United Fire Group, Inc. (Nasdaq: UFCS),
Consolidated Financial Results -
Highlights(1):
| Three Months Ended
June 30, 2021 |
|
|
Six Months Ended June
30, 2021 |
|
|
Net income per diluted share |
$ |
0.54 |
|
|
Net income per diluted share |
$ |
1.28 |
|
| Adjusted operating income(2)
per diluted share |
$ |
0.35 |
|
|
Adjusted operating income(2)
per diluted share |
$ |
0.33 |
|
| Net realized investment gains
per diluted share |
$ |
0.19 |
|
|
Net realized investment gains
per diluted share |
$ |
0.95 |
|
| GAAP combined ratio |
100.8 |
% |
|
GAAP combined ratio |
104.3 |
% |
| |
|
|
Book value per share |
$ |
33.42 |
|
| |
|
|
Return on equity(3) |
7.8 |
% |
United Fire Group, Inc. (the "Company" or
"UFG") (Nasdaq: UFCS) today reported consolidated net income,
including net realized investment gains and changes in the fair
value of equity securities, of $13.8 million ($0.54 per diluted
share) for the three-month period ended June 30, 2021 (the "second
quarter of 2021"), compared to a consolidated net income of $6.0
million ($0.24 per diluted share) for the same period in 2020. For
the six-month period ended June 30, 2021 ("year-to-date"),
consolidated net income, including realized investment gains and
losses and changes in the fair value of equity securities, was
$32.5 million ($1.28 per diluted share), compared to a net loss of
$66.6 million ($2.66 per diluted share) for the same period in
2020.
The Company reported consolidated adjusted operating income of
$0.35 per diluted share for the second quarter of 2021, compared to
consolidated adjusted operating income of $0.26 per diluted share
for the same period in 2020. Year-to-date, consolidated adjusted
operating income was $0.33 per diluted share compared to a
consolidated adjusted operating loss of $0.21 per diluted share for
the same period in 2020.
"I am pleased to report net income of $0.54 per diluted share
and adjusted operating income of $0.35 per diluted share in the
second quarter of 2021," stated Randy A. Ramlo, President and Chief
Executive Officer. "The improvement in profitability is primarily
due to a decrease in frequency and severity of commercial auto
liability losses, which we believe is the direct result of our
strategic initiatives, and lower catastrophe losses. We also
continued to see a decrease in commercial auto exposure units in
the second quarter of 2021."
________________(1) Per share amounts are after tax.(2) Adjusted
operating income (loss) is a non-GAAP financial measure of net
income excluding net realized investment gains and losses, after
applicable federal and state income taxes. Management evaluates
this measure and ratios derived from this measure and the Company
provides this information to investors because we believe it better
represents the normal, ongoing performance of our business. See
Definitions of Non-GAAP Information and Reconciliations to
Comparable GAAP Measures for a reconciliation of adjusted operating
income (loss) to net income (loss). (3) Return on equity is
calculated by dividing annualized net income (loss) by average
year-to-date stockholders' equity.
Financial Highlights
Net income, including net realized investment gains and losses,
was $13.8 million ($0.54 per diluted share) for the second quarter
of 2021, compared to net income of $6.0 million ($0.24 per diluted
share) for the same period in 2020. The increase in net income was
primarily due to a decrease in losses and loss settlement expenses,
a decrease in other underwriting expenses and amortization of
deferred acquisition costs. These were partially offset by a
decrease in net premiums earned and less realized investment gains
from the increase in the fair value of equity securities as
compared to the same period of 2020.
Year-to-date, consolidated net income, including net realized
investment gains and losses was $32.5 million ($1.28 per diluted
share), compared to net loss of $66.6 million ($2.66 per diluted
share) for the same period in 2020. The change was primarily due to
an increase in net realized investment gains from an increase in
the fair value of equity securities as compared to net realized
investment losses for the same period of 2020, a decrease in losses
and loss settlement expenses, a decrease in other underwriting
expenses and an increase in net investment income. These were
partially offset by a decrease in net premiums earned.
Net premiums earned decreased 14.8 percent to $224.7 million in
the second quarter of 2021, compared to $263.6 million in the same
period in 2020. Year-to-date net premiums earned decreased 9.1
percent to $483.9 million compared to $532.5 million in the same
period in 2020. The decrease in both the three- and six-month
periods ended June 30, 2021 was primarily due to our focus on
improving profitability through non-renewal of under-performing
accounts in our commercial auto line of business and our exit of
the personal lines business which began in September 2020.
