024, Demotech, Inc. affirmed the Financial Stability Rating® of “A” for the Insurance Entities and Kroll affirmed its insurer financial strength ratings of “A-”.
The Insurance Entities currently maintain acceptable ratings from two rating agencies recognized by Freddie Mac and Fannie Mae. In 2025, Demotech, Inc. affirmed the Financial Stability Rating® of “A” for the Insurance Entities and Kroll affirmed its insurer financial strength ratings of “A-”.
Factors Affecting Reserve Estimates Reserve estimates are developed based on the processes and historical development trends discussed in “Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses)” to the consolidated financial statements.
Factors Affecting Reserve Estimates Reserve estimates are developed based on the processes and historical development trends discussed in “ Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses) ” to the consolidated financial statements.
See the discussion above and “Part II—Item 8—Note 14 (Other Comprehensive Income (Loss))” for additional information about the amounts comprising other comprehensive income (loss), net of taxes for these periods and “Part II—Item 8—Note 3 (Investments)” for explanations on changes in investments .
See the discussion above and “ Part II—Item 8—Note 14 (Other Comprehensive Income (Loss)) ” for additional information about the amounts comprising other comprehensive income (loss), net of taxes for these periods and “ Part II—Item 8—Note 3 (Investments) ” for explanations on changes in investments .
The total general and administrative expense ratio was 24.9% for the year ended December 31, 2024 compared to 24.3% for the year ended December 31, 2023. • The policy acquisition costs increased by $25.4 million due to higher commissions resulting from a 7.7% increase in direct written premiums compared to the previous year, as well as more writings outside of Florida which incur higher commissions.
The total expense ratio was 24.9% for the year ended December 31, 2024 compared to 24.3% for the year ended December 31, 2023. • The policy acquisition costs increased by $25.4 million due to higher commissions resulting from a 7.7% increase in the direct premiums written compared to the previous year, as well as more writings outside of Florida which incur higher commissions.
Recorded reserves are compared to the indicated range provided in the actuary’s report accompanying the SAO. At December 31, 2024, the recorded amount for net loss and LAE falls within the range determined by the Company’s appointed independent actuary.
Recorded reserves are compared to the indicated range provided in the actuary’s report accompanying the SAO. At December 31, 2025, the recorded amount for net loss and LAE falls within the range determined by the Company’s appointed independent actuary.
General and Administrative Expenses For the year ended December 31, 2024, general and administrative expenses were $342.1 million, compared to $304.1 million during the year ended December 31, 2023, as follows (dollars in thousands): For the Years Ended December 31, Change 2024 2023 $ % $ Ratio $ Ratio Premiums earned, net $ 1,373,073 $ 1,251,936 $ 121,137 9.7 % General and administrative expenses: Policy acquisition costs 233,444 17.0 % 208,011 16.6 % 25,433 12.2 % Other operating costs 108,639 7.9 % 96,055 7.7 % 12,584 13.1 % Total general and administrative expenses $ 342,083 24.9 % $ 304,066 24.3 % $ 38,017 12.5 % For the year ended December 31, 2024 g en eral and administrative expenses increased by $38.0 million, compared to the year ended December 31, 2023, which was the result of an increase in policy acquisition costs of $25.4 million and an increase in other operating costs of $12.6 million.
Policy acquisition costs and other operating costs and expenses For the year ended December 31, 2024, policy acquisition costs and other operating costs and expenses were $342.1 million, compared to $304.1 million during the year ended December 31, 2023, as follows (dollars in thousands): For the Years Ended December 31, Change 2024 2023 $ % $ Ratio $ Ratio Premiums earned, net $ 1,373,073 $ 1,251,936 $ 121,137 9.7 % Policy acquisition costs and other operating costs and expenses: Policy acquisition costs 233,444 17.0 % 208,011 16.6 % 25,433 12.2 % Other operating costs and expenses 108,639 7.9 % 96,055 7.7 % 12,584 13.1 % Total policy acquisition costs and other operating costs and expenses $ 342,083 24.9 % $ 304,066 24.3 % $ 38,017 12.5 % For the year ended December 31, 2024, policy acquisition costs and other operating costs and expenses increased by $38.0 million, compared to the year ended December 31, 2023, which was the result of an increase in policy acquisition costs of $25.4 million and an increase in other operating costs and expenses of $12.6 million.
