Business Wire | Aug 4, 2021 04:06PM EDT

United Insurance Holdings Corp. Reports Financial Results for Its Second Quarter Ended June 30, 2021

Aug. 04, 2021

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Aug. 04, 2021--United Insurance Holdings Corp. (Nasdaq: UIHC) (UPC Insurance or the Company), a property and casualty insurance holding company, today reported its financial results for the second quarter ended June 30, 2021.

($ in Three Months Ended Six Months Endedthousands,except for pershare data) June 30, June 30,

2021 2020 Change 2021 2020 Change

Gross premiums $ 426,424 $ 439,651 (3.0 ) % $ 738,062 $ 774,834 (4.7 ) %written

Gross premiums $ 356,433 $ 344,139 3.6 % $ 713,096 $ 688,758 3.5 %earned

Net premiums $ 145,460 $ 185,482 (21.6 ) % $ 291,409 $ 377,078 (22.7 ) %earned

Total revenues $ 155,454 $ 216,397 (28.2 ) % $ 317,243 $ 392,701 (19.2 ) %

Earnings(loss) before $ (32,773 ) $ 29,482 NM $ (59,055 ) $ 13,678 NM income tax

Net income(loss) $ (23,510 ) $ 24,274 NM $ (41,281 ) $ 11,551 NM attributableto UIHC

Net income(loss)available toUIHC common $ (0.55 ) $ 0.56 NM $ (0.96 ) $ 0.27 NM stockholdersper dilutedshare



Reconciliationof net income (loss) to coreincome (loss):

Plus: Non-cashamortization $ 889 $ 1,044 (14.8 ) % $ 1,932 $ 2,181 (11.4 ) %of intangibleassets

Less: Netrealized gains(losses) on $ (124 ) $ 59 NM $ 379 $ (9 ) NM investmentportfolio

Less:Unrealizedgains (losses) $ 2,438 $ 20,552 (88.1 ) % $ 5,002 $ (5,904 ) NM on equitysecurities

Less: Net tax $ (299 ) $ (4,109 ) 92.7 % $ (724 ) $ 1,700 NM impact ^(1)

Core income $ (24,636 ) $ 8,816 NM $ (44,006 ) $ 17,945 NM (loss) ^(2)

Core income(loss) per $ (0.57 ) $ 0.20 NM $ (1.03 ) $ 0.42 NM diluted share^(2)



Book value per $ 7.85 $ 12.27 (36.0 ) %share

NM = Not Meaningful (1) In order to reconcile net income (loss) to the core income (loss) measures, we included the tax impact of all adjustments using the 21% corporate federal tax rate. (2) Core income (loss), and core income (loss) per diluted share, both of which are measures that are not based on GAAP, are reconciled above to net income (loss) and net income (loss) per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

"The second quarter results reflect execution of our ongoing 2021 transition plan, in which we pivot to dramatically reduced named and non-named catastrophe retentions and increased quota share reinsurance protection," said Dan Peed, CEO of UPC Insurance. "These all drive a significant increase in reinsurance spend, which reduces our margin during transition, but is priced into the portfolio going forward."

"We continue to stay focused on the steps necessary to achieve a strong underwriting profit and reduced volatility from both our commercial and personal lines businesses, including compounding rate increases, adequate reserving, exposure management and enhanced risk selection."

Return on Equity and Core Return on Equity

The calculations of the Company's return on equity and core return on equity are shown below.

Three Months Ended Six Months Ended($ in thousands) June 30, June 30,

2021 2020 2021 2020

Net income (loss) $ (23,510 ) $ 24,274 $ (41,281 ) $ 11,551 attributable to UIHC

Return on equitybased on GAAP netincome (loss) (23.3 ) % 18.8 % (20.5 ) % 4.5 %attributable to UIHC^(1)



Core income (loss) $ (24,636 ) $ 8,816 $ (44,006 ) $ 17,945

Core return on equity (24.4 ) % 6.8 % (21.8 ) % 6.9 %^(1)(2)

(1) Return on equity for the three and six months ended June 30, 2021 and 2020 is calculated on an annualized basis by dividing the net income (loss) or core income (loss) for the period by the average stockholders' equity for the trailing twelve months. (2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income (loss), which is reconciled on the first page of this press release to net income (loss), the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

Combined Ratio and Underlying Ratio

The calculations of the Company's combined ratio and underlying combined ratio are shown below.

