United Fire Group, Inc. (the “Company” or “UFG”)
(Nasdaq: UFCS) today reported financial results for the three-month
period ended June 30, 2024 (the “second quarter of 2024”) with a
consolidated net loss of $2.7 million ($0.11 loss per diluted
share) and consolidated adjusted operating loss of $0.07 per
diluted share.
“Our second quarter results reflect continued progress in our
efforts to deliver improved performance through the strategic
execution of our business plan,” said UFG President and CEO Kevin
Leidwinger. “The quarter was marked by continued premium growth,
lower underlying loss ratio, neutral prior period development and
increased investment income.
“Net written premiums grew 9% to $326.1 million, led by ongoing
growth in our core commercial and assumed reinsurance business
units. Core commercial growth remained steady with average renewal
premium increases of 12.3%, healthy retention and attractive new
business opportunities reflecting our continued focus on
profitability. Rate increases accelerated to 9.8% with all
liability lines increasing in the second quarter and improving
margins above loss cost trends.
“The second quarter GAAP combined ratio of 105.6% improved
significantly over prior year, primarily due to lower prior period
reserve development and decreases in catastrophe and underlying
combined ratios.
“Prior period reserve development in the second quarter was
neutral overall. Consistent with the first quarter, favorable
emergence across several lines of business enabled us to further
reinforce our position against the future inflationary uncertainty
challenging our industry in certain liability lines. Loss emergence
remains within our expectations, and we believe these proactive
steps are a prudent measure to mitigate the impact of a potential
further acceleration in severity trends.
“As you will recall, in the second quarter of 2023 we
significantly strengthened loss reserves as a result of investments
in our actuarial processes and increased depth of analysis that
provided a more informed understanding of our reserve position.
Those investments also led to greater visibility into our
underlying loss trends, and we reacted quickly to recognize the
increased levels of severity observed in our liability portfolio.
For the last four quarters, we have been reflecting this elevated
view of trend in our analyses and management decisions, which has
fostered greater confidence in the strength of our reserve
position. We remain committed to establishing a strong and stable
reserve position, providing a solid foundation to grow our
business.
“Second quarter catastrophe loss ratio of 11.2% improved 1.8
points over prior year and was below our five-year and 10-year
historical averages as we continue our focus on effectively
managing our property catastrophe risk profile.
“The second quarter underlying loss ratio of 58.9% improved 5.7
points from the prior year reflecting strong earned rate
achievement and continued disciplined underwriting. In addition,
results in the second quarter of 2023 were impacted by elevated
surety loss activity.
“Our intense focus on expense management has reduced our overall
cost structure compared to last year. Efficiencies in non-revenue
generating functions have funded investments in talent and
technology supporting our underwriting capabilities and shifted our
cost structure toward the underwriting expense ratio. As a result,
the underwriting expense ratio increased to 35.5% in the second
quarter while we see reductions in the loss adjusting expense ratio
that contribute to a lower net loss ratio. We will continue to
diligently manage the underwriting expense ratio down over
time.
“Overall, the second quarter underlying combined ratio of 94.4%
improved 4.8 points over prior year as a result of the successful
execution of our ongoing actions to improve core margins.
“Net investment income increased 59.2% from prior year to $18.0
million on improving fixed maturity income along with higher
valuations on alternative assets. Fixed maturity investment income
increased 19% from prior year to $16.0 million as we repositioned
portions of our fixed income portfolio to take advantage of the
current attractive reinvestment rates and further support future
earnings.
“Recently, we identified rating errors within our core
commercial business and recorded a pre-tax charge of $3.2 million
in anticipation of voluntarily issuing refunds to certain affected
policyholders. We are committed to resolving this matter as
expediently as possible and have begun working with state
regulators to ensure resolution.
“The improvements in underlying profitability were sufficient to
generate positive adjusted operating income in the second quarter,
excluding the impact of this rating adjustment. We remain committed
to continuing to drive improvements in our performance through
strategic execution of our business plan during the second half of
the year.”
(1) Net premiums written is a performance measure reflecting the
amount charged for insurance policy contracts issued and recognized
on an annualized basis at the effective date of the policy. See
Certain Performance Measures for additional information.(2)
Underlying loss ratio is a non-GAAP financial measure that is
defined as the net loss ratio less impacts of catastrophes and
non-catastrophe prior year reserve development. See Definitions of
Non-GAAP Information and Reconciliations to Comparable GAAP
Measures for additional information.(3) Underlying combined ratio
is a non-GAAP financial measure that is defined as the GAAP
combined ratio less impacts of catastrophes and non-catastrophe
prior period reserve development. See Definitions of Non-GAAP
Information and Reconciliations to Comparable GAAP Measures for
additional information.
