FORT LAUDERDALE, FL–(Marketwire – Mar 26, 2012) – Universal Insurance Holdings, Inc. (the Company or Universal) (NYSE Amex: UVE), a vertically integrated insurance holding company, reported net income of $20.1 million, or $0.50 per diluted share, for the full year of 2011, compared to $37.0 million, or $0.91 per diluted share, for the full year of 2010. For the fourth quarter of 2011, the Company reported a net loss of $2.3 million, or $0.06 per diluted share, compared to net income of $6.2 million, or $0.15 per diluted share, for the same period in 2010.

Full-Year 2011 Results
For the full year of 2011, the Company’s net income and diluted earnings per share declined $16.9 million and $0.41, respectively, compared to the full year of 2010. The decline is primarily attributable to net losses in the Company’s investment portfolio recorded during 2011 compared to net gains recorded in the Company’s investment portfolio in 2010. Meanwhile, the Company’s net premiums earned improved in 2011, as an increase in premium rates occurring in the beginning of 2011 and the latter part of 2009 mitigated somewhat the negative effect of wind mitigation credits. The improvement in net premiums earned in 2011 outpaced the increase in operating costs and expenses, which contributed positively to results.

During 2011, the performance of the Company’s investment portfolio reduced income before income taxes by $14.5 million. During 2010, the performance of the Company’s investment portfolio contributed $30.6 million to income before income taxes. The net losses in the Company’s investment portfolio during 2011 reflect a particularly steep decline in the value of the equity securities holdings within the Company’s investment portfolio occurring mostly during the second half of the year ended December 31, 2011.

Net premiums earned increased 16.7 percent for the full year of 2011, compared to the same period of 2010, primarily a result of the rate increases which became effective during the first quarter of 2011 and in the latter part of 2009, as well as an increase in the average number of policies in-force generated by the Company’s agent network year-over-year. Meanwhile, full-year 2011 operating costs and expenses were higher compared to the full year of 2010, as losses and loss adjustment expenses (LAE) increased 9.7 percent and general and administrative expenses increased 5.5 percent. The increase in losses and LAE is due to additional servicing required by the growth in the average number of policies in-force. Despite the increase, the net loss and LAE ratio improved to 62.5 percent during the 2011 period compared to 66.5 percent for 2010. This improvement is the result of a proportionately greater amount of increase in premiums earned relative to the increase in losses and LAE, driven primarily by the premium rate increases effective during the first quarter of 2011 and the latter part of 2009. General and administrative expenses increased for the full year of 2011 compared to the same period in 2010, due primarily to an increase in the amount of expenses related to policy acquisition costs, net of ceding commissions, the absence, during the 2011 period, of credits from the recovery of FIGA assessments which were recorded during the 2010 period, and increases in insurance department fees and legal fees related to corporate matters. These increases were partially offset by decreases in performance-based incentive bonus accruals which are based on measures of income before income taxes. There were also decreases in stock-based compensation, bad debt expense and equipment expense.

At December 31, 2011, stockholders’ equity was $150.0 million compared to $156.9 million at September 30, 2011, and $139.8 million at December 31, 2010.

Fourth-Quarter 2011 Results
Net income and diluted earnings per share declined approximately $8.5 million and $0.21, respectively, in the 2011 fourth quarter compared to the same period in the previous year. Notwithstanding an increase in net premiums earned, the Company’s profitability decreased primarily as a result of the performance of the Company’s investment portfolio during the 2011 fourth quarter, compared to the same period of 2010. Additionally, the Company had higher losses and LAE, and its profitability continued to be moderated by state-mandated wind mitigation credits in Florida.

For the fourth quarter of 2011, the performance of the Company’s investment portfolio reduced income before income taxes by $3.6 million. For the fourth quarter of 2010, the performance of the Company’s investment portfolio contributed $11.6 million to income before income taxes. The net losses in the Company’s investment portfolio during the fourth quarter of 2011 reflect a decline in the value of the equity securities holdings within the Company’s investment portfolio.

