10-Q 1 uve-20240930.htm 10-Q uve-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM 10-Q
________________________________________________________
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024

OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33251
________________________________________________________

Image2.jpg
UNIVERSAL INSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________
Delaware65-0231984
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip Code)
(954) 958-1200
(Registrant’s telephone number, including area code)
________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueUVENew York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐ 

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒   No  ☐ 

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”

“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer  
☐
Smaller reporting company
☐
Emerging growth company
☐
                
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)      Yes  ☐    No  ☒

    Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 28,286,229 shares of common stock, par value $0.01 per share, outstanding on October 28, 2024.



UNIVERSAL INSURANCE HOLDINGS, INC.
TABLE OF CONTENTS
Page No.

2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Universal Insurance Holdings, Inc.
Fort Lauderdale, Florida

RESULTS OF REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have reviewed the accompanying condensed consolidated balance sheet of Universal Insurance Holdings, Inc. and its wholly-owned subsidiaries (the “Company”) as of September 30, 2024 and the related condensed consolidated statements of income, comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended September 30, 2024 and 2023 and the related condensed consolidated statement of cash flows for the nine-month periods ended September 30, 2024 and 2023. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of Universal Insurance Holdings, Inc. as of December 31, 2023 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 28, 2024. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
BASIS FOR REVIEW RESULTS
These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
/s/ Plante & Moran, PLLC
East Lansing, Michigan
October 30, 2024
3
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except per share data)
 As of
September 30,December 31,
20242023
ASSETS
Available-for-sale debt securities, at fair value, net of allowance for credit loss of $558 and $566 (amortized cost: $1,337,397 and $1,162,919)
$1,276,732 $1,064,330 
Equity securities, at fair value (cost: $79,917 and $91,052)
79,470 80,495 
Other investments, at fair value (cost: $4,794 and $4,794)
12,248 10,434 
Investment real estate, net5,618 5,525 
Total invested assets1,374,068 1,160,784 
Cash and cash equivalents333,678 397,306 
Restricted cash and cash equivalents68,635 2,635 
Prepaid reinsurance premiums418,834 236,254 
Reinsurance recoverable130,124 219,102 
Premiums receivable, net92,400 77,064 
Property and equipment, net49,358 47,628 
Deferred policy acquisition costs125,305 109,985 
Income taxes recoverable7,480 — 
Deferred income tax asset, net23,683 43,175 
Other assets26,953 22,628 
Total assets$2,650,518 $2,316,561 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses$460,437 $510,117 
Unearned premiums1,108,890 990,559 
Advance premium71,700 48,660 
Book overdraft— 14,597 
Reinsurance payable, net420,282 191,850 
Commission payable25,763 20,989 
Income taxes payable— 5,886 
Other liabilities and accrued expenses61,767 90,600 
Long-term debt, net101,434 102,006 
Total liabilities2,250,273 1,975,264 
Commitments and Contingencies (Note 12)
STOCKHOLDERS’ EQUITY:
Cumulative convertible preferred stock, $0.01 par value
— — 
Authorized shares - 1,000
Issued shares - 10 and 10
Outstanding shares - 10 and 10
Minimum liquidation preference, $9.99 and $9.99 per share
Common stock, $0.01 par value
472 472 
Authorized shares - 55,000
Issued shares - 47,298 and 47,269
Outstanding shares - 28,286 and 28,966
Treasury shares, at cost - 19,012 and 18,303
(274,977)(260,779)
Additional paid-in capital121,003 115,086 
Accumulated other comprehensive income (loss), net of taxes(45,593)(74,172)
Retained earnings599,340 560,690 
Total stockholders’ equity400,245 341,297 
Total liabilities and stockholders’ equity$2,650,518 $2,316,561 
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
4
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in thousands, except per share data)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
REVENUES
Direct premiums written$574,351 $531,988 $1,598,797 $1,489,216 
Change in unearned premium(66,606)(57,677)(118,331)(96,213)
Direct premium earned507,745 474,311 1,480,466 1,393,003 