Three Months Ended Six Months Ended($ in thousands) June 30, June 30,

2021 2020 Change 2021 2020 Change

Loss ratio, net^(1) 81.2 % 54.8 % 26.4 pts 80.2 % 54.2 % 26.0 pts

Expense ratio, net^ 46.7 % 44.6 % 2.1 pts 47.3 % 45.0 % 2.3 pts(2)

Combined ratio (CR) 127.9 % 99.4 % 28.5 pts 127.5 % 99.2 % 28.3 pts^(3)

Effect of currentyear catastrophe 27.7 % 16.1 % 11.6 pts 22.0 % 12.4 % 9.6 ptslosses on CR

Effect of prioryear unfavorable (0.3) % (0.4) % 0.1 pts 10.1 % (0.5) % 10.6 pts(favorable)development on CR

Underlying combined 100.5 % 83.7 % 16.8 pts 95.4 % 87.3 % 8.1 ptsratio^(4)

(1) Loss ratio, net is calculated as losses and loss adjustment expenses (LAE), net of losses ceded to reinsurers, relative to net premiums earned. (2) Expense ratio, net is calculated as the sum of all operating expenses less interest expense relative to net premiums earned. (3) Combined ratio is the sum of the loss ratio, net and expense ratio, net. (4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

Quarterly Financial Results

Net loss attributable to the Company for the second quarter of 2021 was $23.5 million, or $0.55 per diluted share, compared to net income of $24.3 million, or $0.56 per diluted share, for the second quarter of 2020. The change in earnings was primarily driven by a decrease in revenue during the second quarter of 2021 compared to the second quarter of 2020. This change was driven by an increase in ceded premiums earned as a result of changes made to the Company's reinsurance structure at December 31, 2020 and June 1, 2021. Details of these changes are outlined in our reinsurance costs discussion below. Additionally, the Company experienced a decrease in gross written premiums as described below. The Company also experienced a large unrealized gain on equity securities during the second quarter of 2020 as the market recovered from the large decline caused by COVID-19 in the first quarter of 2020. The Company's equity portfolio is smaller now than it was in the second quarter of 2020, resulting in less volatility in the Company's unrealized position on these holdings. The Company also experienced increased loss & LAE incurred in the second quarter of 2021, driven by increased current year catastrophe losses incurred.

The Company's total gross written premium decreased by $13.2 million, or 3.0%, to $426.4 million for the second quarter of 2021, from $439.7 million for the second quarter of 2020. This decrease was driven primarily by a decrease in assumed premiums due to the termination of a contract which included commercial property business assumed from unaffiliated insurers. In addition, the Company has experienced decreases in written premiums across the personal lines business, due to underwriting actions taken by the Company at the end of 2020. The Company's commercial written premiums have increased year over year, offsetting the personal lines decrease in Florida, resulting in a net increase for the region. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums by region and gross written premium by line of business are shown in the table below.

Three Months Ended($ in thousands) June 30,

2021 2020 Change $ Change %

Direct Written andAssumed Premium by Region ^(1)

Florida $ 281,728 $ 263,108 $ 18,620 7.1 %

Gulf 67,290 74,083 (6,793 ) (9.2 )

Northeast 49,879 55,189 (5,310 ) (9.6 )

Southeast 27,483 35,206 (7,723 ) (21.9 )

Total direct written 426,380 427,586 (1,206 ) (0.3 ) premium by region

Assumed premium ^(2) 44 12,065 (12,021 ) (99.6 )

Total gross written $ 426,424 $ 439,651 $ (13,227 ) (3.0 ) %premium by region



Gross Written Premium by Line of Business

Personal property $ 270,442 $ 307,965 $ (37,523 ) (12.2 ) %

Commercial property 155,982 131,686 24,296 18.4

Total gross writtenpremium by line of $ 426,424 $ 439,651 $ (13,227 ) (3.0 ) %business

(1) "Gulf" is comprised of Louisiana and Texas in 2021 and Hawaii, Louisiana, and Texas in 2020; "Northeast" is comprised of Connecticut, Massachusetts, New Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia, North Carolina and South Carolina. (2) Assumed premium written for 2021 and 2020 primarily included commercial property business assumed from unaffiliated insurers.

