Universal Insurance Holdings, Inc. Reports First-Quarter 2009 Financial Results

FORT LAUDERDALE, FL, May 11 (MARKET WIRE) --
Universal Insurance Holdings, Inc. ("the Company") (NYSE Amex: UVE), a
vertically integrated insurance holding company, announced first-quarter
2009 net income of $12.4 million, or $0.31 per diluted share, compared to
$14.3 million, or $0.35 per diluted share, in the first quarter of 2008.

First Quarter 2009 Results

UPCIC, the Company's wholly-owned regulated insurance subsidiary, saw
continued growth in its policy count, servicing approximately 498,000
homeowners' and dwelling fire insurance policies as of March 31, 2009, up
from 461,000 policies and 399,000 policies at December 31, 2008, and March
31, 2008, respectively. The increase in the number of policies in-force
continues to be the result of heightened relationships with existing
agents, an increase in new agents, a new web-based policy administration
platform, and the continued disruption in the Florida marketplace.
Additionally, as announced in December 2008, UPCIC has started to write
homeowners' insurance policies in South Carolina, and as of March 31, 2009
it has written approximately 165 policies totaling $342,000 of in-force
premiums.

In-force premiums were approximately $534.3 million as of March 31, 2009,
versus $504.0 million at March 31, 2008, while gross premiums written were
$145.2 million in the first quarter of 2009, compared to $126.7 million
for the same period of 2008. In-force premiums at December 31, 2008 were
approximately $518.2 million.

Notwithstanding the growth in the number of homeowners' and dwelling fire
insurance policies serviced by UPCIC and related growth in gross premiums
written during the 2009 first quarter, the Company experienced a decrease
in net income in the current period primarily as a result of the effects
of state mandated rate reductions and wind mitigation discounts, and
increased non-catastrophe losses and loss adjustment expenses incurred.

As the Company has previously discussed, a rate decrease required by the
Florida Legislature resulted in rate decreases averaging 11.1 percent
statewide on homeowners' policies and 2.3 percent statewide on dwelling
fire policies, and were integrated into UPCIC's rates on June 1, 2007. The
effect of these rate decreases on existing policies and the corresponding
premium decreases in direct written premium was fully recognized in
UPCIC's policies by May 31, 2008. Also, rate decreases of 4.1 percent
statewide for homeowners' policies and 0.2 percent statewide for dwelling
fire policies were required by the Florida Legislature and implemented
with effective dates in January 2008 for the homeowners' program and
March 2008 for the dwelling fire program. The effect of these rate
decreases on existing policies and the corresponding premium decreases in
direct written premium was fully recognized in UPCIC's policies by
January 2009 for the homeowners' program and March 2009 for the dwelling
fire program. Finally, in February 2009 rate increases of 4.8 percent
statewide for homeowners' policies and 4.7 percent statewide for dwelling
fire policies were approved by the Florida Office of Insurance Regulation
("OIR") and were implemented with effective dates of February 27, 2009,
for new business and April 19, 2009, for renewal business. Despite the
most recent rate increases, the cumulative effect of the prior rate
decreases had an adverse effect on UPCIC's premium growth during the 2009
first quarter.

Additionally, UPCIC recognized a higher volume of premium discounts in
response to a state-required wind mitigation discount program available to
policyholders. Such discounts, which were required by the Florida
Legislature and became effective on June 1, 2007, for new business, and
August 1, 2007, for renewal business, have also had a continued
significant negative effect on UPCIC's premium volume. As of March 31,
2008, 16.9 percent of UPCIC policyholders were receiving wind mitigation
credits totaling $52.4 million, (a 10.4 percent reduction of in-force
premium), while 36.3 percent of UPCIC policyholders were receiving wind
mitigation credits totaling $158.2 million, (a 29.8 percent reduction of
in force premium), at March 31, 2009.

Nonetheless, net premiums earned increased 7.6 percent to $37.8 million in
the first quarter of 2009, from $35.1 million in the 2008 first quarter,
as a result of an increase in direct premiums earned (net of previously
discussed rate decreases and implementation of higher wind mitigation
credits).

Net investment income decreased 73.8 percent to $324,589 for the
three-month period ended March 31, 2009, from $1.2 million for the
three-month period ended March 31, 2008. Net investment income is
comprised primarily of interest and dividends. The decrease is primarily
due to changes in the composition of the Company's investment portfolio
during the three-month period ended March 31, 2009.