Ceded premium earned(162,009)(143,271)(455,747)(476,465)
Premiums earned, net345,736 331,040 1,024,719 916,538 
Net investment income15,406 12,755 43,589 34,735 
Net realized gains (losses) on investments(1,146)(431)(1,534)(337)
Net change in unrealized gains (losses) on investments
7,299 (1,285)11,760 1,403 
Commission revenue12,959 10,830 35,671 43,098 
Policy fees5,194 5,111 15,175 14,662 
Other revenue2,106 2,028 6,347 6,027 
Total revenues387,554 360,048 1,135,727 1,016,126 
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses316,955 287,972 800,714 717,853 
General and administrative expenses87,103 78,322 252,883 230,924 
Total operating costs and expenses404,058 366,294 1,053,597 948,777 
Interest and amortization of debt issuance costs1,619 1,631 4,864 4,896 
INCOME (LOSS) BEFORE INCOME TAXES(18,123)(7,877)77,266 62,453 
Income tax expense (benefit)(1,960)(1,962)24,356 15,629 
NET INCOME (LOSS)$(16,163)$(5,915)$52,910 $46,824 
Basic earnings (loss) per common share$(0.57)$(0.20)$1.85 $1.56 
Weighted average common shares outstanding - Basic28,355 29,617 28,607 30,087 
Diluted earnings (loss) per common share$(0.57)$(0.20)$1.80 $1.54 
Weighted average common shares outstanding - Diluted28,355 29,617 29,317 30,378 
Cash dividend declared per common share$0.16 $0.16 $0.48 $0.48 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income (loss)$(16,163)$(5,915)$52,910 $46,824 
Other comprehensive income (loss), net of taxes30,125 (11,258)28,579 (3,333)
Comprehensive income (loss)$13,962 $(17,173)$81,489 $43,491 
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
5
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited)
(in thousands, except per share data)
Treasury SharesCommon
Shares
Issued		Preferred
Shares
Issued		Common
Stock
Amount		Preferred
Stock
Amount		Additional
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
Shares,
at Cost		Total
Stockholders’
Equity
Balance, December 31, 2023(18,303)47,269 10 $472 $— $115,086 $560,690 $(74,172)$(260,779)$341,297 
Purchases of treasury stock
(208)— — — — — — (4,139)(4,139)
Share-based compensation— — — — — 2,033 — — — 2,033 
Other (1)
— — — — — (880)— — — (880)
Net income (loss)— — — — — — 33,657 — — 33,657 
Other comprehensive gain (loss), net of taxes— — — — — — — (2,542)— (2,542)
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (4,762)— — (4,762)
Balance, March 31, 2024(18,511)47,269 10 472 — 116,239 589,585 (76,714)(264,918)364,664 
Grant of restricted stock awards— 28 — — — — — — — — 
Stock option exercises— 1 — — — — — — — — 
Purchases of treasury stock(274)— — — — 370 — — (5,624)(5,254)
Share-based compensation— — — — — 2,186 — — — 2,186 
Net income (loss)— — — — — — 35,416 — — 35,416 
Other comprehensive loss, net of taxes— — — — — — — 996 — 996 
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (4,771)— — (4,771)
Balance, June 30, 2024(18,785)47,298 10 472 — 118,795 620,230 (75,718)(270,542)393,237 
Stock option exercises(2)(2)2 — — — 54 — — (55)(1)
Retirement of treasury shares2 (2)(2)— — — (55)— — 55 — 
Purchases of treasury stock(227)— — — — — — — (4,435)(4,435)
Share-based compensation— — — — — 2,209 — — — 2,209 
Net income (loss)— — — — — — (16,163)— — (16,163)
Other comprehensive loss, net of taxes— — — — — — — 30,125 — 30,125 
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (4,727)— — (4,727)
Balance, September 30, 2024(19,012)47,298 10 $472 $— $121,003 $599,340 $(45,593)$(274,977)$400,245 
(1)
The Other line within Paid-in Capital includes $511 thousand related to cash settlement of certain restricted share units.
(2)All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of stock options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
6
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(in thousands, except per share data)

Treasury SharesCommon
Shares
Issued		Preferred
Shares
Issued		Common
Stock
Amount		Preferred
Stock
Amount		Additional
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
Shares,
 at Cost		Total
Stockholders’
Equity
Balance, December 31, 2022(16,790)47,179 10 $472 $— $112,509 $517,455 $(103,782)$(238,758)$287,896 
Vesting of performance share units(6)
(1)
16 — — — — — — (64)(64)
Vesting of restricted stock units(16)
(1)
48 — — — — — — (160)(160)
Stock option exercises(54)
(1)
63 — — — 928 — — (90)838 
Retirement of treasury shares76 
(1)
(76)— — — (1,242)— — 314 (928)
Share-based compensation— — — — — 1,230 — — — 1,230 
Net income (loss)— — — — — — 24,173 — — 24,173 
Other comprehensive gain (loss), net of taxes— — — — — — — 13,791 — 13,791 
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (4,970)— — (4,970)
Balance, March 31, 2023
(16,790)47,230 10 472 — 113,425 536,658 (89,991)(238,758)321,806 
Grants and vesting of restricted stock

