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Jun 30, 2023
United Fire Group Q2 2023 Earnings Report
Second quarter results were impacted by reserve strengthening and seasonally elevated catastrophe losses.
Key Takeaways
United Fire Group reported a net loss of $56.4 million, or $2.23 per diluted share, and an adjusted operating loss of $2.27 per diluted share for the second quarter of 2023. The results were impacted by prior period loss reserve strengthening and elevated catastrophe losses. However, net premiums written increased by 14.6% compared to the prior year quarter.
Net loss of $56.4 million driven by prior period loss reserve strengthening and elevated catastrophe losses.
Net premiums written of $299.1 million increased 14.6% compared to the second quarter of 2022, representing five consecutive quarters of growth.
GAAP combined ratio of 132.9%, including an underlying loss ratio of 64.6%, catastrophe loss ratio of 13.0%, and prior period reserve strengthening of 20.8%. Expense ratio was 34.5%.
Net investment income of $11.3 million increased 23.4% compared to the second quarter of 2022.
Revenue by Segment
Forward Guidance
UFG remains confident that they are executing the actions necessary for UFG to deliver superior financial and operational performance over time.
Positive Outlook
- Double-digit growth in net premiums written.
- Fifth consecutive quarter of growth in net premiums written.
- Second consecutive quarter of growth in core commercial business.
- Average renewal premiums increased.
- Rate achievement up across all lines of business from the first quarter of 2023, and at the highest level in six quarters.
Challenges Ahead
- Second quarter results were impacted by reserve strengthening and seasonally elevated catastrophe losses.
- The reserve strengthening is a result of enhanced actuarial processes within our Company.
- Industry dealt with a historic level of catastrophe losses in the second quarter of 2023.
- UFG experiencing catastrophe losses from 18 separate weather events that resulted in losses slightly above the five- and 10-year historic averages.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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