Q1 2020 Earnings Call
Ladies and.
Ladies and gentlemen, thank you for standing bar.
Welcome to the Universal Insurance Holdings first quarter 2020 result school.
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I would I like to hand, the conference over to your Speaker today, Vice President corporate strategy and Investor Relations Mr. Rob.
Sir please begin.
[music], Thank you and good morning, everyone.
Indoor discussion on our first quarter 2020 earnings results, which reported yesterday.
I told me today, Steve done he Chief Executive Officer, Jon Springer, President and Chief Risk Officer.
I think 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 our earnings presentation.
And you can use FCC filings all of which are available on the investor section of our website, a universal insurance holdings Dot com and on the Fccs website.
A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release with that Steve I'll turn it over to you.
[music], Thank you, Rob and good morning, everyone.
Thank you for joining us today.
As we mentioned in our release yesterday afternoon, the circumstances over the past few months and all of our communities I've been both difficult and inspiring.
Our Hearts go out to all those affected by the Kogan 19 pandemic.
We are inspired by the health care providers, the first responders the ingenuity of our communities businesses and governments.
We commenced business operations more than 20 years ago intent on protecting serving our consumers in their most critical time.
Some of the most challenging coastal areas in the United States for natural disasters.
We have remained hobby perficient steadfast in that commitment.
We ended this critical time, the position of strength with a debt to equity ratio less than 2%.
Currently accruing more reserves than at any point the company's history.
And with a highly experienced rapid response disaster team.
We're off to a good start and 2020 with solid first quarter results, including an annualized return on average equity of 16.1%.
And progress on our reinsurance renewals for June 1st.
And this dynamic environment, we continue to support our consumers whether they are shopping for new policies submitting claims refinancing or extending terms.
I'll, having substantially all of our employees in our rapid response virtual protocol.
When those last two points I would like to highlight the following.
First since March 15th we have extended favorable terms to consumers of all states upon request.
Secondly around the same mid March timeframe, we implemented our rapid response virtual protocol, which included outfitting employees with remote capabilities and enhancing our consumer outreach via virtual solutions.
In addition, we've accelerated the use of our virtual inspection software and trained an additional 100 employees on the application.
We have utilized various virtual tools to continue to attend appraisals mediation and deposition.
All of our continuous improvement training has been uninterrupted through the use of Microsoft team led by our learning and development organization.
Most importantly, we continue to accelerate the use of virtual desk adjusting when appropriate.
And for the claims that cannot be adjusted virtually we recognize the increased hardship place both on the consumer and our field staff.
So as an essential business, we have outfitted art adjusters with the appropriate personal protective equipment.
We believe we remain well positioned for 2020 and remain resolute in serving our consumers and creating value for our stakeholders.
So with that let me now turn it over to frame to walk through our financial results Frank.
Thank you Stephen good morning, everyone.
As a reminder, discussions today on adjusted operating income and adjusted EPS or on a non-GAAP basis, and exclude effects from unrealized and realized gains and losses on investments and extraordinary reinstatement premiums and related commissions.
Adjusted operating income also excludes interest expense.
Yes for the quarter was 61 cents on a GAAP basis, and 79 cents on a non-GAAP adjusted EPS basis.
Direct premiums written were up 15.7% for the quarter led by strong direct premium growth of 19% another states and 15% in Florida.
Net premiums earned were up 5.3% for the quarter, reflecting an increase in direct premiums earned offset by increased cost for reinsurance.
On the expense side, the combined ratio increased seven points for the quarter to 94.1% driven primarily by increased losses in connection with a continued diversification in the company's underlying business the states outside of Florida.
An increase in core loss pick for 2020.
An increase in prior year adverse development, partially offset by lower level of weather events and twentytwenty in a small reduction in the expense ratio.
Turning to services total services revenue increased 25.6% to 15.3 million for the quarter driven primarily by commission revenue earned on ceded premiums.