Year-to-date the overall average renewal pricing increase was
6.4 percent. Excluding workers' compensation line of business, the
overall average renewal pricing increase was 7.8 percent. The
increase in pricing was driven by our commercial auto and
commercial property lines of business. Year-to-date, the commercial
auto average renewal rate increase was 9.9 percent. The commercial
property average renewal rate increase was 8.4 percent.
Net investment income was $13.8 million for the second
quarter of 2021, as compared to net investment income of
$12.7 million for the same period in 2020. Year-to date, net
investment income was $30.9 million, compared to net investment
income of $15.1 million for the same period in 2020. The
increase in net investment income in the three- and six-month
periods ended June 30, 2021 was primarily due to an increase in the
fair value of our investments in limited liability partnerships.
The valuation of these investments in limited liability
partnerships varies from period to period due to the current equity
market conditions, specifically related to financial
institutions.
The Company recognized net realized investment gains of $6.0
million during the second quarter of 2021 as compared to net
realized investment gains of $15.8 million for the same period in
2020. Year-to-date, the Company recognized net realized investment
gains of $30.5 million compared to net realized losses of $77.6
million for the same period in 2020. The change in the three- and
six-month periods ended June 30, 2021 as compared to the same
periods in 2020 was primarily due to the change in the fair value
of equity securities.
Losses and loss settlement expenses decreased by 25.8 percentage
points and by 8.4 percentage points in the three- and six-month
periods ended June 30, 2021 as compared to the same periods of
2020. For the second quarter, the decrease in losses and loss
settlement expenses was primarily due to a decrease in catastrophe
losses and frequency and severity of commercial auto liability
losses. Year-to-date, the decrease in losses and loss settlement
expenses was primarily due to a decrease in catastrophe losses.
Consolidated net unrealized investment gains, net of tax,
totaled $67.0 million as of June 30, 2021, a decrease of $16.1
million from December 31, 2020. The decrease in net unrealized
investment gains was primarily the result of an increase in
interest rates in the first half of 2021.
Total consolidated assets as of June 30, 2021 were $3.1
billion, which included $2.1 billion of invested assets. The
Company's book value per share was $33.42, which is an increase of
$0.49 per share, or 1.5 percent, from December 31, 2020. This
increase is primarily attributable to net income of $32.5 million,
offset by a decrease in net unrealized investment gains on fixed
maturity securities of $16.1 million, net of tax, and shareholder
dividends of $7.5 million.
The annualized return on equity was 7.8 percent year-to-date
compared to negative 15.0 percent for the same period in 2020. The
change in the annualized return on equity was primarily driven by
net income of $32.5 million year-to-date compared to a net loss of
$66.6 million in the same period in 2020.
Reserve Development
The Company experienced favorable development in its net
reserves for prior accident years of $1.8 million in the second
quarter of 2021, compared to favorable development of $10.0 million
in the same period in 2020. Year-to-date, favorable development in
our net reserves for prior accident years was $15.0 million,
compared to $23.8 million favorable development in the same period
in 2020. The favorable prior accident year reserve development in
the three- and six-month periods ended June 30, 2021 came primarily
from our workers' compensation line of business. Development
amounts can vary significantly from quarter-to-quarter depending on
a number of factors, including the number of claims settled and the
settlement terms. At June 30, 2021, the Company's total reserves
were within its actuarial estimates.
GAAP Combined Ratio
The GAAP combined ratio decreased by 10.6 percentage points to
100.8 percent for the second quarter of 2021, compared to 111.4
percent in the same period in 2020. For the six-month period ended
June 30, 2021, the GAAP combined ratio decreased 3.9 percentage
points to 104.3 percent compared to 108.2 percent for the six-month
period ended June 30, 2020. The decrease in the combined ratio
during the three- and six-month periods ended June 30, 2021 as
compared to the same period in 2020 was primarily driven by both a
decrease in the net loss ratio and underwriting expense ratio.
Net Loss Ratio
The GAAP net loss ratio decreased 10.1 percentage points during
the second quarter of 2021 as compared to the same period in 2020
primarily due to a decrease in catastrophe losses and a decrease in
the frequency and severity of commercial auto liability losses.
Year-to-date, the GAAP net loss ratio increased 0.6 percentage
points to 74.1 percent compared to 73.5 percent for the six-month
period ended June 30, 2020. The increase in the net loss ratio was
primarily due to prior accident year reserve strengthening on
commercial auto claims in the first quarter of 2021 partially
offset by a decrease in catastrophe losses.
