Insurance

UNITED INSURANCE HOLDINGS CORP. – 10-K

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and related notes appearing in   Part II, Item 8   of this Form 10-K.
The following discussion provides an analysis of our results of operations and
financial condition for 2021 as compared to 2020. Discussion regarding our
results of operations and financial condition for 2020 as compared to 2019 is
included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended
December 31, 2020. This discussion and analysis contains forward-looking
statements that involve risks, uncertainties and assumptions. Actual results may
differ materially from those expressed or implied in these forward-looking
statements as a result of certain known and unknown risks and uncertainties. See
"  Forward-Looking Statements  ."


OVERVIEW

  United Insurance Holding Corp. is a holding company primarily engaged in
residential personal and commercial property and casualty insurance business
with investments in the United States. We conduct our business principally
through four wholly-owned insurance subsidiaries and one majority-owned
insurance subsidiary: United Property & Casualty Insurance Company (UPC);
American Coastal Insurance Company (ACIC); Family Security Insurance Company,
Inc. (FSIC); Interboro Insurance Company (IIC); and Journey Insurance Company
(JIC). Collectively, we refer to the holding company and all our subsidiaries,
including non-insurance subsidiaries, as "UPC Insurance," which is the preferred
brand identification for our Company.

Our Company's primary source of revenue is generated from writing insurance in
Florida, Louisiana, New York and Texas. The Company also writes policies in
Georgia, Massachusetts, New Jersey, North Carolina and South Carolina where
renewal rights have been sold and all premiums and losses are ceded. Effective
January 1, 2021, we no longer write in the state of Hawaii. Effective December
1, 2021, we no longer write in the states of Connecticut or Rhode Island. We are
also licensed to write property and casualty insurance in an additional six
states; however, we have not commenced writing in these states. Our target
market in such areas consists of states where the perceived threat of natural
catastrophe has caused large national insurance carriers to reduce their
concentration of policies. We believe an opportunity exists for UPC Insurance to
write profitable business in such areas.

Our Company, together with wholly-owned subsidiaries UPC and United Insurance
Management, L.C. (UIM), entered into a Renewal Rights Agreement (Southeast
Renewal Agreement), dated as of December 30, 2021 with Homeowners Choice
Property and Casualty, Inc. (HCPCI), pursuant to which our Company, UPC and UIM
agreed to sell, and HCPCI agreed to purchase, the renewal rights to UPC's
personal lines homeowners business in Georgia, South Carolina and North
Carolina. The transfer of policies is subject to regulatory approval. The sale
was consummated on December 30, 2021.

Effective December 31, 2021, we entered into a quota share reinsurance agreement
with HCPCI in connection with the Southeast Renewal Agreement. Under the terms
of this agreement, we will cede 85% of our in-force, new, and renewal policies
in the states of Georgia, North Carolina and South Carolina. When coupled with
the 15% cessions from our third-party quota share reinsurance agreement, we will
no longer retain any risk associated with these states.

Our Company, together with wholly-owned subsidiaries UPC and UIM, entered into a
Renewal Rights Agreement (Northeast Renewal Agreement), dated as of January 18,
2021 with HCPCI and HCI Group, Inc. (HCI), pursuant to which our Company, UPC
and UIM agreed to sell, and HCPCI agreed to purchase, the renewal rights to
UPC's personal lines homeowners business in Connecticut, Massachusetts, New
Jersey and Rhode Island. The transfer of Massachusetts and New Jersey policies
is subject to regulatory approval. The sale was consummated on January 18, 2021.
The transfer of Rhode Island and Connecticut policies was completed as of
December 31, 2021.

Effective June 1, 2021, we entered into a quota share reinsurance agreement with
HCPCI and TypTap Insurance Company (TypTap) in connection with the Northeast
Renewal Agreement. Under the terms of this agreement, we will cede 100% of our
in-force, new, and renewal policies in the states of Connecticut, New Jersey,
Massachusetts, and Rhode Island. The cession of these policies is 50% to HCPCI
and 50% to TypTap. As the transfer of each state is completed under the
Northeast Renewal Agreement, the quota share coverage for the transitioned state
will no longer be in effect.

We have historically grown our business through strong organic growth
complemented by strategic acquisitions and partnerships, including our
acquisitions of AmCo Holding Company (AmCo) and its subsidiaries, including
ACIC, in April 2017, IIC in April 2016, and Family Security Holdings, LLC (FSH),
including its subsidiary FSIC in February 2015, and our strategic partnership
with a subsidiary of Tokio Marine Kiln Group Limited (Kiln), which formed JIC in
August 2018. During
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                        UNITED INSURANCE HOLDINGS CORP.

2021, our policies in force decreased by 25.2% compared to 630,991 policies
effective at December 31, 2020 to 471,724 policies in force as of December 31, 2021.

Our business is subject to the impact of weather-related catastrophes on our
loss and loss adjustment expenses (LAE). Over the last three years, the
frequency of these catastrophes has increased. As a result, we have experienced
increased catastrophe losses incurred during the prior three years. During the
years ended December 31, 2021, 2020 and 2019, seven, thirteen, and five named
storms, respectively, made landfall in our geographic footprint, resulting in
retained pre-tax catastrophe losses of $35,872,000, $208,157,000, and
$32,170,000, respectively. In addition, during each of the three years we
increased our loss and LAE reserves as a result of development trends from
2017's Hurricane Irma, that indicated our ultimate gross loss estimate should be
increased.

The following discussion highlights significant factors influencing the
consolidated financial position and results of operations of UPC Insurance. In
evaluating our results of operations, we use premiums written and earned,
policies in-force and new and renewal policies by geographic concentration. We
also consider the impact of catastrophe losses and prior year development on our
loss ratios, expense ratios and combined ratios. In monitoring our investments,
we use credit quality, investment income, cash flows, realized gains and losses,
unrealized gains and losses, asset diversification and portfolio duration. To
evaluate our financial condition, we consider our liquidity, financial strength,
ratings, book value per share and return on equity.









































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                        UNITED INSURANCE HOLDINGS CORP.

Consolidated net profit (loss)

                                                                              Year Ended December 31,
                                                                 2021                 2020                    2019
REVENUE:
Gross premiums written                                      $ 1,329,445          $ 1,456,863             $ 1,380,268
Change in gross unearned premiums                                78,998              (49,883)                (46,742)
Gross premiums earned                                         1,408,443            1,406,980               1,333,526
Ceded premiums earned                                          (818,682)            (641,317)               (581,126)
Net premiums earned                                             589,761              765,663                 752,400
Net investment income                                            13,772               24,125                  30,145
Net realized gains                                                3,567               66,691                   1,228
Net unrealized gains (losses) on equity securities                3,237              (27,562)                 24,761

Other revenue                                                    24,190               17,739                  16,582
Total revenues                                                  634,527              846,656                 825,116
EXPENSES:
Losses and loss adjustment expenses                             422,134              608,316                 499,493
Policy acquisition costs                                        173,574              236,002                 238,268
Operating expenses                                               56,257               52,876                  44,310
General and administrative expenses                              57,212               72,057                  65,989
Interest expense                                                  9,391                9,582                   9,781
Total expenses                                                  718,568              978,833                 857,841
Loss before other income                                        (84,041)            (132,177)                (32,725)
Other income                                                        184                   74                     119
Loss before income taxes                                        (83,857)            (132,103)                (32,606)
Benefit for income taxes                                        (23,989)             (36,605)                 (3,121)
Net loss                                                    $   (59,868)         $   (95,498)            $   (29,485)
Less: Net income (loss) attributable to
noncontrolling interests                                         (1,949)                 956                     387
Net loss attributable to UIHC                               $   (57,919)         $   (96,454)            $   (29,872)
Net loss per diluted share                                  $     (1.35)         $     (2.25)            $     (0.70)
Book value per share                                        $      7.20          $      9.19             $     11.69
Return on equity based on GAAP net loss                           (16.9) %             (20.2) %                 (5.6) %
Loss ratio, net (1)                                                71.6  %              79.4  %                 66.4  %
Expense ratio (2)(5)                                               48.7  %              47.1  %                 46.3  %
Combined ratio (3)(5)                                             120.3  %             126.5  %                112.7  %

Effect of current year catastrophe losses on
report

                                                              19.3  %              38.5  % 0.385           12.9  %
Effect of prior year development on combined ratio                  4.7  %              (0.9) %                  4.4  %

Underlying combined ratio(4)(5)                                    96.3  %              88.9  %                 95.4  %


(1) Loss ratio, net is calculated as losses and LAE net of losses ceded to
reinsurers, relative to net premiums earned. Management uses this operating
metric to analyze our loss trends and believes it is useful for investors to
evaluate this component separately from our other operating expenses.
(2) Expense ratio is calculated as the sum of all operating expenses less
interest expense relative to net premiums earned. Management uses this operating
metric to analyze our expense trends and believes it is useful for investors to
evaluate these components separately from our loss expenses.
(3) Combined ratio is the sum of the loss ratio, net and expense ratio.
Management uses this operating metric to analyze our total expense trends and
believes it is a key indicator for investors when evaluating the overall
profitability of our business.
(4) Underlying combined ratio, a measure that is not based on GAAP, is
reconciled above to the combined ratio, the most directly comparable GAAP
measure. Additional information regarding non-GAAP financial measures presented
in this Form 10-K can be found in "Definitions of Non-GAAP Measures", below.
(5) Included in both the expense ratio and the combined ratio is amortization
expense predominately associated with the AmCo, IIC, and FSH acquisitions, which
cause comparative differences among periods.
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                        UNITED INSURANCE HOLDINGS CORP.

