Hello, and welcome to the United Insurance Holdings Corp. Q1 conference call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question- and- answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Adam Prior with The Equity Group. Please go ahead. Thanks, Kevin, and good afternoon, everyone. Thank you for joining us. You can find copies of UPC's earnings release today at www.upcinsurance.com in the investor relations section. In addition, the company has made an accompanying presentation available on its website. You're also welcome to contact our office at 212-836-9606, and I'd be happy to send you a copy. In addition, UPC Insurance has made this broadcast available on its website as well. Before we get started, I'd like to read the following statement on behalf of the company. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of the federal securities laws, including statements relating to trends in the company's operations and financial results and the business and the products of the company and its subsidiaries. Actual results from UPC may differ materially from those results anticipated in these forward-looking statements as a result of risks and uncertainties, including those described from time to time in UPC's filings with the U.S. Securities and Exchange Commission. UPC specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. With that, I'd now like to turn the call over to Mr. Dan Peed, UPC's Chief Executive Officer. Please go ahead, Dan. Hello, thanks for joining us on our first quarter earnings call. I'm Dan Peed, Chairman and CEO of UPC. I plan to offer an overview, and then Brad Martz will go over specific numbers, and then we'll take some questions. The first quarter yielded an underlying combined ratio of 90.4%, which is a slight improvement on a year-over-year basis. Our first quarter CATs, including Winter Storm Uri, caused a loss near $24 million net, somewhat better than planned and benefiting from a reduced AOP CAT retention in our 2021 reinsurance program. As such, we were set to deliver results for the first quarter on track with plan and in line with our expected transition year. However, due to unusual loss development patterns in February, and especially March, at the end of the first quarter, we did an analysis of our exposure to the accelerating litigation trends in Florida. This resulted in a $30 million strengthening of both CAT and non-CAT prior year reserves focused in our Florida personal lines exposures. This drove a disappointing after-tax core loss for the quarter of approximately $19.4 million. Subsequent to closing the quarter, we are very encouraged with last Friday's Florida legislative changes and believe that they will help to mitigate the accelerating litigation experienced in Florida. Given our substantial exposure to Florida, we believe this will result in significant improvements for UPC and will make a material difference to our ultimate losses incurred in Florida while allowing UPC to keep the promise and stand strong for our investors, business partners, and policyholders. As mentioned above, while our underlying combined ratio improved slightly year-over-year to 90.4%, we need to target the low 80s. To drive an underwriting profit and continue expanding our underlying margin, we need to continue driving up revenue and driving down loss and reinsurance costs through risk selection and exposure management. We're making good progress. For revenue, our rate increases are continuing with a 10.4% rate increase achieved year to date on personal lines renewal business and nearly 19% on personal lines new business. We anticipate the hardening rates will continue and renewal business rate increases to even accelerate. We have filed rate increases in Florida, Texas, South Carolina, North Carolina, Louisiana, and New York, averaging nearly 15%. Renewal retention rates remain strong. We have curbed new business dramatically as part of our exposure management plan. For exposure management, we are ahead of pace to reduce by 13% our pooled PML by September 30 on a year-over-year basis, which will result in over $300 million less reinsurance limit need. This takes a lot of pressure off our June 1st catastrophe reinsurance placement. To date, we expect to finish our placement soon, and as of today, we are overlined on our core CAT placement. The program includes a significantly reduced occurrence and aggregate retention for hurricane exposure to the pooled companies of at most $25 million per occurrence for first and second events and less than $70 million in the aggregate. This retention level, when applied against the 2020 hurricane season, would've yielded about 1/3 of the actual $208 million retention last year. Our commercial lines business fared well, and results are outlined in our investor supplement, which can be found on UPC's website. American Coastal continues with the number one market share of admitted commercial residential in Florida and is writing in a very firm market. The newly legislated Citizens changes, which include the annual rate increase glide path, inclusion of the reinsurance cost to the 100-year, and the 20% keep out premium will positively impact terms for the Florida commercial residential space. We continue to be on track to roll out our Journey E&S platform and our direct-to-consumer technology product with Skyway Technologies, both planned for the second half of 