United reports $21m of Q2 cat losses, completes reorganization

Property and casualty insurance holding company United Insurance Holdings Corp. (UPC Insurance) has estimated that it incurred catastrophe losses of $21 million during the second quarter of 2022.

This figure is before income taxes and net of expected reinsurance recoveries, UPC explained, with the after tax figure estimated at $17 million.

The company also estimates adverse development on prior year losses incurred during Q2 of approximately $8 million before tax, or $6 million after tax, again net of reinsurance recoveries.

Additionally, UPC Insurance has confirmed the completion of a reorganization plan to consolidate its four Florida domiciled insurance carriers into two.

It plan, which it says will create a more efficient operating structure going forward, merges Family Security Insurance Company, Inc. into United Property & Casualty Insurance Company (United) with United being the surviving entity.

Journey Insurance Company (Journey) has also been merged into American Coastal Insurance Company with American Coastal Insurance Company being the surviving entity. As part of the merger, $30 million of Journey’s capital was redistributed to United.

Furthermore, UPC says that its cumulative loss position has resulted in the need for a valuation allowance on its deferred tax assets.

The company estimates the valuation allowance for Q2 to be approximately $59 million which will decrease net earnings by approximately $44 million.

The Board of UPC Insurance recently disclosed that it is in the process of undertaking a review of the firm’s strategic and capital raising alternatives, which could lead to a sale or merger.