DEFINITIONS OF NON-GAAP MEASURES

We believe that investors' understanding of UPC Insurance's performance is
enhanced by our disclosure of the following non-GAAP measures. Our methods for
calculating these measures may differ from those used by other companies and
therefore comparability may be limited.

Combined ratio excluding the effects of current year catastrophe losses and
prior year reserve development (underlying combined ratio) is a non-GAAP
measure, that is computed by subtracting the effect of current year catastrophe
losses and prior year development from the combined ratio. We believe that this
ratio is useful to investors, and it is used by management to highlight the
trends in our business that may be obscured by current year catastrophe losses
and prior year development. Current year catastrophe losses cause our loss
trends to vary significantly between periods as a result of their frequency of
occurrence and magnitude, and can have a significant impact on the combined
ratio. Prior year development is caused by unexpected loss development on
historical reserves. We believe it is useful for investors to evaluate these
components separately and in the aggregate when reviewing our performance. The
most directly comparable GAAP measure is the combined ratio. The underlying
combined ratio should not be considered as a substitute for the combined ratio
and does not reflect the overall profitability of our business.

Net loss and LAE excluding the effects of current year catastrophe losses and
prior year reserve development (underlying loss and LAE) is a non-GAAP measure
that is computed by subtracting the effect of current year catastrophe losses
and prior year reserve development from net loss and LAE. We use underlying loss
and LAE figures to analyze our loss trends that may be impacted by current year
catastrophe losses and prior year development on our reserves. As discussed
previously, these two items can have a significant impact on our loss trends in
a given period. We believe it is useful for investors to evaluate these
components both separately and in the aggregate when reviewing our performance.
The most directly comparable GAAP measure is net loss and LAE. The underlying
loss and LAE measure should not be considered a substitute for net loss and LAE
and does not reflect the overall profitability of our business.





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                        UNITED INSURANCE HOLDINGS CORP.


RESULTS OF OPERATIONS

Consolidated Results

Net loss attributable to UIHC for the year ended December 31, 2021 decreased by
$38,535,000 to $57,919,000, compared to $96,454,000 for the year ended
December 31, 2020. The decrease in net losses was primarily driven by a
$186,182,000 decrease in loss & LAE expense for the year. This was driven by our
decision to lower the retention related of our Core Catastrophe reinsurance
program for the 2021-2022 hurricane season coupled with a lower frequency of
catastrophic weather activity when compared to 2020 and an increase in ceded
losses to our quota share reinsurance program. This was partially offset by a
decrease in revenue, driven by a $127,418,000 decrease in gross written premiums
as described below. In addition, the company experienced a $177,365,000 increase
in ceded premium earned as the result of the changes to the Company's quota
share reinsurance agreements described below, as well as a decrease in realized
investments gains in 2021.

Revenues

Our gross written premiums decreased by $127,418,000, or 8.7%, to $1,329,445,000
for the year ended December 31, 2021, from $1,456,863,000 for the year ended
December 31, 2020, driven primarily by a decline in written premiums across our
personal lines business, due to underwriting actions taken at the end of 2020
and throughout 2021. In addition, we experienced a decrease in assumed premiums
due to the termination of a contract which included commercial property business
assumed from unaffiliated insurers. The breakdown of the year-over-year changes
in both direct and assumed written premiums by region and gross written premium
by line of business are shown in the table below.

Direct Written and Assumed Premium By Region (1)                 2021                 2020               Change
Florida                                                     $   852,711          $   829,777          $   22,934
Gulf                                                            225,013              258,064             (33,051)
Northeast                                                       158,217              197,556             (39,339)
Southeast                                                        93,188              126,161             (32,973)
Total direct written premium by region                      $ 1,329,129          $ 1,411,558          $  (82,429)
Assumed premium (2)                                                 316               45,305             (44,989)
Total gross written premium by region                       $ 1,329,445     

$1,456,863 ($127,418)

Gross Written Premium by Line of Business
Personal property (3)                                       $   907,207          $ 1,063,599          $ (156,392)
Commercial property                                             422,238              393,264              28,974
Total gross written premium by line of business             $ 1,329,445     

$1,456,863 ($127,418)

(1) "Gulf" is comprised of Louisiana and Texas in 2021 and Hawaii, Louisiana,
and Texas in 2020; "Northeast" is comprised of Connecticut, Massachusetts, New
Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia,
North Carolina and South Carolina. As of December 1, 2021, we are no longer
writing in Connecticut or Rhode Island as the policies have transitioned to
HCPCI.
(2) Assumed premium written for 2021 and 2020 primarily included commercial
property business assumed from unaffiliated insurers.
(3) Includes gross written premium from flood policies.

     New and Renewal Policies(1) By Region(2)           2021          2020          Change
     Florida                                          212,497       264,001        (51,504)
     Gulf                                             113,983       150,748        (36,765)
     Northeast                                        122,723       147,079        (24,356)
     Southeast                                         60,406        98,086        (37,680)
     Total                                            509,609       659,914       (150,305)


(1) Only includes new and renewal homeowner, commercial and dwelling fire
policies written during the year.
(2) "Gulf" is comprised of Louisiana and Texas in 2021 and Hawaii, Louisiana,
and Texas in 2020; "Northeast" is comprised of Connecticut, Massachusetts, New
Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia,
North Carolina and South Carolina. As of December 1, 2021, we are no longer
writing in Connecticut or Rhode Island as the policies have transitioned to
HCPCI.


Ceded premiums earned increased by $177,365,000, or 27.7%, to $818,682,000 for
the year ended December 31, 2021 from $641,317,000 for 2020. The increase is
primarily driven by a $163,713,000 increase in ceded premiums earned from our
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                        UNITED INSURANCE HOLDINGS CORP.


quota share agreements. We entered into additional quota share reinsurance
agreements effective December 31, 2020, which increased our ceding percentage
overall and was modified to provide coverage to ACIC. In addition, effective
December 31, 2020 we entered into a quota share reinsurance agreement with HCPCI
for our Northeast business, excluding New York, as a part of our renewal rights
agreement.

Net investment income decreased by $10,353,000, or 42.9%, to $13,772,000 for the
year ended December 31, 2021 from $24,125,000 for 2020. The decrease is driven
by a $8,905,000 decrease in income from our fixed maturity investment portfolio
as a result of lower yields as well as a decrease in the size of our fixed
maturity portfolio in 2021. Our equity securities have also produced lower
returns during the year ended December 31, 2021, driven by decreased holdings
during 2021, as the result of our decision to dispose of our equity portfolio at
the end of 2020, causing a $1,460,000 decrease in net investment income.

Net realized investment gains and net unrealized gains (losses) on equity
securities decreased by $32,325,000, or 82.6%, to a net gain of $6,804,000 for
the year ended December 31, 2021 from a net gain of $39,129,000 for the year
ended December 31, 2020, primarily driven by the disposal of our equity
portfolio and the sale and reinvestment of our fixed maturity portfolio in 2020,
during a favorable price environment, in efforts to mitigate potential surplus
declines from market volatility for each of our insurance subsidiaries.

Expenses

Expenses for the year ended December 31, 2021 decreased $260,265,000, or 26.6%,
to $718,568,000 for the year ended December 31, 2021, from $978,833,000 for
2020. The decrease in expenses was primarily due to a decrease in loss and LAE
as a result of increased cessions in 2021 to our Core Catastrophe and quota
share reinsurance programs, as well as a lower frequency of catastrophe activity
during 2021. The calculations of our combined loss ratios and underlying loss
ratios are shown below.

                                                                  Year ended
 ($ in thousands)                                                December 31,
                                                   2021            2020             Change
 Net loss and LAE                              $ 422,134       $ 608,316       $ (186,182)
 % of Gross earned premiums                         30.0  %         43.2  %         (13.2)  pts
 % of Net earned premiums                           71.6  %         79.4  %          (7.8)  pts
 Less:
 Current year catastrophe losses               $ 113,740       $ 294,537    

($180,797)

Unfavorable change in prior year reserve 27,856 (6,786)

       34,642
 Underlying loss and LAE (1)                   $ 280,538       $ 320,565       $  (40,027)
 % of Gross earned premiums                         19.9  %         22.8  %          (2.9)  pts
 % of Net earned premiums                           47.6  %         41.8  %           5.8   pts


(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled
above to net loss and LAE, the most directly comparable GAAP measure. Additional
information regarding non-GAAP financial measures presented in this Form 10-K
can be found in the "Definitions of Non-GAAP Measures" section, above.