Similarly, the Insurance Entities’ 2024-2025 catastrophic reinsurance program meets the stress test and review requirements of Demotech, Inc., for maintaining Financial Stability Ratings® of “A” (Exceptional) and of Kroll for maintaining insurer financial strength rating of “A-”.
Similarly, the Insurance Entities’ 2025-2026 catastrophic reinsurance program meets the stress test and review requirements of Demotech, Inc., for maintaining Financial Stability Ratings® of “A” (Exceptional) and of Kroll for maintaining insurer financial strength rating of “A-”.
The credit line is subject to annual renewals. The credit line contains customary financial and other covenants, with which the Company is in compliance. 52 Long-term Debt In November 2021, we issued and sold $100 million of 5.625% Senior Unsecured Notes due 2026 (the “Notes”) to certain institutional accredited investors and qualified institutional buyers.
The credit line is subject to annual renewals. The credit line contains customary financial and other covenants, with which the Company is in compliance. Debt In November 2021, we issued and sold $100 million of 5.625% Senior Unsecured Notes due 2026 (the “Notes”) to certain institutional accredited investors and qualified institutional buyers.
The balance of restricted cash and cash equivalents as of December 31, 2024 and 2023 represents cash equivalents on deposit with certain regulatory agencies in the various states in which our Insurance Entities do business.
The balance of restricted cash and cash equivalents as of December 31, 2025 and 2024 represents cash equivalents on deposit with certain regulatory agencies in the various states in which our Insurance Entities do business.
The Notes mature on November 30, 2026, at which time the entire $100 million of principal is due and payable. At any time on or after November 30, 2023, the Company may redeem all or part of the Notes. See “Part II—Item 8—Note 7 (Long-term debt)” for additional details.
The Notes mature on November 30, 2026, at which time the entire $100 million of principal is due and payable. At any time on or after November 30, 2023, the Company may redeem all or part of the Notes. See “ Part II—Item 8—Note 7 (Debt) ” for additional details.
In 2024, claims and billing for Hurricane Helene and Milton are still ongoing.
In 2024, claims and billing for Hurricane Debby, Helene and Milton are still ongoing.
This ratio helps management measure the amount of financing leverage in place in relation to equity and allows investors to evaluate future leverage capacity. Debt-to-Total Capital Ratio ― long-term debt divided by the sum of total stockholders’ equity and long-term debt (often referred to as total capital resources).
This ratio helps management measure the amount of financing leverage in place in relation to equity and allows investors to evaluate future leverage capacity. Debt-to-Total Capital Ratio ― long-term debt, including current portion, divided by the sum of total stockholders’ equity and long-term debt (often referred to as total capital resources).
See below “ — Liquidity and Capital Resources” for more information. Cash and cash equivalents available for investment are invested short-term until needed to settle loss and LAE payments, reinsurance premium payments, and operating cash needs, or until they are deployed by our investment advisors.
See below “— Liquidity and Capital Resources ” for more information. Cash and cash equivalents are invested short-term until needed to settle loss and LAE payments, reinsurance premium payments, and operating cash needs, or until they are deployed by our investment advisors.
As of December 31, 2024, the Company has not borrowed any amount under this revolving loan. The Company must pay an annual commitment of 0.50% of the unused portion of the commitment. Borrowings mature on May 30, 2025, 364 days after the inception date and carries an interest rate of prime rate plus a margin of 2.00% on borrowings .
As of December 31, 2025, the Company has not borrowed any amount under this revolving loan. The Company must pay an annual commitment of 0.50% of the unused portion of the commitment. Borrowings mature on May 29, 2026, 364 days after the inception date and carries an interest rate of prime rate plus a margin of 2.00% on borrowings .