36 — 1 — (1)— — — — 
Purchases of treasury stock(396)— — — — — — — (6,088)(6,088)
Share-based compensation— — — — — 1,261 — — — 1,261 
Net income (loss)
— — — — — — 28,566 — — 28,566 
Other comprehensive income, net of taxes— — — — — — — (5,866)— (5,866)
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (5,007)— — (5,007)
Balance, June 30, 2023(17,186)47,266 10 473 $— $114,685 $560,217 $(95,857)$(244,846)$334,672 
Purchases of treasury stock(894)— — — — — — — (12,297)(12,297)
Share-based compensation— — — — — 1,237 — — — 1,237 
Net income— — — — — — (5,915)— — (5,915)
Other comprehensive loss, net of taxes— — — — — — — (11,258)— (11,258)
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (4,937)— — (4,937)
Balance, September 30, 2023(18,080)47,266 10 $473 $— $115,922 $549,365 $(107,115)$(257,143)$301,502 
(1)
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
7
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
Nine Months Ended
September 30,
20242023
Cash flows from operating activities:
Net cash provided by (used in) operating activities
$238,697 $70,631 
Cash flows from investing activities:
Proceeds from sale of property and equipment97 34 
Purchases of property and equipment(6,477)(2,869)
Purchases of equity securities(2,180)(32,558)
Purchases of available-for-sale debt securities(350,075)(103,560)
Proceeds from sales of equity securities12,576 42,830 
Proceeds from sales of available-for-sale debt securities49,110 3,985 
Maturities of available-for-sale debt securities89,723 77,676 
Net cash provided by (used in) investing activities(207,226)(14,462)
Cash flows from financing activities:
Preferred stock dividend(8)(8)
Common stock dividend(13,789)(14,679)
Purchase of treasury stock inclusive of excise taxes paid
(14,198)(18,385)
Payments related to tax withholding for share-based compensation(1)(314)
Repayment of debt(1,103)(1,104)
Net cash provided by (used in) financing activities(29,099)(34,490)
Cash and cash equivalents and restricted cash and cash equivalents:
Net increase (decrease) during the period2,372 21,679 
Balance, beginning of period399,941 391,341 
Balance, end of period$402,313 $413,020 
The following table summarizes our cash and cash equivalents and restricted cash and cash equivalents within the Condensed Consolidated Balance Sheets (in thousands):
 September 30,December 31,
20242023
Cash and cash equivalents$333,678 $397,306 
Restricted cash and cash equivalents (1)68,635 2,635 
Total cash and cash equivalents and restricted cash and cash equivalents$402,313 $399,941 
(1)See “—Note 5 (Insurance Operations)” for a discussion of the nature of the restrictions for restricted cash and cash equivalents and "—Note 14
(Variable Interest Entities)” for a discussion of restricted cash held in a trust account.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
8
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Nature of Operations and Basis of Presentation
Nature of Operations
Universal Insurance Holdings, Inc. (“UVE,” and together with its wholly-owned subsidiaries, “the Company”) is a Delaware corporation incorporated in 1990. The Company is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution, and claims. Through its wholly-owned insurance company subsidiaries, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC,” and together with UPCIC, the “Insurance Entities”), the Company is principally engaged in the property and casualty insurance business offered primarily through its network of independent agents. Risk from catastrophic losses is managed through the use of reinsurance agreements. The Company’s primary product is residential homeowners’ insurance offered in 18 states as of September 30, 2024, including Florida, which comprises the majority of the Company’s policies in force. See “—Note 5 (Insurance Operations)” for more information regarding the Company’s insurance operations.
The Company generates revenues primarily from the collection of premiums and investment returns on funds invested on cash flows in excess of those retained and used for claims-paying obligations and insurance operations. Other significant sources of revenue include brokerage commissions collected from reinsurers on certain reinsurance programs placed on behalf of the Insurance Entities, policy fees collected from policyholders by the Company’s wholly-owned managing general agent (“MGA”) subsidiary and payment plan fees charged to policyholders who choose to pay their premiums in installments. The Company’s wholly-owned adjusting company receives claims-handling fees from the Insurance Entities. The Insurance Entities receive reimbursement whenever claims-handling fees are subject to recovery under the Insurance Entities’ respective reinsurance programs. These fees, after expenses, are recorded in the Consolidated Financial Statements as an adjustment to losses and loss adjustment expense (“LAE”).
The consolidated financial statements have been prepared in conformity with: (i) United States (“U.S.”) generally accepted accounting principles (“GAAP”); and (ii) the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
Basis of Presentation and Consolidation