The Company’s expense ratio calculations are shown below.

                                                         Year ended
          ($ in thousands)                              December 31,
                                           2021            2020            Change
          Policy acquisition costs     $ 173,574       $ 236,002       $ (62,428)
          Operating and underwriting      56,257          52,876           3,381
          General and administrative      57,212          72,057         (14,845)
          Total Operating Expenses     $ 287,043       $ 360,935       $ (73,892)

% of gross premiums earned 20.4% 25.7% (5.3) pts

% of net premiums earned 48.7% 47.1%

 1.6   pts




  Loss and LAE decreased by $186,182,000, or 30.6%, to $422,134,000 for the year
ended December 31, 2021, from $608,316,000 for the year ended December 31, 2020.
Loss and LAE expense as a percentage of net earned premiums
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                        UNITED INSURANCE HOLDINGS CORP.


decreased 7.8 points to 71.6% for the year ended December 31, 2021, compared to
79.4% for the year ended December 31, 2020. During the year ended December 31,
2021, we experienced increased non-catastrophe cessions as a result of the
changes to our quota share agreements at the end of 2020 and during 2021. In
addition, during the year ended December 31, 2020 there was a higher frequency
of catastrophe events when compared to 2021. Excluding catastrophe losses and
reserve development, our gross underlying loss and LAE ratio for the year ended
December 31, 2021 would have been 19.9%, a decrease of 2.9 points from 22.8%
during the year ended December 31, 2020.

Policy acquisition costs decreased by $62,428,000, or 26.5%, to $173,574,000 for
the year ended December 31, 2021, from $236,002,000 for the year ended
December 31, 2020. The primary driver of the decrease in expense was an increase
in ceding commission income of $63,661,000 related to our quota share
reinsurance agreements. In addition, there was a $11,678,000 decrease in
expenses incurred, such as premium taxes and agent commission expenses, which
fluctuate in conjunction with the year over year decrease in written premium.
This was partially offset by an $18,576,000 increase in external management fees
incurred during 2021 as the result of an increased volume of commercial written
premium year over year.

Operating and underwriting expenses increased by $3,381,000, or 6.4%, to
$56,257,000 for the year ended December 31, 2021, from $52,876,000 for the year
ended December 31, 2020, primarily due to increased expenses related to our
investment in technology of $7,271,000. This was partially offset by a
$3,092,000 decrease in agent incentive costs in 2021 as we have discontinued our
agent incentive program. We also experienced decreases in travel expenses of
$289,000 due to the lack of company travel during 2021 as a result of the
continued effects of the coronavirus pandemic and decreases in office overhead
expenses of $378,000 in 2021 driven by our shift to a remote work environment.

General and administrative expenses decreased by $14,845,000, or 20.6%, to
$57,212,000 for the year ended December 31, 2021, from $72,057,000 for the year
ended December 31, 2020, primarily due to a $8,215,000 decrease in salary
related expenses driven by an increase in the allocation of claims adjustment
payroll related costs to loss & LAE from general and administrative expenses in
2021. In addition, in 2020 we incurred $2,763,000 in expenses related to the
discontinuation of plans to build new headquarters, an expense which is
non-recurring in 2021.

We have experienced unfavorable reserve development in the current year and its
the historical impact on our net loss and underlying net loss ratios is described in
the next board.

                                                                       Historical Reserve Development
($ in thousands, except ratios)                 2017             2018               2019              2020              2021
Prior year reserve favorable (unfavorable)
development                                  $ 2,613          $ (4,318)     

($33,134) $6,786 ($27,856)
Change in % of gains before
interest and taxes

                              62.9  %          (76.7) %           145.2  %          (5.5) %            37.4  %
Consolidated net loss and LAE ratio (LR)        62.4  %           59.3  %            66.4  %          79.4  %            71.6  %
Prior year reserve unfavorable (favorable)
development on LR                               (0.4) %            0.6  %             4.4  %          (0.9) %             4.7  %
Current year catastrophe losses on LR           19.8  %           14.6  %            12.9  %          38.5  %            19.3  %
Underlying net loss and LAE ratio(1)            43.0  %           44.1  %            49.1  %          41.8  %            47.6  %


(1) Underlying net loss and LAE Ratio is a non-GAAP measure and is reconciled
above to the Consolidated net loss and LAE Ratio, the most directly comparable
GAAP measure. Additional information regarding non-GAAP financial measures
presented in this Form 10-K can be found in the "Definitions of Non-GAAP
Measures" section, above.













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                        UNITED INSURANCE HOLDINGS CORP.

Personal lines operating segment results

Pretax earnings attributable to our personal lines operating segment for the
year ended December 31, 2021 increased by $30,541,000 to a pretax loss of
$104,556,000, compared to a pretax loss of $135,097,000 for the year ended
December 31, 2020. The decrease in pretax net loss was primarily due to a
$148,803,000 decrease in losses and LAE during 2021, driven by increased
cessions to our core catastrophe reinsurance program and quota share reinsurance
agreements. We also experienced a $44,350,000 decrease in policy acquisition
costs year over year due to increased ceding commission income. This was
partially offset by a $153,778,000 decrease in net premiums earned, driven by
decreases in gross written premiums as well as increased ceded premiums earned
in 2021.

Revenues

Our gross written premiums attributable to our personal lines operating segment
decreased by $156,393,000, or 14.7%, to $907,207,000 for the year ended
December 31, 2021, from $1,063,600,000 for the year ended December 31, 2020,
primarily reflecting the impact of our underwriting actions taken at the end of
2020 and during 2021. The breakdown of the year-over-year changes in both direct
and assumed written premiums by region are shown in the table below.
 Direct Written and Assumed Premium By Region(1)          2021            2020            Change
 Florida                                               $ 439,645      $   485,487      $  (45,842)
 Gulf                                                    217,604          255,185         (37,581)
 Northeast                                               158,217          197,556         (39,339)
 Southeast                                                91,741          125,372         (33,631)
 Total direct written premium by region                $ 907,207      $ 

1,063,600 ($156,393)

 Assumed premium                                               -                -               -
 Total gross written premium by region                 $ 907,207      $ 

1,063,600 ($156,393)

(1) "Gulf" is comprised of Louisiana and Texas in 2021 and Hawaii, Louisiana,
and Texas in 2020; "Northeast" is comprised of Connecticut, Massachusetts, New
Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia,
North Carolina and South Carolina. As of December 1, 2021, we are no longer
writing in Connecticut or Rhode Island as the policies have transitioned to
HCPCI.

New and Renewal Policies(1) By Region(2)                                2021                      2020                 Change
Florida                                                                206,366                   257,880               (51,514)
Northeast                                                113,884       122,723                   147,079               (24,356)
Gulf                                                                   113,884     147,079       150,716               (36,832)
Southeast                                                               60,376                    98,071               (37,695)
Total                                                                  503,349                   653,746              (150,397)


(1) Only includes new and renewal homeowner and dwelling fire policies written
during the year.
(2) "Gulf" is comprised of Louisiana and Texas in 2021 and Hawaii, Louisiana,
and Texas in 2020; "Northeast" is comprised of Connecticut, Massachusetts, New
Jersey, New York and Rhode Island; and "Southeast" is comprised of Georgia,
North Carolina and South Carolina. As of December 1, 2021, we are no longer
writing in Connecticut or Rhode Island as the policies have transitioned to
HCPCI.


Ceded premiums earned attributable to our personal lines operating segment
increased by $134,786,000, or 30.2%, to $581,626,000 for the year ended
December 31, 2021 from $446,840,000 for the year ended December 31, 2020. The
increase is primarily driven by a $101,722,000 increase in ceded premiums earned
from our quota share agreements. Effective December 31, 2020, we modified our
existing and entered into a new quota share agreement which increased our
overall ceding percentage. In addition, effective December 31, 2020 we entered
into a quota share reinsurance agreement with HCPCI for our northeast business,
excluding New York, as a part of our renewal rights agreement. In addition to
these quota share changes, we also experienced an increase in our ceded earned
premiums related to our catastrophe reinsurance agreements of $35,957,000 as we
added more coverage to the program.

Net investment income attributable to our personal lines operating segment
decreased by $6,761,000, or 43.0%, to $8,962,000 for the year ended December 31,
2021 from $15,723,000 for the year ended December 31, 2020. The decrease is
driven by a $6,049,000 decrease in income from our fixed maturity investment
portfolio as a result of lower yields as well as a decrease in the size of our
fixed maturity portfolio in 2021. In addition to this decrease we also
experienced lower returns from our equity securities driven by a decrease in our
holdings during 2021, causing a $946,000 decrease in net investment income.

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                        UNITED INSURANCE HOLDINGS CORP.