On our investment portfolio net investment income decreased 60.
Lease yields on cash and short term investments during the first quarter of 2020, when compared to the first quarter of 29 team.
The prior year also includes one time income benefits from a special dividend received.
Any one time reduction in investment expenses.
The company continually monitors the federal reserves actions, which has impacted effective yields on new fixed income and overnight cash purchases.
During March of this year as a result of the Cobiz 19 pandemic, we saw extreme instability in the fixed income market prior to the federal reserve, providing liquidity into that market.
As a result of the instability, we had a decline in the amount of unrealized gains in our fixed income portfolio, which affected the balance sheet only.
That said, we still ended the quarter with an overall unrealized gain in our fixed income portfolio of 15.4 million, which is further improved subsequent to the end of the first quarter.
To be clear the impact Cobiz 19 had during the first quarter on debt and equity markets affected our book value per share by approximately 45 cents made up of approximately 27 cents related to the balance sheet only impact from the decline in the amount of unrealized gains in our fixed.
Income portfolio with the remainder being attributable to the effective unrealized losses on our equity securities reflected in the piano and consequently and retained earnings.
With the exception to these factors our book value per share growth would have been enhanced in the quarter.
The credit rating on our fixed income Securities was eight plus at the end of the first quarter with the duration of 3.6 years, which we feel gives us a strong foundations or whether the current market conditions.
I realized losses on our equity securities were again, driven by market volatility related to the covert 19 pandemic, resulting in an under favorable outcome for the quarter.
In response to the pin debit the Board's investment company has approved measures to continue building or portfolios cash position to preserve capital for both risks and opportunities.
In regards to capital deployment during the first quarter the company repurchased approximately 312000 of Uva he shares at an aggregate cost of 6.6 million.
On April 16, 2020, the board of directors declared a quarterly cash dividend of 16 cents per share payable on may 21st 2020 to shareholders of record as of the close of business on May 14 2020.
Let me now I'll turn it over to John to walk through some additional specifics.
Thank you Frank and good morning, everyone.
As we've done every quarter since hurricane Hermine made landfall I would like to start with some additional color on past cat events.
Then talk briefly about one Q weather and lastly provide an update on our June one reinsurance placement efforts.
On past cat events, we continue to make progress Im resolving the remaining open claims and of course handling newly reported claims as quickly as possible.
In House claims and legal staff continue to deliver day in day out for our company and for a reinsurance partners as we approach the finish line on these cat events.
As a 331 hurricane Matthew in Florence, each were approaching single digit open claims and are very near the end.
Hurricane Michael had approximately 200 open claims and continues to be booked at the same 360 million is yearend.
On Hurricane Hermine.
Despite the fact that new claims continued to be reported throughout the first quarter, we still successfully reduced the remaining open claim count down to below 600.
As we prepare for the three year statute of limitation for filing new aroma claims we elected to add another 50 million of IB in order to this event.
This brings our booked ultimate to 1.4 or 5 billion at 331.
As a reminder, at this point in the lifecycle of hurricane or not the vast majority of any increase in ultimate is covered by the Florida Hurricane catastrophe Khan.
However, looking this level of additional IB in our did result in some net exposure as outlined in our release.
Turning now to one Q weather.
For the most part one Q whether for US was within plan. However, we continue to closely monitor to smaller cat events.
One occurring in mid January impacting us, primarily in Georgia and Alabama.
And the second occurring in early February and impacting us primarily in Florida and the Carolinas.
As noted in our release, we have added an additional $1 million to actually your 2020 losses as we monitor these events.
As a reinsurance update over the course of the past several months, we've met with nearly all of our reinsurance partners to discuss our upcoming June one reinsurance renewal.
As you might imagine.
Most of these meetings were forced to be conducted virtually but the reinsurance market overall was very receptive and appreciative of the time and effort put forth.
To be able to share our message and answer their questions directly.