Years Ended December 31, Change 2024 2023 $ % REVENUES Direct premiums written $ 2,069,692 $ 1,921,833 $ 147,859 7.7 % Change in unearned premium (69,887) (46,704) (23,183) 49.6 % Direct premium earned 1,999,805 1,875,129 124,676 6.6 % Ceded premium earned (626,732) (623,193) (3,539) 0.6 % Premiums earned, net 1,373,073 1,251,936 121,137 9.7 % Net investment income 59,148 48,449 10,699 22.1 % Net realized gains (losses) on investments (1,315) (1,229) (86) 7.0 % Net change in unrealized gains (losses) on investments 9,936 12,046 (2,110) (17.5) % Commission revenue 51,792 54,058 (2,266) (4.2) % Policy fees 19,490 18,881 609 3.2 % Other revenue 8,412 7,441 971 13.0 % Total revenues 1,520,536 1,391,582 128,954 9.3 % OPERATING COSTS AND EXPENSES Losses and loss adjustment expenses 1,087,366 992,636 94,730 9.5 % General and administrative expenses 342,083 304,066 38,017 12.5 % Total operating costs and expenses 1,429,449 1,296,702 132,747 10.2 % Interest and amortization of debt issuance costs 6,476 6,531 (55) (0.8) % INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 84,611 88,349 (3,738) (4.2) % Income tax expense (benefit) 25,683 21,526 4,157 19.3 % NET INCOME (LOSS) $ 58,928 $ 66,823 $ (7,895) (11.8) % Other comprehensive income (loss), net of taxes 11,006 29,610 (18,604) (62.8) % COMPREHENSIVE INCOME (LOSS) $ 69,934 $ 96,433 $ (26,499) (27.5) % DILUTED EARNINGS (LOSS) PER SHARE DATA: Diluted earnings (loss) per common share $ 2.01 $ 2.22 $ (0.21) (9.5) % Weighted average diluted common shares outstanding 29,274 30,147 (873) (2.9) % 39 Premium Revenues Direct premiums written increased by $147.9 million, or 7.7%, for the year ended December 31, 2024, driven by premium growth within our Florida business of $33.2 million, or 2.1%, and premium growth in our other states business of $114.6 million, or 32.1%, as compared to the prior year.
Years Ended December 31, Change 2024 2023 $ % REVENUES Direct premiums written $ 2,069,692 $ 1,921,833 $ 147,859 7.7 % Change in unearned premium (69,887) (46,704) (23,183) 49.6 % Direct premium earned 1,999,805 1,875,129 124,676 6.6 % Ceded premium earned (626,732) (623,193) (3,539) 0.6 % Premiums earned, net 1,373,073 1,251,936 121,137 9.7 % Net investment income 59,148 48,449 10,699 22.1 % Net realized gains (losses) on investments (1,315) (1,229) (86) 7.0 % Net change in unrealized gains (losses) on investments 9,936 12,046 (2,110) (17.5) % Commission revenue 51,792 54,058 (2,266) (4.2) % Policy fees 19,490 18,881 609 3.2 % Other revenue 8,412 7,441 971 13.0 % Total revenues 1,520,536 1,391,582 128,954 9.3 % OPERATING COSTS AND EXPENSES Losses and loss adjustment expenses 1,087,366 992,636 94,730 9.5 % Policy acquisition costs 233,444 208,011 25,433 12.2 % Other operating costs and expenses 108,639 96,055 12,584 13.1 % Total operating costs and expenses 1,429,449 1,296,702 132,747 10.2 % Interest and amortization of debt issuance costs 6,476 6,531 (55) (0.8) % INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 84,611 88,349 (3,738) (4.2) % Income tax expense (benefit) 25,683 21,526 4,157 19.3 % NET INCOME (LOSS) $ 58,928 $ 66,823 $ (7,895) (11.8) % Other comprehensive income (loss), net of taxes 11,006 29,610 (18,604) (62.8) % COMPREHENSIVE INCOME (LOSS) $ 69,934 $ 96,433 $ (26,499) (27.5) % DILUTED EARNINGS PER SHARE DATA: Diluted earnings per common share $ 2.01 $ 2.22 $ (0.21) (9.5) % Weighted average diluted common shares outstanding 29,274 30,147 (873) (2.9) % 42 Revenues Direct premiums written increased by $147.9 million, or 7.7%, for the year ended December 31, 2024, driven by premium growth within our Florida business of $33.2 million, or 2.1%, and premium growth in our other states business of $114.6 million, or 32.1%, as compared to the prior year.
See “Overview—Trends and Geographical Distribution—Florida Trends and Summary of Recent Rate Changes.” Due to the time associated with analyzing data, preparing and submitting rate filings, implementing new rate levels and earning the corresponding premiums, the Insurance Entities’ rate adjustments typically lag their experience by months or even years.
See “ Overview—Trends and Geographical Distribution—Florida Trends and Summary of Recent Rate Changes. ” Due to the time associated with analyzing data, preparing and submitting rate filings, implementing new rate levels and earning the corresponding premiums, the Insurance Entities’ rate adjustments typically lag their enactment by months or even years.
Refer to “Item 7— Management’s Discussion and Analysis— Reinsurance” for further details. Reinsurance costs associated with each year’s reinsurance program are earned over the annual policy period, typically from June 1st to May 31st. Specific reinsurance policies require reinstatement premiums based on contractual triggering events.