Net realized investment gains and net unrealized gains (losses) on equity
securities attributable to our personal lines operating segment decreased by
$17,349,000, or 76.4%, to a net gain of $5,367,000 for the year ended
December 31, 2021 from a net gain of $22,716,000 for the year ended December 31,
2020, primarily driven by the disposal of our equity portfolio and the sale and
reinvestment of our fixed maturity portfolio in 2020, during a favorable price
environment, in efforts to mitigate potential surplus declines from market
volatility for each of our insurance subsidiaries.

Expenses

Expenses attributable to our personal lines operating segment for the year ended
December 31, 2021 decreased $201,862,000, or 26.5%, to $559,812,000 for the year
ended December 31, 2021, from $761,674,000 for the year ended December 31, 2020.
The decrease in expenses was primarily due to a decrease in loss and LAE of
$148,803,000, as a result of increased cessions to our core catastrophe and
quota share reinsurance programs, as well as a lower frequency of catastrophe
activity during 2021. The calculations of our combined loss ratios and
underlying loss ratios are shown below.

                                                                   Year ended
($ in thousands)                                                  December 31,
                                                    2021            2020             Change
Net loss and LAE                                $ 367,416       $ 516,219       $ (148,803)
% of Gross earned premiums                           36.8  %         50.8  %         (14.0)  pts
% of Net earned premiums                             88.2  %         90.5  %          (2.3)  pts
Less:
Current year catastrophe losses                 $ 104,210       $ 269,875       $ (165,665)
Prior year reserve unfavorable (favorable)
development                                        32,209          (7,587)          39,796
Underlying loss and LAE (1)                     $ 230,997       $ 253,931       $  (22,934)
% of Gross earned premiums                           23.1  %         25.0  %          (1.9)  pts
% of Net earned premiums                             55.5  %         44.5  %          11.0   pts


(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled
above to net loss and LAE, the most directly comparable GAAP measure. Additional
information regarding non-GAAP financial measures presented in this Form 10-K
can be found in the "Definitions of Non-GAAP Measures" section, above.

The calculations of the Company's personal lines operating segment expense
ratios are shown below.

                                                         Year ended
          ($ in thousands)                              December 31,
                                           2021            2020            Change
          Policy acquisition costs     $  93,376       $ 137,726       $ (44,350)
          Operating and underwriting      51,004          49,255           1,749
          General and administrative      47,927          58,385         (10,458)
          Total Operating Expenses     $ 192,307       $ 245,366       $ (53,059)
          % of Gross earned premiums        19.3  %         24.1  %         (4.8)  pts
          % of Net earned premiums          46.2  %         43.0  %          3.2   pts




Loss and LAE attributable to our personal lines operating segment decreased by
$148,803,000, or 28.8%, to $367,416,000 for the year ended December 31, 2021,
from $516,219,000 for the year ended December 31, 2020. Loss and LAE expense as
a percentage of net earned premiums decreased 2.3 points to 88.2% for the year
ended December 31, 2020, compared to 90.5% for the year ended December 31, 2020.
Excluding catastrophe losses and reserve development, our gross underlying loss
and LAE ratio for the year ended December 31, 2021 would have been 23.1%, a
decrease of 1.9 points from 25.0% during the year ended December 31, 2020.

Policy acquisition costs attributable to our personal lines operating segment
decreased by $44,350,000, or 32.2%, to $93,376,000 for the year ended
December 31, 2021, from $137,726,000 for the year ended December 31, 2020. The
primary driver of the decrease in costs was an increase in ceding commission
income related primarily to our quota share reinsurance agreements of
$28,507,000. In addition, we also experienced decreases in various other
expenses such as agent commissions and policy admin fees due to decreased
written premiums year over year, as described above.

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                        UNITED INSURANCE HOLDINGS CORP.


Operating and underwriting expenses attributable to our personal lines operating
segment increased by $1,749,000, or 3.6%, to $51,004,000 for the year ended
December 31, 2021, from $49,255,000 for the year ended December 31, 2020,
primarily due to increased expenses related to our investment in technology of
$6,680,000, partially offset by a decrease in agent costs of $3,087,000, driven
by the discontinuation of our agent incentive program in 2021, as well as a
$2,452,000 decrease in underwriting expenses such as inspection costs and
underwriting reports, driven by the decrease in our written premiums in 2021.

General and administrative expenses attributable to our personal lines operating
segment decreased by $10,458,000, or 17.9%, to $47,927,000 for the year ended
December 31, 2021, from $58,385,000 for the year ended December 31, 2020,
primarily due to decreased salary and benefit related costs of $8,361,000 driven
by an increase in the allocation of claims adjustment payroll related costs to
loss & LAE from general and administrative expenses in 2021.


Commercial lines results

Pretax earnings attributable to our commercial lines operating segment for the
year ended December 31, 2021 increased by $16,073,000 to pretax income of
$32,021,000, compared to pretax income of $15,948,0000 for the year ended
December 31, 2020. The increase in pretax earnings was primarily due to a
decrease in our loss & LAE expense in 2021 of 37,379,000, driven by increased
cessions to our core catastrophe reinsurance program in 2021 compared to 2020
and cessions to our quote share reinsurance agreements which were modified to
include ACIC effective December 31, 2020. In addition, we also experienced an
$18,078,000 decrease in policy acquisition costs, which can be attributed to
ceding commission income in 2021 from our quota share agreements. These
decreases were offset by a $22,123,000 decrease in net premiums earned in 2021
driven by increased ceded premium earned year over year.

Revenue

Our gross written premiums attributable to our commercial lines operating
segment increased by $28,975,000, or 7.4%, to $422,238,000 for the year ended
December 31, 2021, from $393,263,000 for the year ended December 31, 2020,
primarily reflecting the impact of rate increases as well as organic growth in
renewal business generated. These increases were partially offset by a decrease
in assumed premiums of $44,989,000 or 99.3%, due to the termination of a
contract which included commercial property business assumed from unaffiliated
insurers. The breakdown of the year-over-year changes in both direct and assumed
written premiums by state are shown in the table below.

    Direct Written and Assumed Premium By State           2021           2020          Change
    Florida                                            $ 413,066      $ 344,289      $ 68,777
    Texas                                                  7,409          2,879         4,530
    South Carolina                                         1,447            790           657
    Total direct written premium by region             $ 421,922      $ 

347,958 $73,964

    Assumed premium (1)                                      316         

45,305 (44,989)

    Total gross written premium by region              $ 422,238      $ 

393 263 $28,975

(1) The assumed written premium for 2021 and 2020 mainly comprised
real estate matters covered by unaffiliated insurers.

             New and Renewal Policies(1) By State        2021        2020       Change
             Florida                                    6,131       6,121        10
             Texas                                         99          32        67
             South Carolina                                30          15        15
             Total                                      6,260       6,168        92

(1) Includes only new and renewed commercial policies taken out during the year.

Ceded premiums earned attributable to our commercial lines operating segment
increased by $42,579,000 or 21.9%, to $237,056,000 for the year ended
December 31, 2021 from $194,477,000 for the year ended December 31, 2020. The
increase is primarily driven by a $61,991,000 increase in ceded premiums earned
from adding ACIC to our quota share agreements, offset by a decrease in our
catastrophe reinsurance agreements ceded premiums earned of $18,050,000.
Effective December 31, 2020, our quota share agreements were modified to
increase our ceding percentage and include ACIC. In the prior year we had no
ceded premium earned related to quota share reinsurance agreements.

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                        UNITED INSURANCE HOLDINGS CORP.


Net investment income attributable to our commercial lines operating segment
decreased by $3,118,000, or 39.6%, to $4,764,000 for the year ended December 31,
2021 from $7,882,000 for 2020. The decrease is driven by a $2,544,000 decrease
in income from our fixed maturity investment portfolio as a result of lower
yields, as well as a decrease in the size of our fixed maturity portfolio in
2021. Our equity securities also produced lower returns during the year ended
December 31, 2021, driven by a decrease in our holdings during 2021, causing a
$219,000 decrease in net investment income.

Net realized investment gains and net unrealized gains (losses) on equity
securities attributable to our commercial lines operating segment decreased by
$12,817,000, or 89.9%, to a net gain of $1,437,000 for the year ended
December 31, 2021 from a net gain of $14,254,000 for 2020, primarily driven by
the disposal of our equity portfolio and the sale and reinvestment of our fixed
maturity portfolio in 2020, during a favorable price environment, in an effort
to mitigate potential surplus declines from market volatility for each of our
insurance subsidiaries.


Expenses

Expenses attributable to our commercial lines operating segment for the year
ended December 31, 2021 decreased $54,138,000, or 26.9%, to $147,388,000 for the
year ended December 31, 2021, from $201,526,000 for the year ended December 31,
2020. The decrease in expenses was primarily due to a decrease in loss and LAE
as a result of increased cessions in 2021 to our core catastrophe reinsurance
program and cessions to our quote share reinsurance agreements which were
modified to include ACIC effective December 31, 2020. In addition, we also
experienced a lower frequency of catastrophe activity during 2021. The
calculations of our combined loss ratios and underlying loss ratios are shown
below.