As is our normal practice from a timing perspective, we have already begun securing the necessary catastrophe capacity to be effective at June 1st.
It goes without saying that the impacts of covert 19 are being felt by many of our long time reinsurance partners and we could not be more appreciative of their professionalism in the face of this challenge.
Well, we all might like to press pause on this reinsurance renewal that is unfortunately, not an option.
We will not be sharing any pricing specifics today as a negotiations are still in progress.
However, I do feel it important to provide a few high level comments on the overall status of our core first the that reinsurance tower for this year.
As we disclosed during our yearend earnings call with capacity already locked in via the Florida Hurricane catastrophe fun and multiyear deals we stood at over 75% of our desired core first event reinsurance tower complete.
The market pricing for the remaining capacity has already been sent into the worldwide catastrophe reinsurance market for its proper subscriptions.
And since last week.
We have already been receiving authorizations from our reinsurance partners for the June 120 20 program.
As of today the percentage complete is approaching 90%. So we're well on our way with that I'll turn it back to Rob.
Thanks, John I'd like to ask the operator to now open the line for questions.
Yes.
As a reminder to ask a question you will be to press star one on your telephone to withdraw your question press the pound cake again, that's star one of your telephone to ask a question. Please standby, while we've compiled the culinary roster.
Our first question comes on line a build from all of Dowling and partners. Your line is open.
Great. Thank you.
Just to start with the growth.
If we get a road show another quarter of strong topline growth can you just help us.
Let me think about what do you think has allowed you to be successful in growing the top line and.
And maybe can you help let's think about rate versus exposure growth.
Hey, Bill good morning.
I think I think the continued growth that we experience is a byproduct one of our organization.
Our commitment to.
Doing our own underwriting over the years.
Growing that book of business organically.
Ever since the company was founded without inorganic book of business that you thoughtfully underwrite you run the risk of taking on business that may not be rate adequate or fit within the the desires of our underwriting and reinsurance team.
To fill the goals of the company and further the relationships that you know relationship as an overused term in today's society, but I feel strongly that the relationships, we've built with our agent.
And our desire to solicit their help in growing our book of business.
Served us well and I still find that we're one of the few people online that allow the complete fulfillment of a buying double policy in our Clover business. So I think it's a it's a plethora of things that roll into it.
You know ultimately at the execution in the street really serves as well in that regard and it's something we've managed to.
No we do it really well in Florida, and we've been able to expand that into the other states that we serve <unk>.
Bands.
Great.
And you mentioned covert.
Can you just talked about.
The growth in.
Portion of your.
Your book and the success, you're having maybe relative to.
The non it's called non covered.
Some of your books I was trying to think of the magnet you know the contribution covert might have.
To the overall growth.
Well again I think the strategy that we implemented three years ago was something one to enter a new market be a leader in the direct to consumer channel and also have a position that we can protect.
Our growth should others March into the online space and the experience. We've garnered kind of leads us to have a system today that not only serves our consumers, but it's also really passed our underwriting team and others to make sure that large system are ultimately.
Adaptable to the online environment so.
No. One has corporate sits today it is our fastest growing agency and out of 10000 agents that are appointed with it.
And all of those people are located in one room servicing customers, where we have agency partners that have over 150 facility locations that are doing the same thing with a really really good people that help us everyday as well, but the the platform and the efficiencies that are built.
Into it.
Serves us well, we track our loss ratio, we track the spread of the business.
And it all has served us very well that's bard and I would also tell you build it.
The total that pandemic.
Continues we've seen a different type of consumer come into the the Clover net so to say it as people that may be at home in our are getting insurance builds in or trying to do some research online and we've been very pleased with the organic.
The organic nature of the lead since since the event and I've been able to help consumers, while they're at home asking questions about the policy.
Perfect.
And just staying on.
On the cobot topic I think in your press release, you talked about.
Rents are market homeowner is that from your perspective.