Realized gains on investments increased 100.0 percent to $1.1 million for
the three-month period ended March 31, 2009, from zero realized gains on
investments for the three-month period ended March 31, 2008. The increase
is due to the expansion of the Company's investment portfolio into equity
securities and the related sales of these securities.

Commission revenue increased 8.4 percent to $7.4 million in the 2009 first
quarter, from $6.9 million in the same quarter last year. Commission
revenue is comprised principally of the managing general agent's policy
fee income and service fee income on all new and renewal insurance
policies, reinsurance commission sharing agreements, and commissions
generated from agency operations. The increase is primarily attributable
to a decrease in reinsurance commission sharing of approximately $391,000
and an increase in managing general agent's policy fee income of
approximately $973,000.

Other revenue increased 36.6 percent to $1.5 million in the 2009 first
quarter, from $1.1 million in the 2008 period, primarily attributable to
growth in fees earned on new payment plans offered to policyholders by
UPCIC.

In the first quarter of 2009, net losses and loss adjustment expenses
(LAE) increased 60.5 percent to $20.4 million from $12.7 million in the
first quarter of 2008. The net loss ratio, which is derived from net
losses and LAE as a percentage of net earned premium, for the three-month
period ended March 31, 2009, was 54.1 percent compared to 36.3 percent
for the same quarter of 2008. The increase in the net loss ratio is
primarily attributable to the increase in direct loss and LAE incurred
outpacing the increase in direct earned premium in the 2009 quarter as
compared to the 2008 quarter.

Although total direct premiums earned increased 2.7 percent in the 2009
first quarter compared to the same quarter in 2008, the average premium
per policy decreased significantly due to the previously described rate
decreases and wind mitigation credits. At March 31, 2009, UPCIC was
servicing approximately 498,000 homeowners' and dwelling fire insurance
policies with in-force premiums of approximately $534.3 million, or an
average of $1,073 per policy, while the amount of policies UPCIC was
servicing at the comparable quarter of 2008 was approximately 399,000 with
in-force premiums of approximately $504.0 million, or an average of
$1,262. Consequently, as a result of increased net losses and LAE in
connection with the servicing of additional policies, the direct loss and
LAE ratio increased significantly for the 2009 period. Additionally,
although the per unit price of reinsurance has decreased, total
reinsurance costs are higher as UPCIC purchased additional coverage for
the June 1, 2008 through May 31, 2009 period.

First-quarter 2009 general and administrative expenses decreased 8.5
percent to $7.5 million from $8.2 million in the 2008 first quarter. The
decrease in general and administrative expenses was the result of several
factors including an increase in ceding commissions due to greater ceded
earned premiums, a decrease in assessment expense, and a decrease in
interest expense.

The Company's income taxes decreased 14.3 percent to $7.7 million, or 38.4
percent of pre-tax income, in the 2009 first quarter, from $9.0 million,
or 38.7 percent of pre-tax income, for the same period of 2008. The
decrease in income taxes is primarily due to lower pre-tax income in the
2009 period versus the same period in 2008.

At March 31, 2009, stockholders' equity increased to $109.3 million from
$101.6 million at December 31, 2008, representing growth of 7.6 percent.
As of March 31, 2009, UPCIC's statutory capital and surplus was $98.5
million versus $94.0 million at December 31, 2008.

Investment Portfolio

The Company's investment portfolio includes a greater level of fixed
maturities and equity securities at March 31, 2009, as compared to
December 31, 2008, and earlier periods in order to more conservatively
limit its exposure to the volatility in the current banking environment.
The Company's investment objective is to maximize total rate of return
after federal income taxes while maintaining liquidity and minimizing
risk. The Company's current investment policy, which limits investments in
non-investment grade fixed maturity securities (including high-yield
bonds), and limits total investments in preferred stock and common stock,
complies with applicable laws and regulations, which further restrict the
type, quality and concentration of investments.