                                                                 Year ended
   ($ in thousands)                                             December 31,
                                                   2021           2020            Change
   Net loss and LAE                             $ 54,718       $ 92,097       $ (37,379)
   % of Gross earned premiums                       13.3  %        23.6  %        (10.3)  pts
   % of Net earned premiums                         31.6  %        47.1  %        (15.5)  pts
   Less:
   Current year catastrophe losses              $  9,530       $ 24,662       $ (15,132)
   Prior year reserve favorable development       (4,353)           801          (5,154)
   Underlying loss and LAE (1)                  $ 49,541       $ 66,634       $ (17,093)
   % of Gross earned premiums                       12.1  %        17.1  %         (5.0)  pts
   % of Net earned premiums                         28.6  %        34.1  %         (5.5)  pts


(1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled
above to net loss and LAE, the most directly comparable GAAP measure. Additional
information regarding non-GAAP financial measures presented in this Form 10-K
can be found in the "Definitions of Non-GAAP Measures" section, above.

The calculations of the Company's commercial lines operating segment expense
ratios are shown below.

                                                          Year ended
           ($ in thousands)                              December 31,
                                           2021            2020            Change
           Policy acquisition costs     $ 80,198       $  98,276       $ (18,078)
           Operating and underwriting      4,873           3,440           1,433
           General and administrative      7,599           7,685             (86)
           Total Operating Expenses     $ 92,670       $ 109,401       $ (16,731)
           % of Gross earned premiums       22.6  %         28.1  %         (5.5)  pts
           % of Net earned premiums         53.5  %         56.0  %         (2.5)  pts



Loss and LAE attributable to our commercial lines operating segment decreased by
$37,379,000, or 40.6%, to $54,718,000 for the year ended December 31, 2021, from
$92,097,000 for the year ended December 31, 2020. Loss and LAE expense as a
percentage of net earned premiums decreased 15.5 points to 31.6% for the year
ended December 31, 2021, compared to 47.1% for the year ended December 31, 2020.
Excluding catastrophe losses and reserve development, our gross underlying loss
and LAE ratio for the year ended December 31, 2021 would have been 12.1%, a
decrease of 5.0 points from 17.1% during the year ended December 31, 2020.
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                        UNITED INSURANCE HOLDINGS CORP.



Policy acquisition costs attributable to our commercial lines operating segment
decreased by $18,078,000, or 18.4%, to $80,198,000 for the year ended
December 31, 2021, from $98,276,000 for the year ended December 31, 2020. The
primary driver of the decrease in costs was an increase of $24,159,000 in ceding
commission income related to our quota share reinsurance agreements. In
addition, we experienced a decrease in ceding commission expenses related to our
assumed premiums of $11,053,000 in 2021. This was offset by an increase in our
external management fees paid of $18,606,000 as a result of increased written
premium in 2021.

Operating and underwriting expenses attributable to our commercial lines
operating segment increased by $1,433,000, or 41.7%, to $4,873,000 for the year
ended December 31, 2021, from $3,440,000 for the year ended December 31, 2020,
primarily due to increased expenses related to our investment in technology of
$1,226,000.

General and administrative expenses attributable to our commercial lines
operating segment remained relatively flat, decreasing by $86,000, or 1.1%, to
$7,599,000 for the year ended December 31, 2021, from $7,685,000 for the year
ended December 31, 2020.






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                        UNITED INSURANCE HOLDINGS CORP.

ANALYSIS OF THE FINANCIAL SITUATION

The following discussion and analysis of our financial condition and the results of
transactions should be read in conjunction with our accompanying consolidated documents.
financial statements and related notes in Part II, Item 8 of this Form 10-K.

Investments

The primary goals of our investment strategy are to preserve capital, maximize
after-tax investment income, maintain liquidity and minimize risk. To accomplish
our goals, we purchase debt securities in sectors that represent the most
attractive relative value, and we maintain a moderate equity exposure. Limiting
equity exposure manages risks and helps to preserve capital for two reasons:
first, bond market returns are less volatile than stock market returns, and
second, should the bond issuer enter bankruptcy liquidation, bondholders
generally have a higher priority than equity holders in a bankruptcy proceeding.
Our investment strategy is the same for both our personal lines and commercial
lines operating segments.

We must comply with applicable state insurance regulations that prescribe the
type, quality and concentrations of investments our insurance subsidiaries can
make; therefore, our current investment policy limits investment in
non-investment-grade fixed maturities and limits total investment amounts in
preferred stock, common stock and mortgage notes receivable. We do not invest in
derivative securities.

Two external portfolio management companies, which have the power and discretion to
buy and sell securities for us, manage our investments subject to (i) the
guidelines established by our Board of Directors and (ii) the management of
management. The Investment Committee of our Board of Directors reviews and
regularly approves our investment policy.

Our cash and investment portfolios totaled $964,844,000 at December 31, 2021
compared to $1,296,549,000 at December 31, 2020.

The following table summarizes our investments, by type:

                                        December 31, 2021                   

December 31, 2020

                                  Estimated Fair      Percent of       

Estimation of the correct percentage of

                                      Value             Total              Value              Total
   U.S. government and agency
   securities                    $       49,340            5.1  %    $        130,425           10.1  %
   Foreign governments                    3,459            0.4  %               1,516            0.1  %
   States, municipalities and
   political subdivisions                79,896            8.3  %             134,382           10.4  %
   Public utilities                      25,457            2.6  %              29,980            2.3  %
   Corporate securities                 244,443           25.3  %             292,329           22.4  %
   Mortgage-backed securities           186,740           19.4  %             288,212           22.2  %
   Asset-backed securities               70,162            7.3  %              56,657            4.4  %
   Redeemable preferred stocks            4,105            0.4  %               6,510            0.5  %
   Total fixed maturities               663,602           68.8  %             940,011           72.4  %
   Mutual fund                           33,064            3.4  %                 152              -  %

   Non-redeemable preferred
   stocks                                 4,894            0.5  %               7,293            0.6  %
   Total equity securities               37,958            3.9  %               7,445            0.6  %
   Other investments                     18,006            1.9  %              47,595            3.7  %

   Total investments                    719,566           74.6  %             995,051           76.7  %
   Cash and cash equivalents            212,024           22.0  %             239,420           18.5  %
   Restricted cash                       33,254            3.4  %              62,078            4.8  %
   Total cash, cash equivalents,
   restricted cash and
   investments                   $      964,844          100.0  %    $      1,296,549          100.0  %



We classify all of our investments as available-for-sale. Our investments at
December 31, 2021 and 2020 consisted mainly of U.S. government and agency
securities, states, municipalities and political subdivisions, mortgage-backed
securities and securities of investment-grade corporate issuers. Our equity
holdings in 2021 and 2020 consisted mainly of securities issued by companies in
the financial, utilities and industrial sectors or mutual funds. Most of the
corporate bonds we hold reflected a similar diversification. At December 31,
2021, approximately 83.2% of our fixed maturities were U.S. Treasuries, or
corporate bonds rated "A" or better, and 16.8% were corporate bonds rated "BBB"
or "BB".
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                        UNITED INSURANCE HOLDINGS CORP.



The most significant impact of COVID-19 on our business occurred during the year
ended December 31, 2020, where we saw fluctuations in our investment portfolio
due to volatility in the equity securities markets that we were unable to
predict. During the second half of the year ended December 31, 2020, we
decreased our equity portfolio from 9.1% of our total invested assets (including
cash, restricted cash and cash equivalents) at June 30, 2020 to 0.6% of our
total invested assets (including cash, restricted cash and cash equivalents) at
December 31, 2020. As a result of this decrease, we experienced a decreased
impact from fluctuations in the equity securities markets on our financial
statements for the second half of the year ended December 31, 2020. In the first
quarter of 2021, we began to increase our investments in the equities market.
Management is working closely with our investment managers to monitor the
fluctuations in the markets and the corresponding impact to our portfolios.

Reinsurance

We follow industry practice of reinsuring a portion of our risks. Reinsurance
involves transferring, or "ceding", all or a portion of the risk exposure on
policies we write to another insurer, known as a reinsurer. To the extent that
our reinsurers are unable to meet the obligations they assume under our
reinsurance agreements, we remain primarily liable for the entire insured loss
under the policies we write.

Our reinsurance program is designed, utilizing our risk management methodology,
to address our exposure to catastrophes. According to the Insurance Service
Office (ISO), a catastrophe loss is defined as a single unpredictable incident
or series of closely related incidents that result in $25,000,000 or more in
U.S. industry-wide direct insured losses to property and that affect a
significant number of policyholders and insurers (ISO catastrophes). In addition
to ISO catastrophes, we also include as catastrophes those events (non-ISO
catastrophes), which may include losses, that we believe are, or will be,
material to our operations which we define as incidents that result in
$1,000,000 or more in losses for multiple policyholders.

