Released on: Nov 5, 2024, 15:01 PM

CEDAR RAPIDS, Iowa - (GLOBE NEWSWIRE) - United Fire Group, Inc. (Nasdaq: UFCS), November 5, 2024 - FOR IMMEDIATE RELEASE

Third quarter 2024 highlights compared to third quarter 2023:(1)

• Net income increased from $6.4 million to $19.7 million.
• Net investment income increased 49% to $24.5 million.
• GAAP combined ratio improved 3.8 points to 98.2%; composed of an underlying loss ratio of 57.9%, catastrophe loss ratio of 4.4%, no prior year reserve development, and underwriting expense ratio of 35.9%.
• The underlying combined ratio improved 2.1 points to 93.8%.
• Net premiums written(2) increased 23% to $305.6 million.
• Book value per common share increased $1.97 to $31.01 as of September 30, 2024, compared to December 31, 2023.
• Adjusted book value per share excluding net after-tax unrealized gains and losses of $32.42 as of September 30, 2024.

United Fire Group, Inc. (“UFG”) (Nasdaq: UFCS) today reported financial results for the three-month period ended September 30, 2024, with a consolidated net income of $19.7 million ($0.76 income per diluted share) and consolidated adjusted operating income of
$0.81 per diluted share.

“Our third quarter results reflect our ongoing efforts to improve performance through the execution of our strategic business plan,” said UFG President and CEO Kevin Leidwinger. “This quarter, we generated the highest levels of net income and adjusted operating income in the past 10 quarters.

“Net written premiums grew 23% to $305.6 million, led by continued growth in our core commercial and assumed reinsurance business units. Core commercial growth remained steady with average renewal premium increases exceeding 12%, stable retention and strong new business production. Rate increases accelerated to 11.2%, exceeding loss trends with all liability lines near or exceeding double-digit rate increases.

“The third quarter GAAP combined ratio improved 3.8 points to 98.2% from ongoing actions to improve core margins, stable prior period reserve development, and catastrophe losses below prior year and historical averages.

“The third quarter underlying loss ratio of 57.9% improved 2.6 points from the prior year, reflecting strong earned rate achievement exceeding loss trends, continued underwriting discipline, and lower than expected property large loss experience.

“The underwriting expense ratio in the third quarter was 35.9%, slightly higher than prior year, as a result of stronger business performance during the current quarter and increased technology costs as we invest for continued growth.
 
“Prior period reserve development was neutral overall in the third quarter. The pattern of stable to favorable loss emergence continues and we are strategically positioning reserves to better defend against the industry's troubling litigation trends.

“The third quarter catastrophe loss ratio was 4.4%, below prior year and both five-year and 10-year historical averages. This quarter’s results directly reflect our ongoing efforts to optimize our property catastrophe risk profile, including targeted actions in hurricane-exposed geographies over the past year that reduced our exposure to events like Hurricanes Helene, Debby and Beryl in the third quarter and Milton in the fourth quarter. At this time, we expect Hurricane Milton to have an immaterial impact on our fourth quarter catastrophe loss ratio. We remain committed to assisting policyholders affected by these recent devastating events and are grateful for the compassionate and responsive service delivered by our UFG catastrophe claims team.

“Third quarter net investment income of $24.5 million increased 49%, or $8.0 million, above prior year. Recent actions to reposition portions of our fixed income portfolio resulted in a strong and sustainable increase in fixed maturity investment income to $18.7 million in the third quarter and $78.0 million on an annualized basis going forward. New purchase yields remained strongly above total portfolio yields, creating potential for further improvement. Improved valuations on our limited partnership portfolio contributed $5.4 million of pre- tax investment income in the third quarter.

“Book value per share increased to $31.01 in the third quarter as a result of the quarter's improved net income and a significant reduction in after-tax unrealized loss from $78.0 million at June 30, 2024, to $35.8 million at September 30, 2024.

“We continue to make progress in resolving the rating errors in our core commercial business that were identified last quarter. We have reached a resolution with the Iowa Insurance Division, our lead regulator, resulting in no further action and no financial impact to the company. Through our lead regulator, we continue to work with regulators in other states to achieve resolution.

“Finally, I am pleased with our third quarter results and the cumulative progress we have made over the past nine months. Our strategic actions continue to materialize in our results, and we remain committed to driving ongoing improvements through the strategic execution of our business plan.”