2021. We will have more information on our plans for these platforms as we near rollout. As stated previously, we expect 2021 to be a transition year, but we remain well-positioned to continue expanding our underlying margin while also significantly cutting our net catastrophe ratios. We plan to take advantage of the accelerating rate increases and our opportunities in E&S and direct-to-consumer technology. The property cat market remains as hard as it has been in years, especially the Florida personal lines market. With that, I'll turn it over to Brad. Thank you, Dan, and hello. This is Brad Martz, the President and CFO of UPC Insurance. I'm pleased to review UPC's financial results, but also encourage everyone to review our press release, investor presentation, and Form 10-Q for more information regarding the company's performance. For the quarter ended March 31st, 2021, the company reported a GAAP net loss of $17.8 million, or $0.41 a share, compared to a loss of $12.7 million, or $0.30 per share last year. Our core loss of $19.4 million, or $0.45 per share, represented a $28.5 million decline from core income of $9.1 million, or $0.21 a share in the first quarter last year. As Dan mentioned, the deterioration in core results was driven by a $30 million charge to strengthen loss reserves due to higher-than-expected prior year loss development. This irregular loss development deviated from historical patterns in February and March due to higher frequency of litigation and a rise in severity fueled by higher material costs. This trend continued in April and was factored into our re-estimation of ultimate loss liabilities at quarter end. Page six of our investor presentation paints a nice picture of the litigation trends we've seen since 2017 and why legislative changes in Florida were needed. We applaud every leader in Florida who helped make that happen. Assuming these changes become law on or about July 1st, I believe it's a game changer and should have a positive impact on future results over time. Our GAAP and core losses also included $24 million or $0.44 a share of current year catastrophe losses consistent with our pre-announcement. Winter Storm Uri was approximately $16 million, with the remaining $8 million stemming from nine smaller cat events during the first quarter. Gross premiums written for the quarter decreased $23.5 million, or 7% from a year ago, driven primarily by a $21 million or 9.4% decline in personal lines, consistent with our strategy to de-risk and reshape our homeowners' insurance risk portfolio. Commercial premium production was down slightly due to lower assumed E&S premiums written of $19 million, which was offset by strong premium growth in American Coastal's admitted commercial residential portfolio of $16.5 million, or up 18% year-over-year, driven by higher rates. Ceded earned premiums were $210.7 million, an increase of $57.7 million, or approximately 38% year-over-year, due to more business being ceded via our quota share reinsurance programs. Other items included in total revenue during the first quarter included $5.1 million of fee income related to our renewal rights transaction in the Northeast that was completed in January, unrealized gains from equity securities of $2.6 million and investment income of $3.6 million, which declines $3.3 million or 48% from the prior year due to lower yields and dividends from equities. UPC's first quarter net loss and Loss Adjustment Expense was $115.8 million, an increase of $12.9 million, or 12.6% year-over-year. Net retained cat losses added over 16 points, the prior year reserve development added over 20 points to our net loss and combined ratio. Excluding these two items, the underlying loss and LAE was down, or was $62 million, down $24.8 million, or 29% year-over-year. This produced an underlying gross loss ratio of 17.4%, which improved nearly eight points compared to 25.2% a year ago, due primarily to higher ceded losses. Our underlying net loss ratio of 42.5% improved approximately three points from 45.4% in the first quarter last year, which is a better baseline for comparison this period since it includes both ceded premiums and losses. UPC's operating expenses were $69.9 million, a decrease of $17 million or 20% year-over-year. This decline was driven almost entirely by higher ceding commission income in the current quarter, which is reflected in lower acquisition costs. Including ceding commissions, total operating expenses increased roughly $1.7 million year-over-year. Our gross expense ratio 19.6%-25.6%, including the benefit of ceding commissions. In contrast, our net expense ratio increased 2.6 points to 47.9%, inclusive of reinsurance costs. Speaking of reinsurance, our team made exceptional progress on renewing our core catastrophe reinsurance program that will become effective June 1st, 2021. I'm happy to report we've secured commitments from our reinsurance partners in excess of the total limit being sought and are now in the process of determining final allocation of lines. We're able to retain our aggregate cascading structure, which we believe provides superior protection against risk of ruin, and the risk-adjusted cost increase is likely to be in the mid-single digits. It's not finalized yet because we are still evaluating various options related to reducing our occurrence and aggregate retention. As Dan mentioned, the most significant