Refer to “ Item 7— Management’s Discussion and Analysis— Reinsurance ” for further details. Reinsurance costs associated with each year’s reinsurance program are earned over the annual policy period, typically from June 1st to May 31st. Specific reinsurance policies require reinstatement premiums based on contractual triggering events.
In addition, these balances exclude amounts recoverable from our reinsurance program. See “Part II—Item 8—Note 4 (Reinsurance).” and Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses).” (3) Long-term debt consists of a Surplus note and 5.625% Senior Unsecured Notes.
In addition, these balances exclude amounts recoverable from our reinsurance program. See “ Part II—Item 8—Note 4 (Reinsurance) ” and “— Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses) ”. (3) Debt consists of a Surplus note and 5.625% senior unsecured notes.
Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $7.4 million for the year ended December 31, 2023 compared to $7.7 million for the same period in 2022.
Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $8.4 million for the year ended December 31, 2024 compared to $7.4 million for the same period in 2023.
As for prior policy periods, insurers must continue to adjust claims under the prior laws that were subject to abuse while awaiting the expiration of claim reporting periods and statute of limitations periods applicable to those policies.
As for prior policy periods, insurers typically must continue to adjust claims under the prior laws that were subject to abuse while awaiting the expiration of applicable claim reporting periods and statute of limitations periods.
The duration of our available-for-sale securities was 3.4 years as of December 31, 2024 compared to 3.7 years at December 31, 2023. Duration is a measure of a bond’s sensitivity to interest rate changes and is used by management to limit the potential impact of longer-term investments.
The duration of our available-for-sale securities was 3.6 years as of December 31, 2025 compared to 3.4 years at December 31, 2024. Duration is a measure of a bond’s sensitivity to interest rate changes and is used by management to limit the potential impact of longer-term investments.
The net loss ratio was 79.2% in 2024 compared to 79.3% in 2023, with the combined ratio at 104.1% compared to 103.6% in 2023. Further details are available in the “Overview—Trends and Geographical Distribution—Florida Trends” section. A detailed discussion of our operations follows the table below (in thousands, except per share data).
The net loss ratio was 79.2% in 2024 compared to 79.3% in 2023, with the combined ratio at 104.1% compared to 103.6% in 2023. Further details are available in the “ Overview—Trends and Geographical Distribution—Florida Trends ” section. A detailed discussion of our results of operations follows the table below (in thousands, except per share data).
Refer to the risk factors disclosed in “Part I, Item 1A—Risk Factors,” set forth elsewhere in the Annual Report on Form 10-K, for details of specific risks attributable to catastrophic losses and reinsurance. Effective June 1, 2024, the Insurance Entities entered into multiple reinsurance agreements comprising our 2024-2025 reinsurance program.
Refer to the risk factors disclosed in “P art I, Item 1A—Risk Factors, ” set forth elsewhere in the Annual Report on Form 10-K, for details of specific risks attributable to catastrophic losses and reinsurance. Effective June 1, 2025, the Insurance Entities entered into multiple reinsurance agreements comprising our 2025-2026 reinsurance program.
Book Value Per Common Share ― total stockholders’ equity, adjusted for preferred stock liquidation, divided by the number of common shares outstanding as of a reporting period. Book value per common share is the excess of assets over liabilities at a reporting period attributed to each share of common stock.
Definitions of Key Performance Indicators Book Value Per Common Share ― total stockholders’ equity, adjusted for preferred stock liquidation, divided by the number of common shares outstanding as of a reporting period. Book value per common share is the excess of assets over liabilities at a reporting period attributed to each share of common stock.
As of December 31, 2024, the balance of income taxes payable was $6.6 million, compared to a balance payable of $5.9 million as of December 31, 2023. Deferred income taxes represent the estimated tax asset or tax liability caused by temporary differences between the tax return basis of certain assets and liabilities and amounts recorded in the financial statements.
As of December 31, 2025, the balance of income taxes payable was $28.6 million, compared to a balance payable of $6.6 million as of December 31, 2024. Deferred income taxes represent the estimated tax asset or tax liability caused by temporary differences between the tax return basis of certain assets and liabilities and amounts recorded in the financial statements.
As a result of our business strategy, rate changes and disciplined underwriting initiatives, we have seen an increase in total policy count in 16 out of 19 states, as well increase in in-force premium in 18 states and total insured value in 16 states.
