Hello, and welcome to the United Insurance Holdings Corp. First Quarter 2023 Financial Results Conference Call and Webcast. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Karin Daly, Investor Relations with The Equity Group. Please go ahead, Karin.

Thank you, Kevin, and good afternoon, everyone. United Insurance Holdings Corp. has also made this broadcast available on its website at www.upcinsurance.com. A replay will be available for approximately 30 days following the call. Additionally, you can find copies of UIHC's earnings release and presentation in the Investors section of the company's website. Speaking today will be Chairman of the Board and Chief Executive Officer R. Daniel Peed, and President and Chief Financial Officer, Bennett Bradford Martz. On behalf of the company, I'd like to note that statements made during this call that are not historical facts are forward-looking statements. The company believes these statements are based on reasonable estimates, assumptions, and plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause actual results to differ materially may be found in the company's filings with the U.S. Securities and Exchange Commission in the Risk Factors section in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and except as required by applicable law, the company undertakes no obligation to update or revise any forward-looking statements. With that, it's my pleasure to turn the call over to Mr. Daniel Peed. Dan, you may begin.

Thanks, Karin. Hello, and thanks for joining us on our first quarter earnings call. I'm Dan Peed, Chairman and CEO of United Insurance Holdings Corp. I plan to overview the activities from the first quarter, including touching on the operating results in our continuing operations and specifically, our commercial lines segment. I'll also comment on our reinsurance placement and then Brad Martz will expand on the financial results for the first quarter. Over the last two years, we've been exiting our personal lines business written by UPC Insurance Company. This eventually culminated in receivership of United P&C Insurance Company on February 27. We are working diligently with the Department of Financial Services to support policyholders and complete the separation of UPC Insurance Company. The deconsolidation of UPC as of the effective date of February 27 drives some extreme numbers such as the net income of $260 million in our first quarter financial results. However, if you focus on the results of continuing operations as well as the results of our commercial lines portfolio, you'll get a better picture of our current and future business. First, it's worth noting that we do believe that the legislative changes made in May and December of last year will prove to be an effective mitigation of some of the excessive litigation issues in Florida over the last half dozen years. The pre-suit notification of intent to litigate, the time to report reduced to one year, the elimination of the one-way attorney fees and the assignment of benefits, as well as other changes, will work their way through the system to reduce loss costs and subsequently insurance premium rates over time. Industry estimates seem to suggest that these reductions will be approximately a 25% reduction in loss rates. However, it will take some time for these changes to work their way through the system, but they do appear to have mitigated some of the negative sentiment from investors and reinsurers surrounding the future Florida exposure. Back to our first quarter results. As mentioned, the most useful numbers reported in the first quarter are our results of continuing operations and specifically the commercial lines segment. For the first quarter, continuing operations pretax income was approximately $40 million, with gross written premium up 31% year-over-year and net earned premium up 51% year-over-year. For the commercial lines segment, pretax income was approximately $39 million, driven by gross written premiums that were up 38% year-over-year; a net loss ratio of 22% and favorable development of 3.5%. The commercial lines combined ratio was 53% with an underlying combined ratio of 54%, demonstrating the strong underlying profitability produced by the commercial lines portfolio. On the underwriting side, our first-quarter retention rate was 83%. Our probable maximum loss exposure is down 6% year-to-date. Valuations are improving materially with the portfolio average valuation up 21% year-over-year. Turning to our June 1 core cat reinsurance program, the market has been supportive with capacity, although risk-adjusted rate increases are up as expected. For American Coastal, we are effectively done with over 100% of the limit authorized and the structure outlined in our investor supplement. This creates first event hurricane protection exceeding the 160-year return period on a first event basis. Also, with our American Coastal footprint limited to Florida, we will have significantly reduced frequency exposure. Reinsurance includes two cornerstone quota share partners. It is important to point out that our FHCF and our Florida capacity sit much higher in the structure than typical Florida residential books and provides greater than 60% of American Coastal's first event limits, which dilutes the impact of private market rate increases. Our ACIC occurrence retention is expected to be $10 million, although we expect to modestly expand the group retention through the use of our captive. In conclusion, the Florida residential cat market remains extremely hard. It will take some time for the reinsurers and investors to get comfortable with the exposures and challenges that Florida offers. While this creates challenges in our reinsurance placement, it also creates an excellent opportunity for both our reinsurers and American Coastal, which has the number one market share for admitted commercial residential exposure in Florida. I expect the market to remain hard for both the near and intermediate terms. With that, I'll turn it over to Brad Martz.

