Gross insurance premiums written increased 167.3% to $36,844,517 for the three-month period ended March 31, 2006 from $13,781,499 for the three-month period ended March 31, 2005. The increase in gross premiums written is primarily attributable to an approximate 159.5% increase in new business as well as an overall 7.8% premium rate increase. The increase in new business is partially attributable to the recent windstorm catastrophes providing an opportunity in the otherwise competitive marketplace as certain companies are not accepting new business.

Net premiums earned increased 257.9% to $4,285,586 for the three-month period ended March 31, 2006 from $1,197,562 for the three-month period ended March 31, 2005. The increase is due to an increase in new business, premium rate increases and changes in the reinsurance program.

Investment income increased 86.0% to $383,967 for the three-month period ended March 31, 2006 from $206,415 for the three-month period ended March 31, 2005. The increase is primarily due to higher investment balances that resulted from advances from reinsurers and a higher interest rate environment during the three-months ended March 31, 2006.

Transaction fee revenue decreased 100.0% to $0 for the three-month period ended March 31, 2006 from $112,734 for the three-month period ended March 31, 2005. The decrease is primarily due to the discontinuance of sales of on-line insurance leads to insurance agents during the three-month period ended March 31, 2006.

Commission income increased 67.3% to $920,892 for three-month period ended March 31, 2006 from $550,575 for the three-month period ended March 31, 2005. Commission income is comprised principally of the managing general agent's policy fee income on all new and renewal insurance policies and commissions generated from agency operations. The increase is primarily attributable to an increase in commissions generated from agency operations on new policies.

Insurance Rating - "A"

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Conclusion

Please use UVIH as a momentum and growth opportunity. We feel that UVIH is well undervalued and is worth considering for your risk portfolio.

UVIH is a strong growth company. It's core capabilities and strengths help it to solve the problems of property owners in risky areas. While many insurance companies are resisting writing policies in risky areas such as Florida and the rest of the Gulf Coast, UVIH has taken the plunge and is (we feel) showing the other companies how it's done. There is money to be made there as long as premiums are high enough. The larger companies may balk, which brings business to smaller companies like UVIH.

UVIH has moved quite a bit higher recently. There is a risk of a pull-back in the short-term. UVIH's stock is a balancing act between the new investors that see opportunity and those who have had a large gain and may want to 'take' profits. We feel that the technical analysis we've performed shows us that this is a great stock to own. However, since this can change rapidly, we recommend investors use a stop-loss (especially a trailing stop-loss) around 15% or so. This is not a stock for anyone to buy and stick in their IRA, never to be looked at again. Because of the recent gains (and more gains that we expect in the near future), UVIH seems to be a shorter-term hold for most investors. In other words, if you do not use stops, make sure you check the price frequently. There is nothing more frustrating than looking at an older holding that could have been sold for massive gains - and is now at a loss, or much lower than recent highs.

As mentioned, while we feel that this is an excellent investment - for at least 25-50% gains in a short amount of time, a pull-back is likely in the next few months.