Consolidated Financial Highlights:
Consolidated Financial Highlights |
(unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
Thousands, Except Per Share Data) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Net premiums earned |
$ |
287,569 |
|
|
$ |
254,638 |
|
|
$ |
568,428 |
|
|
$ |
510,765 |
|
Net premiums written |
|
326,119 |
|
|
|
299,076 |
|
|
|
647,390 |
|
|
|
572,344 |
|
|
|
|
|
|
|
|
|
GAAP Combined Ratio: |
|
|
|
|
|
|
|
Net loss ratio |
|
70.1 |
% |
|
|
98.4 |
% |
|
|
67.0 |
% |
|
|
83.3 |
% |
Underwriting expense ratio |
|
35.5 |
% |
|
|
34.6 |
% |
|
|
35.2 |
% |
|
|
34.9 |
% |
GAAP combined ratio |
|
105.6 |
% |
|
|
133.0 |
% |
|
|
102.2 |
% |
|
|
118.2 |
% |
|
|
|
|
|
|
|
|
Additional Ratios: |
|
|
|
|
|
|
|
Net loss ratio |
|
70.1 |
% |
|
|
98.4 |
% |
|
|
67.0 |
% |
|
|
83.3 |
% |
Catastrophes-effect on net loss ratio(1) |
|
11.2 |
% |
|
|
13.0 |
% |
|
|
7.9 |
% |
|
|
8.8 |
% |
Reserve development-effect on net loss ratio(1) |
|
— |
% |
|
|
20.8 |
% |
|
|
— |
% |
|
|
10.4 |
% |
Underlying loss ratio(1) (non-GAAP) |
|
58.9 |
% |
|
|
64.6 |
% |
|
|
59.1 |
% |
|
|
64.1 |
% |
Underwriting expense ratio |
|
35.5 |
% |
|
|
34.6 |
% |
|
|
35.2 |
% |
|
|
34.9 |
% |
Underlying combined ratio(2) (non-GAAP) |
|
94.4 |
% |
|
|
99.2 |
% |
|
|
94.3 |
% |
|
|
99.0 |
% |
|
|
|
|
|
|
|
|
Net investment income, net of investment expenses |
$ |
18,029 |
|
|
$ |
11,327 |
|
|
$ |
34,371 |
|
|
$ |
24,049 |
|
Net investment gains (losses) |
|
(1,229 |
) |
|
|
1,124 |
|
|
|
(2,431 |
) |
|
|
(621 |
) |
Other income (loss)(3) |
|
(4,812 |
) |
|
|
(598 |
) |
|
|
(6,726 |
) |
|
|
(2,968 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(2,735 |
) |
|
$ |
(56,382 |
) |
|
$ |
10,767 |
|
|
$ |
(55,688 |
) |
Adjusted operating income (loss)(4) |
|
(1,764 |
) |
|
|
(57,270 |
) |
|
|
12,688 |
|
|
|
(55,197 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per diluted share |
$ |
(0.11 |
) |
|
$ |
(2.23 |
) |
|
$ |
0.42 |
|
|
$ |
(2.21 |
) |
Adjusted operating income (loss) per diluted share(4) |
|
(0.07 |
) |
|
|
(2.27 |
) |
|
|
0.49 |
|
|
|
(2.19 |
) |
|
|
|
|
|
|
|
|
Return on equity(5) |
|
|
|
|
|
2.9 |
% |
|
|
(15.7 |
)% |
|
|
|
|
|
|
|
|
|
|
(1) Underlying loss ratio is a non-GAAP financial measure that
is defined as the net loss ratio less impacts of catastrophes and
non-catastrophe prior period reserve development. See Definitions
of Non-GAAP Information and Reconciliations to Comparable GAAP
Measures for additional information.(2) Underlying combined ratio
is a non-GAAP financial measure that is defined as the GAAP
combined ratio less impacts of catastrophes and non-catastrophe
prior period reserve development. See Definitions of Non-GAAP
Information and Reconciliations to Comparable GAAP Measures for
additional information.(3) Other income (loss) is comprised of
other income (loss), interest expense and other non-underwriting
expenses.(4) Adjusted operating income (loss) is a non-GAAP
financial measure of net income excluding net investment gains and
losses, after applicable taxes. See Definitions of Non-GAAP
Information and Reconciliations to Comparable GAAP Measures for
additional information and a reconciliation of adjusted operating
income (loss) to net income. (5) Return on equity is calculated by
dividing annualized net income by average stockholders’ equity,
which is calculated using a simple average of the beginning and
ending balances for the period.