Pre-tax catastrophe losses in the second quarter of 2021 were
lower than our 10-year historical average for the second quarter
and when compared to second quarter of 2020, with catastrophe
losses adding 9.6 percentage points to the combined ratio in 2021,
as compared to 19.2 percentage points in 2020. Our 10-year
historical average for second quarter catastrophe losses is 10.6
percentage points added to the combined ratio. Year-to-date,
catastrophe losses totaled $50.9 million ($1.58 per diluted share)
compared to $65.9 million ($2.08 per diluted share) for the same
period in 2020.
Underwriting Expense Ratio
The underwriting expense ratio for the second quarter of 2021
was 33.1 percent compared to 33.6 percent for the second quarter in
2020. Year-to-date, the underwriting expense ratio was 30.2 percent
compared to 34.7 percent in the same period in 2020. The decrease
in the underwriting expense ratio in both the second quarter of
2021 and year-to-date as compared to the same periods in 2020 was
primarily due to the change in the design of our employee
post-retirement benefit plans and a decrease in the acceleration of
the amortization of our deferred acquisition costs due to improved
profitability in our commercial auto line of business.
Capital Management
During the second quarter of 2021, we declared and paid a $0.15
per share cash dividend to shareholders of record as of June 4,
2021. We have paid a quarterly dividend every quarter since March
1968. During the second quarter of 2021, the Company repurchased
31,027 shares of its common stock for a total purchase price of
approximately $1.0 million. Year-to-date, the Company repurchased
31,234 shares of its common stock for a total purchase price of
approximately $1.0 million.
Earnings Call Access Information
An earnings call will be held at 9:00 a.m. Central Time on
August 4, 2021 to allow securities analysts, shareholders and
other interested parties the opportunity to hear management discuss
the Company's second quarter of 2021 results.
Teleconference: Dial-in information for the call is toll-free
1-844-492-3723. The event will be archived and available for
digital replay through August 18, 2021. The replay access
information is toll-free 1-877-344-7529; conference ID no.
10157853.
Webcast: An audio webcast of the teleconference can be accessed
at the Company's investor relations page at
http://ir.ufginsurance.com/event or
https://services.choruscall.com/links/ufcs210804. The archived
audio webcast will be available until August 18, 2021.
Transcript: A transcript of the teleconference will be available
on the Company's website soon after the completion of the
teleconference.
About UFG
Founded in 1946 as United Fire & Casualty Company, UFG,
through its insurance company subsidiaries, is engaged in the
business of writing property and casualty insurance.
Through our subsidiaries, we are licensed as a property and
casualty insurer in 50 states, plus the District of Columbia, and
we are represented by approximately 1,000 independent agencies.
A.M. Best Company assigns a rating of “A” (Excellent) for members
of the United Fire & Casualty Group.
For more information about UFG, visit www.ufginsurance.com or
contact:
Randy Patten, AVP and Controller, 319-286-2537 or
IR@unitedfiregroup.com.
Disclosure of Forward-Looking Statements
This release may contain forward-looking statements about our
operations, anticipated performance and other similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe
harbor under the Securities Act of 1933 and the Securities Exchange
Act of 1934 for forward-looking statements. The forward-looking
statements are not historical facts and involve risks and
uncertainties that could cause actual results to differ from those
expected and/or projected. Such forward-looking statements are
based on current expectations, estimates, forecasts and projections
about the Company, the industry in which we operate, and beliefs
and assumptions made by management. Words such as "expect(s),"
"anticipate(s)," "intend(s)," "plan(s)," "believe(s),"
"continue(s)," "seek(s)," "estimate(s)," "goal(s)," "remain(s)
optimistic," "target(s)," "forecast(s)," "project(s),"
"predict(s)," "should," "could," "may," "will," "might," "hope,"
"can" and other words and terms of similar meaning or expression in
connection with a discussion of future operations, financial
performance or financial condition, are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed in such
forward-looking statements. Information concerning factors that
could cause actual outcomes and results to differ materially from
those expressed in the forward-looking statements is contained in
Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K
for the year ended December 31, 2020, filed with the
Securities and Exchange Commission ("SEC") on February 26,
2021. The risks identified in our Annual Report on Form 10-K and in
our other SEC filings are representative of the risks,
uncertainties, and assumptions that could cause actual outcomes and
results to differ materially from what is expressed in the
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this release or as of the date they are
made. Except as required under the federal securities laws and the
rules and regulations of the SEC, we do not have any intention or
obligation to update publicly any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Definitions of Non-GAAP Information and Reconciliations
to Comparable GAAP Measures
The Company prepares its public financial statements in
conformity with accounting principles generally accepted in the
United States of America ("GAAP"). Management also uses certain
non-GAAP measures to evaluate its operations and profitability. As
further explained below, management believes that disclosure of
certain non-GAAP financial measures enhances investor understanding
of our financial performance. Non-GAAP financial measures disclosed
in this report include: adjusted operating income (loss) and net
premiums written. The Company has provided the following
definitions and reconciliations of the non-GAAP financial
measures:
Adjusted operating income (loss): Adjusted
operating income (loss) is calculated by excluding net realized
investment gains and losses, after applicable federal and state
income taxes from net income. Management believes adjusted
operating income (loss) is a meaningful measure for evaluating
insurance company performance and a useful supplement to GAAP
information because it better represents the normal, ongoing
performance of our business. Investors and equity analysts who
invest and report on the insurance industry and the Company
generally focus on this metric in their analyses.