The Company's Investment Committee, consisting of all current directors,
establishes and reviews on a regular basis the Company's investment policy
in addition to managing the investment portfolio in accordance with
guidelines established by the Florida OIR. Pursuant to this investment
policy, as of March 31, 2009, approximately 26.5 percent of investments
were in fixed maturities and short-term investments, which are intended to
be held until maturity, based upon the Company's estimates of required
liquidity. Approximately 38.3 percent of the investments were in fixed
maturities available for sale and 35.2 percent in equity securities
considered available for sale, based upon the Company's estimates of
required liquidity. Furthermore, the equity security position is comprised
of holdings in commodity type areas including energy, precious metals, and
agriculture. At this time the Company does not use any swaps, options,
futures or forward contracts to hedge or enhance the investment portfolio.

At March 31, 2009, the Company had net unrealized gains on investments,
net of tax, of $2.6 million, as compared to no net unrealized gains on
investments, net of tax as of March 31, 2008.

Management Comments

Bradley I. Meier, president and chief executive officer, commented, "We
are pleased with the continued growth in UPCIC's homeowners' policies and
the continued profitability of the Company, despite the effect of Florida
mandated rate decreases and wind mitigation credits across UPCIC's book of
business. The Company's profitability has afforded it the opportunity to
pay dividends of 22 cents per common share thus far in 2009, while also
allowing for continued growth in book value per share."

Mr. Meier concluded, "We are proud of the progress we have made to date in
2009 with respect to our expansion plans. UPCIC recently received approval
of its rates and forms from the North Carolina Department of Insurance to
write homeowners' insurance in the State of North Carolina, and on April
20, 2009 UPCIC wrote its first homeowners' insurance policy in the state.
Also, on April 24, 2009, UPCIC received approval of its rates and forms
from the insurance division of Hawaii's Department of Commerce and
Consumer Affairs and will begin writing homeowners' policies in the State
of Hawaii shortly. Finally, on May 8, 2009, the Company filed an
application to the Texas Department of Insurance to form a separate
property and casualty insurance subsidiary to write homeowners' coverage
in Texas."

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings, Inc. (UIH) is a vertically integrated
insurance holding company, which through its various subsidiaries, covers
substantially all aspects of insurance underwriting, distribution, claims
processing and exposure management. Universal Property & Casualty
Insurance Company (UPCIC), a wholly owned subsidiary of UIH, is one of
the five leading writers of homeowners' insurance in Florida and is now
fully licensed and has commenced its operations in Georgia, Hawaii, North
Carolina and South Carolina. Additionally, the Company has also filed an
application to the Texas Department of Insurance to form a separate
property and casualty subsidiary to write homeowners' insurance coverage
in Texas.

Readers should refer generally to reports filed by the Company with the
Securities and Exchange Commission (SEC), specifically the Company's Form
10-K for the year ended December 31, 2008, and the Company's Form 10-Q for
the quarterly period ended March 31, 2009, for a discussion of the risk
factors that could affect its operations. Such factors include, without
limitation, exposure to catastrophic losses; reliance on the Company's
reinsurance program; underwriting performance on catastrophe and
non-catastrophe risks; the ability to maintain relationships with
customers, employees or suppliers; competition and its effect on pricing,
spending and third-party relationships; the Company's financial stability
rating; product pricing and revenues; and the effect of Federal or state
laws and regulations. Additional factors that may affect future results
are contained in the Company's filings with the SEC, which are available
on the SEC's web site at http://www.sec.gov. The Company disclaims any
obligation to update and revise statements contained in this press release
based on new information or otherwise.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" that anticipate
results based on our estimates, assumptions and plans that are subject to
uncertainty. These statements are made subject to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995. We
assume no obligation to update any forward-looking statements as a result
of new information or future events or developments.

These forward-looking statements do not relate strictly to historical or
current facts and may be identified by their use of words like "plans,"
"seeks," "expects," "will," "should," "anticipates," "estimates,"
"intends," "believes," "likely," "targets" and other words with similar
meanings. These statements may address, among other things, our strategy
for growth, catastrophe exposure management, product development,
investment results, regulatory approvals, market position, expenses,
financial results, litigation and reserves. We believe that 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.