Thank you, Dan, and hello. This is Brad Martz, the President and CFO of UIHC. I'm pleased to review our financial results but encourage everyone to review the company's press release, investor presentation, and forms 10-Q and K for more information regarding our performance. Page 3 of our investor presentation supplement provides a summary of the quarter ending March 31, 2023, which included GAAP net income of $260.9 million or $5.99 a share compared to a net loss of $33.2 million or $0.77 a share last year. This included a non-recurring gain from discontinued operations of $230.3 million or $5.29 a share resulting from the deconsolidation of our former affiliate, United Property & Casualty Insurance Company. Last year, we did not have discontinued operations, so certain amounts for 2022 have been recast, consistent with the disclosure requirements for discontinued operations that helped improve comparability between the prior year. Most meaningful results this period, as Dan mentioned, is the earnings from continuing operations before tax of $40.4 million. That compared favorably to $5.6 million last year, an increase of approximately 619% year-over-year. After tax, net income from continuing operations was $30.5 million or $0.78 a share, which also compared favorably to $4.6 million or $0.11 a share a year ago. Page 4 of our investor presentation provides a reconciliation of net income to core income, which is a non-GAAP measure we believe is the best metric of comparability between periods by excluding gains and losses from investments in discontinued operations as well as non-cash amortization of intangible assets. Core income for the first quarter 2023 was $30.9 million or $0.71 a share compared to only $6 million or $0.14 a share last year. Our combined ratio dropped to 70.5%, a significant improvement from over 191% last year. In the current year, catastrophe losses of $3.1 million were offset by $3.2 million of favorable prior year reserve development, resulting in an underlying combined ratio for our group of 70.6%, compared to 185.6% last year. Page 5 of our investor presentation provides a breakdown of our current year results against the recast 2022 amounts, which show the impact of other revenue earned by our operating affiliates, United Insurance Management and Skyway Claims Services that is mostly nonrecurring in nature, and the amounts related to UPC no longer being eliminated in UIHC's consolidated financial statements. Page 6 of our investor presentation breaks down our results by segment with $39 million of pretax profit from commercial lines, $4.6 million from personal lines, which is reduced by a $3.2 million pretax loss primarily related to interest expense. We also call out the personal lines segment's other revenue here because it's not included in the expense or combined ratios for the personal lines segment, making those ratios less useful in the current period. Since most of this is related to UPC, we expect the management fees earned by United Insurance Management as other revenue in personal lines to decline in future periods. But operating expenses associated with that revenue will also follow suit albeit at a slower rate as services being provided to support UPC's runoff wind down over time. Page 7 of our investor presentation provides some balance sheet highlights that as of March 31, 2023, included stockholders' equity of $83.5 million or $1.93 per share. Unrealized losses on our bond portfolio included in accumulated other comprehensive income or loss of $25.6 million or $0.59 a share, indicating an underlying book value excluding those unrealized losses of $2.52 a share. Cash and invested assets totaled nearly $373 million with total assets of over $1.44 billion. The largest component of UIHC's total assets includes over $792 million of reinsurance recoverable. Included in reinsurance recoverable is approximately $38.1 million of reinsurance recovered by UPC and not yet paid to American Coastal Insurance Company. This amount increased to approximately $43 million during the second quarter due to required reinsurance premium payments made by American Coastal on behalf of our former affiliate UPC. However, management and the Florida Department of Financial Services see an opportunity to settle all balances due to American Coastal via the realization of certain deferred tax assets. UPC holds significant net operating loss carryforwards that are of no value to UPC on a stand-alone basis. However, UIHC has the opportunity, subject to certain conditions, to utilize UPC's net operating losses and create a win-win scenario. Accordingly, UIHC and the Florida Department of Financial Services continue to work towards a fair and equitable solution we believe will result in all amounts due to American Coastal being fully collected over time. While we believe the risk of this not occurring is remote, the probability isn't zero percent either. UIHC intends to disclose the details of our proposed solution with the Florida Department of Financial Services in a Form 8-K filing on or before the date our Form 10-Q for the current period is filed. Pages 8 and 9 of our investor presentation show the projected 2023, 2024 catastrophe reinsurance program details for both American Coastal and Interboro Insurance Company. As Dan mentioned, ACIC is projecting a $10 million retention in a program exhaustion point of over $1.1 billion, which is approximately the 164-year return period using the AIR long-term with demand surge calculation. Reinstatement protection ensures ACIC would also have sufficient limit for a 50-year period second event followed by a one-in-100 first event. A portion of the overall capacity is expected to come in the form of quota share reinsurance from two highly rated reinsurers, which will have the benefit of decreasing net premium risk via more ceded premiums, which will be offset by ceding commission income that lowers statutory underwriting expenses and the statutory expense ratio that will help improve overall capital adequacy. Interboro Insurance Company is expected to maintain its $3 million retention and look very similar to prior years, with an exhaustion point of $85 million or approximately the one and 139-year return period also using AIR long-term with demand surge. It also includes reinstatement protection for multiple events, similar to American Coastal. As Dan mentioned, we are substantially complete with the 61 placement for American Coastal, having secured all the needed capacity from the private market on fair and reasonable terms. But we are still working on finalizing the renewal of Interboro and allocation of lines to reinsurers, including the possible participation of our captive UPC Re. We expect to issue a Form 8-K filing in early June of 2023 once all the details of our catastrophe reinsurance program renewals are completed. In conclusion, management believes we have substantially rectified the going concern opinion expressed in the company's Form 10-K for 2022, and we are cautiously optimistic regarding our ability to demonstrate significant improvements in UIHC's financial performance during the remainder of 2023. That completes our prepared remarks, and we thank you for your continued interest in UIHC.