2023
United Fire Group, Inc. Reports Estimates for Second Quarter 2023 Results
United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) announced today preliminary earnings estimates for the second quarter 2023 results, including net loss of $2.23 per diluted share, and an adjusted operating loss of $2.27 per diluted share.
The Company expects second quarter 2023 results to include pre-tax reserve strengthening for prior accident years of $53 million representing 20.8 points of earned premium. In addition, the Company expects estimated pre-tax catastrophe losses of $33 million representing 13.0 points of earned premium.
As a result, the GAAP combined ratio is estimated to be 133% in the second quarter of 2023.
“During the second quarter, we increased prior period loss reserves by approximately $53 million to strengthen our position relative to loss trends across a range of commercial liability lines of business,” said UFG President and CEO Kevin Leidwinger. “This action reflects the impact of ongoing economic and social inflation, as well as continued development of actuarial insights that allow us to more confidently assess and respond to potential risks.
“Over the past four quarters, we have significantly advanced the breadth and depth of our reserving analyses, providing a greater understanding of the underlying factors shaping our loss experience. These insights now allow us to react more quickly and assuredly in today’s dynamic loss cost environment. We will continue to invest in the talent and process that is necessary to further enhance our analytical rigor and continuously extract actionable insights that are essential in managing the portfolio to long-term financial success.
“Our second quarter results were also impacted by elevated catastrophe activity from 18 separate weather events. Second quarter catastrophe losses are estimated at approximately $33 million, adding approximately 13.0 points to the combined ratio, which is 2.0 points above our 5-year and 10-year historic average. We continue to take action to improve the risk profile of our property business to reposition the portfolio and reduce volatility. During the second quarter, our property average premium increase was 19%, with rate increases of 12% and exposure increases of 7%.
“The increase in pricing for our property portfolio over the last four quarters and additional improvement in rate achievement for our liability products resulted in the highest level of rate achievement in the overall portfolio since the fourth quarter of 2021.
“While it was clearly a challenging quarter for us, we continue to successfully execute strategies to grow our entire portfolio, sustainably reduce expenses, and invest in the talent and capabilities needed to become a top-performing commercial lines insurer. We are confident in our strategies and remain committed to executing the actions necessary for UFG to deliver superior financial and operational performance over time.”
The unaudited loss estimates and other data presented in this release are preliminary, based upon management estimates and subject to the completion of the Company's procedures for the preparation of its unaudited quarterly financial statements. As a result, further adjustments may be made between now and the time financial results for the second quarter of 2023 are finalized.
UFG will report second quarter 2023 earnings on Monday, August 7, 2023, after the close of regular trading on the Nasdaq Stock Market and will host a conference call to discuss financial results at 9:00 a.m. CT on Tuesday, August 8, 2023.
View the full press release here.