The Company has prepared the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the Financial Statements do not include all of the information and footnotes required by United States Generally Accepted Accounting Principles (“GAAP”) for annual financial statements. Therefore, the Financial Statements should be read in conjunction with the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024. The Condensed Consolidated Balance Sheet at December 31, 2023 was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods do not necessarily indicate the results that may be expected for any interim period or for the full year.
To conform to the current period presentation, certain amounts in the prior periods’ condensed consolidated financial statements and notes have been reclassified. Such reclassifications were of an immaterial amount and had no effect on net income or stockholders’ equity.
The Financial Statements include the accounts of UVE and its wholly-owned subsidiaries, as well as variable interest entities (“VIE”) in which the Company is determined to be the primary beneficiary. All material intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s primary use of estimates is in the recognition of liabilities for unpaid losses, loss adjustment expenses, subrogation recoveries, and reinsurance recoveries. Actual results could differ from those estimates.
9
Note 2. Significant Accounting Policies
The Company reported Significant Accounting Policies in its Annual Report on Form 10-K for the year ended December 31, 2023. In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company has adopted all required disclosures. Refer to “Item 1—Note 3 (Investments)” for updated disclosures associated with the adoption of the ASU.
10
Note 3. Investments
Available-for-Sale Securities
The following table provides the amortized cost and fair value of available-for-sale debt securities as of the dates presented (in thousands):
September 30, 2024
Amortized
Cost		Allowance for Expected Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Debt Securities:
  U.S. government obligations and agencies$20,209 $— $226 $(332)$20,103 
  Corporate bonds905,947 (459)5,671 (41,896)869,263 
  Mortgage-backed and asset-backed securities385,871 — 2,708 (24,830)363,749 
  Municipal bonds15,891 (1)10 (1,282)14,618 
  Redeemable preferred stock9,479 (98)25 (407)8,999 
Total$1,337,397 $(558)$8,640 $(68,747)$1,276,732 
December 31, 2023
Amortized
Cost		Allowance for Expected Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Debt Securities:
  U.S. government obligations and agencies$23,886 $— $49 $(677)$23,258 
  Corporate bonds779,177 (469)1,097 (64,091)715,714 
  Mortgage-backed and asset-backed securities334,460 — 969 (32,283)303,146 
  Municipal bonds15,916 (4)— (1,873)14,039 
  Redeemable preferred stock9,480 (93)— (1,214)8,173 
Total$1,162,919 $(566)$2,115 $(100,138)$1,064,330 
The following table provides the credit quality of available-for-sale debt securities with contractual maturities as of the dates presented (dollars in thousands):
September 30, 2024December 31, 2023
Average Credit RatingsFair Value% of Total
 Fair Value		Fair Value% of Total
 Fair Value
AAA$385,954 30.2 %$333,516 31.3 %
AA143,512 11.2 %128,249 12.0 %
A430,319 33.7 %356,090 33.5 %
BBB311,096 24.4 %245,823 23.1 %
No Rating Available5,851 0.5 %652 0.1 %
   Total$1,276,732 100.0 %$1,064,330 100.0 %
The table above includes credit quality ratings by Standard and Poor’s Rating Services, Inc. (“S&P”), Moody’s Investors Service, Inc. and Fitch Ratings, Inc. The Company has presented the highest rating of the three rating agencies for each investment position.
11
The following table summarizes the amortized cost and fair value of mortgage-backed and asset-backed securities as of the dates presented (in thousands):
September 30, 2024December 31, 2023
Amortized
Cost		Fair ValueAmortized
Cost		Fair Value
Mortgage-backed securities:
Agency$190,218 $174,065 $165,507 $145,686 
Non-agency57,234 51,351 63,729 55,102 
Asset-backed securities:
Auto loan receivables62,783 63,208 53,686 52,869 
Credit card receivables9,673 9,789 3,414 3,428 
Other receivables65,963 65,336 48,124 46,061 
Total$385,871 $363,749 $334,460 $303,146 
The following tables summarize available-for-sale debt securities, aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position, for which no allowance for expected credit losses has been recorded as of the dates presented (in thousands):
September 30, 2024
Less Than 12 Months12 Months or Longer
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies$— $— $2,774 $(332)
Corporate bonds30,149 (159)326,540 (24,410)
Mortgage-backed and asset-backed securities26,770 (480)189,663 (24,350)
Municipal bonds291 (3)9,467 (961)
Redeemable preferred stock— — 1,120 (90)
Total$57,210 $(642)$529,564 $(50,143)
December 31, 2023
Less Than 12 Months12 Months or Longer
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies$9,045 $(108)$6,811 $(569)
Corporate bonds1,387 (9)365,893 (37,088)
Mortgage-backed and asset-backed securities18,150 (316)216,220 (31,967)
Municipal bonds293 (1)7,010 (1,069)
Redeemable preferred stock529 (30)1,052 (158)
Total$29,404 $(464)$596,986 $(70,851)
Unrealized losses on available-for-sale debt securities in the above table as of September 30, 2024 have not been recognized into income as credit losses because the issuers are of high credit quality (investment grade securities), management does not intend to sell nor does it believe it is more likely than not it will be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. There were no material factors impacting any one category or specific security requiring an accrual for credit loss. The issuers continue to make principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