Loss and LAE increased by $16.4 million, or 16.1%, to $118.1 million for the second quarter of 2021, from $101.7 million for the second quarter of 2020. Loss and LAE expense as a percentage of net earned premiums increased 26.4 points to 81.2% for the second quarter of 2021, compared to 54.8% for the second quarter of 2020. Excluding catastrophe losses and reserve development, the Company's gross underlying loss and LAE ratio for the second quarter of 2021 would have been 21.9%, an increase of 0.8 points from 21.1% during the second quarter of 2020.

Policy acquisition costs decreased by $11.3 million, or 21.5%, to $41.3 million for the second quarter of 2021, from $52.6 million for the second quarter of 2020 primarily due to an increase in ceding commission income related to the Company's quota share reinsurance agreements. In addition, there was a decrease in the Company's assumed ceding commission expense due to the termination of the contract which included commercial property business assumed from unaffiliated insurers. This was partially offset by increased external management fees incurred during the second quarter of 2021 as a result of an increased volume of commercial written premium.

Operating and underwriting expenses remained relatively flat, decreasing by $0.5 million, or 3.6%, to $13.5 million for the second quarter of 2021, from $14.0 million for the second quarter of 2020

General and administrative expenses decreased by $3.0 million, or 18.6%, to $13.1 million for the second quarter of 2021, from $16.1 million for the second quarter of 2020, primarily due to an increase in the allocation of claims adjuster payroll related costs to loss & LAE from general and administrative expenses in 2021.

Combined Ratio Analysis

The calculations of the Company's loss ratios and underlying loss ratios are shown below.

Three Months Ended Six Months Ended($ inthousands) June 30, June 30,

2021 2020 Change 2021 2020 Change

Loss and $ 118,064 $ 101,693 $ 16,371 $ 233,845 $ 204,530 $ 29,315 LAE

% of Grossearned 33.1 % 29.5 % 3.6 pts 32.8 % 29.7 % 3.1 ptspremiums

% of Netearned 81.2 % 54.8 % 26.4 pts 80.2 % 54.2 % 26.0 ptspremiums

Less:

Currentyear $ 40,257 $ 29,799 $ 10,458 $ 64,222 $ 46,917 $ 17,305 catastrophelosses

Prior yearreserveunfavorable (372) (823) 451 29,397 (1,952) 31,349 (favorable)development

Underlyingloss and $ 78,179 $ 72,717 $ 5,462 $ 140,226 $ 159,565 $ (19,339) LAE^ (1)

% of Grossearned 21.9 % 21.1 % 0.8 pts 19.7 % 23.2 % (3.5) ptspremiums

% of Netearned 53.7 % 39.2 % 14.5 pts 48.1 % 42.3 % 5.8 ptspremiums

(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

The calculations of the Company's expense ratios are shown below.

Three Months Ended Six Months Ended

($ in thousands) June 30, June 30,

2021 2020 Change 2021 2020 Change

Policy acquisition $ 41,327 $ 52,573 $ (11,246 ) $ 82,148 $ 111,448 $ (29,300 ) costs

Operating and 13,482 13,977 (495 ) 26,704 23,681 3,023 underwriting

General and 13,112 16,121 (3,009 ) 28,994 34,422 (5,428 ) administrative

Total Operating $ 67,921 $ 82,671 $ (14,750 ) $ 137,846 $ 169,551 $ (31,705 ) Expenses

% of Gross earned 19.1 % 24.0 % (4.9 ) pts 19.3 % 24.6 % (5.3 ) ptspremiums

% of Net earned 46.7 % 44.6 % 2.1 pts 47.3 % 45.0 % 2.3 ptspremiums

Reinsurance Costs as a Percentage of Gross Earned Premium

Reinsurance costs as a percentage of gross earned premium for the three months ended June 30, 2021 and 2020 were as follows:

2021 2020

Non-at-Risk (2.0) % (2.6) %

Quota Share (25.6) % (13.0) %

All Other (31.6) % (30.5) %

Total Ceding Ratio (59.2) % (46.1) %

The increase in this ratio was driven by multiple modifications made to the Company's existing quota share agreements effective December 31, 2020 and June 1, 2021. These modifications include extending coverage to include American Coastal Insurance Company on the 15% quota share agreement, as well as increasing the cession percentage by 8%. In addition, the Company entered into a quota share agreement with Homeowners Choice Property & Casualty Insurance Company, Inc. (HCP) effective December 31, 2020 through May 31, 2021, which provided 69.5% reinsurance coverage on in-force, new and renewal policies in Connecticut, Massachusetts, New Jersey, and Rhode Island.

Effective June 1, 2021, the Company entered into a new quota share reinsurance agreement with HCP and TypTap Insurance Company (Typtap), which provides 100% reinsurance coverage on in-force, new and renewal policies in Connecticut, Massachusetts, New Jersey, and Rhode Island. The cession of these policies is 50% to HCP and 50% to Typtap. Finally, the Company's 7.5% quota share agreement effective in 2020 expired on May 31, 2021 and was not renewed.

In addition to the changes in the Company's quota share agreements, the Company also reduced the retention amounts related to their catastrophe excess of loss reinsurance program for the 2021-2022 season, resulting in higher ceded premiums year over year but less risk if the named storm season is as active as the 2020-2021 season. Combined with increased costs associated with the all other perils catastrophe agreement, these modifications have resulted in increases to the Company's ceding ratio quarter over quarter.

Investment Portfolio Highlights

The Company's cash, restricted cash and investment holdings remained consistent at $1.3 billion at December 31, 2020 and June 30, 2021. The Company's cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt and 100% investment grade money market instruments. Fixed maturities represented approximately 90.2% of total investments at June 30, 2021, compared to 94.5% at December 31, 2020. At June 30, 2021, our fixed maturity investments had a modified duration of 4.3 years, compared to 4.1 years at December 31, 2020.

Book Value Analysis

Book value per common share decreased 14.6% from $9.19 at December 31, 2020, to $7.85 at June 30, 2021. Underlying book value per common share decreased 12.2% from $8.96 at December 31, 2020 to $7.87 at June 30, 2021. A decrease in the Company's retained earnings as the result of a net loss in the first half of 2021 drove the decrease in our book value per share. As shown in the table below, removing the effect of AOCI increases the Company's book value per common share, as the Company experienced unfavorable market conditions for the six months ended June 30, 2021.

($ in thousands, except for share and per share data) June 30, 2021 December 31, 2020

Book Value per Share

Numerator:

Common stockholders' equity attributable to UIHC $ 339,333 $ 395,753

Denominator:

Total Shares Outstanding 43,227,957 43,075,877

Book Value Per Common Share $ 7.85 $ 9.19



Book Value per Share, Excluding the Impact of Accumulated Other Comprehensive Income (AOCI)

Numerator:

Common stockholders' equity attributable to UIHC $ 339,333 $ 395,753

Less: Accumulated other comprehensive income (662 ) 9,693 (loss)

Stockholders' Equity, excluding AOCI $ 339,995 $ 386,060

Denominator:

Total Shares Outstanding 43,227,957 43,075,877

Underlying Book Value Per Common Share^(1) $ 7.87 $ 8.96

(1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below.

Definitions of Non-GAAP Measures

The Company believes that investors' understanding of UPC Insurance's performance is enhanced by the Company's disclosure of the following non-GAAP measures. The Company's methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Net income (loss) excluding the effects of amortization of intangible assets, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income and subtracting realized gains (losses) on the Company's investment portfolio, net of tax, and unrealized gains (losses) on the Company's equity securities, net of tax, from net income. Amortization expense is related to the amortization of intangible assets acquired through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company's operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net income. The core income measure should not be considered a substitute for net income and does not reflect the overall profitability of the Company's business.

Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income for the period by the average stockholders' equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income is an after-tax non-GAAP measure that is calculated by excluding from net income the effect of non-cash amortization of intangible assets, unrealized gains or losses on the Company's equity security investments and net realized gains or losses on the Company's investment portfolio. In the opinion of the Company's management, core income, core income per share and core return on equity are meaningful indicators to investors of the Company's underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company's management uses core income, core income per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis. The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company's business.

Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors, and it is used by management to highlight the trends in the Company's business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company's loss trends to vary significantly between periods as a result of their frequency of occurrence and severity and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company's business.

Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company's loss trends that may be impacted by current year catastrophe losses and prior year development on the Company's reserves. As discussed previously, these two items can have a significant impact on the Company's loss trends in a given period. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company's performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company's business.

Book value per common share, excluding the impact of accumulated other comprehensive income (underlying book value per common share), is a non-GAAP measure that is computed by dividing common stockholders' equity after excluding accumulated other comprehensive income, by total common shares outstanding plus dilutive potential common shares outstanding. The Company uses the trend in book value per common share, excluding the impact of accumulated other comprehensive income, in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes this non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors that are not influenced by management. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income, should not be considered a substitute for book value per common share and does not reflect the recorded net worth of the Company's business.

Conference Call Details

Date and August 4, 2021 - 5:00 P.M. ETTime:



Participant (United States): 877-445-9755Dial-In:

(International): 201-493-6724



To listen to the live webcast, please go to http://Webcast: investors.upcinsurance.com and click on the conference call link at the top of the page or go to: https://event.webcasts.com/ starthere.jsp?ei=1478671&tp_key=73fc5c851a



An archive of the webcast will be available for a limited period of time thereafter.



The information in this press release should be read inPresentation: conjunction with an investor presentation that is available on our website at investors.upcinsurance.com/Presentations.

About UPC Insurance

Founded in 1999, UPC Insurance is an insurance holding company that sources, writes and services personal and commercial residential property and casualty insurance policies using a group of wholly owned insurance subsidiaries and one majority owned insurance subsidiary through a variety of distribution channels. The Company currently writes policies in Connecticut, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode Island, South Carolina and Texas. From its headquarters in St. Petersburg, UPC Insurance's team of dedicated professionals manages a completely integrated insurance company, including sales, underwriting, customer service and claims.

Forward-Looking Statements

Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are "forward-looking statements" that anticipate results based on our estimates, assumptions and plans and are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as "may," "will," "expect," "endeavor," "project," "believe," "plan," "anticipate," "intend," "could," "would," "estimate" or "continue" or the negative variations thereof or comparable terminology. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the "Risk Factors" section in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, we undertake no obligation to update or revise any forward-looking statement.

Consolidated Statements of Comprehensive Income (loss)In thousands, except share and per share amounts

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

REVENUE:

Gross premiums $ 426,424 $ 439,651 $ 738,062 $ 774,834 written

Change in grossunearned (69,991 ) (95,512 ) (24,966 ) (86,076 ) premiums

Gross premiums 356,433 344,139 713,096 688,758 earned

Ceded premiums (210,973 ) (158,657 ) (421,687 ) (311,680 ) earned

Net premiums 145,460 185,482 291,409 377,078 earned

Net investment 3,683 5,907 7,266 12,824 income

Net realizedinvestment gains (124 ) 59 379 (9 ) (losses)

Net unrealizedgains (losses) 2,438 20,552 5,002 (5,904 ) on equitysecurities

Other revenue 3,997 4,397 13,187 8,712

Total revenues $ 155,454 $ 216,397 $ 317,243 $ 392,701

EXPENSES:

Losses and lossadjustment 118,064 101,693 233,845 204,530 expenses

Policyacquisition 41,327 52,573 82,148 111,448 costs

Operating 13,482 13,977 26,704 23,681 expenses

General andadministrative 13,112 16,121 28,994 34,422 expenses

Interest expense 2,257 2,565 4,632 4,984

Total expenses 188,242 186,929 376,323 379,065

Income (loss)before other (32,788 ) 29,468 (59,080 ) 13,636 income

Other income 15 14 25 42

Income (loss)before income (32,773 ) 29,482 (59,055 ) 13,678 taxes

Provision(benefit) for (9,352 ) 5,040 (17,174 ) 1,752 income taxes

Net income $ (23,421 ) $ 24,442 $ (41,881 ) $ 11,926 (loss)