Total Property & Casualty Underwriting
Results
Second quarter 2024 results:(All comparisons
vs. second quarter 2023, unless noted otherwise)
Net premiums written increased by 9.0% in the second quarter of
2024 driven by core commercial and assumed reinsurance business.
Net premiums earned increased 12.9% in the second quarter of 2024
due to growth in net premiums written in both prior and current
quarters. Commercial lines net premiums written excluding surety
and specialty increased 13.2%, supported by increased pricing with
an overall increase in average renewal premiums of 12.3%. Rate
increases accounted for 9.8% while exposure increases contributed
an additional 2.3%. Excluding the workers’ compensation line of
business, the overall average increase in renewal premiums was
13.5%, with 11.0% from rate increases and 2.2% from exposure
changes.
The GAAP combined ratio for the second quarter of 2024 was
105.6%, improving 27.4 points from 133.0% driven by improvement in
all components of the net loss ratio. Prior period development
excluding catastrophe losses was neutral for the second quarter of
2024. This compares to 20.8% of unfavorable development in the
second quarter of 2023. Pre-tax catastrophe losses added 11.2
percentage points to the GAAP combined ratio, a 1.8 point
improvement and below both five-year and 10-year historical
averages. The underlying loss ratio of 58.9% improved 5.7 points,
reflecting improvement in core commercial lines from a combination
of underwriting actions, increased pricing, expense management and
lower claim count trends. The prior year underlying loss ratio was
also impacted by elevated surety losses, which did not repeat in
the current year. The underwriting expense ratio of 35.5%
deteriorated 0.9 points due to investments in underwriting talent
and technology offset by premium growth.
In July 2024, the Company identified rating errors related to
umbrella and general liability products that resulted in an
overcharge to certain policyholders. Corrective actions are
currently underway, and UFG is voluntarily notifying and
cooperating with state insurance regulators to determine the
appropriate extent of refunds to impacted policyholders. The
Company may receive requests for information in the future from
regulators in connection with this matter. As a result of this
issue, the Company recorded an estimated liability of $3.2 million
to cover its anticipated exposure for this matter based on
information available to management at this time. However, the
Company's estimate of the anticipated exposure may change as
additional information becomes available and it continues its
discussions with regulatory agencies. The Company is reviewing
other business lines to determine whether other similar issues
exist. Fines, penalties or further refunds related to the foregoing
are reasonably possible, but the amount of such losses, if any,
cannot be estimated at this time.
Investment Results
Second quarter 2024 results:(All comparisons
vs. second quarter 2023, unless noted otherwise)
Net investment income was $18.0 million for the second
quarter of 2024, an increase of $6.7 million. Income from the
fixed maturity portfolio increased by $2.5 million due to
investing at higher interest rates. In addition, income from cash
and cash equivalents increased by $1.8 million. Income on
other long-term investments resulted in an additional
$4.1 million of income as the valuation of investments in
limited liability partnerships varies from period to period.
Investment expense increased by $0.5 million. The dividends on
equity securities decreased by $1.2 million due to a strategic
reallocation of equity securities to fixed income assets over the
past year.
Investment Results |
(unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
Thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Investment income: |
|
|
|
|
|
|
|
Interest on fixed maturities |
$ |
15,947 |
|
|
$ |
13,423 |
|
|
$ |
31,107 |
|
|
$ |
26,720 |
|
Dividends on equity securities |
$ |
— |
|
|
$ |
1,185 |
|
|
$ |
341 |
|
|
$ |
2,428 |
|
Income (loss) on other long-term investments |
$ |
623 |
|
|
$ |
(3,504 |
) |
|
$ |
381 |
|
|
$ |
(4,584 |
) |
Other |
$ |
4,188 |
|
|
$ |
2,434 |
|
|
$ |
8,086 |
|
|
$ |
4,294 |
|
Total investment income |
$ |
20,758 |
|
|
$ |
13,538 |
|
|
$ |
39,915 |
|
|
$ |
28,858 |
|
Less investment expenses |
$ |
2,729 |
|
|
$ |
2,211 |
|
|
$ |
5,544 |
|
|
$ |
4,809 |
|
Net investment income |
$ |
18,029 |
|
|
$ |
11,327 |
|
|
$ |
34,371 |
|
|
$ |
24,049 |
|
|
|
|
|
|
|
|
|
Average yields: |
|
|
|
|
|
|
|
Fixed income securities: |
|
|
|
|
|
|
|
Pre-tax(1) |
|
3.62 |
% |
|
|
3.24 |
% |
|
|
3.43 |
% |
|
|
3.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Fixed income securities yield excluding net unrealized
investment gains/losses and expenses.