So the focus point for where you think hope it might impact you the most.
There's nothing I.
I'll try to that I guess that would concern you at all I'm just trying to make sure that I understand all the.
The different items.
Might impact universal rather well to make it the other insurance companies that we hear about in the press just trying to categorize the different maybe lines of business where.
You could have again, it won't be material, but.
Areas that you're you're looking at.
Yeah, Yeah built the great question and it's a question we cast our internal legal team with in early March as we kind of anticipated some of the event we didn't foresee that.
The the size of this event, but our internal legal team came back they did a solid Oh policy review word review, we don't see a lot of even in rental rental market and others that direct still damage, resulting from the pandemic, but we've got a small.
Double digit number of claims that have already been filed and many of them. After we talk to the consumer they understand that you know the exclusion for contaminant or communicable disease exclusion kind of eliminate.
Payments under that policy form so we're not we're not very far around in our first lap of the mile run, but we will continue to track it very very closely and.
Provide you updates as we go where where its a.
Applicable.
And these claims each were homeowner claims that were coming in and then people were.
Well there.
Yes, the virus under the homeowner policies that.
Is that true and.
You talked about policy already.
To your policies have.
Hi, rich exclusions or anything like that.
They have they have a series of exclusions relative to disease and contaminants Bill and I think you know we're all we always try to be considered of the people that call in you know, sometimes what people call in relative to Hey, I can't get the work do I have any coverage you know some of those are very easy answers it for us to provide because.
We don't provide coverage in many of those regard some people are concerned that that they their their home as additional people in it and is there coverage and cannot firewall claim for various reasons.
Reasons, and we try intend to those as politely as possible and thus far we haven't come across a request that merit.
Any reserve or considerations, thus far but not to say that in the future something couldn't come across that were we don't expect that we haven't thought of yet.
Okay.
Got it.
And then.
On the.
The IB an art.
You know ism is a more modest amount but.
For the past two years Q1 tends to have no development I was just wondering what you saw in Q1.
Relative to the review you did last quarter that had you add a little bit too, though I'd be an art grannies two points, but.
I mean any thoughts there would be helpful.
Oh, Yeah Bill. This is John those two points were primarily related to I'd be an hour on prior cat events.
So as we as we're monitoring aroma.
Approaching the statute of limitations, which is just a little over four months away.
Trying to pay close attention to that and do our best to make sure that that we have the appropriate I'd be an are set up.
For new claims that continue to come in on that event.
Got it.
Okay.
How come with the small increase.
For for.
How come there wasn't.
Any reinstatement premium included in the reconciliation because they thought as it.
You know if there is.
I guess, if it goes I think she it.
Wouldn't but I'm just trying to understand how come the earnings there wasn't any reinstatement premium even though you did we.
From a loss.
Yes, So we book what we did as we booked another 50 million of Oh fresh I'd be in our into aroma.
Bringing the total up to 1.45 billion.
So that that leaves us a booking to that level leaves us where what we have left.
For coverage would be a little over 1.3 billion of FHC f. limit at the 90% level.
And I think it's important I tried to say this on every call I think it's important that.
That listeners and readers understand that we do have that coverage amount 1.33 billion laughed at the 90% level and with the size of our claims and legal teams were able to handle these remaining claims and any potential new claims internally. So we'll have.
Minimal outside Ellie.
Got it okay. That's that's helpful.
Oh and then.
The cold feed kind of shutting down a lot of.
States.
It has impacted Florida I was wondering.
How has that affected litigation trend in.
The.
Aggressiveness of the trial bar to get.
Filed claims because as we talked about this quarter in past with a three year coming up as has it slowed it down at all and then if it has as we come out.
Yeah, we heard him.
Peering Governor just santarus talking about reopening the state as a state reopens.
Do you think litigation trends might change at all points.
The economy starts to open up any thoughts on how to think about.
The activity would be helpful.