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

For the Three
Months Ended March 31,
----------------------------
2009 2008
------------- -------------
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written $ 145,212,145 $ 126,667,669
Ceded premiums written (95,727,857) (89,770,703)
------------- -------------
Net premiums written 49,484,288 36,896,966
Increase in net unearned premium (11,726,636) (1,803,571)
------------- -------------
Premiums earned, net 37,757,652 35,093,395
Net investment income 324,589 1,240,878
Realized gains on investments 1,111,333 -
Commission revenue 7,444,849 6,867,187
Other revenue 1,479,377 1,083,013
------------- -------------
Total premiums earned and other revenues 48,117,800 44,284,473
------------- -------------

OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses 20,420,664 12,725,862
General and administrative expenses 7,515,228 8,209,374
------------- -------------
Total operating costs and expenses 27,935,892 20,935,236
------------- -------------

INCOME BEFORE INCOME TAXES 20,181,908 23,349,237

Income taxes, current 8,582,617 10,557,716
Income taxes, deferred (838,539) (1,516,795)
------------- -------------
Income taxes, net 7,744,078 9,040,921
------------- -------------

NET INCOME $ 12,437,830 $ 14,308,316
============= =============

Basic net income per common share $ 0.33 $ 0.39
============= =============
Weighted average of common shares
outstanding - Basic 37,561,341 36,946,000
============= =============

Fully diluted net income per share $ 0.31 $ 0.35
============= =============
Weighted average of common shares
outstanding - Diluted 39,921,929 41,327,000
============= =============

Cash dividend declared per common share $ 0.22 $ 0.10
============= =============

For the Three
Months Ended March 31,
----------------------------
2009 2008
------------- -------------
Comprehensive Income:
Net income $ 12,437,830 $ 14,308,316
Net unrealized gains on investments, net
of tax 2,556,141 -
------------- -------------
Comprehensive Income $ 14,993,971 $ 14,308,316
============= =============

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
March 31, December 31,
ASSETS 2009 2008
------------- -------------
Cash and cash equivalents $ 158,204,010 $ 256,964,637
Investments
Fixed maturities, held to maturity, at
amortized cost 45,621,548 4,334,405
Fixed maturities, available for sale, at
fair value 65,855,861 -
Equity securities, available for sale, at
fair value 60,425,345 1,314,370
Real estate, net 3,367,357 3,399,609
Prepaid reinsurance premiums 178,240,090 173,046,776
Reinsurance recoverables 45,349,520 44,009,847
Premiums receivable, net 46,568,202 40,358,720
Receivable from securities 353,118 -
Other receivables 2,595,461 5,130,402
Property and equipment, net 886,676 864,125
Deferred policy acquisition costs, net 347,924 407,946
Deferred income taxes 13,372,130 14,113,463
Other assets 310,509 692,612
------------- -------------
Total assets $ 621,497,751 $ 544,636,912
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 89,676,542 $ 87,947,774
Unearned premiums 275,409,412 258,489,460
Accounts payable 3,773,924 3,147,260
Payable for securities 3,305,754 1,273,941
Reinsurance payable, net 52,020,429 23,984,248
Income taxes payable 5,989,694 -
Dividends payable 4,515,715 -
Other accrued expenses 17,628,300 14,680,443
Other liabilities 34,917,612 28,560,131
Long-term debt 25,000,000 25,000,000
------------- -------------
Total liabilities 512,237,382 443,083,257
------------- -------------

STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01
par value 1,087 1,387
Authorized shares - 1,000,000
Issued shares - 108,640 and 138,640
Outstanding shares - 108,640 and 138,640
Minimum liquidation preference -
$288,190 and $1,419,700
Common stock, $.01 par value 402,328 401,578
Authorized shares - 55,000,000
Issued shares - 40,233,019 and
40,158,019
Outstanding shares - 37,617,172 and
37,542,172
Treasury shares, at cost - 1,709,847 and
1,709,847 shares (7,381,768) (7,381,768)
Common stock held in trust, at cost - 906,000
shares (733,860) (733,860)
Additional paid-in capital 34,569,639 33,587,414
Accumulated other comprehensive income, net
of taxes 2,580,975 24,834
Retained earnings 79,821,968 75,654,070
------------- -------------
Total stockholders' equity 109,260,369 101,553,655
------------- -------------
Total liabilities and stockholders'
equity $ 621,497,751 $ 544,636,912
============= =============

Investor Contact:
Philip Kranz
Dresner Corporate Services
312-780-7240
pkranz@dresnerco.com

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