Universal’s direct premiums written grows 3.2% to $597m in Q2’25

Florida-domiciled and expansive primary insurance company, Universal Insurance Holdings, has reported a 3.2% increase in direct premiums written to $596.7 million in the second quarter of 2025, from $578.2 million a year earlier, driven by a 25.4% growth in other states, slightly offset by a 2.5% decrease in Florida.

For this quarter, the insurer’s direct premiums earned were $523.4 million, up 6.7% from the prior year quarter’s $490.6 million, driven by growth over the past twelve months.

Meanwhile, net premiums earned were $360.2 million, an increase of 4.4% from Q2’24’s $344.9 million, driven by higher direct premiums earned, partly offset by a higher ceded premium ratio.

The combined ratio for Q2’25 increased by 1.9 percentage points to 97.8% from 95.9% in Q2’24, driven by a higher net loss and expense ratio.

For Q2’25, the net loss ratio was 72.3% an increase of 1.7 points compared to Q2’24 due to a higher ceded premium ratio, which was 31.2%. The ceded premium ratio in Q2’24 was 29.7%. The increase primarily reflects the replacement of the Reinsurance to Assist Policyholders (RAP) layer, which was provided by the state of Florida, with private market coverage, explains the firm.

Universal’s net expense ratio for Q2’25 is 25.5%, up 0.2 points from 25.3% in Q2’24, primarily driven by a higher ceded premium ratio and higher policy acquisition costs associated with growth outside Florida, partly offset by economies of scale.

The operating income margin in this quarter is 12%, compared to 13% in the prior year quarter. The adjusted operating income margin was 12.2%, compared to Q2’24’s 12.8%. The decrease primarily reflects a higher ceded premium ratio, partly offset by higher net investment income and commission revenue.

For Q2’25, net income available to common stockholders was $35.1 million, a very slight decrease from Q2’24’s $35.4 million. The adjusted net income available to common stockholders was $35.7 million, up from $34.6 million in Q2’24.

The higher adjusted net income was driven by higher direct premiums earned, net investment income and commission revenue, partly offset by a higher ceded premium ratio.

Lastly, net investment income for Q2’25 is $17.3 million, up from $14.7 million in the prior year comparable quarter, driven by higher fixed income reinvestment yields and higher invested assets.

Finally, the insurer’s commissions, policy fees and other revenue increased by 20% to $23.5 million in Q2’25, driven again by higher reinsurance brokerage commissions due to the replacement of the RAP layer with private market coverage, and the replacement of the catastrophe bond with traditional reinsurance coverage in the 2024-2025 program.

Stephen J. Donaghy, Chief Executive Officer, commented, “In the quarter, we delivered a very strong 29.4% adjusted return on common equity. We are encouraged by favourable underwriting trends, as the Florida market continues to improve, and we are optimistic as we look ahead.”

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