Yes, Bill that's a broad question I'll do my best buy don't get to all the point don't hesitate to remind me of what I missed yeah. As we look at as we look at other state.
The litigation trends are less than what we've traditionally seen in Florida and that continues.
And within Florida, We case quite clearly has served us well that our claims that go to litigation continue to reduce.
Not by drastic amounts, but in a steady downward decline, which we're very pleased with relative to the current environment art, our entire legal team of over 150 people.
We're all available to work from home since we declared.
That was our intent on March 17.
And I I sit here today, we feel good because we're getting the more claims because we can and we don't see as much of an aggressive response.
On the trial bar since the pandemic has really taken hold.
As far as looking into the future I left my Crystal ball to out so we think optimistically, but we prepare pessimistically. So if we're doing the best we can and we hope that things continue on that pattern, but we feel pretty good about where we're at.
Case quite as good indication for us and future state of the business.
Well that piece of it.
Great. Thank you very much I think that's all I hope.
Hi, Thanks Bill basic.
Thank you next question comes from Tom shot of Piper Sandler Your line is open.
Hi, good morning, guys.
Good morning, Monica I was hoping we could talk about guidance you guys gave on the fourth quarter I'm sure you're under <unk> underlying loss ratio picked up a.
A few points year over year.
How do you guys feel in regards to the guidance that you guys gave in the fourth quarter.
Well a quarter end.
Yeah. Thanks, Tom we feel good about the guidance and we continue to stand behind it. We we were very thoughtful in our approach to issuing guidance for the first time and as we looked and contemplated we saw in the market that.
Was there for many people to withdraw their guidance for a host of very valid reason.
The key variables within our our model.
Continue to represent our ability to execute within a range provided and those variables are considerable and expensive and.
We sat and talked a lot about it and as we indicated when we issue the guidance if one of the large pillars or something would change we would revisit that with the market when we see it but as we sit here today, we feel good about it about the range and.
The variables that roll into that guidance continue to favorably for for our stakeholders.
Tom and this is Frank just a follow on to Steve's comments, when we created guys getting a year R gap IEC, yes, not reading U.P.S. are the same because we simply don't plan for unrealized gains and losses in reinstatement premium as well as realized gains and losses. So throughout the year as those things naturally occur which.
They did in the first quarter, there's the diversions. So I think it's fair to say that operating EPS guidance does not change the gap could be affected by those unforeseen.
Events.
Okay and then.
This relates to covert a you know various jurisdictions have been pushing for payment forgiveness and grace periods and whatnot does your expense ratio include any assumption for.
Bad debt related to the potential for that.
Yes, so we implemented that new accounting principle this quarter, a widely known as Cecil and for US. There are three broad categories, where we have credit exposure, we've got credit exposure to the extent to policyholders don't pay their premium we have credit exposure to the extent that we don't collect.
Monies that were due from our reinsurers and then finally inherently within our.
Fixed income portfolio, the debt securities present, us with with credit risk as well now I'll handle each one of those individually but back during.
The latter part or actually during 2019, we tested the Cecil model on the various parts of those that I just discussed to see what the potential impact would be and we found that in all instances they would be in material that being said, we did implemented and we put.
Some disclosures in our 10-Q.
Including an adjustment to the beginning retained earnings which is appropriate under these circumstances. So when you look at the premiums receivable.
Inherently in our business is a business model that includes collecting the vast majority of the premium before we earn that so when you look at our book of business, we have about $1.4 billion of enforce premium and yet we only have a receivable of about $65 billion from from agents.
Historically, our write off of those uncollectible amounts are somewhere between four and $500000 a year, obviously as we grow the incrementally grow with that growth and then the balance that we historically Kerry.
As an allowance for those receivables is somewhere around six or $700000. So we don't feel that the Cecil model has caused us to reevaluate that so we're continuing with that model.
