It’s been a while since I last covered Universal Insurance Holdings, Inc. (NYSE:UVE). For the past months, I got worried about the continued insurance exodus in Florida. Hurricane Ian was another challenge that hit the P&C insurance market in the state. But the company proves its resilience amidst these adversities. It keeps its revenue growing despite the lower policies in force. It incurs net losses due to a surge in claims, but operating expenses remain under control. Even better, it maintains a stellar Balance Sheet, allowing it to cover insurance liabilities and borrowings.
Moreover, dividends are still increasing with attractive yields. The stock price remains low and almost unchanged from my last coverage. Nevertheless, its pattern may open an entry point for investors.
Universal Insurance Holdings, Inc. operates in a highly volatile and hammered market. Florida is one of the states needing P&C insurance due to its higher exposure to natural calamities. It is no surprise that the demand for P&C insurance providers is higher. However, it also means higher claims due to hurricanes and roofing scams that have pulverized it in recent years. In my previous coverage, an insurance exodus in Florida has intensified, leading to five more liquidations in 2022. Let’s face it, the Florida market is stumbling as insurers grapple with litigation costs and insurance claims. The massive damage left by Hurricane Ian further aggravated the situation. Despite this, I am optimistic about UVE navigating this tough market.
The operating revenue of the company amounts to $312.81, a 9% year-over-year growth. Various factors drove this decent growth. First, UVE maintains a strategic pricing strategy. Once again, many Florida homeowners rely on P&C insurance. But right now, insurers like UVE have become stricter with their underwriting policies due to abuses in litigation and