2023
United Fire Group, Inc. Reports Third Quarter 2023 Results
Released on: Nov 2, 2023, 15:01 PM
Company Release - 11/1/2023 4:01 PM ET
Third Quarter Net Income of $0.25 per Diluted Share and Adjusted Operating Income of $0.31 per Diluted Share
Third quarter 2023 highlights:
- Net income of $6.4 million driven by increased earned premium, favorable loss and loss adjustment expense and higher investment income.
- Net premiums written(1) of $247.7 million increased 0.1% compared to the third quarter of 2022. Core commercial lines growth of 2.7% driven by increasing levels of rate achievement and new business.
- GAAP combined ratio of 102.1%, including an underlying loss ratio(2) of 60.5% and catastrophe loss ratio of 5.9%. Expense ratio was 35.5%.
- Underlying combined ratio of 96.0%.
- Net investment income of $16.5 million increased 41.8% compared to the third quarter of 2022.
- Book value per common share decreased 13.0% to $25.53 as of September 30, 2023, compared to December 31, 2022.
United Fire Group, Inc. (the “Company” or “UFG”) (Nasdaq: UFCS) today reported financial results for the three-month period ended September 30, 2023 (the “third quarter of 2023”) with a consolidated net income of $6.4 million ($0.25 per diluted share) and consolidated adjusted operating income of $0.31 per diluted share.
“I remain pleased with the progress we are making in positioning UFG to deliver superior financial and operational performance,” said UFG President and CEO Kevin Leidwinger. “Our third quarter results show signs of improvement while we continue to execute strategies to strengthen our Company.
“Net written premium was flat in the quarter as growth in our core commercial and assumed reinsurance business was offset by targeted underwriting action on underperforming segments as well as increased surety reinsurance reinstatement premiums.
“Core commercial new business remained significantly above the prior year period, and average renewal premiums change accelerated to 11.0% in the third quarter, representing our highest level since at least 2018. Rate achievement increased across all lines of business from the second quarter of 2023, excluding workers' compensation, with property rates increasing 17.3%.
“The third quarter underlying loss ratio of 60.5% included approximately 2.0 points of impact from a small number of large claims and associated reinsurance reinstatement premiums in our surety business as economic conditions discussed last quarter continued. This impact was reduced by an improved outlook for profitability in other lines of business.
“The third quarter expense ratio of 35.5% was also impacted by surety reinstatement premiums that offset our ongoing actions to sustainably reduce expenses. In addition to reducing expenses through careful vacancy management, we took the additional step to implement a voluntary early retirement program that we anticipate will provide ongoing benefits to our expense ratio in 2024.
“Other results improved in the third quarter of 2023, including neutral prior period reserve development, catastrophe losses below long-term averages, and investment returns that benefited from investing at higher interest rates and the strategic reallocation of public equity assets into fixed maturities.
“We continued to make strategic investments in the third quarter, including the ongoing rollout of our small business quoting platform in multiple states, and continued additions to leadership talent from within and outside the Company.
“We remain confident in our strategy and in the actions we are taking to position UFG for superior financial and operational performance in the long term.”
View the full press release here.