Balance Sheet
Balance Sheet |
|
|
|
|
|
|
|
|
(In Thousands) |
June 30, 2024 |
|
December 31, 2023 |
|
(unaudited) |
|
|
Invested assets |
$ |
1,935,876 |
|
|
$ |
1,886,494 |
|
Cash |
|
153,430 |
|
|
|
102,046 |
|
Total assets |
|
3,408,697 |
|
|
|
3,144,190 |
|
Losses and loss settlement
expenses |
|
1,755,739 |
|
|
|
1,638,755 |
|
Total liabilities |
|
2,682,102 |
|
|
|
2,410,445 |
|
Net unrealized investment
gains (losses), after-tax |
|
(77,994 |
) |
|
|
(66,967 |
) |
Total
stockholders’ equity |
|
726,595 |
|
|
|
733,745 |
|
|
|
|
|
Book value per share |
$ |
28.68 |
|
|
$ |
29.04 |
|
|
|
|
|
|
|
|
|
Total consolidated assets as of June 30, 2024 were
$3.4 billion, which included $1.9 billion of invested
assets. The Company’s book value per share was $28.68, a decrease
of $0.36 per share, or 1.2%, from December 31, 2023. This
decrease is primarily related to an increase in net income, more
than offset by net unrealized loss after tax on fixed maturity
securities and shareholder dividends during the first six months of
2024.
Capital Management
The Company successfully completed a placement of $70 million
aggregate principal senior unsecured 9.0% notes due May 31, 2039 in
a private offering. Proceeds from the offering will be used to
support anticipated growth and for general corporate purposes.
During the second quarter of 2024, the Company declared and paid
a $0.16 per share cash dividend to shareholders of record as of May
31, 2024. UFG has paid a quarterly dividend every quarter since
March 1968.
Earnings Call Access Information
An earnings call will be held at 9:00 a.m. CT on August 7,
2024, to allow securities analysts, shareholders and other
interested parties the opportunity to hear management discuss the
Company’s second quarter of 2024 results.
Teleconference: Dial-in information for the call is toll-free
1-844-492-3723 (international 1-412-542-4184). The event will be
archived and available for digital replay through August 14, 2024.
The replay access information is toll-free 1-877-344-7529
(international 1-412-317-0088); conference ID no. 9685737.
Webcast: An audio webcast of the teleconference can be accessed
at the Company’s investor relations page at
https://ir.ufginsurance.com/event/ or
https://event.choruscall.com/mediaframe/webcast.html?webcastid=5d3Ej3OM.
The archived audio webcast will be available until August 14,
2024.
Transcript: A transcript of the teleconference will be available
on the Company’s website soon after the completion of the
teleconference.
About UFG
Founded in 1946 as United Fire & Casualty Company, UFG,
through its insurance company subsidiaries, is engaged in the
business of writing property and casualty insurance.
Through our subsidiaries, we are licensed as a property and
casualty insurer in 50 states, plus the District of Columbia, and
we are represented by approximately 1,000 independent agencies.
A.M. Best Company assigns a rating of “A-” (Excellent) for members
of the United Fire & Casualty Group. For more information about
UFG, visit www.ufginsurance.com.