|
Net Income Reconciliation |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (In
Thousands, Except Per Share Data) |
2021 |
|
2020 |
Change % |
|
2021 |
|
2020 |
Change % |
|
Income Statement Data |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
13,750 |
|
$ |
5,960 |
|
130.7 |
|
% |
|
$ |
32,452 |
|
$ |
(66,574 |
) |
148.7 |
% |
|
Less: after-tax net realized investment gains (losses) |
4,743 |
|
12,466 |
|
(62.0 |
) |
% |
|
24,104 |
|
(61,326 |
) |
139.3 |
% |
|
Adjusted operating income (loss) |
$ |
9,007 |
|
$ |
(6,506 |
) |
238.4 |
|
% |
|
$ |
8,348 |
|
$ |
(5,248 |
) |
259.1 |
% |
| Diluted Earnings Per
Share Data |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
0.54 |
|
$ |
0.24 |
|
125.0 |
|
% |
|
$ |
1.28 |
|
$ |
(2.66 |
) |
148.1 |
% |
|
Less: after-tax net realized investment gains (losses) |
0.19 |
|
0.50 |
|
(62.0 |
) |
% |
|
0.95 |
|
(2.45 |
) |
138.8 |
% |
|
Adjusted operating income (loss) |
$ |
0.35 |
|
$ |
(0.26 |
) |
234.6 |
|
% |
|
$ |
0.33 |
|
$ |
(0.21 |
) |
257.1 |
% |
Net premiums written: While not a substitute
for any GAAP measure of performance, net premiums written is
frequently used by industry analysts and other recognized reporting
sources to facilitate comparisons of the performance of insurance
companies. Net premiums written are the amount charged for
insurance policy contracts issued and recognized on an annualized
basis at the effective date of the policy. Management believes net
premiums written are a meaningful measure for evaluating insurance
company sales performance and geographical expansion efforts. Net
premiums written for an insurance company consists of direct
premiums written and reinsurance assumed, less reinsurance ceded.
Net premiums earned is calculated on a pro rata basis over the
terms of the respective policies. Unearned premium reserves are
established for the portion of premiums written applicable to the
unexpired term of insurance policy in force. The difference between
net premiums earned and net premiums written is the change in
unearned premiums and change in prepaid reinsurance premiums.
