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Amid growing concerns about the health of Florida’s property insurers, the state’s largest carrier posted a somewhat mixed bag of financial results for the first quarter of 2022. But the company said it has taken big steps to reduce exposure and expenses.

Universal Insurance Holdings, the parent company of Universal Property & Casualty Insurance Co., said in its latest financial information that its combined ratio had dropped sharply compared to the end of 2021, to 97.9%. But the ratio was up slightly compared to this time last year, the publicly traded company reported.

Net income for Q1 2022 was $17 million, down from $26 million in the first quarter last year, but much stronger than the $48 million loss reported at the end of last year. Total revenue increased from the first quarter of 2021, but was down a bit from the final quarter of 2021.

“We reported a 16.9% annualized ROE despite the challenging external environment, which is a testament to the strength and resilience of our business,” CEO Stephen Donaghy said in a statement posted Thursday.

Net investment income for the first quarter was $4 million, up slightly from the end of 2021 and significantly higher than in the first quarter last year.

Direct premiums written fell slightly from Q4 2021 but were up 8.5% from this time last year, the financial report shows. That significantly outpaced a 6.1% decline in policies in force “as meaningful rate increases benefited premium volumes,” the CEO said.

Donaghy said that in addition to raising rates, the company has shed policies in “less profitable geographies,” tightened underwriting criteria and renegotiated agencies’ commission rates. The number of policies in force has fallen significantly, from 976,250 in March 2021 to 916,745 at the end of March 2022.

Universal is still slightly ahead of the state-backed Citizens Property Insurance Corp. in the number of policies it holds – but probably not for long. At the end of March this year, Citizens reported some 817,926 policies in force, but officials have said that number is expected to top 1 million by year’s end.

“Given our strong capital position, the profitability of our business and the steps we continue to take to improve results, we believe we stand out favorably as reinsurers increasingly differentiate amongst cedants in the current market,” Donaghy said.

TOPICS FLORIDA PROPERTY CASUALTY