Universal Insurance Holdings, Inc. Reports Second-Quarter and First Six-Months 2007 Financial Results

FORT LAUDERDALE, FL--(Marketwire - August 13, 2007) - Universal Insurance Holdings, Inc. ("UIH") (AMEX: UVE), a vertically integrated insurance holding company, announced second-quarter 2007 net income of $17.6 million, or $0.43 per diluted share, compared to $2.0 million, or $0.05 per diluted share, in the second quarter of 2006.

Gross premiums written increased 70.5 percent to $131.6 million in the second quarter of 2007 from $77.2 million for the same period of 2006 primarily attributable to an increase in new business as well as premium rate increases. Increased new business is due to heightened relationships with existing agents, an increase in new agents, a new web-based policy administration platform, and the disruption in the marketplace as a result of the windstorm catastrophes in 2004 and 2005.

In the 2007 second quarter, net premiums earned increased 545.5 percent to $43.2 million from $6.7 million in the 2006 second quarter, due primarily to an increase in new business, premium rate increases, and changes in the Company's reinsurance program.

Investment income increased 369.7 percent to $2.7 million for the three-month period ended June 30, 2007, from $585,216 for the three-month period ended June 30, 2006. The increase is primarily due to higher investment balances and a higher interest rate environment during the 2007 period.

Comparing the second quarter of 2007 with the same period of 2006, commission revenue increased 321.1 percent to $7.4 million from $1.8 million due mainly to an increase in the managing general agent's policy fee income and a greater amount of reinsurance commission sharing.

Net losses and loss adjustment expenses (LAE) increased 171.9 percent to $12.5 million in the 2007 second quarter compared to $4.6 million in the same period of 2006. Losses and LAE increased as a result of increased premium volume and changes in the Company's reinsurance program. The Company's net loss ratio for the three-month period ended June 30, 2007, was 28.9 percent compared to 68.7 percent for the same period ended June 30, 2006.

Second-quarter general and administrative expenses increased 337.7 percent to $11.3 million in the 2007 period from $2.6 million in the 2006 period due primarily to an increase in direct written and ceded written premiums and changes in the Company's reinsurance program.

During the second quarter of 2007, the Company's balance sheet improved, as total assets were $556.0 million versus $481.6 million at December 31, 2006. In the second quarter of 2007, stockholders equity increased to $51.7 million from $22.0 million at December 31, 2006, and total debt was reduced to $28.1 million from $37.4 million at December 31, 2006.

As of June 30, 2007, the Company was servicing approximately 341,000 homeowner's and dwelling fire insurance policies and in-force premiums of approximately $510.0 million, while its statutory capital and surplus was $82.7 million.

First Half Results

First-half 2007 net income was $29.9 million, or $0.73 per diluted share, compared to $5.3 million, or $0.14 per diluted share, in the same period of 2006.

In the first six months of 2007, gross premiums written increased 130.3 percent to $262.6 million from $114.0 million for the same period of 2006, primarily attributable to an increase in new business as well as premium rate increases. In the 2007 six-month period, net premiums earned increased 652.8 percent to $82.6 million from $11.0 million in the 2006 period, due primarily to an increase in new business, premium rate increases and changes in the reinsurance program.

Investment income increased 464.9 percent to $5.5 million for the six-month period ended June 30, 2007, from $969,183 for the six-month period ended June 30, 2006. The increase is primarily due to higher investment balances and a higher interest rate environment during the 2007 period.

Comparing the first half of 2007 with the same period of 2006, commission revenue increased 259.9 percent to $9.8 million from $2.7 million due mainly to an increase in the managing general agent's policy fee income and a greater amount of reinsurance commission sharing.

Net losses and LAE increased 316.2 percent to $24.9 million in the 2007 first half compared to $6.0 million in the same period of 2006. Losses and LAE increased as a result of increased premium volume and changes in the Company's reinsurance program. The Company's net loss ratio for the six-month period ended June 30, 2007, was 30.1 percent compared to 54.4 percent for the same period ended June 30, 2006.

First six-month general and administrative expenses increased 943.7 percent to $21.3 million in the 2007 period from $2.0 million in the 2006 period due to the reasons listed above.

The Company announced on July 13, 2007, a cash dividend on its common stock. Stockholders of record as of September 27, 2007, will receive $0.08 for each share owned on that date, payable on October 22, 2007.

Management Comments

Bradley I. Meier, president and chief executive officer, commented, "Our results this quarter illustrate the diligent execution of our strategies for growth, productivity, and efficiency. We met our overall corporate performance expectations while we continued to position Universal Insurance Holdings for success in the future. The Company's sound balance sheet and positioning within the Florida market have allowed us to capture a greater market share. We remain committed to further growing the Company while focusing on profitability and writing rate adequate business."

About Universal Insurance Holdings, Inc.

The Company is a vertically integrated insurance holding company operating solely in the state of Florida. Through its subsidiaries, the Company is currently engaged in insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), which generates revenue from the collection and investment of premiums, is one of the top 10 leading writers of homeowners insurance in the state of Florida and has aligned itself with well respected service providers in the industry.

Readers should refer generally to reports filed by the Company with the Securities and Exchange Commission (SEC), and specifically to the Company's Form 10-KSB for the year ended December 31, 2006 for a discussion of the risk factors that could affect its operations. Such factors include, without limitation, exposure to catastrophic losses; reliance on the Company's reinsurance program; underwriting performance on catastrophe and non-catastrophe risks; the ability to maintain relationships with customers, employees or suppliers; and competition and its effect on pricing, spending, third-party relationships and revenues. Additional factors that may affect future results are contained in the Company's filings with the SEC, which are available on the SEC's web site at http://www.sec.gov. The Company disclaims any obligation to update and revise statements contained in this press release based on new information or otherwise.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "remain committed," "believe," "expect," "anticipate" and "project," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include, but not be limited to, projections of revenues, income or loss, expenses, plans, and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described in forward-looking statements.