|
Net Premiums Earned Reconciliation |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (In
Thousands, Except Ratios) |
2021 |
|
2020 |
Change % |
|
2021 |
|
2020 |
Change % |
|
Premiums: |
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
224,703 |
|
|
$ |
263,609 |
|
(14.8 |
) |
% |
|
$ |
483,928 |
|
|
$ |
532,458 |
|
(9.1 |
) |
% |
|
Less: change in unearned premiums |
(12,641 |
) |
|
(9,841 |
) |
(28.5 |
) |
% |
|
(9,325 |
) |
|
(25,639 |
) |
63.6 |
|
% |
|
Less: change in prepaid reinsurance premiums |
(1,062 |
) |
|
2,817 |
|
(137.7 |
) |
% |
|
(614 |
) |
|
4,956 |
|
(112.4 |
) |
% |
|
Net premiums written |
$ |
238,406 |
|
|
$ |
270,633 |
|
(11.9 |
) |
% |
|
$ |
493,867 |
|
|
$ |
553,141 |
|
(10.7 |
) |
% |
Supplemental Tables
|
Consolidated Financial Highlights |
| (unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (In
Thousands, Except Share and Per Share Data and Ratios) |
2021 |
|
2020 |
Change % |
|
2021 |
|
2020 |
Change % |
|
Revenue Highlights |
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
224,703 |
|
|
|
$ |
263,609 |
|
|
(14.8 |
) |
% |
|
$ |
483,928 |
|
|
|
$ |
532,458 |
|
|
(9.1 |
) |
% |
|
Net investment income |
13,795 |
|
|
|
12,696 |
|
|
8.7 |
|
% |
|
30,876 |
|
|
|
15,059 |
|
|
105.0 |
|
% |
|
Net realized investment gains (losses) |
6,004 |
|
|
|
15,779 |
|
|
(61.9 |
) |
% |
|
30,512 |
|
|
|
(77,628 |
) |
|
139.3 |
|
% |
|
Other income (loss) |
(90 |
) |
|
|
5,719 |
|
|
NM |
|
(169 |
) |
|
|
5,719 |
|
|
NM |
|
Total revenues |
244,412 |
|
|
|
297,803 |
|
|
(17.9 |
) |
% |
|
$ |
545,147 |
|
|
|
$ |
475,608 |
|
|
14.6 |
|
% |
| Income Statement
Data |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
13,750 |
|
|
|
5,960 |
|
|
130.7 |
|
% |
|
$ |
32,452 |
|
|
|
$ |
(66,574 |
) |
|
148.7 |
|
% |
|
After-tax net realized investment gains (losses) |
4,743 |
|
|
|
12,466 |
|
|
(62.0 |
) |
% |
|
24,104 |
|
|
|
(61,326 |
) |
|
139.3 |
|
% |
|
Adjusted operating income (loss)(1) |
$ |
9,007 |
|
|
|
$ |
(6,506 |
) |
|
238.4 |
|
% |
|
$ |
8,348 |
|
|
|
$ |
(5,248 |
) |
|
259.1 |
|
% |
| Diluted Earnings Per
Share Data |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
0.54 |
|
|
|
$ |
0.24 |
|
|
125.0 |
|
% |
|
$ |
1.28 |
|
|
|
$ |
(2.66 |
) |
|
148.1 |
|
% |
|
After-tax net realized investment gains (losses) |
0.19 |
|
|
|
0.50 |
|
|
(62.0 |
) |
% |
|
0.95 |
|
|
|
(2.45 |
) |
|
138.8 |
|
% |
|
Adjusted operating income (loss)(1) |
$ |
0.35 |
|
|
|
$ |
(0.26 |
) |
|
234.6 |
|
% |
|
$ |
0.33 |
|
|
|
$ |
(0.21 |
) |
|
257.1 |
|
% |
| Catastrophe
Data |
|
|
|
|
|
|
|
|
|
|
Pre-tax catastrophe losses |
$ |
21,612 |
|
|
|
$ |
50,634 |
|
|
(57.3 |
) |
% |
|
$ |
50,859 |
|
|
|
$ |
65,900 |
|
|
(22.8 |
) |
% |
|
Effect on after-tax earnings per share |
0.67 |
|
|
|
1.58 |
|
|
(57.6 |
) |
% |
|
1.58 |
|
|
|
2.08 |
|
|
(24.0 |
) |
% |
|
Effect on combined ratio |
9.6 |
|
% |
|
19.2 |
|
% |
(50.0 |
) |
% |
|
10.5 |
|
% |
|
12.4 |
|
% |
(15.3 |
) |
% |
| |
|
|
|
|
|
|
|
|
|
| Favorable reserve development
experienced on prior accident years |
$ |
1,765 |
|
|
|
$ |
10,023 |
|
|
(82.4 |
) |
% |
|
$ |
15,024 |
|
|
|
$ |
23,770 |
|
|
(36.8 |
) |
% |
| |
|
|
|
|
|
|
|
|
|
| GAAP combined ratio |
100.8 |
|
% |
|
111.4 |
|
% |
(9.5 |
) |
% |
|
104.3 |
|
% |
|
108.2 |
|
% |
(3.6 |
) |
% |
| Return on equity |
|
|
|
|
|
7.8 |
|
% |
|
(15.0 |
) |
% |
152.0 |
|
% |
| Cash dividends declared per
share |
$ |
0.15 |
|
|
|
$ |
0.33 |
|
|
(54.5 |
) |
|
|
$ |
0.30 |
|
|
|
$ |
0.66 |
|
|
(54.5 |
) |
% |
| Diluted
weighted average shares outstanding |
25,416,868 |
|
|
|
25,255,604 |
|
|
0.6 |
|
% |
|
25,394,728 |
|
|
|
25,019,441 |
|
|
1.5 |
|
% |
NM = Not meaningful(1) Adjusted operating income (loss) is a
non-GAAP financial measure of net income (loss). See Definitions of
Non-GAAP Information and Reconciliations to Comparable GAAP
Measures for a reconciliation of adjusted operating income (loss)
to net income (loss).
