2023

Fourth Quarter Net Income of $0.79 per Diluted Share and Adjusted Operating Income of $0.18 per Diluted Share; Net Premiums Written increased 6.3%

Full Year Net Income of $0.59 per Diluted Share and Adjusted Operating Income of $1.09 per Diluted Share; Net Premiums Written increased 4.6%

Fourth quarter 2022 highlights:

• Net premiums written(1) increased 6.3% compared to the fourth quarter of 2021.
• GAAP combined ratio of 103.6% including an underlying loss ratio(2) of 60.0%, catastrophe loss ratio of 4.9%, and unfavorable prior period reserve development(2) of 4.9%. Expense ratio was 33.8%.
• Net investment income of $12.9 million decreased 3.5% compared to the fourth quarter of 2021 due to lower other long-term investment income.
• Book value per common share of $29.36 as of December 31, 2022, up 5.5% compared to September 30, 2022.

Full year 2022 highlights:

• Net premiums written of $984.2 million, an increase of 4.6% as compared to full year 2021.
• GAAP combined ratio of 101.4% driven by underlying loss ratio of 59.2% and catastrophe loss ratio of 7.7%. Expense ratio was 34.4% for the full year.
• Net investment income declined as compared to full year 2021 as increasing fixed income yields were offset by lower other long-term investment income.
• Return on Equity of 1.9%.

United Fire Group, Inc. (the “Company” or “UFG”) (Nasdaq: UFCS) today reported financial results for the three-month period ended December 31, 2022 (the “fourth quarter of 2022”) with a consolidated net income of $20.1 million ($0.79 per diluted share) and consolidated adjusted operating income of $0.18 per diluted share. The fourth quarter combined ratio of 103.6% was driven by catastrophe losses of 4.9% and unfavorable prior period reserve development of 4.9%. Net premiums written increased 6.3% for the quarter compared to the same quarter last year.

Net income for the full year 2022 was $15.0 million ($0.59 per diluted share) and consolidated adjusted operating income of $1.09 per diluted share. The full year combined ratio of 101.4% benefited from an underlying loss ratio of 59.2%. Net premiums written increased 4.6% from full year 2021.

“I am pleased with our progress in 2022 as we continue to position UFG for superior operational and financial performance,” said President and CEO Kevin Leidwinger, who took over leadership of the company in August 2022.

“In addition to three consecutive quarters of year-over-year written premium growth, we generated a strong underlying loss ratio of 59.2% for the full year – the lowest in the last 10 years. Catastrophe losses for the year of 7.7% were in line with historic averages and prior period reserve development was neutral.

“Looking ahead, our strategic plan remains centered on long-term profitability, diversified growth, attracting and retaining top talent, continuous innovation and expense management.

“We begin 2023 well-positioned to responsibly and profitably grow across our commercial, specialty, surety and assumed reinsurance businesses and are excited to welcome Julie Stephenson, our new Executive Vice President and Chief Operating Officer, to lead these efforts at UFG.”

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(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) Net underlying loss ratio is defined as the net loss ratio less impacts of catastrophes and non-catastrophe prior period reserve development. See Certain Performance Measures for additional information.

View the full press release here.