Less: Net income(loss)attributable to 89 168 (600 ) 375 noncontrollinginterests

Net income(loss) $ (23,510 ) $ 24,274 $ (41,281 ) $ 11,551 attributable toUIHC

OTHERCOMPREHENSIVE INCOME (LOSS):

Change in netunrealized gains 8,242 28,332 (13,497 ) 24,222 (losses) oninvestments

Reclassificationadjustment fornet realized 124 (59 ) (379 ) 9 investmentlosses (gains)

Income taxbenefit(expense)related to items (2,012 ) (6,858 ) 3,364 (5,875 ) of othercomprehensiveincome (loss)

Totalcomprehensive $ (17,067 ) $ 45,857 $ (52,393 ) $ 30,282 income (loss)

Less:Comprehensiveincome (loss) 160 549 (757 ) 523 attributable tononcontrollinginterests

Comprehensiveincome (loss) $ (17,227 ) $ 45,308 $ (51,636 ) $ 29,759 attributable toUIHC



Weighted averageshares outstanding

Basic 42,950,666 42,860,922 42,924,662 42,833,225

Diluted 42,950,666 43,055,115 42,924,662 43,041,623



Earningsavailable toUIHC common stockholders pershare

Basic $ (0.55 ) $ 0.57 $ (0.96 ) $ 0.27

Diluted $ (0.55 ) $ 0.56 $ (0.96 ) $ 0.27



Dividendsdeclared per $ 0.06 $ 0.06 $ 0.12 $ 0.12 share

Consolidated Balance SheetsIn thousands, except share amounts

June 30, 2021 December 31, 2020

ASSETS

Investments, at fair value:

Fixed maturities, available-for-sale $ 841,105 $ 940,011

Equity securities 31,176 7,445

Other investments 60,078 47,595

Total investments $ 932,359 $ 995,051

Cash and cash equivalents 276,382 239,420

Restricted cash 42,791 62,078

Accrued investment income 4,328 4,680

Property and equipment, net 32,490 34,187

Premiums receivable, net 96,665 87,339

Reinsurance recoverable on paid and unpaid 927,427 821,156 losses

Ceded unearned premiums 592,974 384,588

Goodwill 73,045 73,045

Deferred policy acquisition costs 86,858 74,414

Intangible assets, net 19,998 21,930

Other assets 63,355 51,053

Total Assets $ 3,148,672 $ 2,848,941

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Unpaid losses and loss adjustment expenses $ 1,136,375 $ 1,089,966

Unearned premiums 748,904 723,938

Reinsurance payable on premiums 538,217 241,636

Payments outstanding 72,209 77,912

Accounts payable and accrued expenses 70,648 91,173

Operating lease liability 2,159 2,311

Other liabilities 62,584 46,365

Notes payable, net 157,154 158,041

Total Liabilities $ 2,788,250 $ 2,431,342

Commitments and contingencies

Stockholders' Equity:

Preferred stock, $0.0001 par value;1,000,000 authorized; none issued or - - outstanding

Common stock, $0.0001 par value; 50,000,000shares authorized; 43,373,346 and 4 4 43,250,731 issued, respectively; 43,227,957and 43,075,877 outstanding, respectively

Additional paid-in capital 393,524 393,122

Treasury shares, at cost; 212,083 shares (431 ) (431 )

Accumulated other comprehensive income (662 ) 9,693 (loss)

Retained earnings (53,102 ) (6,635 )

Total stockholders' equity attributable to $ 339,333 $ 395,753 UIHC stockholders

Noncontrolling interests 21,089 21,846

Total Stockholders' Equity $ 360,422 $ 417,599

Total Liabilities and Stockholders' Equity $ 3,148,672 $ 2,848,941

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006053/en/

CONTACT: United Insurance Holdings Corp. Jessica Strathman Deputy CFO (727) 895-7737 / jstrathman@upcinsurance.com

CONTACT: OR

CONTACT: INVESTOR RELATIONS: The Equity Group Adam Prior Senior Vice-President (212) 836-9606 / aprior@equityny.com