12
The following table presents a reconciliation of the beginning and ending balances for expected credit losses on available-for-sale debt securities (in thousands):
Corporate BondsMunicipal BondsRedeemable
 Preferred Stock		Total
Balance, December 31, 2022
$729 $2 $189 $920 
Provision for (or reversal of) credit loss expense(260)2 (96)(354)
Balance, December 31, 2023
469 4 93 566 
Provision for (or reversal of) credit loss expense(10)(3)5 (8)
Balance, September 30, 2024
$459 $1 $98 $558 
Refer to “Part II—Item 8—Note 2 (Summary of Significant Accounting Policies)” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for details of accounting policies and reporting in the consolidated financial statements associated with available-for-sale debt securities and allowance for credit losses.
The following table presents the amortized cost and fair value of investments with maturities as of the date presented (in thousands):
September 30, 2024
Amortized CostFair Value
Due in one year or less$130,132 $128,433 
Due after one year through five years733,539 714,587 
Due after five years through ten years439,295 402,889 
Due after ten years30,833 27,319 
Perpetual maturity securities3,598 3,504 
Total$1,337,397 $1,276,732 
All securities, except those with perpetual maturities, were categorized in the table above utilizing years to effective maturity. Effective maturity takes into consideration all forms of potential prepayment, such as call features or prepayment schedules, that shorten the lifespan of contractual maturity dates.
13
The following table provides certain information related to available-for-sale debt securities and equity securities during the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Proceeds from sales and maturities (fair value):
  Available-for-sale debt securities $73,568 $34,934 $138,833 $81,661 
  Equity securities$1,624 $5,597 $12,576 $42,830 
Gross realized gains on sale of securities:
  Available-for-sale debt securities $118 $29 $703 $34 
  Equity securities$334 $18 $1,128 $1,570 
Gross realized losses on sale of securities:
  Available-for-sale debt securities$(918)$(39)$(1,499)$(766)
  Equity securities $(680)$(439)$(1,866)$(1,175)
The following table presents the components of net investment income, comprised primarily of interest and dividends, for the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Available-for-sale debt securities$9,430 $6,325 $25,034 $18,122 
Equity securities864 953 2,600 2,874 
Cash and cash equivalents (1)5,689 5,961 17,397 15,113 
Other (2)86 127 413 395 
  Total investment income16,069 13,366 45,444 36,504 
Less: Investment expenses (3)(663)(611)(1,855)(1,769)
  Net investment income$15,406 $12,755 $43,589 $34,735 
(1)
Includes interest earned on restricted cash and cash equivalents.
(2)
Includes investment income earned on real estate investments.
(3)
Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.
Equity Securities
The following table provides the unrealized gains and (losses) recognized for the periods presented on equity securities still held at the end of the reported period (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Unrealized gains (losses) recognized during the reported period on equity securities still held at the end of the reported period$5,078 $(1,129)$8,963 $(831)
14
Investment Real Estate
Investment real estate consisted of the following as of the dates presented (in thousands):
September 30,December 31,
20242023
Income Producing:
Investment real estate$7,332 $7,097 
Less: Accumulated depreciation(1,714)(1,572)
Investment real estate, net$5,618 $5,525 
The following table provides the depreciation expense related to investment real estate for the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Depreciation expense on investment real estate$49 $46 $142 $139 
Other Investments
The Company has an ownership interest in a limited partnership that is not registered or readily tradable on a securities exchange. This partnership is a private equity fund managed by a general partner who makes decisions with regard to financial policies and operations. As such, the Company is not the primary beneficiary and does not consolidate this partnership.