Financial tables to follow...

             UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Unaudited)


                      Six Months Ended             Three Months Ended
                June 30, 2007  June 30, 2006  June 30, 2007  June 30, 2006
                -------------  -------------  -------------  -------------

PREMIUMS EARNED
 AND OTHER
 REVENUES:
Direct premiums
 written        $ 262,563,270  $ 114,003,676  $ 131,573,917  $  77,159,159
Ceded premiums
 written         (185,148,008)   (77,945,774)   (91,071,965)   (45,963,214)
                -------------  -------------  -------------  -------------
Net premiums
 written           77,415,262     36,057,902     40,501,952     31,195,945
Decrease
 (increase) in
 net unearned
 premiums           5,228,113    (25,079,437)     2,703,160    (24,503,066)
                -------------  -------------  -------------  -------------
Premiums
 earned, net       82,643,375     10,978,465     43,205,112      6,692,879
Net investment
 income             5,475,079        969,183      2,748,858        585,216
Commission
 revenue            9,773,589      2,715,592      7,420,733      1,762,219
Other revenue         110,233         16,202         58,531          9,853
                -------------  -------------  -------------  -------------
  Total
   premiums
   earned and
   other
   revenues        98,002,276     14,679,442     53,433,234      9,050,167
                -------------  -------------  -------------  -------------

OPERATING COSTS
 AND EXPENSES
Losses and loss
 adjustment
 expenses          24,866,277      5,974,787     12,497,543      4,597,154
General and
 administrative
 expenses          21,304,473      2,041,208     11,292,398      2,579,902
                -------------  -------------  -------------  -------------
  Total
   operating
   costs and
   expenses        46,170,750      8,015,995     23,789,941      7,177,056
                -------------  -------------  -------------  -------------

INCOME BEFORE
 INCOME TAXES      51,831,526      6,663,447     29,643,293      1,873,111
                -------------  -------------  -------------  -------------

  Income taxes,
   current         23,105,624      2,615,933     13,731,190      1,337,068
  Income taxes,
   deferred        (1,202,361)    (1,238,670)    (1,641,331)    (1,437,547)
                -------------  -------------  -------------  -------------
  Income taxes,
   net             21,903,263      1,377,263     12,089,859       (100,479)
                -------------  -------------  -------------  -------------

NET INCOME      $  29,928,263  $   5,286,184  $  17,553,434  $   1,973,590
                =============  =============  =============  =============


INCOME PER
 COMMON SHARE:
Basic           $        0.84  $        0.15  $        0.49  $        0.06
                =============  =============  =============  =============

WEIGHTED
 AVERAGE COMMON
 SHARES
 OUTSTANDING -
 BASIC             35,528,000     34,373,000     35,577,000     34,306,000
                =============  =============  =============  =============

INCOME PER
 COMMON SHARE:
Diluted         $        0.73  $        0.14  $        0.43  $        0.05
                =============  =============  =============  =============

WEIGHTED
 AVERAGE COMMON
 SHARES
 OUTSTANDING -
 DILUTED           41,217,000     36,863,000     40,851,000     37,300,000
                =============  =============  =============  =============

CASH DIVIDEND
 DECLARED PER
 COMMON SHARE   $        0.07  $        0.08  $           -  $        0.04
                =============  =============  =============  =============




            UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEET
                            June 30, 2007
                             (Unaudited)



                             ASSETS
Cash and cash equivalents                                   $  256,049,954
Real estate, net                                                 3,211,986
Prepaid reinsurance premiums                                   180,970,635
Reinsurance recoverables and other reinsurance receivable       86,036,298
Premiums and other receivables, net                             19,223,252
Property and equipment, net                                        607,620
Deferred income taxes                                            9,874,117
Other assets                                                        16,222
                                                            --------------
Total assets                                                $  555,990,084
                                                            ==============

               LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Unpaid losses and loss adjustment expenses                  $   52,130,976
Unearned premiums                                              271,885,614
Deferred ceding commission, net                                  1,558,077
Accounts payable                                                 1,673,508
Reinsurance payable                                            101,898,123
Federal and state income taxes payable                          19,401,565
Dividends payable                                                2,446,392
Other accrued expenses                                          13,279,300
Other liabilities                                               11,987,103
Loans payable                                                    3,025,940
Long-term debt                                                  25,040,870
                                                            --------------
Total liabilities                                              504,327,468
                                                            --------------

STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01 par value,
 1,000,000 shares authorized, 138,640 shares issued and
 outstanding, minimum liquidation preference of $1,419,700           1,387
Common stock, $.01 par value, 55,000,000 shares authorized,
 39,057,103 shares issued and 35,762,729 shares outstanding        390,572
Common stock in treasury, at cost - 394,374 shares                (974,746)
Common stock held in trust, at cost - 2,900,000 shares          (2,349,000)
Additional paid-in capital                                      21,759,615
Retained earnings                                               32,834,788
                                                            --------------
Total stockholders' equity                                      51,662,616
                                                            --------------
Total liabilities and stockholders' equity                  $  555,990,084
                                                            ==============

Contact Information: Investor Contact: Philip Kranz Dresner Corporate Services 312-780-7240 pkranz@dresnerco.com