|
Income Statement |
| (unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (In
Thousands, Except Ratios) |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
224,703 |
|
|
|
$ |
263,609 |
|
|
|
$ |
483,928 |
|
|
|
$ |
532,458 |
|
|
| Investment income, net of
investment expenses |
13,795 |
|
|
|
12,696 |
|
|
|
30,876 |
|
|
|
15,059 |
|
|
| Net realized investment gains
(losses) |
6,004 |
|
|
|
15,779 |
|
|
|
30,512 |
|
|
|
(77,628 |
) |
|
| Other
income (loss) |
(90 |
) |
|
|
5,719 |
|
|
|
(169 |
) |
|
|
5,719 |
|
|
|
Total Revenues |
$ |
244,412 |
|
|
|
$ |
297,803 |
|
|
|
$ |
545,147 |
|
|
|
$ |
475,608 |
|
|
| |
|
|
|
|
|
|
|
| Benefits, Losses and
Expenses |
|
|
|
|
|
|
|
| Losses and loss settlement
expenses |
$ |
152,139 |
|
|
|
$ |
204,973 |
|
|
|
$ |
358,537 |
|
|
|
$ |
391,476 |
|
|
| Amortization of deferred
policy acquisition costs |
46,007 |
|
|
|
51,893 |
|
|
|
99,272 |
|
|
|
106,345 |
|
|
| Other underwriting
expenses |
28,400 |
|
|
|
36,701 |
|
|
|
46,768 |
|
|
|
78,550 |
|
|
|
Interest expense |
1,594 |
|
|
|
— |
|
|
|
1,594 |
|
|
|
— |
|
|
|
Total Benefits, Losses and Expenses |
$ |
228,140 |
|
|
|
$ |
293,567 |
|
|
|
$ |
506,171 |
|
|
|
$ |
576,371 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
16,272 |
|
|
|
4,236 |
|
|
|
38,976 |
|
|
|
(100,763 |
) |
|
|
Federal income tax expense (benefit) |
2,522 |
|
|
|
(1,724 |
) |
|
|
6,524 |
|
|
|
(34,189 |
) |
|
|
Net income (loss) |
$ |
13,750 |
|
|
|
$ |
5,960 |
|
|
|
$ |
32,452 |
|
|
|
$ |
(66,574 |
) |
|
|
|
|
|
|
|
|
|
|
|
GAAP combined ratio: |
|
|
|
|
|
|
|
|
Net loss ratio - excluding catastrophes |
58.1 |
|
% |
|
58.6 |
|
% |
|
63.6 |
|
% |
|
61.1 |
|
% |
|
Catastrophes - effect on net loss ratio |
9.6 |
|
|
|
19.2 |
|
|
|
10.5 |
|
|
|
12.4 |
|
|
|
Net loss ratio |
67.7 |
|
% |
|
77.8 |
|
% |
|
74.1 |
|
% |
|
73.5 |
|
% |
|
Underwriting expense ratio |
33.1 |
|
|
|
33.6 |
|
|
|
30.2 |
|
|
|
34.7 |
|
|
|
GAAP combined ratio |
100.8 |
|
% |
|
111.4 |
|
% |
|
104.3 |
|
% |
|
108.2 |
|
% |
|
Balance Sheet |
|
|
|
|
|
|
| (In Thousands) |
|
June 30, 2021 |
|
|
December 31, 2020 |
|
|
|
|
(unaudited) |
|
|
|
|
|
Invested assets |
$ |
2,107,245 |
|
$ |
2,149,217 |
|
| Cash |
|
118,519 |
|
|
87,948 |
|
| Total assets |
|
3,058,153 |
|
|
3,069,678 |
|
| Losses and loss settlement
expenses |
|
1,568,453 |
|
|
1,578,131 |
|
| Total liabilities |
|
2,218,678 |
|
|
2,244,529 |
|
| Net unrealized investment
gains, after-tax |
|
67,005 |
|
|
83,070 |
|
| Total
stockholders’ equity |
|
839,475 |
|
|
825,149 |
|
|
Net Premiums Written by Line of Business |
| (unaudited) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(In Thousands) |
|
|
|
|
Net Premiums Written(1) |
|
