United Fire Group reported third-quarter 2024 financial results, with a consolidated net income of $19.7 million, or $0.76 per diluted share, and an adjusted operating income of $0.81 per diluted share.
CEO Kevin Leidwinger (pictured above) commented that UFG’s third-quarter performance reflects the company's efforts to improve results through its strategic business plan, marking the highest levels of net and adjusted operating income in the last 10 quarters.
Net written premiums increased by 23% to $305.6 million, driven by growth in core commercial and assumed reinsurance units. Core commercial business experienced steady growth with average renewal premium increases above 12%, stable retention, and strong new business production.
Rate increases accelerated to 11.2%, exceeding loss trends, with liability lines showing near or above double-digit rate increases.
The company’s GAAP combined ratio for the third quarter improved by 3.8 points to 98.2%, supported by actions to improve core margins, stable reserve development, and catastrophe losses below prior year and historical averages.
The underlying loss ratio improved by 2.6 points to 57.9%, driven by earned rate gains, underwriting discipline, and lower-than-expected property large loss experience.
The underwriting expense ratio increased slightly to 35.9%, attributed to stronger business performance and higher technology costs as part of UFG’s investment in growth. Prior period reserve development was neutral for the quarter, with stable to favorable loss emergence. The company is positioning reserves strategically to address litigation trends affecting the industry.
The third-quarter catastrophe loss ratio was 4.4%, lower than prior year and five- and ten-year averages. UFG’s efforts to optimize its property catastrophe risk profile included targeted actions in hurricane-exposed areas, which reduced exposure to recent events such as Hurricanes Helene, Debby, and Beryl in the third quarter, and Milton in the fourth quarter.
UFG expects Hurricane Milton to have a minimal impact on its fourth-quarter catastrophe loss ratio.
Net investment income rose by 49% to $24.5 million, boosted by recent adjustments to the fixed income portfolio. This repositioning led to a substantial increase in fixed maturity investment income to $18.7 million for the quarter, with a projected $78 million annualized run rate. Improved valuations in the limited partnership portfolio contributed $5.4 million in pre-tax investment income.
UFG’s book value per share rose to $31.01 due to improved net income and a reduction in after-tax unrealized losses, which dropped from $78 million at June 30 to $35.8 million at September 30.
The company also addressed previously identified rating errors in its core commercial business, reaching a resolution with the Iowa Insurance Division, its lead regulator, with no further action or financial impact. UFG said that it continues to work with other regulators through the lead regulator to finalize the matter.
“Our strategic actions continue to materialize in our results, and we remain committed to driving ongoing improvements through the strategic execution of our business plan,” Leidwinger said.
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