change we expect to make this year is reducing potential earnings volatility in the second half of 2021 from named windstorms. We look forward to announcing all the details later this month once the terms are finalized. Wanted to express today that our program is in great shape and much improved compared to a year ago. On the balance sheet, UPC's total assets were $2.8 billion, including cash and investments of approximately $1.2 billion. The modified duration of our fixed income holdings increased to 4.4 years, our composite rating of A+ remained unchanged. GAAP equity attributable to UIHC stockholders declined approximately 9% from year-end to $359 million, with a book value per share of $8.32. Our unrestricted liquidity as a holding company was approximately $40 million at quarter end, we intend to utilize up to half of that liquidity for capital contributions to our pooled group of companies given the impact of our reserve charge had to statutory surplus this quarter. Finally, I would also like to preview our intent to refresh our currently stale dated shelf registration statement. We can't provide any additional details regarding future plans to access capital markets at this time, but we always want to be properly positioned to do so. Thanks for your valuable time and interest in our company, and that concludes our prepared remarks. We are now happy to take any questions. Thank you. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we poll for questions. Our first question today is coming from Greg Peters from Raymond James. Your line is now live. Good afternoon. I'd like to focus first on the litigation charts you put on page six, some of the commentary you had in other parts of your presentation. The legislation was passed, and it's going to go into effect on July 1st. There's two parts to the litigation question. First of all, there are other parties that have observed the litigation and observed what's been passed and have suggested that while it might help a little bit on the margin, it's not going to go far enough to fixing the problem. The second part of the litigation question would be if the trends accelerated in February, March, and it goes into effect July 1st, should we expect that chart that's on page six on the right-hand side of the page to go up even further as there's a rush to the filing date to get more claims filed? Will that result in a poor loss ratio in the second quarter? Thanks, Greg. This is Dan. We've heard a lot of feedback from the various parties on how effective the legislation will be. Of course, we did not get everything that was originally in the Senate Bill 76. There were a few key things that were removed. However, from the standpoint of just the dynamics of a claim and litigation, there's quite a bit of good stuff that puts more structure around that process and makes it more fair than it has been. Florida has been really difficult, and I think for people that are really close to the situation, they can see that there will be changes in how those claims are addressed. We feel like they will make a significant difference including the two-year timeframe as it applies to the tail and stuff like that. We have heard the various things, and the fact is that we won't really know until we see how this impacts some of the claims. Your second question, which is really what do we expect out of Q2, I would expect that we'll have something of a rush to the courthouse. Of course, when we're looking at our reserves, we're thinking about how that impacts the future. We would not project the Q2 number of litigation events to continue to grow into Q3 or Q4. Obviously, we would project that to come down dramatically. I don't think that that will have a negative impact on how we look at reserves at the end of Q2. Thank you for that answer. Just as a follow-up, I know you report the underlying number. I'm just curious about how meaningful the underlying number is in the context of the unfavorable reserve development. It would suggest the $29 million, or $29,769, you had understated the underlying loss ratio in prior quarters. Actually, the actual underlying loss ratio or underlying combined ratio is running higher than what you're reporting. Am I looking at that wrong? Greg, this is Brad. I'll try that one. I think the underlying number tends to help with comparability between periods by stripping out the noise. For example, if some of the data that emerged in the second half of the first quarter this year was available at year-end when we were making certain decisions, and that $30 million had been put into our year-end numbers, you'd be talking about a pretty significant improvement in the combined ratio, potentially. That's the sort of thing that distorts comparability, and the underlying metric is just one of many metrics. We think all are important, especially the combined ratio. Don't want to de-emphasize the combined whatsoever, but it is a way to help improve comparability. I got it. The last question would be on the reinsurance and risk-based capital. I guess with this first quarter results, your risk-based capital ratios deteriorated. Obviously, with the reinsurance, you have an opportunity to sort of reset that. How are you thinking about risk-based capital ratios as we go through the second quarter and the reinsurance renewals? Maybe you want to give us an update, because it all ties in with the first