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
|
Other liability(2) |
$ |
82,235 |
|
|
$ |
82,250 |
|
|
$ |
154,514 |
|
|
$ |
167,190 |
|
|
Fire and allied lines(3) |
60,023 |
|
|
64,161 |
|
|
120,977 |
|
|
131,003 |
|
|
Automobile |
59,798 |
|
|
71,842 |
|
|
125,417 |
|
|
151,028 |
|
|
Workers’ compensation |
14,899 |
|
|
19,417 |
|
|
32,263 |
|
|
41,156 |
|
|
Fidelity and surety |
9,790 |
|
|
8,636 |
|
|
18,139 |
|
|
15,611 |
|
|
Miscellaneous |
324 |
|
|
392 |
|
|
691 |
|
|
807 |
|
|
Total commercial lines |
$ |
227,069 |
|
|
$ |
246,698 |
|
|
$ |
452,001 |
|
|
$ |
506,795 |
|
|
|
|
|
|
|
|
|
|
|
Personal lines: |
|
|
|
|
|
|
|
|
Fire and allied lines(4) |
$ |
1,012 |
|
|
$ |
9,747 |
|
|
$ |
1,766 |
|
|
$ |
18,140 |
|
|
Automobile |
(77 |
) |
|
7,144 |
|
|
312 |
|
|
14,710 |
|
|
Miscellaneous |
16 |
|
|
307 |
|
|
25 |
|
|
610 |
|
|
Total personal lines |
$ |
951 |
|
|
$ |
17,198 |
|
|
$ |
2,103 |
|
|
$ |
33,460 |
|
|
Reinsurance assumed |
10,386 |
|
|
6,737 |
|
|
39,763 |
|
|
12,886 |
|
|
Total |
238,406 |
|
|
270,633 |
|
|
$ |
493,867 |
|
|
$ |
553,141 |
|
(1) Net premiums written is a non-GAAP financial measure of net
premiums earned. See Definitions of Non-GAAP Information and
Reconciliations to Comparable GAAP Measures for a reconciliation of
net premiums written to net premiums earned.(2) Commercial lines
“Other liability” is business insurance covering bodily injury and
property damage arising from general business operations, accidents
on the insured’s premises and products manufactured or sold.(3)
Commercial lines “Fire and allied lines” includes fire, allied
lines, commercial multiple peril and inland marine.(4) Personal
lines “Fire and allied lines” includes fire, allied lines,
homeowners and inland marine.
|
Net Premiums Earned, Net Losses and Loss Settlement
Expenses and Net Loss Ratio by Line of Business |
| Three
Months Ended June 30, |
2021 |
|
2020 |
|
|
|
|
Net Losses |
|
|
|
|
|
Net Losses |
|
|
| |
|
|
and Loss |
|
|
|
|
|
and Loss |
|
|
| |
Net |
|
Settlement |
|
Net |
|
Net |
|
Settlement |
|
Net |
| (In Thousands, Except
Ratios) |
Premiums |
|
Expenses |
|
Loss |
|
Premiums |
|
Expenses |
|
Loss |
|
(unaudited) |
Earned |
|
Incurred |
|
Ratio |
|
Earned |
|
Incurred |
|
Ratio |
|
Commercial lines |
|
|
|
|
|
|
|
|
|
|
|
|
Other liability |
$ |
74,654 |
|
|
|
$ |
44,723 |
|
|
|
59.9 |
% |
|
$ |
77,407 |
|
|
$ |
46,914 |
|
|
60.6 |
% |
|
Fire and allied lines |
58,277 |
|
|
|
42,203 |
|
|
|
72.4 |
|
|
62,592 |
|
|
67,055 |
|
|
107.1 |
|
|
Automobile |
63,270 |
|
|
|
42,396 |
|
|
|
67.0 |
|
|
73,682 |
|
|
58,014 |
|
|
78.7 |
|
|
Workers' compensation |
15,575 |
|
|
|
14,556 |
|
|
|
93.5 |
|
|
19,200 |
|
|
6,247 |
|
