United Insurance Holdings Corp. (NASDAQ:UIHC) reported first-quarter 2018 operating income of 40 cents per share, beating the Zacks Consensus Estimate by 5.3%. The bottom line also soared 73.9% year over year.
United Insurance Holdings Corp. Price, Consensus and EPS Surprise
Though in the reported quarter, the company witnessed catastrophe activities at places where it operates from, its premium-in-force however, increased 3% to $1.1 billion.
Quarter in Detail
Operating revenues totaled $182 million, surpassing the Zacks Consensus Estimate by 2.3%. The top line also surged nearly 48% year over year.
Gross premiums written increased 65.6% year over year to $279.6 million in the quarter under review, driven by a merger with AmCo last year and organic growth in new plus renewed business generated across all regions.
Net premiums earned improved 51.8% to $162.7 million. This improvement was owing to a better performance at Personal Property and Commercial Property lines of business.
Investment income skyrocketed nearly 93% to $5.7 million.
Loss and loss adjustment (LAE) expense jumped 22% to $77.2 million while LAE expense as a percentage of net earned premiums decreased 1160 basis points to 47.5% in the first quarter.
Operating and underwriting expenses rose 41.7% to $8.3 million, attributable to escalated costs related to expenses for software tools, agent incentive costs and the same incurred for underwriting services and assessments.
Underlying combined ratio of 92.4% deteriorated150 basis points in the period under discussion.
Financial Update
Cash and cash equivalents of $216.7 million as of Mar 31, 2018 were down 21.6% from the level at year-end 2017. Total shareholders’ equity of $535.1 million as of Mar 31, 2018 slid 0.4% from the level as of Dec 31, 2017.
Book value per share was $12.52 as of Mar 31, 2018, up 10.1% from the figure at year-end 2017.
Core return on equity of 13.2% expanded 500 basis points year over year, reflecting the company’s effective utilization of shareholders’ funds.
Dividend Update
The board of directors approved a quarterly cash dividend of 6 cents per share to shareholders of record on May 22, 2018, payable May 29, 2018.
Zacks Rank
United Insurance carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other insurers, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (NYSE:PGR) and RLI Corp. (NYSE:RLI) outpaced the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (NYSE:TRV) missed the same.
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RLI Corp. (RLI): Free Stock Analysis Report
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
United Insurance Holdings Corp. (UIHC): Free Stock Analysis Report
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