quarter result, where they are, et cetera. Yeah, we're comfortable with our capital position. We put a lot of work and thought into that. Obviously, at year-end, with some of the additional reinsurance protections we put in place, both at year-end and at January 1st with our all other perils catastrophe excess to loss program, which did help lower our retention of risk from Winter Storm Uri. We're going to do the same thing for our six one renewal. That is going to take pressure off of some of the earnings volatility that we've seen in recent years as we start to take more reasonable retentions of risk relative to our capital. The de-risking of the portfolio is really driving down our net premium risk, and that is the primary driver of required capital. Actual capital will obviously be determined by the frequency and severity of losses in the second half of the year. We're doing everything in our power to improve our risk portfolio and drive down our required capital. Got it. Thank you for the answers. Thank you. As a reminder, that's star one to be placed into question queue. Our next question today is coming from Elyse Greenspan from Wells Fargo. Your line is now live. Hi, thanks. My first question, I think, Dan, you started off your discussion by saying, right, you're targeting a low 80s on an underlying basis. Can you just give us a sense, kind of an update on a timeframe on when you guys would expect to get there? The way to get there is, of course, to drive down our loss costs and increase our revenue. We're on a run rate. We have achieved, let's say 10.2% or 10.4% rate increase looking backwards. We have filings. There's two filings in Florida for 14.7%, and I think Texas, Louisiana, South Carolina, North Carolina, and New York, which all average around 15%, in addition to the 10% that we achieved for last year. On the exposure management and on the loss cost side, we've taken a number of steps from the standpoint of underwriting and risk selection to try to eliminate what we call the bottom decile of our portfolio. Those steps will try to move that underlying combined ratio down into the low 80s. When is a good question. It moves around a little bit, obviously, with how quarters go. We would certainly hope that we're there by the end of this year, 2021. Okay, that's helpful. In terms of the color that you guys gave around bringing down your net cat costs, right? Just in reference to what we saw last year from the event. This is following the full placement of your reinsurance cover as you see it getting placed, right, as of June one. It sounds like you have all the commitments for the program, basically you expect that the loss, I think you said $70 million, right? That's basically after we go through the full renewal of the program? What we said was at the most $70 million. $25 million for the first and the second occurrences and a $70 million aggregate. We're working to potentially bring that down even further, and we hope to have news over the next couple of weeks. Yes, that would be applicable at June one. We have a separate, what we call all other perils cat tower that we placed at one one, which helped us in our Winter Storm Uri loss and gave us a net loss that was reduced from that outside of hurricane. That retention applies to named storms, the $25 million. Okay, that's helpful. How much, Brad, sorry, I think I might have missed some of your commentary on capital in your prepared remarks. I think you were talking about having to contribute some capital to pooled entities just because of the reserve charge in the quarter. Did you provide a number? Can you just kind of re-highlight to us what you said? Certainly. I had mentioned in my remarks that we had approximately $40 million of unrestricted cash on hand at the holdco level, and we intended to utilize up to half of that liquidity for contributions. Those have not been finalized yet in terms of exact amounts, but we do want to backfill the hole that was caused by the reserve charge that we feel was prudent and warranted given the loss development activity we saw. That's essentially what was communicated. Okay, great. A couple of quick numbers. One, I had heard from a reinsurer actually, that they said that even though it's more than three years out, that they're still seeing some adverse development on Irma. Have you guys seen your growth loss from that event move recently, like in the current quarter? Yes. We did reevaluate Irma at March 31st as well. Our gross loss increased to $150 million for Irma. From the end of last year?v That's correct. Okay. One last one. There's been some events in April, just in terms of some of the storms. I've heard some at the end of the month could be, I guess, of more significant losses. Is there anything that we should think about you guys in terms of April to date maybe having more or perhaps you're less exposed to some of the events that we've seen so far? Sure. Yeah, we can acknowledge some cat activity in April, but nothing out of the ordinary, and we don't have anything to pre-announce at this time. Okay. Thanks for the color. You're welcome. Thank you. Thank you. We've reached the end of our question- and- answer session. I'd like to turn the floor back over to management for any further or closing comments. Well, we just want to thank everybody for being here, and thanks again. Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.