I recently presented UIHC, post 7974. Ears suggested that it would be useful to compare it to UVE.
Both UIHC and UVE are property & casualty insurers originating in FL. They both still have most of their business in FL. They are both currently pursuing a strategy of geographic diversification outside FL.
As you may recall from my presentation of UIHC, it suffered significant claims in Q1 2015, leading to a collapse of EPS from 0.65 in Q1 2014 to 0.01 in Q1 2015. This came from their now significant exposure in the NE states and the fact that those states got hit by this winter’s highly unusual weather.
UVE did not have a big earnings miss in Q1 2015. This is because it had little exposure to the Northeastern US. Over 90% of UVE’s business is still in FL, though it is expanding outside it.
Revenue $MM
UIHC UVE
Level Growth Level Growth
2014 280 37% 369 23%
2013 208 59% 301 11%
2012 131 36% 270 19%
2011 96 226
TTM 295 27% 399 30%
Earnings per Diluted Share
UIHC UVE
Level Growth Level Growth
2014 2.05 63% 2.08 33%
2013 1.26 38% 1.56 108%
2012 0.91 18% 0.75 50%
2011 0.77 0.50
TTM 1.43 (13%) 2.31 39%
Other data
UIHC UVE
Mkt Cap $MM 363 927
P 16.61 26.24
PE (TTM) 11.62 11.36
PE (2014 EPS) 8.10 12.62
PEG (TTM) 0.29
PEG (2014 EPS) 0.13 0.38
P/B 1.64 4.54
Combnd Ratio (14) 81 66
Demotech Rating A A
Weiss Rating C D
% FL 72.9 91.1
The two companies are pretty similar. The biggest difference is that UVE is larger and slower growing than is UIHC. The larger size for UVE allows it to take better advantage of economies of scale, so its combined ratio is lower, at 66 vs UIHC’s 81 (recalling lower is better here). Back in 2011 and 2012, when UVE was roughly the size UIHC is now, it had a combined ratio of 80-85. Another difference is balance sheet strength. UIHC has a book value per share of 10.14 while UVE has a book value per share of 6.70. Presumably, this also explains the difference in the Weiss rating.