Effective December 31, 2021, we entered into a structured quota share agreement.
This structured quota share reinsurance agreement has a cession rate of 25% and
covers UPC and FSIC's non-catastrophe losses on policies in-force on the
effective date of the agreement.

Effective December 31, 2021, we entered into a quota share reinsurance agreement
with HCPCI. Under the terms of this agreement, we will cede 85% of our in-force,
new, and renewal policies in the states of Georgia, North Carolina and South
Carolina. As a result, our 8% quota share agreement was modified to exclude
these states, effective December 31, 2021.

Effective December 13, 2021, we renewed our all other perils (AOP) catastrophe
excess of loss agreement. The agreement provides protection from catastrophe
loss events other than named windstorms and earthquakes up to $110,000,000.
During the year ended December 31, 2021, we ceded $91,223,000 under the contract
period effective January 1, 2021 through December 31, 2021.

Effective June 1, 2021, we entered into a quote share reinsurance agreement with
HCPCI and TypTap. Under the terms of this agreement, we will cede 100% of our
in-force, new, and renewal policies in the states of Connecticut, New Jersey,
Massachusetts, and Rhode Island. The cession of these policies is 50% to HCPCI
and 50% to TypTap. As a result, our 15% quota share and excess of loss
agreements were modified to exclude policies in these states effective June 1,
2021. As the transfer of states is completed, the quota share coverage for the
transitioned state will no longer be in effect.

During the second quarter of 2021, we placed our reinsurance program for the
2021 hurricane season. We purchased catastrophe excess of loss reinsurance
protection of $2,900,000,000. The treaties reinsure personal and commercial
lines property excess catastrophe losses caused by multiple perils including
hurricanes and tropical storms. The agreements were effective as of June 1,
2021, for a one-year term and incorporate the mandatory coverage required by and
placed with the Florida Hurricane Catastrophe Fund (FHCF). The FHCF covers
Florida risks only and we participate at 90%. Under our core catastrophe excess
of loss treaty and excess of loss aggregate treaty, retention on a first and
second event is $15,000,000 each and retention on subsequent events total
$1,000,000, resulting in a maximum retention of $31,000,000. Retentions for JIC
are $4,000,000 for a first event and $1,000,000 for subsequent events, covering
all perils. Retention for IIC is $3,000,000 per occurrence, covering all perils.

Effective December 31, 2020, we extended our quota share agreement that was set
to expire on May 31, 2021. This quota share reinsurance agreement had a cession
rate of 15% and 7.5% for all subject business and provides coverage for all
catastrophe perils and attritional losses. The cession rate is comprised of a
quota share cession of 15% which was renewed through May 31, 2022, which covers
UPC, FSIC, and ACIC, a quota share cession of 8% which was renewed effective
December 31, 2021 through December 31, 2022, with the remaining 7.5% covering
UPC and FSIC only, which was
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                        UNITED INSURANCE HOLDINGS CORP.

not renewed at June 1, 2021. For all catastrophic perils, the quota
agreements provide basic protection effectively reducing our retention for
catastrophic losses.

In addition, effective June 1, 2021 our quota share agreements were modified to
exclude policies in New York. This modification was made as the result of our
100% internal quota share agreement, effective June 1, 2021, which cedes 100% of
UPC's in-force, new, and renewal policies in the state of New York to our
subsidiary, IIC.

Effective December 31, 2020, we entered into a quota share reinsurance agreement
with HCPCI, effective as of December 31, 2020. According to the terms of this
reinsurance contract, UPC Insurance ceded and HCPCI assumed a 69.5% quota share
of our personal lines homeowners business in Connecticut, Massachusetts, New
Jersey, and Rhode Island on an in-force, new and renewal basis for the period
from December 31, 2020 through May 31, 2021. This agreement was replaced by the
100% quota share agreement with HCPCI and TypTap.

Reinsurance costs as a percentage of gross premiums earned during the years ended
December 31, 2021 and 2020 were as follows:

                          2021         2020
Non-at-Risk               (2.1) %      (2.4) %
Quota Share              (24.8) %     (13.1) %
All Other                (31.3) %     (30.1) %
Total Ceding Ratio       (58.2) %     (45.6) %



Reinsurance costs as a percent of gross earned premium for our commercial lines
and personal lines operating segments during the years ended December 31, 2021
and 2020 were as follows:

                               Personal                  Commercial
                          2021         2020          2021          2020
Non-at-Risk               (2.9) %      (3.1) %        (0.2) %      (0.6) %
Quota Share              (28.7) %     (18.2) %       (15.1) %         -  %
All Other                (26.7) %     (22.6) %       (42.5) %     (49.3) %
Total Ceding Ratio       (58.3) %     (43.9) %       (57.8) %     (49.9) %


Please note that the sum of the above percentages will not equal the
consolidated percentages as calculated using each operating segment
gross earned premium rather than our consolidated gross earned premium.

We amortize our ceded unearned premiums over the annual agreement period, and we
record that amortization in ceded premiums earned on our Consolidated Statements
of Comprehensive Loss. The table below summarizes the amounts of our ceded
premiums written under the various types of agreements, as well as the
amortization of ceded unearned premiums:

                                                              Year Ended December 31,
                                                                    2021            2020            2019
 Quota Share                                                    $ (294,570)     $ (306,331)     $ (174,147)
 Excess-of-loss                                                   (545,128)       (412,220)       (424,622)

Equipment, identity theft and cybersecurity

 (1)                                                                (1,562) 

(13,801) (13,379)

 Flood and inland flood (1)                                        (23,465) 

(23,517) (21,127)

 Ceded premiums written                                         $ (864,725) 

($755,869) ($633,275)

 Change in ceded unearned premiums                                  46,043  

114,552 52,149

 Ceded premiums earned                                          $ (818,682) 

($641,317) $(581,126)

(1) We started drafting cybersecurity and indoor flooding policies in 2020.

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                        UNITED INSURANCE HOLDINGS CORP.

The distribution of our ceded premiums underwritten under the different types of
agreements, as well as the amortization of ceded unearned premiums for our
commercial lines and personal lines operating segments can be viewed in the tables
below. These values ​​can be reconciled with the table above.

Personal lines operating segment

                                                                            Year Ended December 31,
                                                                                2021                2020                2019
Quota Share                                                                 $ (219,293)         $ (284,886)         $ (174,147)
Excess-of-loss                                                                (373,419)           (222,107)           (233,575)
Equipment, identity theft, and cyber security (1)                                 (811)            (11,724)            (11,036)

Flood and inland flood (1)                                                     (23,465)            (23,517)            (21,128)
Ceded premiums written                                                      

($616,988) ($542,234) ($439,886)
Change in ceded unearned premiums

                                               35,362              95,394              35,614
Ceded premiums earned                                                       

($581,626) ($446,840) $(404,272)

(1) We started drafting cybersecurity and indoor flooding policies in 2020.

Impact on Commercial Lines Operating Segment

                                                                            Year Ended December 31,
                                                                                2021                2020                2019
Quota Share                                                                 $  (75,277)         $  (21,445)         $        -
Excess-of-loss                                                                (171,709)           (190,113)           (191,047)
Equipment, identity theft, and cyber security (1)                                 (751)             (2,077)             (2,342)

Ceded premiums written                                                      

($247,737) ($213,635) ($193,389)
Change in ceded unearned premiums

                                               10,681              19,158              16,535
Ceded premiums earned                                                       

$(237,056) ($194,477) ($176,854)

(1) We started writing about cybersecurity in 2020.
























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                        UNITED INSURANCE HOLDINGS CORP.

Current year disaster losses broken down by named and numbered storms
and all other catastrophic losses are presented in the following table.

                                                                                                   Incurred Loss and
                                                                                                    Loss adjustment
                                                                     Number of Events              expense (LAE) (1)         Combined Ratio Impact
December 31, 2021
Current period catastrophe losses
incurred
Named and numbered storms                                                        7               $           35,872                          6.1  %
All other catastrophe loss events                                               40                           77,868                         13.2  %
Total                                                                           47               $          113,740                         19.3  %

December 31, 2020
Current period catastrophe losses
incurred
Named and numbered storms                                                       13               $          208,157                         27.2  %
All other catastrophe loss events                                               35                           86,380                         11.3  %
Total                                                                           48               $          294,537                         38.5  %

December 31, 2019
Current period catastrophe losses
incurred
Named and numbered storms                                                        5               $           32,170                          4.3  %
All other catastrophe loss events                                               32                           64,705                          8.6  %
Total                                                                           37               $           96,875                         12.9  %


(1) Incurred loss and LAE is equal to losses and LAE paid plus the change in
case and incurred but not reported reserves. Shown net of losses ceded to
reinsurers. Incurred loss and LAE and number of events includes the development
on storms during the year in which it occurred.

