United Insurance Holdings Corp. today announced estimated current year catastrophe losses incurred during the first quarter ending March 31, 2021 of approximately $24 million before income taxes (approximately $19 million after tax), net of expected reinsurance recoveries. The Company’s first quarter catastrophe losses included claims from Winter Storm Uri, seven additional PCS catastrophe events and two non-PCS catastrophe events.
UPC Insurance also experienced a significant increase in litigated claims volume from Florida homeowners’ during the first quarter compared to prior periods, which led to actual loss reserve development exceeding our expectations across most accident years. As a result of higher-than-expected frequency of litigation in Florida, the Company intends to strengthen its reserves for unpaid loss and loss adjustment expenses on prior accident years by $30 million (approximately $24 million after tax) for the quarter ending March 31, 2021.
“We anticipated the unfavorable trend of litigated homeowners claims in Florida continuing in 2021, but the actual number of new lawsuits filed during the first quarter was extremely disappointing and requires us to re-estimate our ultimate loss liabilities due to the overall increase in loss severity,” said Brad Martz, President & CFO of UPC Insurance.