As a result of our business strategy, rate changes and disciplined underwriting initiatives, we have seen an increase in total policy count in 13 out of 19 states, as well as increases in in-force premium in 17 states and total insured value in 16 states.
Revolving Loan As discussed in “Part II—Item 8—Note 7 (Long-term Debt),” the Company entered into a committed and unsecured $50.0 million revolving credit line with JP Morgan Chase Bank, N.A. This agreement succeeded the previous $40.0 million revolving credit line with J.P. Morgan Chase, N.A.
Unsecured Revolving Loan As discussed in “ Part II—Item 8—Note 7 (Debt) ”, the Company entered into a committed and unsecured $50.0 million revolving credit line with JP Morgan Chase Bank, N.A. This agreement succeeded the previous $50.0 million revolving credit line with J.P. Morgan Chase, N.A.
The expense ratio includes management fees and commissions, which are based on market rates, paid to an affiliate of the Insurance Entities in the amount of $55.8 million and $86.8 million for UPCIC for the years ended December 31, 2024 and 2023, respectively, and $2.8 million for APPCIC for each of the years ended December 31, 2024 and 2023, respectively.
The expense ratio includes management fees and commissions, which are based on market rates, paid to an affiliate of the Insurance Entities in the amount of $119.5 million and $55.8 million for UPCIC for the years ended December 31, 2025 and 2024, respectively, and $2.8 million for APPCIC for each of the years ended December 31, 2025 and 2024, respectively.
This years results reflects favorable shifts in market prices during 2024 compared to 2023 . During 2024, maturing securities and investment returns were reinvested at market rates, reducing 42 unrealized losses on maturing securities. The maturity of the remaining securities in an unrealized loss position has also reduced during the year.
This year’s results reflects favorable shifts in market prices during 2025 compared to 2024 . During 2025, maturing securities and investment returns were reinvested at market rates, reducing unrealized losses on maturing securities. The maturity of the remaining securities in an unrealized loss position has also reduced during the year.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to assist in an understanding of our financial condition and results of operations and should be read in conjunction with our consolidated financial statements and accompanying notes in “Part II—Item 8—Financial Statements and Supplementary Data” below.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to assist in an understanding of our financial condition and results of operations and should be read in conjunction with our consolidated financial statements and accompanying notes in “ Part II—Item 8—Financial Statements and Supplementary Data ” below.
SELECTED FINANCIAL DATA The following selected historical consolidated financial data should be read in conjunction with our consolidated financial statements and notes thereto and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth elsewhere in the Annual Report on Form 10-K.
SELECTED FINANCIAL DATA The following selected historical consolidated financial data should be read in conjunction with our consolidated financial statements and notes thereto and “ Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations ” set forth elsewhere in the Annual Report on Form 10-K.
The change in stockholders’ equity was the result of our 2024 net income offset by treasury share purchases and dividends to shareholders. See “Part II—Item 8—Consolidated Statements of Stockholders’ Equity” and “Part II—Item 8—Note 8 (Stockholders’ Equity)” for an explanation of changes in treasury stock.
The change in stockholders’ equity was the result of our 2025 net income offset by treasury share purchases and dividends to shareholders. See “ Part II—Item 8—Consolidated Statements of Stockholders’ Equity ” and “ Part II—Item 8—Note 8 (Stockholders’ Equity) ” for an explanation of changes in treasury stock.
See “Part II—Item 8—Note 15 (Commitments and Contingencies)” for more information.
See “ Part II—Item 8—Note 15 (Commitments and Contingencies) ” for more information.
As of December 31, 2024, UPCIC’s net written premium to surplus ratio and gross written premium to surplus ratio were in excess of the required minimums and, therefore, UPCIC is not subject to increases in interest rates. See “Part II—Item 8—Note 7 (Long-term debt)” for additional details.
As of December 31, 2025, UPCIC’s net written premium to surplus ratio and gross written premium to surplus ratio were in excess of the required minimums and, therefore, UPCIC is not subject to increases in interest rates. See “ Part II—Item 8—Note 7 (Debt) ” for additional details.
Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $8.4 million for the year ended December 31, 2024 compared to $7.4 million for the year ended December 31, 2023.
Other revenue, representing revenue from policy installment fees, premium financing, and other miscellaneous income, was $8.3 million for the year ended December 31, 2025 compared to $8.4 million for the year ended December 31, 2024.