The impact of the current year catastrophes to our commercial lines and personal
lines operating segments can be seen in the table below. Please note that the
catastrophe events may have impacted both operating segments. As a result, the
sum of the number of events in the tables below will not reconcile to the
consolidated number of events above. In addition, the combined ratio impact is
calculated and sum of the ratios in the tables below will not reconcile to the
ratios above.

























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                        UNITED INSURANCE HOLDINGS CORP.

Impact on the Personal Lines Line of Business

                                                                                                   Incurred Loss and
                                                                                                    Loss adjustment
                                                                     Number of Events              expense (LAE) (1)         Combined Ratio Impact
December 31, 2021
Current period catastrophe losses
incurred
Named and numbered storms                                                        7               $           35,715                          8.6  %
All other catastrophe loss events                                               40                           68,495                         16.4  %
Total                                                                           47               $          104,210                         25.0  %

December 31, 2020
Current period catastrophe losses
incurred
Named and numbered storms                                                       13               $          191,473                         33.6  %
All other catastrophe loss events                                               33                           78,402                         13.7  %
Total                                                                           46               $          269,875                         47.3  %

December 31, 2019
Current period catastrophe losses
incurred
Named and numbered storms                                                        5               $           29,477                          5.5  %
All other catastrophe loss events                                               32                           48,217                          9.1  %
Total                                                                           37               $           77,694                         14.6  %


(1) Incurred loss and LAE is equal to losses and LAE paid plus the change in
case and incurred but not reported reserves. Shown net of losses ceded to
reinsurers. Incurred loss and LAE and number of events includes the development
on storms during the year in which it occurred.































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                        UNITED INSURANCE HOLDINGS CORP.

Impact on Commercial Lines Operating Segment

                                                                                                 Incurred Loss and Loss
                                                                                                   adjustment expense
                                                                     Number of Events                  (LAE) (1)              Combined Ratio Impact
December 31, 2021
Current period catastrophe losses
incurred
Named and numbered storms                                                        4               $               158                          0.1  %
All other catastrophe loss events                                                4                             9,372                          5.4  %
Total                                                                            8               $             9,530                          5.5  %

December 31, 2020
Current period catastrophe losses
incurred
Named and numbered storms                                                        8               $            16,684                          8.5  %
All other catastrophe loss events                                                9                             7,978                          4.1  %
Total                                                                           17               $            24,662                         12.6  %

December 31, 2019
Current period catastrophe losses
incurred
Named and numbered storms                                                        1               $             2,693                          1.2  %
All other catastrophe loss events                                                3                            16,488                          7.5  %
Total                                                                            4               $            19,181                          8.7  %


(1) Incurred loss and LAE is equal to losses and LAE paid plus the change in
case and incurred but not reported reserves. Shown net of losses ceded to
reinsurers. Incurred loss and LAE and number of events includes the development
on storms during the year in which it occurred.

See note 9 of our notes to the consolidated financial statements for additional information.
information about our reinsurance program.

Unpaid losses and loss adjustments

We generally use the term "loss(es)" to collectively refer to both loss and LAE.
We establish reserves for both reported and unreported unpaid losses that have
occurred at or before the balance sheet date for amounts we estimate we will be
required to pay in the future, including provisions for claims that have been
reported but are unpaid at the balance sheet date and for obligations on claims
that have been incurred but not reported at the balance sheet date. Our policy
is to establish these loss reserves after considering all information known to
us at each reporting period. At any given point in time, our loss reserve
represents our best estimate of the ultimate settlement and administration costs
of our insured claims incurred and unpaid.

Unpaid losses and LAE totaled $1,084,450,000 and $1,089,966,000 as of
December 31, 2021 and 2020, respectively. Of this total, $230,377,000 and
$349,882,000 is related to our commercial lines operating segment, respectively.
The remaining $854,073,000 and $740,084,000 is related to our personal lines
operating segment, respectively. On a consolidated basis, this balance has
remained relatively flat year over year, despite decreased current year
catastrophe losses incurred in 2021, driven by a decrease in the frequency of
catastrophe activity in 2021. This decrease in activity is offset by the
increase in severity of current year losses, driven primarily by Hurricane Ida
which made landfall in the third quarter of 2021. Despite unpaid losses and LAE
remaining flat year over year, we have seen an increase in our reinsurance
recoverables year over year due to the decrease in our core catastrophe
reinsurance program's retention levels in 2021 and our increase in quota share
cessions in 2021..

Since the process of estimating loss reserves requires significant judgment due
to a number of variables, such as fluctuations in inflation, judicial decisions,
legislative changes and changes in claims handling procedures, our ultimate
liability will likely differ from these estimates. We revise our reserve for
unpaid losses as additional information becomes available, and reflect
adjustments, if any, in our earnings in the periods in which we determine the
adjustments as necessary.

See note 10 of our notes to the consolidated financial statements for more information.
information regarding our losses and LAE.

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                        UNITED INSURANCE HOLDINGS CORP.

CASH AND CAPITAL RESOURCES

We generate cash through premium collections, reinsurance recoveries, investment
income, the sale or maturity of invested assets, the issuance of debt and the
issuance of additional shares of our stock. We use our cash to pay reinsurance
premiums, claims and related costs, policy acquisition costs, salaries and
employee benefits, other expenses and stockholder dividends, acquire
subsidiaries and pay associated costs, as well as to repay debts and purchase
investments.

As a holding company, we do not conduct any business operations of our own and,
as a result, we rely on cash dividends or intercompany loans from our management
subsidiaries to pay our general and administrative expenses. Insurance
regulatory authorities heavily regulate our insurance subsidiaries, including
restricting any dividends paid by our insurance subsidiaries and requiring
approval of any management fees our insurance subsidiaries pay to our management
subsidiaries for services rendered; however, nothing restricts our non-insurance
company subsidiaries from paying us dividends other than state corporate laws
regarding solvency. Our management subsidiaries pay us dividends primarily using
cash from the collection of management fees from our insurance subsidiaries,
pursuant to the management agreements in effect between those entities. In
accordance with state laws, our insurance subsidiaries may pay dividends or make
distributions out of that part of their statutory surplus derived from their net
operating profit and their net realized capital gains. The RBC guidelines
published by the NAIC may further restrict our insurance subsidiaries' ability
to pay dividends or make distributions if the amount of the intended dividend or
distribution would cause their respective surplus as it regards policyholders to
fall below minimum RBC guidelines. See   Note 15   in our Notes to Consolidated
Financial Statements and   Part II, Item 5   for additional information.

During the year ended December 31, 2021, we contributed $17,000,000, $8,000,000
and $17,500,000 to our insurance subsidiaries, UPC, FSIC, and ACIC,
respectively. During the year ended December 31, 2020, we contributed
$12,000,000 and $3,000,000 to our insurance subsidiary, UPC, and reinsurance
subsidiary, UPC Re, respectively. We may make future contributions of capital to
our insurance subsidiaries as circumstances require.

During February 2021, we received a dividend of $3,500,000 from IIC. During
February 2020, we received a dividend of $12,000,000 from IIC. During August
2019, we received a dividend of $13,579,000 from our insurance subsidiary ACIC.
In 2019, the $1,764,000 dividend paid by IIC in 2018 was returned by UIHC.

On December 13, 2017, we issued $150,000,000 of senior notes (Senior Notes) that
will mature on December 15, 2027 and bear interest at a rate equal to 6.25% per
annum payable semi-annually on each June 15 and December 15, commencing June 15,
2018. The Senior Notes are senior unsecured obligations of the Company. We may
redeem the Senior Notes at our option, at any time and from time to time in
whole or in part, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Senior Notes to be redeemed and (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon from the date of redemption to the date that is three months prior to
maturity. On and after that date, we may redeem the Senior Notes at par.

As a result of claim activity from the current and prior years, we have an
obligation related to the unpaid policyholder losses and unpaid loss adjustment
expenses associated with the settling of these claims. As of December 31, 2021,
our total obligation related to these claim payments was $1,084,450,000, of
which we estimate $608,615,000 to be short-term in nature (due in less than
twelve months), based upon our cumulative claims paid over the last 21 years.
While we believe that historical performance of loss payment patterns is a
reasonable source for projecting future claim payments, there is inherent
uncertainty in this estimated projected settlement, and as a result these
estimates will differ, perhaps significantly, from actual future payments.

In addition to our unpaid loss and loss adjustment expenses, as of December 31,
2021 we have outstanding debt obligations related to our notes payable totaling
$158,559,000. This is exclusive of interest costs, which we estimate will total
$65,629,000 over the life of the debt, based on the current fixed and variable
interest rates of these notes. Our short-term obligation related to these notes
payable total $1,523,000 in principal payments and $9,506,000 in estimated
interest payments. For more information regarding these outstanding notes,
please see   Note 11  .

In connection with entering into contracts with our outside vendors, we have
minimum obligations due to our vendors over the life of the contracts. Our main
vendor obligations are related to underwriting tools, claims and policy
administration systems, and software used by our information technology
department in their daily operations. Our total obligation related to these
three categories of obligations are $2,370,000, $8,031,000, and $6,250,000,
respectively. Of these obligations, $1,257,000, $5,940,000, and $1,250,000,
respectively are short-term in nature.