Contact:
Investor RelationsEmail:
ir@unitedfiregroup.com
Media Inquiries Email:
news@unitedfiregroup.com
Disclosure of Forward-Looking Statements
This release may contain forward-looking statements about our
operations, anticipated performance and other similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe
harbor under the Securities Act of 1933 and the Securities Exchange
Act of 1934 for forward-looking statements. The forward-looking
statements are not historical facts and involve risks and
uncertainties that could cause actual results to differ from those
expected and/or projected. Such forward-looking statements are
based on current expectations, estimates, forecasts and projections
about the Company, the industry in which we operate, and beliefs
and assumptions made by management. Words such as “expect(s),”
“anticipate(s),” “intend(s),” “plan(s),” “believe(s),”
“continue(s),” “seek(s),” “estimate(s),” “goal(s),” “remain(s)
optimistic,” “target(s),” “forecast(s),” “project(s),”
“predict(s),” “should,” “could,” “may,” “will,” “might,” “hope,”
“can” and other words and terms of similar meaning or expression in
connection with a discussion of future operations, financial
performance or financial condition, are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed in such
forward-looking statements. Information concerning factors that
could cause actual outcomes and results to differ materially from
those expressed in the forward-looking statements is contained in
Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K
for the year ended December 31, 2023 (“2023 Annual Report”),
filed with the Securities and Exchange Commission (“SEC”) on
February 29, 2024. The risks identified in our 2023 Annual
Report and in our other SEC filings are representative of the
risks, uncertainties, and assumptions that could cause actual
outcomes and results to differ materially from what is expressed in
the forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this release or as of the date they are
made. Except as required under the federal securities laws and the
rules and regulations of the SEC, we do not have any intention or
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as required by law. In addition, future dividend
payments are within the discretion of our Board of Directors and
will depend on numerous factors, including our financial condition,
our capital requirements and other factors that our Board of
Directors considers relevant.
Definitions of Non-GAAP Information and Reconciliations
to Comparable GAAP Measures
The Company prepares its public financial statements in
conformity with accounting principles generally accepted in the
United States of America (“GAAP”). Management also uses certain
non-GAAP financial measures to evaluate its operations and
profitability. As further explained below, management believes that
disclosure of certain non-GAAP financial measures enhances investor
understanding of our financial performance. Non-GAAP financial
measures disclosed in this report include: adjusted operating
income, underlying loss ratio, and underlying combined ratio. The
Company has provided the following definitions and reconciliations
of the non-GAAP financial measures:
Adjusted operating
income: Adjusted operating income
is calculated by excluding net investment gains and losses, after
applicable federal and state income taxes from net income (loss).
Management believes adjusted operating income is a meaningful
measure for evaluating insurance company performance and a useful
supplement to GAAP information because it better represents the
normal, ongoing performance of our business. Investors and equity
analysts who invest in and report on the insurance industry and the
Company generally focus on this metric in their analyses.
Net Income Reconciliation |
(unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
Thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Income Statement Data |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(2,735 |
) |
|
$ |
(56,382 |
) |
|
$ |
10,767 |
|
|
$ |
(55,688 |
) |
Less: after-tax net investment gains (losses) |
|
(971 |
) |
|
|
888 |
|
|
|
(1,921 |
) |
|
|
(491 |
) |
Adjusted operating income (loss) |
$ |
(1,764 |
) |
|
$ |
(57,270 |
) |
|
$ |
12,688 |
|
|
$ |
(55,197 |
) |
Diluted Earnings Per
Share Data |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(0.11 |
) |
|
$ |
(2.23 |
) |
|
$ |
0.42 |
|
|
$ |
(2.21 |
) |
Less: after-tax net investment gains (losses) |
|
(0.04 |
) |
|
|
0.04 |
|
|
|
(0.07 |
) |
|
|
(0.02 |
) |
Adjusted operating income (loss) |
$ |
(0.07 |
) |
|
$ |
(2.27 |
) |
|
$ |
0.49 |
|
|
$ |
(2.19 |
) |
Underlying loss ratio and underlying combined
ratio: Underlying loss ratio represents the net loss ratio
less the impacts of catastrophes and non-catastrophe prior period
reserve development. The underlying combined ratio represents the
GAAP combined ratio less the impacts of catastrophes and
non-catastrophe prior period reserve development. The Company
believes that the underlying loss ratio and underlying combined
ratio are meaningful measures to understand the underlying trends
in the core business in the current accident year, removing the
volatility of prior period impacts and catastrophes. Management
believes separate discussions on catastrophe losses and prior
period reserve development are important to understanding how the
Company is managing catastrophe risk and in identifying
developments in longer-tailed business.
Prior period reserve development is the increase (unfavorable)
or decrease (favorable) in incurred loss and loss adjustment
expense at the valuation dates for losses which occurred in
previous calendar years. This measure excludes development on
catastrophe losses.
