Universal Insurance Holdings reported second-quarter net income available to common stockholders of $59.2 million, up 68.7% from $35.1 million a year earlier, as the Florida-based insurer credited state litigation reforms for a sharply improved loss ratio.
The company's net loss ratio fell 7.5 percentage points year-over-year to 64.8%, driving a combined ratio of 91.6%, down 6.2 points. Direct premiums written rose 4.1% to $621.3 million, split between 0.8% growth in Florida and 14.4% growth across other states - a split that points to a company still banking its core profitability on Florida's now-stabilized market while pursuing most of its new growth elsewhere, a pattern consistent with an insurer confident enough in Florida's reformed legal environment to hold that book steady while diversifying its expansion risk outside the state.
Chief executive officer Stephen J. Donaghy attributed the improvement to Florida's 2022-2023 legislative reforms. "The favorable claims and litigation trends in our results are a direct product of Florida's legislative reforms," he said. "Thanks to the efforts of the Governor, the Legislature, and the OIR, the Florida homeowners insurance market has stabilized and now operates much more like the rest of the country. Our litigation inventory is back down to levels that preceded Florida's litigation crisis, and the impact of pre-reform claims practices is behind us. As a result, we believe our aggregate reserves provide a meaningful margin above expected ultimate losses."
Donaghy's comments align with independent state data. Florida's share of nationwide homeowners insurance lawsuits dropped from 79% in 2020 to 41% in 2025, according to the Florida Office of Insurance Regulation's July 2026 Property Insurance Stability Report. The state's domestic property insurers posted a pooled combined ratio of 83% in 2025, the lowest in more than a decade.
Separately, the American Property Casualty Insurance Association found homeowners insurance litigation in Florida fell nearly 50% in the 18 months following the reforms, with consumers seeing an average 14.5% reduction in insurance costs compared with what would have occurred without the changes.
Shares of Universal jumped 10.43% to $41.61 following the release. Adjusted earnings beat the Zacks Consensus Estimate of $1.43 per share by 28.7%, while revenue of $427 million topped the consensus estimate of $382 million.
Universal is not the only Florida-focused insurer reporting strong results. HCI Group, the Tampa-based parent of Homeowners Choice, reported first-quarter 2026 pre-tax income of $115 million and diluted earnings per share of $5.45, compared with $100 million and $5.35, respectively, a year earlier. The company also continued its share repurchase program, buying back $17.5 million of stock during the quarter. HCI's second-quarter results are due Aug. 6.
Universal's ceded premium ratio declined to 30.8% from 31.2%, linked to a new reinsurance program effective June 1, 2026. Book value per share rose 39.7% year-over-year to $22.89.
During the quarter, Universal repurchased roughly 122,000 shares for $4.5 million, completing $11.39 million of share repurchases under its January 2026 buyback program, and leaving about $8.6 million under its buyback authorization. The board declared a quarterly dividend of $0.16 per share, payable August 7 to shareholders of record as of July 31. Taken together with the HCI comparison above, the capital returns underway at both companies reflect the same underlying confidence: two of Florida's largest domestic insurers now generating enough surplus capital to fund buybacks and dividends is itself a market signal that the reform-driven turnaround Donaghy describes is being treated as durable, not a single-quarter reprieve.