The reduction during 2024 in long-term debt was primarily the result of principal payments on long-term debt of $1.5 million offset by amortization of debt issuance costs of $0.7 million on our 5.625% Senior Unsecured Notes due 2026. See “— Liquidity and Capital Resources” for more information.
The reduction during 2025 in debt was primarily the result of principal payments on debt of $1.5 million offset by amortization of debt issuance costs of $0.7 million on our 5.625% Senior Unsecured Notes due 2026. See “— Liquidity and Capital Resources ” for more information.
See “Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses)” for a discussion of the Company’s basis and methodologies used to establish its liability for unpaid losses and LAE along with the following quantitative disclosures: • Five-year accident year table on incurred claim and allocated claim adjustment expenses, net of reinsurance including columns of: ◦ IBNR—Total of Incurred-but-not-reported liabilities plus expected development (redundancy) on reported claims by accident year, and ◦ Claim counts—cumulative number of reported claims by accident year. • Five-year accident year table on cumulative paid claims and allocated claim adjustment expenses, net of reinsurance, • Reconciliation of net incurred and paid claims development tables to the liability for unpaid losses and LAE in the consolidated balance sheet, • Duration—a table of the average historical claims duration for the past five years, and • Reconciliation of the change in liability for unpaid losses and LAE presented in the consolidated financial statements.
See “ Part II—Item 8—Note 17 (Liability for Unpaid Losses and Loss Adjustment Expenses) ” for a discussion of the Company’s basis and methodologies used to establish its liability for unpaid losses and LAE along with the following quantitative disclosures: • Five-year accident year table on incurred claim and allocated claim adjustment expenses, net of reinsurance including columns of: ◦ IBNR—Total of Incurred-but-not-reported liabilities plus expected development (redundancy) on reported claims by accident year, and ◦ Claim counts—cumulative number of reported claims by accident year. • Five-year accident year table on cumulative paid claims and allocated claim adjustment expenses, net of reinsurance, • Reconciliation of net incurred and paid claims development tables to the liability for unpaid losses and LAE in the consolidated balance sheets, • Duration—a table of the average historical claims duration for the past five years, and • Reconciliation of the change in liability for unpaid losses and LAE presented in the consolidated financial statements. 53 We utilize independent actuaries to help establish liabilities for unpaid losses, anticipated loss recoveries, and LAE.
Combined Ratio ― the combined ratio is a measure of underwriting profitability for a reporting period and is calculated by dividing total operating costs and expenses (which is made up of losses and LAE and general and administrative expenses) by premiums earned, net, which is net of ceded premium earned.
Combined Ratio ― the combined ratio is a measure of underwriting profitability for a reporting period and is calculated by dividing total operating costs and expenses (which is made up of losses and LAE, policy acquisition costs and other operating expenses) by premiums earned, net, which is net of ceded premium earned.
Due to the uncertainties involved, the ultimate cost of losses and LAE may vary materially from recorded amounts, which are based on our best estimates. The liability for unpaid losses and LAE, net of subrogation at December 31, 2024 is $959.3 million.
Due to the uncertainties involved, the ultimate cost of losses and LAE may vary materially from recorded amounts, which are based on our best estimates. The liability for unpaid losses and LAE, net of subrogation at December 31, 2025 is $680.7 million.
This revenue is recognized on a pro-rata basis over the reinsurance policy period which runs from June 1 st to May 31 st of the following year. For the year ended December 31, 2024, commission revenue amounted to $51.8 million, compared to $54.1 million for the year ended December 31, 2023.
Commission revenue is earned pro-rata over the reinsurance policy period which runs from June 1 st to May 31 st of the following year. For the year ended December 31, 2024, commission revenue amounted to $51.8 million, compared to $54.1 million for the year ended December 31, 2023.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed above under “Cautionary Note Regarding Forward-Looking Statements” and “Part I— Item 1A—Risk Factors.” 27 Overview We are a vertically integrated holding company offering property and casualty insurance and value-added insurance services.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed above under “ Cautionary Note Regarding Forward-Looking Statements ” and “ Part I— Item 1A—Risk Factors” . Overview We are a vertically integrated holding company offering property and casualty insurance and value-added insurance services.
Under the terms of the surplus notes, interest accrues at a variable rate which resets annually (currently 10.70% for 2024) on the outstanding surplus note balances and, if approved by the FLOIR, is payable annually to the holding company.
Under the terms of the surplus notes, interest accrues at a variable rate which resets annually (currently 11.33% for 2025) on the outstanding surplus note balances and, if approved by the FLOIR, is payable annually to the holding company.