Catastrophe losses is an operational measure which utilizes the
designations of the Insurance Services Office (“ISO”) and is
reported with losses and loss adjustment expense amounts net of
reinsurance recoverables, unless specified otherwise. In addition
to ISO catastrophes, we also include as catastrophes those events
(“non-ISO catastrophes”), which may include U.S. or international
losses, that we believe are, or will be, material to our
operations, either in amount or in number of claims made.
Catastrophes are not predictable and are unique in terms of timing
and financial impact. While management estimates catastrophe losses
as incurred, due to the inherently unique nature of catastrophe
losses, the impact in a reporting period is inclusive of
catastrophes that occurred in the reporting period, as well as
development on catastrophes that may have occurred in prior
periods.
Certain Performance Measure
The Company uses the following measure to evaluate its financial
performance. Management believes a discussion of this measure
provides financial statement users with a better understanding of
the Company’s results of operations. The Company has provided the
following definition:
Net premiums written: Net premiums written is
frequently used by industry analysts and other recognized reporting
sources to facilitate comparisons of the performance of insurance
companies. Net premiums written is the amount charged for insurance
policy contracts issued and recognized on an annualized basis at
the effective date of the policy. Management believes net premiums
written is a meaningful measure for evaluating insurance company
sales performance and geographical expansion efforts. Net premiums
written for an insurance company consists of direct premiums
written and premiums assumed, less premiums ceded. Net premiums
earned is calculated on a pro-rata basis over the terms of the
respective policies. Unearned premium reserves are established for
the portion of premiums written applicable to the unexpired terms
of the insurance policies in force. The difference between net
premiums earned and net premiums written is the change in unearned
premiums and the change in prepaid reinsurance premiums.
Supplemental Tables
Income Statement |
(unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
Thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenues |
|
|
|
|
|
|
|
Net premiums earned |
$ |
287,569 |
|
|
$ |
254,638 |
|
|
$ |
568,428 |
|
|
$ |
510,765 |
|
Investment income, net of
investment expenses |
|
18,029 |
|
|
|
11,327 |
|
|
|
34,371 |
|
|
|
24,049 |
|
Net investment gains
(losses) |
|
(1,229 |
) |
|
|
1,124 |
|
|
|
(2,431 |
) |
|
|
(621 |
) |
Other
income (loss) |
|
(3,200 |
) |
|
|
— |
|
|
|
(3,200 |
) |
|
|
— |
|
Total Revenues |
$ |
301,169 |
|
|
$ |
267,089 |
|
|
$ |
597,168 |
|
|
$ |
534,193 |
|
|
|
|
|
|
|
|
|
Benefits, Losses and
Expenses |
|
|
|
|
|
|
|
Losses and loss settlement
expenses |
$ |
201,325 |
|
|
$ |
250,730 |
|
|
$ |
380,971 |
|
|
$ |
425,327 |
|
Amortization of deferred
policy acquisition costs |
|
67,389 |
|
|
|
59,156 |
|
|
|
133,079 |
|
|
|
118,991 |
|
Other underwriting
expenses |
|
34,613 |
|
|
|
28,832 |
|
|
|
67,078 |
|
|
|
59,135 |
