Universal, AmCoastal Report Some Costs from Helene, Milton for Q3

One of Florida’s largest property insurers and one of its smaller carriers reported losses at least partly related to Hurricane Helene, which landed just before the third quarter closed, and from Hurricane Milton, which struck less than two weeks later.

Universal Insurance Holdings, parent of Universal Property & Casualty Insurance Co., considered Florida’s third-largest with more than 570,000 policies in the state, said in a statement that it incurred a $16.2 million net loss in Q3 2024. That’s a big change from the $49 million profit reported in the second quarter of this year and a greater net loss than Universal saw in third quarter in 2023, according to financial statements.

CEO Stephen Donaghy said the company’s “substantial reinsurance protection and the strong reinsurance relationships that we’ve built over many years provide us with the financial resilience to weather both high-frequency and high-severity storm seasons.”

He noted in a statement that Universal’s consolidated retention “drops for subsequent events and we expect a smaller financial impact from weather in the fourth quarter, inclusive of Hurricane Milton. Non-catastrophe underwriting trends continue to improve and we’re highly encouraged as we look ahead.”

Revenues improved almost 8% compared to Q3 2023, thanks to more net premiums earned, investment income and commission revenue. But some costs rose, too, including reinsurance payable, which more than doubled to $420 million in the third quarter this year. Losses and loss-adjustment expenses climbed in the last year, to about $316 million.

Universal’s reported combined ratio also rose considerably, from a healthy 96% in the second quarter this year to 117% in Q3. And while many Florida insurers have followed a steady diet and have shed thousands of policies in recent years, Universal added about 11,000 policies in Q3. The 844,539 policies in force is up from 807,553 in Q3 2023. Almost all of the policy growth came in states outside of Florida. Universal has 570,432 policies in Florida, about the same as it had in Q2 this year and in Q3 last year.

Universal, based in Fort Lauderdale, also noted that it had begun writing business this month in Wisconsin, its 19^th state.

Universal did not provide further information on claims, losses and expenses that were directly related to Hurricanes Helene and Milton. For all Florida carriers, more than 247,400 claims have been filed from Milton as of Friday, Oct. 25, the Florida Office of Insurance Regulation reported. Those claims will produce a total estimated loss of more $2.8 billion. That dollar value that is expected to rise, but perhaps not as much as initially feared.

Claims adjusters and insurance brokers for condominiums have told Insrance Journal that damage in some parts of Florida is proving to be less severe than expected and most claims will be below the insureds’ deductible levels.

Meanwhile, St. Petersburg-based American Coastal Insurance Corp., which held fewer than 23,000 policies in June, reported that company leadership expects to see about $3.8 million in catastrophe losses from Hurricanes Debby and Helene, for Q3. Some $1.4 million of that will be covered by AmCoastal’s captive reinsurance corporation, the firm said in a news release.

For Q4, Hurricane Milton, which scraped through Florida on Oct. 9 and 10 this year, should produce about $16 million in cat losses. The captive will retain about $8 million of that.

“We estimate a gross loss between $150 million and $200 million from Milton, leaving 100% of AmCoastal’s $1.26 billion occurrence-based reinsurance tower available for subsequent catastrophe events,” AmCoastal President Brad Martz said in a statement.

With AmCoastal’s reinsurance tower “fully intact” and a lower $10.3 million retention on potential second and third events, net of tax impacts, “the Company remains strongly positioned for the remainder of the 2024 Atlantic hurricane season, and is expected to remain profitable in the fourth quarter, despite Milton’s impact,” Martz added.

More financial information will be provided in Nov. 6 earnings call. AmCoastal has been through major changes in the last two years. After United Property & Casualty Insurance was deemed insolvent, subsidiary AmCoastal was left standing and several executives from UPC moved to manage American Coastal. Then, in December 2023, some of those same officers were forced to step aside or were reassigned due to a Florida statute that forbids officials with insolvent carriers from overseeing other carriers.

Top photo: Property owners speak with an official as they process the damage to their homes and community following Hurricane Milton, on Manasota Key, in Englewood, Florida. (AP Photo/Rebecca Blackwell).

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