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Sep 30, 2023
United Fire Group Q3 2023 Earnings Report
Reported third quarter net income of $0.25 per diluted share and adjusted operating income of $0.31 per diluted share.
Key Takeaways
United Fire Group reported a net income of $6.4 million and adjusted operating income of $0.31 per diluted share for the third quarter of 2023. The results reflect improvements driven by increased earned premium, favorable loss and loss adjustment expense, and higher investment income.
Net income of $6.4 million driven by increased earned premium, favorable loss and loss adjustment expense and higher investment income.
Net premiums written of $247.7 million increased 0.1% compared to the third quarter of 2022, with 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 of 60.5% and catastrophe loss ratio of 5.9%. Expense ratio was 35.5%.
Net investment income of $16.5 million increased 41.8% compared to the third quarter of 2022.
Revenue by Segment
Forward Guidance
UFG remains confident in its strategy and in the actions it is taking to position the company for superior financial and operational performance in the long term.
Positive Outlook
- Core commercial new business remained significantly above the prior year period.
- Average renewal premiums change accelerated to 11.0% in the third quarter, representing the 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%.
- Other results improved in the third quarter of 2023, including neutral prior period reserve development.
- Catastrophe losses below long-term averages.
Challenges Ahead
- Net written premium was flat in the quarter as growth in core commercial and assumed reinsurance business was offset by targeted underwriting action on underperforming segments as well as increased surety reinsurance reinstatement premiums.
- 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 the surety business.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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