|
Interest expense |
|
1,460 |
|
|
|
797 |
|
|
|
2,319 |
|
|
|
1,594 |
|
Other
non-underwriting expenses |
|
152 |
|
|
|
(199 |
) |
|
|
1,207 |
|
|
|
1,374 |
|
Total Benefits, Losses and Expenses |
$ |
304,939 |
|
|
$ |
339,316 |
|
|
$ |
584,654 |
|
|
$ |
606,421 |
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
$ |
(3,770 |
) |
|
$ |
(72,227 |
) |
|
$ |
12,514 |
|
|
$ |
(72,228 |
) |
Federal income tax expense (benefit) |
|
(1,035 |
) |
|
|
(15,845 |
) |
|
|
1,747 |
|
|
|
(16,540 |
) |
Net income (loss) |
$ |
(2,735 |
) |
|
$ |
(56,382 |
) |
|
$ |
10,767 |
|
|
$ |
(55,688 |
) |
Net Premiums Written by Line of Business |
(unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In
Thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
Net Premiums Written(1) |
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
Other liability(2) |
$ |
103,974 |
|
$ |
99,945 |
|
$ |
193,836 |
|
$ |
179,774 |
Fire and allied lines(3) |
|
62,721 |
|
|
70,408 |
|
|
133,374 |
|
|
132,437 |
Automobile |
|
68,366 |
|
|
60,033 |
|
|
143,207 |
|
|
119,312 |
Workers’ compensation |
|
16,822 |
|
|
14,196 |
|
|
33,902 |
|
|
27,560 |
Surety(4) |
|
14,246 |
|
|
9,520 |
|
|
29,104 |
|
|
24,921 |
Miscellaneous |
|
2,876 |
|
|
839 |
|
|
5,006 |
|
|
1,158 |
Total commercial lines |
$ |
269,005 |
|
$ |
254,941 |
|
$ |
538,429 |
|
$ |
485,162 |
|
|
|
|
|
|
|
|
Personal lines: |
|
|
|
|
|
|
|
Fire and allied lines(5) |
$ |
2,706 |
|
$ |
1,134 |
|
$ |
7,582 |
|
$ |
2,630 |
Automobile |
|
1,084 |
|
|
— |
|
|
1,084 |
|
|
— |
Miscellaneous |
|
1 |
|
|
4 |
|
|
3 |
|
|
9 |
Total personal lines |
$ |
3,791 |
|
$ |
1,138 |
|
$ |
8,669 |
|
$ |
2,639 |
Assumed reinsurance |
|
53,323 |
|
|
42,997 |
|
|
100,292 |
|
|
84,544 |
Total |
$ |
326,119 |
|
$ |
299,076 |
|
$ |
647,390 |
|
$ |
572,344 |
(1) Net premiums written is a performance measure reflecting the
amount charged for insurance policy contracts issued and recognized
on an annualized basis at the effective date of the policy. See
Certain Performance Measures for additional information.(2)
Commercial lines “Other liability” is business insurance covering
bodily injury and property damage arising from general business
operations, accidents on the insured’s premises and products
manufactured or sold.(3) Commercial lines “Fire and allied lines”
includes fire, allied lines, commercial multiple peril and inland
marine.(4) Commercial lines “Surety” previously referred to as
“Fidelity and surety.”(5) Personal lines “Fire and allied lines”
includes fire, allied lines, homeowners and inland marine.
Net Premiums Earned, Net Losses and Loss Settlement
Expenses and Net Loss Ratio by Line of Business |
Three
Months Ended June 30, |
2024 |
|
2023 |
|
|
|
Net Losses |
|
|
|
|
|
Net Losses |
|
|
|
|
|
and Loss |
|
|
|
|
|
and Loss |
|
|
|
Net |
|
Settlement |
|
Net |
|
Net |
|
Settlement |
|
Net |
(In Thousands, Except
Ratios) |
Premiums |
|
Expenses |
|
Loss |
|
Premiums |
|
Expenses |
|
Loss |
(unaudited) |
Earned |
|
Incurred |
|
Ratio |
|
Earned |
|
Incurred |
|
Ratio |
Commercial lines |
|
|
|
|
|
|
|
|
|
|
|
Other liability |
$ |
84,926 |
|
$ |
70,702 |
|
|
83.3 |
% |
|
$ |
81,028 |
|
$ |
106,805 |
|
|
131.8 |
% |
Fire and allied lines |
|
63,643 |
