UFG News
United Fire Group, Inc. Reports Fourth Quarter and Full Year 2024 Results
Released on: Feb 11, 2025, 15:00 PM
Fourth quarter net income of $1.21 per diluted share and adjusted operating income of $1.25 per diluted share; full year net income of $2.39 per diluted share and adjusted operating income of $2.56 per diluted share
Fourth quarter 2024 highlights compared to fourth quarter 2023:(1)
- Net income increased from $19.6 million to $31.4 million.
- Net investment income increased 21.2% to $23.2 million.
- Combined ratio improved 4.8 points to 94.4%; composed of an underlying loss ratio of 55.7%, catastrophe loss ratio of 1.6%, no prior year reserve development, and underwriting expense ratio of 37.1%.
- Underlying combined ratio improved 1.6 points to 92.8%.
- Net written premiums(2) increased 13% to $278.5 million.
Full year 2024 highlights compared to full year 2023:(1)
- Net income increased to $62.0 million.
- Net investment income increased 37.5% to $82.0 million.
- Combined ratio improved 10.1 points to 99.2%; composed of an underlying loss ratio of 57.9%, catastrophe loss ratio of 5.4%, no prior year reserve development and underwriting expense ratio of 35.9%.
- Underlying combined ratio improved 3.3 points to 93.8%.
- Net written premiums increased 15% to $1.2 billion.
- Book value per share increased $1.76 to $30.80 as of December 31, 2024, compared to December 31, 2023.
- Adjusted book value per share increased $1.95 to $33.64 as of December 31, 2024, compared to December 31, 2023.
“Our fourth quarter and full year results reflect the continued progress we are making in the execution of our strategic business plan,” said UFG President and CEO Kevin Leidwinger. “The actions we have taken over the past two years to deepen our underwriting expertise, evolve our capabilities, better align with our distribution partners and improve our investment returns are materializing in our results.
“In 2024, we achieved the highest level of net written premiums in our company’s 79-year history. In addition, we produced the best annual combined ratio and highest adjusted operating income since 2015. These milestones reflect key steps on our journey to consistently deliver superior financial and operational performance.
“In the fourth quarter, net written premiums grew 13% led by our core commercial and assumed reinsurance business. Core commercial growth was driven by average renewal increases of 11.9%, a substantial increase in new business production and stable retention. On a full year basis, net written premiums grew 15% to $1.2 billion.
“The fourth quarter combined ratio improved to 94.4%, the lowest in 11 quarters, while the full year combined ratio improved 10.1 points to 99.2%. The underlying loss ratio improved to 55.7% for the quarter and 57.9% for the year, reflecting the ongoing benefits of strong earned rate achievement exceeding loss trends and continued underwriting discipline resulting in improved frequency outcomes. Prior year reserve development remained neutral overall in the quarter while the impact from catastrophes was well below historical averages at 1.6% for the quarter and 5.4% for the year.
“The fourth quarter and full year expense ratios were elevated due to investments in talent to deepen expertise across the company, accelerated development of our new policy administration system that is now poised for implementation in 2025, and increased performance-based compensation for employees and agents due to current year achievements.
“Net investment income improved to $23.2 million in the fourth quarter and $82.0 million for the full year. Fixed maturity income increased to $70 million for the year as new money yields remained strong. We also benefited from improved valuations on our limited partnership portfolio for the full year. We expect the fixed maturity portfolio to generate over $80 million of annualized fixed maturity income, with potential for further improvement from future reinvestment at higher rates.
“Reported book value per share decreased slightly in the fourth quarter due to a change in after-tax unrealized loss caused by increased interest rates. Our improved annual earnings and return on equity of 8.2% allowed adjusted book value per share to grow $1.95 for the year to $33.64.
“During the fourth quarter, we successfully resolved the rating errors in our core commercial business that were identified in the second quarter, resulting in no financial impact to the company. As a result, we have reversed the $3.2 million contingent liability established in the second quarter.
“While 2024 marked a return to underwriting profitability for UFG, our work is far from finished. We remain confident in our ability to execute the business plan for improved performance in the years ahead and are grateful for our people and their dedication to delivering the deep expertise, specialized capabilities, personal relationships and responsive service that our partners and policyholders value.
“Finally, our hearts go out to all those impacted by the devastating wildfires in Southern California. Our claims and risk control professionals continue to assist policyholders in the wake of the destruction. At this time, we estimate losses in the range of $7 million to $10 million from this tragic event.”
View the full release here.
(1) Underlying loss ratio, underlying combined ratio and adjusted book value per share are non-GAAP financial measures. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for additional information.
(2) Net written premiums 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.