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United Fire Group, Inc. Reports First Quarter 2023 Results

Released on: May 8, 2023, 15:01 PM
CEDAR RAPIDS, Iowa - (GLOBE NEWSWIRE) - United Fire Group, Inc. (Nasdaq: UFCS), May 8, 2023 - FOR IMMEDIATE RELEASE

First Quarter Net Income of $0.03 per Diluted Share and Adjusted Operating Income of $0.08 per Diluted Share; Net Premiums Written increased 13.4%

  • Net income of $0.7 million.
  • Net premiums written(1) of $273.3 million increased 13.4% compared to the first quarter of 2022,representing four consecutive quarters of growth with core commercial lines now also contributing to enterprise growth.
  • GAAP combined ratio of 104.0% including an underlying loss ratio(2) of 63.5%, catastrophe loss ratio of 4.6%, and unfavorable prior period reserve development(2) of 0.1%. Expense ratio was 35.8%.
  • Underlying combined ratio of 99.3%.
  • Net investment income of $12.7 million increased 12.8% compared to the first quarter of 2022.
  • Book value per common share increased 1.5% to $29.80 as of March 31, 2023, compared to December 31, 2022.
  • Return on equity of 0.4%.
United Fire Group, Inc. (the “Company” or “UFG”) (Nasdaq: UFCS) today reported financial results for the three-month period ended March 31, 2023 (the “first quarter of 2023”) with a consolidated net income of $0.7 million ($0.03 per diluted share) and consolidated adjusted operating income of $0.08 per diluted share.

“Despite the quarter's mixed results, I am pleased with the progress we are making in positioning UFG to deliver superior financial and operational performance,” said UFG President and CEO Kevin Leidwinger. “We remain committed to the execution of our strategic plan designed to achieve long-term profitability, diversified growth and
continuous innovation. We are intensely focused on reducing the expense ratio while attracting and retaining the talent needed to evolve the company into a top-performing commercial lines insurer. In the first quarter, we attracted significant industry talent that deepens our underwriting, operational and actuarial expertise.

“Production results in the first quarter were strong as our net premiums written grew 13% driven by the engagement of our underwriting teams, strength of our distribution partnerships, recovery of our core commercial business and continued growth in our surety and assumed reinsurance business.

“The combined loss and expense ratio deteriorated 15 points compared to the first quarter of 2022. The deterioration was driven by an increase in the underlying loss ratio impacted by the emerging loss trends that led to adverse prior period development in the third and fourth quarters of 2022 as well as increased ceded reinsurance costs and higher retentions across the broader portfolio. There is an additional increase in underlying loss ratio attributable to a shift in accident year loss ratio assumptions for our assumed reinsurance business. This business continues to perform in line with our expectations, and we remain confident in its contribution to our future success.

“Our expense ratio increased 2 points compared to the first quarter of 2022. The increase is the result of our investment in strategic talent and higher technology costs. In addition, we no longer receive the financial benefit of the re-design of our post-retirement benefit plans that lowered the expense ratio in the first quarter of 2022.

“Throughout 2023, we will continue to execute our strategic plan and I remain confident the actions we are taking will position us to deliver superior financial and operational performance over time.”

View the full press release here