Other investments consisted of the following as of the dates presented (in thousands):
September 30,December 31,
20242023
Investment in private equity limited partnership
$12,248 $10,434 
The limited partnership investment is subject to a contractual restriction on the transfer or sale by the Company prior to liquidation or dissolution of the partnership agreement by the general partner. This restriction lapses upon the dissolution of the partnership or upon the written consent of the general partner and its Board of Directors. The fair value of this investment was $12.2 million as of September 30, 2024 and $10.4 million as of December 31, 2023.
The following table provides the unrealized gains recognized for the periods presented on investment in private equity limited partnership still held at the end of the reported period (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
20242024
Unrealized gains (losses) recognized during the reported period on investment in private equity limited partnership still held at the end of the reported period$1,814 $1,814 
For the three months ended September 30, 2024 and nine months ended September 30, 2024, the Company recognized $1.8 million in unrealized gains on this investment which is recognized in net change in unrealized gains (losses) on investments in the Consolidated Statement of Income. At September 30, 2024 and December 31, 2023, the Company’s net cumulative contributed capital to the partnership was $4.8 million.
15
Note 4. Reinsurance
The Company seeks to reduce its risk of loss by reinsuring certain levels of risk in various areas of exposure with other insurance enterprises or reinsurers, generally as of the beginning of the hurricane season on June 1st of each year. The Company’s current reinsurance programs consist principally of catastrophe excess of loss reinsurance, subject to the terms and conditions of the applicable agreements. Notwithstanding the purchase of such reinsurance, the Company is responsible for certain retained loss amounts before reinsurance attaches and for insured losses related to catastrophes and other events that exceed coverage provided by or otherwise are not within the scope of the reinsurance programs. The Company remains responsible for the settlement of insured losses irrespective of whether any of the reinsurers fail to make payments otherwise due.
To reduce credit risk for amounts due from reinsurers, the Insurance Entities seek to do business with financially sound reinsurance companies and regularly evaluate the financial strength of all reinsurers used.
The following table presents ratings from rating agencies and the unsecured amounts due from the reinsurers whose aggregate balance exceeded 3% of the Company’s stockholders’ equity as of the dates presented (in thousands):
 Ratings as of September 30, 2024Due from as of
ReinsurerAM Best
Company		Standard
and Poor’s
Rating
Services, Inc.		Moody’s
Investors Service, Inc.		September 30, 2024December 31, 2023
Florida Hurricane Catastrophe Fund “FHCF” (1)n/an/an/a$29,125 $91,275 
Aeolus Re LTD (2)
n/a
n/a
n/a
15,107 — 
Various Lloyd’s of London Syndicates (3)
A+
AA-
n/a
— 22,832 
Total (4)
$44,232 $114,107 
(1)No rating is available, because the fund is not rated.
(2)No rating is available, because the reinsurer is fully collateralized with a trust agreement.
(3)No rating available for Moody’s Investors Service, Inc.
(4)Amounts represent prepaid reinsurance premiums and net recoverables for paid and unpaid losses, including incurred but not reported reserves, and loss adjustment expenses.
16
The Company’s reinsurance arrangements had the following effect on certain items in the Condensed Consolidated Statements of Income for the periods presented (in thousands):
Three Months Ended September 30,
20242023
Premiums
Written		Premiums
Earned		Losses and Loss
Adjustment
Expenses		Premiums
Written		Premiums
Earned		Losses and Loss
Adjustment
Expenses
Direct$574,351 $507,745 $342,218 $