Good morning, ladies and gentlemen, and welcome to Universal's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer. Arash So

Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release and Universal's SEC filings, all of which are available on the Investors section of our website at universalinsuranceholdings.com and on the SEC's website. A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release and can also be found on Universal's website at universalinsuranceholdings.com. With that, I'll turn the call over to Steve.

Thanks, Arash. Good morning, everyone. In the quarter, we delivered a very strong 29.4% adjusted return on common equity. We are encouraged by favorable underwriting trends as the Florida market continues to improve, and we are optimistic as we look ahead. I'll turn it over to Frank to walk through our financial results. Frank?

Thanks, Steve. Good morning. Adjusted diluted earnings per common share was $1.23 compared to adjusted diluted earnings per common share of $1.18 in the prior year quarter. The higher adjusted diluted earnings per common share mostly stems from higher direct premiums earned, net investment income and commission revenue, partially offset by a higher ceded premium ratio. Core revenue of $400.9 million was up 5.7% year-over-year, with growth primarily stemming from higher net premiums earned, net investment income and commission revenue. Direct premiums written were $596.7 million, up 3.2% from the prior year quarter. The increase stems from 25.4% growth in other states, partially offset by a 2.5% decrease in Florida. Overall growth mostly reflects higher policies in force, higher rates and inflation adjustments across our multistate footprint. Direct premiums earned were $523.4 million, up 6.7% from the prior year quarter, reflecting direct premiums written growth over the last 12 months. Net premiums earned were $360.2 million, up 4.4% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned, partially offset by higher ceded premium ratio as described above. The net combined ratio was 97.8%, up 1.9 points compared to the prior year quarter. The increase reflects higher net loss and expense ratios. The 72.3% net loss ratio was up 1.7 points compared to the prior year quarter with the increase primarily reflecting a higher ceded premium ratio. The net expense was 25.5%, up 0.2 points compared to the prior year quarter, with the increase primarily driven by higher ceded premium ratio and higher policy acquisition costs associated with growth outside of Florida, partially offset by economies of scale. During the second quarter, the company repurchased approximately 287,000 shares at an aggregate cost of $7.4 million. The company's current share repurchase authorization program has approximately $15.2 million remaining. On July 9, 2025, the Board of Directors declared a quarterly cash dividend of $0.16 per common share, payable on August 8, 2025, to shareholders of record as of the close of business on August 1, 2025. With that, I'd like to ask the operator to open the line for questions.

[Operator Instructions] Our first question comes from Paul Newsome with Piper Sandler.

Could you give us a little bit more about the reinsurance ceding change and what's going on there just as the drivers?

So you have to appreciate that when you're comping over this particular quarter, you're looking at several different reinsurance programs that are earning in. Last year, the first 2 months, April and May, we were still earning in a program that included the RAP program, which was at no cost, and that was much lower than the cost to replace that. So this year, April and May was last year's program winding up plus the first month of this year's program. So it's really just comping off a different structured program.

A different question. You bought back some shares recently, maybe a review of kind of where you think you are from a capital perspective, including kind of how do you think about how we should measure it as an outsider.

Well, capital at the holding company is abundant. Naturally, we take opportunities to purchase shares when we believe that they're undervalued. We continue to do so when appropriate.

Okay. And then just a few thoughts on the competitive environment. There are concerns, I think, that we're seeing some companies that maybe not just so new, but some companies becoming more competitive in the environment, particularly in Florida, but maybe elsewhere as well. Do you think it's incrementally more competitive market today than it was last quarter or the quarter before?

Paul, this is Steve. I wouldn't say that it's a more competitive market. And we are not driven by the competition. We are driven by 25 years of experience in Florida. And as we've expanded into other states, we use our boots on the ground, our claims experience, et cetera, to really assess and understand where we want to write business and where it can be the most profitable for our shareholders. And I would say that we've recently opened up additional territories in Florida and feel good about the business that we're bringing in at this time across the state. But clearly, there are more competitors in Florida as well than there was a year ago or a quarter ago. But we don't see anybody with a real hungry appetite from a competitive perspective across the state. We see pockets of competition in Florida, but nothing dramatic across the entire state.

Our next question comes from Nic Iacoviello with Dowling & Partners.

Was there any net prior year development or claims handling benefits in the quarter? I'm assuming no, but just wanted to confirm.

It was negligible, Nic. Nothing to really speak of.

Okay. Great. And then just on the new reinsurance program. So I know we have 1 month of ceded premiums now with this Q2 result. But could you discuss the cost which wasn't disclosed this year maybe as a percentage of direct earned premium as you've done in years prior?

The cost year-over-year, this program that went into effect June 1 of '25 is not significantly different than what the cost was as a percentage of direct earned premium for the previous period, which we're very pleased with naturally, given the fact that we had 3 landfalling storms last year, which typically following those events, the price would go up significantly. And that's certainly an indication of the improvement in Florida marketplace.

I would now like to turn the call back over to Steve Donaghy for any closing remarks.

Thank you. I'd like to thank all of our associates, consumers, agents and our stakeholders for their continued support of Universal. Have a good day.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.