So once again the agent bounces receivable not material under Cecil a and then secondly, the reinsurance recoverables reinsurance recoverables are collateralized by mounts either held in trust or letters of credit that we.
Gain or gather from a certain reinsurers. So we the vast majority of that is collateralized in our history Weve.
Not had an incident, where we'd had to write off or any sort of a uncollected amount from <unk> reinsurer. So.
Once again not material and we didn't put me a adjustments on the books in the first quarter for reinsurance Recoverables and then finally, the investment portfolio. The average credit quality of our investment portfolio is a plus.
And you know during this quarter during the Kogut pandemic ER and to date was only see seen three downgrades and it's just not material to our book of business. Obviously, we're going to continue to monitor that as a lot of the credit agencies or the rating agencies catch up with those.
But you know I mentioned before that we had done several calculations in anticipation of adopting this including looking at the unrealized loss balance that we had at 12 31 18.
June Thirtyth 12, 31 19.
And then again as a 331 of this year and none of those amounts calculated under the Cecil model exceeded a million dollars. So what we chose to do is based upon the calculation that will yield it as a 331, we decided to put up a stemming allowance for that.
Effective January one.
And that was just under $800000 and had an after tax effect on retained earnings of less than 600000. So as you can see for us clearly not material, but we will continue to monitor the credit quality of the investment portfolio and take appropriate actions and as Steve said to the extent that we see anything.
Arising yeah, we'll be out there are letting folks now.
Great appreciate it and then I've spoken we could.
Talk about working from home you know I'm sure you most of your employees or work from home right. Now is there any thoughts on how for some of those employees that might be permanent and you know I bring that up.
Knowing that a I think you guys have an office building under construction.
For future growth so.
Hoping for your thoughts on that topic.
Yes, we continue to work on the plan as it you know the Florida domestic carrier, we've always had a focus on disasters and preparations and.
You know standing at about 320 pages are business continuity plan disaster recovery plan had a whole lot of things.
Contemplated a pandemic and everybody working from home wasn't one of them. Fortunately, we managed to acquire a sufficient amount of laptops and outfitted.
I'd say over 98% of our associates with the ability to work from home, we modified our technology, where necessary. So that we could track production productivity.
And thus far all of our controls in place.
Over the metrics by which we run the company in our Associate force.
Have come through in an amazing fashion.
The the go forward plan is to really listen to the state officials see what is necessary and then adapt to our new plan you rightfully bring up our building under construction, which we hope to be completed a very close to the advent of hurricane season.
And one of the things will be doing is taking social dispensing into account for the health and safety of our associates that rather than have cube execute after Q will will build in a moderate amount of space for each associate we're contemplating shifts that may come in various days a week because there's clearly some.
In trading in some advantage to having people on the campus and we're looking at kind of adapting our thinking to one.
Protect people and to ensure that the business continues to run the way, we'd like it too and I think I think we'll be able to manage through that very well. We we sit here with a with a management team Tom It not only has been here for awhile, but we understand each other and how to cooperate.
Due to some in some ways due to the Hurricanes, we've we've experienced in come through but also just yeah generally in a in a good way we care about each other and we're very fortunate to work with each other and have that trust. So kind of a long winded answer, but there's a lot of there's a lot of points there to taken so.
Hopefully that helps I appreciate it thank you and then.
Just just from your customers staying at home is are you guys seeing any a potential benefit from from loss mitigation just from the sensor like for example.
There's a weak in the kitchen or the bathroom and you're able to customer is able to mitigate that loss more quickly than versus if they were at work and it turned into a much bigger loss.
Yeah. That's an interesting question, Tom I think there's a few things.
Things to consider there one is that when you're at home in the water starts to lead to turn it off or fix it you know and and I think we're probably going to benefit from some of that saw a claim that could have grown maybe get.