Homeowners and dwelling fire insurance policies serviced by Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), the Company’s wholly-owned insurance company subsidiaries, and the related direct premiums written, rose during the fourth quarter of 2011 compared to the same period of 2010. The premium rate increase of 14.9 percent statewide for UPCIC’s homeowners insurance program within the state of Florida announced in February 2011 continues to flow through UPCIC’s book of business. The effective dates for this rate increase were February 7, 2011, for new business and March 28, 2011, for renewal business. UPCIC expects the approved premium rate increase to continue to have a favorable effect on premiums written and earned in future months, as new and renewal policies are written at the higher rates.

During the 2011 fourth quarter, the Company’s insurance company subsidiaries’ policy count continued to grow on a year-over-year basis. At December 31, 2011, the Company’s insurance company subsidiaries serviced approximately 593,000 homeowners and dwelling fire insurance policies, a nominal decline from approximately 595,000 policies at September 30, 2011, and an increase from approximately 584,000 policies at December 31, 2010. Of these, UPCIC had approximately 14,400 policies totaling approximately $16.6 million of in-force premiums at December 31, 2011, in North Carolina, South Carolina, Hawaii and Georgia, combined.

Net premiums earned grew 10.4 percent in the fourth quarter of 2011 compared to the same quarter in 2010, primarily as a result of an increase in the number of policies written generated by the Company’s insurance company subsidiaries’ agent network as well as from rate increases, which became effective in February and March of 2011, and in the latter part of 2009.

Operating costs and expenses for the fourth quarter of 2011 were higher compared to the fourth quarter of last year, as losses and LAE increased 20.9 percent. Meanwhile, general and administrative expenses decreased 6.9 percent despite growth in policy count on a year-over-year basis. The loss and LAE ratio for the fourth quarter of 2011 was 82.8 percent compared to 75.6 percent for the same period in 2010. This increase reflects a relatively greater amount of strengthening of the unpaid loss and LAE reserves recorded in the fourth quarter of 2011. General and administrative expenses decreased for the quarter ended December 31, 2011, compared to the same period in 2010, due primarily to decreases in the amount of expenses related to policy acquisition costs, net of ceding commissions, and the amount of performance-based incentive bonus accruals. These decreases were partially offset by increases in stock-based compensation, bad debt expense, and the absence, during the 2011 period, of credits from the recovery of FIGA assessments which were recorded during the 2010 period.

Investment Portfolio Update
For the fourth quarter of 2011, the results of the performance of the Company’s investment portfolio reduced income before income taxes by $3.6 million. During the same period in 2010, the results of the performance of the Company’s investment portfolio contributed $11.6 million to income before income taxes. The net losses in the Company’s investment portfolio during the fourth quarter of 2011 reflect a decline in the value of the equity securities holdings within the Company’s investment portfolio.

As of December 31, 2011, the Company’s investment securities, at fair value, totaled $99.1 million, compared to $153.5 million at September 30, 2011. At December 31, 2011, 96 percent of the investment securities, at fair value, were in equity securities and 4 percent were in debt securities.

Cash Dividends
On December 5, 2011, the Company announced a year-end cash dividend of $0.14 per share on its common stock. The dividend was paid on December 28, 2011, to shareholders of record on December 21, 2011. In total $0.32 per share in cash dividends were paid in 2011.

Also, on February 23, 2012, the Company announced a cash dividend of $0.10 per share on its common stock. The dividend is payable on April 6, 2012, to shareholders of record on March 28, 2012.

UPCIC Florida Premium Rate Update
On January 11, 2012, UPCIC announced that it received approval for premium rate increases for its homeowners and dwelling fire programs within the State of Florida. The premium rate increases, which will average approximately 14.9 percent statewide for its homeowners program and 8.8 percent statewide for its dwelling fire program, were approved by the Florida Office of Insurance Regulation (OIR). The effective dates for both of the premium rate increases are January 9, 2012, for new business and February 28, 2012, for renewal business.

About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc. is a vertically integrated insurance holding company which, through its subsidiaries, covers substantially all aspects of insurance underwriting, distribution, claims processing and exposure management. 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 and Georgia. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly owned subsidiary, currently writes homeowners multi-peril and inland marine 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.