|
|
39,402 |
|
|
61.9 |
|
|
|
61,808 |
|
|
52,056 |
|
|
84.2 |
|
Automobile |
|
57,690 |
|
|
44,790 |
|
|
77.6 |
|
|
|
51,905 |
|
|
53,908 |
|
|
103.9 |
|
Workers’ compensation |
|
13,515 |
|
|
8,402 |
|
|
62.2 |
|
|
|
13,802 |
|
|
1,649 |
|
|
11.9 |
|
Surety |
|
13,944 |
|
|
6,632 |
|
|
47.6 |
|
|
|
6,386 |
|
|
7,872 |
|
|
123.3 |
|
Miscellaneous |
|
2,172 |
|
|
946 |
|
|
43.6 |
|
|
|
374 |
|
|
28 |
|
|
7.5 |
|
Total commercial lines |
$ |
235,890 |
|
$ |
170,874 |
|
|
72.4 |
% |
|
$ |
215,303 |
|
$ |
222,318 |
|
|
103.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Personal lines |
|
|
|
|
|
|
|
|
|
|
|
Fire and allied lines |
$ |
2,748 |
|
$ |
1,206 |
|
|
43.9 |
% |
|
$ |
1,000 |
|
$ |
141 |
|
|
14.1 |
% |
Automobile |
|
243 |
|
|
106 |
|
|
NM |
|
|
|
— |
|
|
(121 |
) |
|
NM |
|
Miscellaneous |
|
3 |
|
|
(15 |
) |
|
NM |
|
|
|
6 |
|
|
(19 |
) |
|
NM |
|
Total personal lines |
$ |
2,994 |
|
$ |
1,297 |
|
|
43.3 |
% |
|
$ |
1,006 |
|
$ |
1 |
|
|
0.1 |
% |
Assumed reinsurance |
|
48,685 |
|
|
29,154 |
|
|
59.9 |
|
|
|
38,329 |
|
|
28,411 |
|
|
74.1 |
|
Total |
$ |
287,569 |
|
$ |
201,325 |
|
|
70.1 |
% |
|
$ |
254,638 |
|
$ |
250,730 |
|
|
98.5 |
% |
NM = Not meaningful
Net Premiums Earned, Net Losses and Loss Settlement
Expenses and Net Loss Ratio by Line of Business |
Six
Months Ended June 30, |
2024 |
|
2023 |
|
|
|
Net Losses |
|
|
|
|
|
Net Losses |
|
|
|
|
|
and Loss |
|
|
|
|
|
and Loss |
|
|
|
Net |
|
Settlement |
|
Net |
|
Net |
|
Settlement |
|
Net |
(In Thousands, Except
Ratios) |
Premiums |
|
Expenses |
|
Loss |
|
Premiums |
|
Expenses |
|
Loss |
(unaudited) |
Earned |
|
Incurred |
|
Ratio |
|
Earned |
|
Incurred |
|
Ratio |
Commercial lines |
|
|
|
|
|
|
|
|
|
|
|
Other liability |
$ |
165,323 |
|
$ |
132,499 |
|
80.1 |
% |
|
$ |
159,433 |
|
$ |
159,649 |
|
|
100.1 |
% |
Fire and allied lines |
|
126,053 |
|
|
75,180 |
|
59.6 |
|
|
|
118,274 |
|
|
97,937 |
|
|
82.8 |
|
Automobile |
|
114,199 |
|
|
87,410 |
|
76.5 |
|
|
|
100,877 |
|
|
90,689 |
|
|
89.9 |
|
Workers’ compensation |
|
25,942 |
|
|
14,661 |
|
56.5 |
|
|
|
27,047 |
|
|
9,700 |
|
|
35.9 |
|
Surety |
|
28,848 |
|
|
10,193 |
|
35.3 |
|
|
|
18,332 |
|
|
9,093 |
|
|
49.6 |
|
Miscellaneous |
|
3,739 |
|
|
2,012 |
|
53.8 |
|
|
|
639 |
|
|
165 |
|
|
25.8 |
|
Total commercial lines |
$ |
464,104 |
|
$ |
321,955 |
|
69.4 |
% |
|
$ |
424,602 |
|
$ |
367,233 |
|
|
86.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Personal lines |
|
|
|
|
|
|
|
|
|
|
|
Fire and allied lines |
$ |
7,643 |
|
$ |
4,968 |
|
65.0 |
% |
|
$ |
2,952 |
|
$ |
2,327 |
|
|
78.8 |
% |
Automobile |
|
243 |
|
|
110 |
|
NM |
|
|
|
— |
|
|
(375 |
) |
|
NM |
|
Miscellaneous |
|
6 |
|
|
23 |
|
NM |
|
|
|
13 |
|
|
(65 |
) |
|
NM |
|
Total personal lines |
$ |
7,892 |
|
$ |
5,101 |
|
64.6 |
% |
|
$ |
2,965 |
|
$ |
1,887 |
|
|
63.6 |
% |
Assumed reinsurance |
|
96,432 |
|
|
53,915 |
|
55.9 |
|
|
|
83,198 |
|
|
56,207 |
|
|
67.6 |
|
Total |
$ |
568,428 |
|
$ |
380,971 |
|
67.0 |
% |
|
$ |
510,765 |
|
$ |
425,327 |
|
|
83.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
United Fire (NASDAQ:UFCS)
Historical Stock Chart
From Aug 2024 to Sep 2024
United Fire (NASDAQ:UFCS)
Historical Stock Chart
From Sep 2023 to Sep 2024