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Universal Insurance Holdings, Inc. Reports Third-Quarter 2012 Financial Results

Third Quarter 2012 Diluted EPS Increases 18 Cents Versus the Same Quarter Last Year, While First Nine-Months 2012 Diluted EPS Grows 16.4 Percent Versus the First Nine Months of 2011

FORT LAUDERDALE, FL -- (Marketwire) -- 11/09/12 -- Universal Insurance Holdings, Inc. (UIH) (NYSE MKT: UVE) with its wholly-owned subsidiaries (the Company or Universal), a vertically integrated insurance holding company, reported net income of $8.3 million, or $0.20 per diluted share, an increase of $0.18, for the third quarter of 2012, compared to net income of $1.0 million, or $0.02 per diluted share, for the same period in 2011.

Third-Quarter 2012 Results
Net income during the third quarter of 2012 increased $7.3 million, or $0.18 per diluted share, as a result of an increase in net earned premiums and improved performance in the Company's investment trading portfolio.

Direct premiums written collectively by Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), Universal's wholly-owned insurance company subsidiaries, rose 12.6 percent during the third quarter of 2012. Net premiums earned grew $9.9 million, or 19.9 percent, in the third quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, the most recent of which were in January and February of 2012, and a reduction in the quota-share cession rate from 50 percent for the 2011-2012 reinsurance program to 45 percent for the 2012-2013 reinsurance program.

Third-quarter 2012 operating costs increased compared to the same quarter last year, as net losses and loss adjustment expenses (LAE) increased $7.0 million, or 23.7 percent, while general and administrative expenses increased $5.4 million, or 28.9 percent. Also in the third quarter, the Company decided to forego efforts to collect $5.4 million from a reinsurer because the tangible and intangible costs associated with the collection effort appeared likely to exceed the amount claimed.

At September 30, 2012, stockholders' equity was $166.0 million compared to $161.8 million at June 30, 2012, and $156.9 million at September 30, 2011.

Cash Dividends
On September 10, 2012, UIH announced that its board of directors declared a cash dividend of $0.08 per share, which was paid on October 9, 2012, to shareholders of record on September 26, 2012. At that time, the board further indicated that it expects to declare an additional dividend of the same amount to shareholders of record in the fourth quarter, which would bring this year's aggregate declared annual dividend to $0.34 for each share of common stock. Declaration and payment of future dividends is subject to the discretion of UIH's board and will be dependent on future earnings, cash flows, financial requirements and other factors.

First Nine-Months 2012 Results
For the first nine months of 2012, the Company's net income and diluted earnings per share grew by 15.5 percent and 16.4 percent, respectively, compared to the same period of 2011.

Net premiums earned increased 11.3 percent for the first nine months of 2012 compared to the same period of 2011, primarily as a result of the previously mentioned rate increases, which have had a positive effect on premium generated by renewal policies.

Tropical Storm/Hurricane Sandy Update
The Company has received few claims from Tropical Storm/Hurricane Sandy, which recently affected the eastern United States. The insurance company subsidiaries write most of their policies in Florida, which was not severely affected.

About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the three leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.

Forward-Looking Statements and Risk Factors
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company's operations and future results, refer to the Company's reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2011 and the Form 10-Q for the quarter ended September 30, 2012.

                   (in thousands, except per share data)

                                  Three Months Ended       Nine Months
                                     September 30,      Ended September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------
Direct premiums written          $ 192,986  $ 171,370  $ 605,557  $ 558,024
Ceded premiums written            (132,776)  (123,984)  (398,643)  (393,673)
                                 ---------  ---------  ---------  ---------
Net premiums written                60,210     47,386    206,914    164,351
Change in net unearned premium        (698)     2,248    (43,068)   (17,189)
                                 ---------  ---------  ---------  ---------
  Premiums earned, net              59,512     49,634    163,846    147,162
  Net investment income
   (expense)                           215        122        163        358
  Net realized gains (losses) on
   investments                      (3,142)     5,884    (12,296)    12,496
  Net unrealized gains (losses)
   on investments                    8,091    (15,985)    11,490    (23,037)
  Net foreign currency gains
   (losses) on investments               -       (455)        23       (384)
  Commission revenue                 4,822      5,192     15,494     14,313
  Policy fees                        3,461      3,535     11,434     12,110
  Other revenue                      1,578      1,486      4,558      4,400
                                 ---------  ---------  ---------  ---------
Total premiums earned and other
 revenues                           74,537     49,413    194,712    167,418
                                 ---------  ---------  ---------  ---------