Mid than the but so to say could more quickly I also think of it if anybody's like my neighborhood, there's a whole lot of people doing stuff to their house, which I think ultimately makes the how a more or less risky potential for a claim so I think theres a lot of Karen feeding that is occurring too.
Our insured biggest asset their home so.
Hopefully that comes to fruition, but again, we're prepared to manage through it or whatever comes out as I think.
Okay.
And then and lastly, you guys mentioned about.
Your board approving measures to.
To build the company's cast cash position is there anything we should read through in relates to stock buybacks.
For the rest of the or.
You know time, there's there's an environment out there with a lot of different perspectives, we're ending up a very strong quarter and we're not adjusting our guidance.
We will review with the board and our executive chair or how to proceed with buybacks when appropriate, but we would not want to do anything that would lead people to question, our intent and our integrity. So to say going forward. So, we'll we'll try and be very thoughtful and seek counsel from from folks in the bid.
As we as we look to that.
All right.
Thank you for your answers.
Yeah. Thanks, I'll have a great day, thank you too.
Thank you we have a follow up from be overcome all of Dowling and partners. Please go ahead.
Great. Thank you just to follow up on the reinsurance.
Think you commented last quarter about 75 being present have your capacity, including FH yet being done.
And your update this quarter was 90%.
Net incremental.
Change I was wondering.
I know you don't probably want to touch on pricing, but we're did you see participation from previous reinsurers that participated in the past coming back in participating again this year.
And then part of that is have you seen.
You know changes in terms and conditions at all from the reinsurance community as you had gone through the process.
Yeah, Thanks, Bill or just talking about the first part.
I think you you've known us long enough to know that we are.
Excuse me, we are very consistent buyer.
We buy from the traditional market and probably 95% or more of our panel stays very similar from year to year to year.
We will occasionally entertain new capacity here or there, but in terms of the the moves that we've made from 75 to approaching 90 odd that's just our existing partners that have.
That have issued authorizations on our firm order terms, we've been really really pleased so far.
Majority of those that have taken a decision on our firm order terms have author rise, including several authorizing increased capacity. So so far. So good are we still have a ways to go we still have a lot of our reinsurance partners to hear from a those that are still.
Oh evaluating what they can or can't do in this challenging environment.
But we're pleased with where we are at this point on April 28, Oh, We think we're in good shape, we think that the majority of our reinsurance partners view universal as a as a quality partner from a counterparty credit risk standpoint, which is becoming more and more important to them.
And then obviously, they're they're viewing the terms that we've offered as as fair terms for for this renewal.
Okay, and any update has anyone and pushing.
Without naming names has I guess broadly the reinsurance market they've been pushing for any changes to terms and conditions.
Yeah, I think it's for the past couple years.
I think it's been fairly well publicized that there's there's a few reinsurers that are are pushing for some rather significant changes and I think some of those changes may make sense.
Others, I think have challenges associated with them and they really need to be discussed from accompanied accompany standpoint, they're not the type of changes that should be just broadly painted across the entire marketplace. So we've had those conversations with a with those reinsurers and and with all.
All of our reinsurers about the ones that we feel that are appropriate for a company like universal like I said, a consistent buyer year end you're out buying from the traditional market offering fair termed a you know one thing they can count on is that we're we're here. This year, we're going to be back next year.
Unlikely that you see us, making radical changes in our buying behavior and I think our our reinsurance partners I appreciate that.
Perfect. Thank you very much.
Thank you at this time I'd like to turn the call back over to Steve Donaghy for closing remarks, Sir.
Thank you.
In closing I'd like to thank our associates consumers agent and our stakeholders for their continued support of universal.
We find ourselves living through surreal, an incredible times and adapting to a new normal.
I'm extremely proud to lead an organization that was able to seamlessly transform our business to ensure the teams safety and continued operating success.
Our highly experienced in battle tested individual habits ready to weather and navigate the storm, while ensuring we are in a position of strength.
As a company going forward.
Stay safe and thanks for your time today.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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