See “Part II— Item 7— “Reinsurance Program” regarding the Company’s reinsurance placement. Reinsurance recoverable represents the estimated amount of paid and unpaid losses, LAE, and other expenses that are expected to be recovered from reinsurers.
See “ Part II— Item 7— “ Reinsurance Program ” regarding the Company’s reinsurance placement. Reinsurance recoverable represents the estimated amount of paid and unpaid losses, LAE, and other expenses that are expected to be recovered from reinsurers.
Also see “Part II—Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Registrant Purchases of Equity Securities” for share repurchase activity during the three months ended December 31, 2024.
Also see “ Part II—Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Registrant Purchases of Equity Securities ” for share repurchase activity during the three months ended December 31, 2025.
Catastrophe losses are an inherent risk of the property-casualty insurance industry that have contributed, and will continue to contribute, to potentially material year-to-year fluctuations in results of operations and financial position.
Reserves for Catastrophe Losses Loss and LAE reserves also include reserves for catastrophe losses. Catastrophe losses are an inherent risk of the property-casualty insurance industry that have contributed, and will continue to contribute, to potentially material year-to-year fluctuations in results of operations and financial position.
See “Part II—Item 8—Note 15 (Commitments and Contingencies)” and additional discussion below under the caption “— Material Cash Requirements ” for more information. During 2024, there were two significant hurricanes, Hurricane Helene and Milton, which exceeded the Company’s reinsurance attachment point. During 2023, there was one significant hurricane, Hurricane Idalia, which was below the Company’s reinsurance attachment point.
See “ Part II—Item 8—Note 15 (Commitments and Contingencies) ” and additional discussion below under the caption “— Material Cash Requirements ” for more information. During 2025, there were no significant hurricanes which exceeded the Company’s reinsurance attachment point. During 2024, there were two significant hurricanes, Hurricane Helene and Milton, which exceeded the Company’s reinsurance attachment point.
Trends and Geographical Distribution Florida Trends We seek to achieve long-term rate adequacy and earnings for the Insurance Entities while managing our risks through market cycles and looking to take advantage of what we believe to be market opportunities.
Trends and Geographical Distribution Florida Trends Regulatory Environment We seek to achieve long-term rate adequacy and earnings for the Insurance Entities while managing our risks through market cycles and looking to take advantage of what we believe to be market opportunities. We currently transact insurance in 19 states.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Generally, when interest rates rise, the fair market value of our fixed rate Financial Instruments declines. 61 The following tables provide information about our fixed income Financial Instruments as of December 31, 2024 compared to December 31, 2023, which are sensitive to changes in interest rates.
Generally, when interest rates rise, the fair market value of our fixed rate Financial Instruments declines. The following tables provide information about our fixed income Financial Instruments as of December 31, 2025 compared to December 31, 2024, which are sensitive to changes in interest rates.
The following table provides information about the Financial Instruments in our investment portfolio subject to price risk as of the dates presented (in thousands): December 31, 2024 December 31, 2023 Fair Value Percent Fair Value Percent Equity Securities: Common stock $ 14,409 18.5 % $ 15,438 19.2 % Mutual funds and other 63,343 81.5 % 65,057 80.8 % Total equity securities $ 77,752 100.0 % $ 80,495 100.0 % A hypothetical decrease of 20% in the market prices of each of the equity securities held at December 31, 2024 and 2023 would have resulted in a decrease of $15.6 million and $16.1 million, respectively, in the fair value of those securities.
The following table provides information about the Financial Instruments in our investment portfolio subject to price risk as of the dates presented (in thousands): December 31, 2025 December 31, 2024 Fair Value Percent Fair Value Percent Equity Securities: Common stock $ 37,509 43.9 % $ 14,409 18.5 % Mutual funds and other 47,911 56.1 % 63,343 81.5 % Total equity securities $ 85,420 100.0 % $ 77,752 100.0 % A hypothetical decrease of 20% in the market prices of each of the equity securities held at December 31, 2025 and 2024 would have resulted in a decrease of $17.1 million and $15.6 million, respectively, in the fair value of those securities. 57
Our investment portfolio as of December 31, 2024 is comprised of available-for-sale debt securities and equity securities, carried at fair market value, which expose us to changing market conditions, specifically interest rates and equity price changes. The primary objectives of the investment portfolio are the preservation of capital and providing adequate liquidity for potential claim payments and other cash needs.