  Losses and loss adjustment
   expenses                         36,301     29,343     91,912     81,380
  General and administrative
   expenses                         24,262     18,827     59,605     48,598
                                 ---------  ---------  ---------  ---------
Total operating costs and
 expenses                           60,563     48,170    151,517    129,978
                                 ---------  ---------  ---------  ---------

INCOME BEFORE INCOME TAXES          13,974      1,243     43,195     37,440

  Income taxes, current                624      7,331     10,484     25,690
  Income taxes, deferred             5,094     (7,063)     6,805    (10,672)
                                 ---------  ---------  ---------  ---------
    Income taxes, net                5,718        268     17,289     15,018
                                 ---------  ---------  ---------  ---------
 INCOME                          $   8,256  $     975  $  25,906  $  22,422
                                 =========  =========  =========  =========

Basic earnings per common share  $    0.21  $    0.02  $    0.65  $    0.57
                                 =========  =========  =========  =========
Weighted average of common
outstanding - Basic                 39,679     39,190     39,579     39,177
                                 =========  =========  =========  =========

Fully diluted earnings per
 common share                    $    0.20  $    0.02  $    0.64  $    0.55
                                 =========  =========  =========  =========
Weighted average of common
outstanding - Diluted               40,450     40,330     40,458     40,536
                                 =========  =========  =========  =========

Cash dividends declared per
 common share                    $    0.08  $    0.08  $    0.26  $    0.18
                                 =========  =========  =========  =========

                   (in thousands, except per share data)

                                                           As of
                                               September 30,   December 31,
ASSETS:                                             2012           2011
                                               -------------  -------------
Cash and cash equivalents                      $     365,675  $     229,685
Restricted cash and cash equivalents                  95,135         78,312
Fixed maturities, at fair value                        4,008          3,801
Equity securities, at fair value                      48,875         95,345
Prepaid reinsurance premiums                         248,899        243,095
Reinsurance recoverables                              80,800         85,706
Reinsurance receivable, net                           30,528         55,205
Premiums receivable, net                              56,044         45,828
Receivable from securities sold                        1,750          9,737
Other receivables                                      3,197          2,732
Property and equipment, net                            8,838          7,116
Deferred policy acquisition costs, net                18,019         12,996
Income taxes recoverable                                 406              -
Deferred income tax asset, net                        16,185         22,991
Other assets                                           1,553          1,477
                                               -------------  -------------
    Total assets                               $     979,912  $     894,026
                                               =============  =============

Unpaid losses and loss adjustment expenses     $     172,674  $     187,215
Unearned premiums                                    408,714        359,842
Advance premium                                       18,468         19,390
Accounts payable                                       4,252          4,314
Bank overdraft                                        29,198         25,485
Payable for securities purchased                       4,706          1,067
Reinsurance payable                                  123,934         87,497
Income taxes payable                                      23         12,740
Dividends payable to shareholders                      3,287              -
Other liabilities and accrued expenses                28,054         24,780
Long-term debt                                        20,588         21,691
                                               -------------  -------------
    Total liabilities                                813,898        744,021
                                               -------------  -------------

Cumulative convertible preferred stock, $.01
 par value                                                 1              1
  Authorized shares - 1,000
  Issued shares - 108
  Outstanding shares - 108
  Minimum liquidation preference, $2.66 per
Common stock, $.01 par value                             419            411
  Authorized shares - 55,000
  Issued shares - 41,889 and 41,100
  Outstanding shares - 40,871 and 40,082
  Treasury shares, at cost - 1,018                    (3,101)        (3,101)
Additional paid-in capital                            37,408         36,536
Retained earnings                                    131,287        116,158
                                               -------------  -------------
    Total stockholders' equity                       166,014        150,005
                                               -------------  -------------
    Total liabilities and stockholders' equity $     979,912  $     894,026
                                               =============  =============

Investor Contact:
Philip Kranz
Dresner Corporate Services
Email Contact

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