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                        UNITED INSURANCE HOLDINGS CORP.




Cash flow for the year ended the 31st of December(in millions)
[[Image Removed: uihc-20211231_g11.jpg]][[Image Removed: uihc-20211231_g12.jpg]][[Image Removed: uihc-20211231_g13.jpg]]

Operational activities

The principal cash inflows from our operating activities come from premium
collections, reinsurance recoveries and investment income. The principal cash
outflows from our operating activities are the result of claims and related
costs, reinsurance premiums, policy acquisition costs and salaries and employee
benefits. A primary liquidity concern with respect to these cash flows is the
risk of large magnitude catastrophe events.

During the year ended December 31, 2021, several balance sheet items were
impacted by our increased reinsurance coverage entered into at the end of 2020
and in 2021. Reinsurance recoverable on paid and unpaid losses increased during
the period, driven by our increased ceding on catastrophe losses related
primarily to Hurricane Ida and increased quota share cessions. Ceded unearned
premiums also increased, driven by the increase in ceded written premiums
associated with these additional agreements. In addition to these items, we also
saw a decrease in our unearned premium balance at December 31, 2021, driven by
our decreased personal lines written premium in 2021 as the result of
underwriting actions taken by the Company at the end of 2020 and throughout
2021.

Investing activities

The principal cash inflows from our investing activities come from repayments of
principal, proceeds from maturities and sales of investments. We closely monitor
and manage these risks through our comprehensive investment risk management
process. The principal cash outflows relate to purchases of investments and cost
of property, equipment and capitalized software acquired. Additional cash
outflows relate to the purchase of fixed assets. The primary liquidity concerns
with respect to these cash flows are the risk of default by debtors and market
disruption. During the year ended December 31, 2021, cash provided by investing
activities increased $214,811,000 as the result of net sales of investments
totaling $256,648,000 in 2021, compared to $47,414,000 in 2020.

Fundraising activities

The principal cash inflows from our financing activities come from issuances of
debt and other securities. The principal cash outflows come from repayments of
debt and payments of dividends. The primary liquidity concern with respect to
these cash flows is market disruption in the cost and availability of credit. We
believe our current capital resources, together with cash provided from our
operations, are sufficient to meet currently anticipated working capital
requirements. During the year ended December 31, 2021, cash used in financing
activities increased by $552,000 due to a $588,000 increase year over year in
cash outflows related to our repayment of our outstanding debt, offset by a
$73,000 decrease year over year in our tax withholding payments related to the
net settlement of equity awards.



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                        UNITED INSURANCE HOLDINGS CORP.
RECENT ACCOUNTING STANDARDS

Please refer to note 2(v) of our notes to the consolidated financial statements
for a discussion of recent accounting standards that may affect us.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with GAAP requires
management to adopt accounting policies and to make estimates and assumptions that
affect the amounts presented in the consolidated financial statements. most
critical estimates include those used to determine:

• provisions for unpaid losses,

•fair value of investments,

• provisions for investment portfolio credit, and

•Good will.

In making these determinations, management makes subjective and complex
judgments that frequently require estimates about matters that are inherently
uncertain. Many of these policies, estimates and related judgments are common in
the insurance industry. It is reasonably likely that changes in these estimates
could occur from time to time and result in a material impact on our
consolidated financial statements.

In addition, the preparation of our financial statements in accordance with GAAP
prescribes when we may reserve for particular risks, including litigation
exposures. Accordingly, our results for a given reporting period could be
significantly affected if and when we establish a reserve for a major
contingency. Therefore, the results we report in certain accounting periods may
appear to be volatile and past results may not be indicative of results in
future periods.

Provisions for unpaid losses and LAE

Reserves for unpaid losses and LAE represent the most significant accounting
estimate inherent in the preparation of our financial statements. These reserves
represent management's best estimate of the amount we will ultimately pay for
losses and we base the amount upon the application of various actuarial reserve
estimation techniques as well as considering other material facts and
circumstances known at the balance sheet date.

As discussed in   Note 10   in our Notes to Consolidated Financial Statements,
we determine our ultimate losses by using multiple actuarial methods to
determine an actuarial estimate within a relevant range of indications that we
calculate using generally accepted actuarial techniques. Our selection of the
actuarial estimate is influenced by the analysis of our historical loss and
claims experience since inception. For each accident year, we estimate the
ultimate incurred losses for both reported and unreported claims. In
establishing this estimate, we reviewed the results of various actuarial methods
discussed in   Note     10   in our Notes to Consolidated Financial Statements.

Fair value of investments

Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. We are responsible for the determination
of fair value of financial assets and the supporting assumptions and
methodologies. We use quoted prices from active markets and we use an
independent third-party valuation service to assist us in determining fair
value. We obtain only one single quote or price for each financial instrument.

As discussed in   Note     4   in our Notes to Consolidated Financial
Statements, we value our investments at fair value using quoted prices from
active markets, to the extent available. For securities for which quoted prices
in active markets are unavailable, we use observable inputs such as quoted
prices in inactive markets, quoted prices in active markets for similar
instruments, benchmark interest rates, broker quotes and other relevant inputs.
We also have investments in limited partnerships that require us to use the net
asset value per share method of valuation to determine fair value.

See "Item 7a. Quantitative and Qualitative Disclosures about Market Risk" for
more information regarding the sensitivity of our fixed maturity portfolio to
changes in interest rates.
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                        UNITED INSURANCE HOLDINGS CORP.



Provisions for investment portfolio credit

For investments classified as available for sale, the difference between fair
value and cost or amortized cost for fixed income securities is reported as a
component of accumulated other comprehensive income (loss) on our Consolidated
Balance Sheet and is not reflected in our net income (loss) of any period until
reclassified to net income (loss) upon the consummation of a transaction with an
unrelated third party. We have a portfolio monitoring process to identify and
evaluate each fixed income security whose carrying value may be impaired as the
result of a credit loss.

For each fixed-income security in an unrealized loss position, if we determine
that we intend to sell the security or that it is more likely than not that we
will be required to sell the security before recovery of the cost or amortized
cost basis for reasons such as liquidity needs, contractual or regulatory
requirements, the security's entire decline in fair value is recorded in
earnings.

If our management decides not to sell the fixed-income security and it is more
likely than not that we will not be required
to sell the fixed-income security before recovery of its amortized cost basis,
we evaluate whether the decline in fair value has
resulted from credit losses or other factors. This is typically indicated by a
change in the rating of the security assigned by a
rating agency, and any adverse conditions specifically related to the security
or industry, among other factors. If the assessment
indicates that a credit loss may exist, the present value of cash flows expected
to be collected from the security are compared to
the amortized cost basis of the security. If the present value of cash flows
expected to be collected is less than the amortized
cost basis, a credit loss exists and an allowance for credit losses will be
recorded in earnings. Credit loss is limited to the
difference between a security's amortized cost basis and its fair value. Any
additional impairment not recorded through an
allowance for credit losses is recognized in other comprehensive income.

If the estimated recovery value is less than the amortized cost of the security,
a credit loss exists and an allowance for the difference between the estimated
recovery value and amortized cost is recorded in earnings. The portion of the
unrealized loss related to factors other than credit remains classified in
accumulated other comprehensive income (loss). If we determine that the fixed
income security does not have sufficient cash flow or other information to
estimate a recovery value for the security, we may conclude that the entire
decline in fair value is deemed to be credit related and the loss is recorded in
earnings.

Due to the adoption of Accounting Standards Update (ASU) 2016-01 (ASU 2016-01)
as of January 1, 2018, equity securities are reported at fair value with changes
in fair value, including impairment write-downs, being recognized in the revenue
section of our Consolidated Statements of Comprehensive Loss.

See note 2(b) of our notes to the consolidated financial statements for more information.
information regarding our credit loss tests.

Measurement of Good will and related impairment

Goodwill is the excess of cost over the estimated fair value of net assets
acquired. Goodwill is not amortized but is tested
for impairment at least annually or more frequently if events or circumstances,
such as adverse changes in the business climate,
indicate that there may be justification for conducting an interim test. We test
goodwill for impairment by performing a
qualitative assessment. If the assessment indicates that an impairment may
exist, a quantitative assessment is performed. Goodwill is impaired when it is
determined that the carrying value of a reporting unit is in excess of the fair
value of that reporting unit. The valuation methodologies utilized are subject
to key judgments and assumptions that are sensitive to change. Estimates of fair
value are inherently uncertain and represent only management's reasonable
expectation regarding future developments.

Please refer to note 2(k) and note 8 of our notes to the consolidated financial statements
Financial Statements for more information on our assessment of
Good will and related impairment.

RELATED PARTY TRANSACTIONS

Please refer to note 16 of our notes to the consolidated financial statements
for a discussion of our related party transactions.



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                        UNITED INSURANCE HOLDINGS CORP.