Our investment portfolio as of 56 December 31, 2025 is comprised of available-for-sale debt securities and equity securities, carried at fair market value, which expose us to changing market conditions, specifically interest rates and equity price changes.
The tables present the expected cash flows of Financial Instruments based on years to effective maturity using amortized cost compared to fair market value and the related book yield compared to coupon yield (dollars in thousands): December 31, 2024 2025 2026 2027 2028 2029 Thereafter Other Total Amortized cost $ 158,437 $ 209,968 $ 248,992 $ 125,914 $ 129,322 $ 477,397 $ 3,502 $ 1,353,532 Fair market value $ 156,618 $ 204,367 $ 240,785 $ 120,510 $ 120,451 $ 422,974 $ 3,374 $ 1,269,079 Coupon rate 3.21 % 3.01 % 2.95 % 3.68 % 3.61 % 3.47 % 4.77 % 3.30 % Book yield 2.80 % 2.66 % 3.07 % 3.40 % 3.20 % 3.16 % 1.23 % 3.03 % * Years to effective maturity - 4.1 years December 31, 2023 2024 2025 2026 2027 2028 Thereafter Other Total Amortized cost $ 92,428 $ 160,575 $ 185,761 $ 166,111 $ 103,731 $ 450,811 $ 3,502 $ 1,162,919 Fair market value $ 91,247 $ 153,712 $ 173,781 $ 153,506 $ 97,304 $ 391,765 $ 3,015 $ 1,064,330 Coupon rate 2.77 % 2.96 % 2.73 % 2.71 % 3.41 % 3.02 % 4.22 % 2.94 % Book yield 2.34 % 2.16 % 2.01 % 2.11 % 2.94 % 2.49 % 1.38 % 2.34 % * Years to effective maturity - 4.6 years All securities, except those with perpetual maturities, were categorized in the tables above utilizing years to effective maturity.
The tables present the expected cash flows of Financial Instruments based on years to effective maturity using amortized cost compared to fair market value and the related book yield compared to coupon yield (dollars in thousands): December 31, 2025 2026 2027 2028 2029 2030 Thereafter Other Total Amortized cost $ 161,486 $ 236,488 $ 160,014 $ 158,158 $ 220,390 $ 527,206 $ 2,403 $ 1,466,145 Fair market value $ 160,558 $ 235,232 $ 158,958 $ 155,235 $ 210,711 $ 507,974 $ 2,360 $ 1,431,028 Coupon rate 3.14 % 3.17 % 3.98 % 3.79 % 3.31 % 4.01 % 3.61 % 3.64 % Book yield 3.15 % 3.59 % 3.72 % 3.64 % 3.24 % 4.04 % 3.69 % 3.67 % * Years to effective maturity - 4.5 years December 31, 2024 2025 2026 2027 2028 2029 Thereafter Other Total Amortized cost $ 158,437 $ 209,968 $ 248,992 $ 125,914 $ 129,322 $ 477,397 $ 3,502 $ 1,353,532 Fair market value $ 156,618 $ 204,367 $ 240,785 $ 120,510 $ 120,451 $ 422,974 $ 3,374 $ 1,269,079 Coupon rate 3.21 % 3.01 % 2.95 % 3.68 % 3.61 % 3.47 % 4.77 % 3.30 % Book yield 2.80 % 2.66 % 3.07 % 3.40 % 3.20 % 3.16 % 1.23 % 3.03 % * Years to effective maturity - 4.1 years All securities, except those with perpetual maturities, were categorized in the tables above utilizing years to effective maturity.
The portfolio’s secondary investment objective is to provide a total rate of return with an emphasis on investment income. None of our investments in risk-sensitive Financial Instruments were entered into for trading purposes. See “Part II—Item 8—Note 3 (Investments)” and “Item 1—Business—Investments” for more information about our Financial Instruments.
The primary objectives of the investment portfolio are the preservation of capital and providing adequate liquidity for potential claim payments and other cash needs. The portfolio’s secondary investment objective is to provide a total rate of return with an emphasis on investment income. None of our investments in risk-sensitive Financial Instruments were entered into for trading purposes.
Interest Rate Risk Interest rate risk is the sensitivity of the fair market value of a fixed rate Financial Instrument to changes in interest rates.
See “ Part II—Item 8—Note 3 (Investments) ” and “ Item 1—Business—Investments ” for more information about our Financial Instruments. Interest Rate Risk Interest rate risk is the sensitivity of the fair market value of a fixed rate Financial Instrument to changes in interest rates.

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