|
32.5 |
|
|
Fidelity and surety |
7,137 |
|
|
|
1,012 |
|
|
|
14.2 |
|
|
6,332 |
|
|
110 |
|
|
1.7 |
|
|
Miscellaneous |
335 |
|
|
|
16 |
|
|
|
4.8 |
|
|
385 |
|
|
96 |
|
|
24.9 |
|
|
Total commercial lines |
$ |
219,248 |
|
|
|
$ |
144,906 |
|
|
|
66.1 |
% |
|
$ |
239,598 |
|
|
$ |
178,436 |
|
|
74.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Personal lines |
|
|
|
|
|
|
|
|
|
|
|
|
Fire and allied lines |
$ |
4,340 |
|
|
|
$ |
6,409 |
|
|
|
147.7 |
|
|
$ |
9,819 |
|
|
$ |
19,187 |
|
|
195.4 |
% |
|
Automobile |
2,295 |
|
|
|
2,261 |
|
|
|
98.5 |
|
|
7,518 |
|
|
2,464 |
|
|
32.8 |
|
|
Miscellaneous |
110 |
|
|
|
(1,450 |
) |
|
|
NM |
|
304 |
|
|
52 |
|
|
17.1 |
|
|
Total personal lines |
$ |
6,745 |
|
|
|
$ |
7,220 |
|
|
|
107.0 |
% |
|
$ |
17,641 |
|
|
$ |
21,703 |
|
|
123.0 |
% |
|
Reinsurance assumed |
$ |
(1,290 |
) |
|
|
$ |
13 |
|
|
|
NM |
|
$ |
6,370 |
|
|
$ |
4,834 |
|
|
75.9 |
% |
|
Total |
$ |
224,703 |
|
|
|
$ |
152,139 |
|
|
|
67.7 |
% |
|
$ |
263,609 |
|
|
$ |
204,973 |
|
|
77.8 |
% |
NM = Not Meaningful
| Six
Months Ended June 30, |
2021 |
|
2020 |
|
|
|
|
Net Losses |
|
|
|
|
|
Net Losses |
|
|
| |
|
|
and Loss |
|
|
|
|
|
and Loss |
|
|
| |
Net |
|
Settlement |
|
Net |
|
Net |
|
Settlement |
|
Net |
| (In Thousands, Except
Ratios) |
Premiums |
|
Expenses |
|
Loss |
|
Premiums |
|
Expenses |
|
Loss |
|
Unaudited |
Earned |
|
Incurred |
|
Ratio |
|
Earned |
|
Incurred |
|
Ratio |
|
Commercial lines |
|
|
|
|
|
|
|
|
|
|
|
|
Other liability |
$ |
150,013 |
|
|
$ |
86,870 |
|
|
|
57.9 |
|
% |
|
$ |
156,716 |
|
|
$ |
90,637 |
|
|
57.8 |
% |
|
Fire and allied lines |
116,609 |
|
|
105,177 |
|
|
|
90.2 |
|
|
|
124,261 |
|
|
118,980 |
|
|
95.8 |
|
|
Automobile |
129,247 |
|
|
109,598 |
|
|
|
84.8 |
|
|
|
151,700 |
|
|
123,319 |
|
|
81.3 |
|
|
Workers' compensation |
32,077 |
|
|
22,336 |
|
|
|
69.6 |
|
|
|
38,628 |
|
|
13,955 |
|
|
36.1 |
|
|
Fidelity and surety |
14,497 |
|
|
2,091 |
|
|
|
14.4 |
|
|
|
12,750 |
|
|
142 |
|
|
1.1 |
|
|
Miscellaneous |
684 |
|
|
(2 |
) |
|
|
(0.3 |
) |
|
|
780 |
|
|
188 |
|
|
24.1 |
|
|
Total commercial lines |
$ |
443,127 |
|
|
$ |
326,070 |
|
|
|
73.6 |
|
% |
|
$ |
484,835 |
|
|
$ |
347,221 |
|
|
71.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Personal lines |
|
|
|
|
|
|
|
|
|
|
|
|
Fire and allied lines |
$ |
10,561 |
|
|
$ |
11,018 |
|
|
|
104.3 |
|
% |
|
$ |
19,789 |
|
|
$ |
25,921 |
|
|
131.0 |
% |
|
Automobile |
6,335 |
|
|
5,561 |
|
|
|
87.8 |
|
|
|
15,148 |
|
|
7,613 |
|
|
50.3 |
|
|
Miscellaneous |
287 |
|
|
(1,360 |
) |
|
|
NM |
|
610 |
|
|
2,658 |
|
|
NM |
|
Total personal lines |
$ |
17,183 |
|
|
$ |
15,219 |
|
|
|
88.6 |
|
% |
|
$ |
35,547 |
|
|
$ |
36,192 |
|
|
101.8 |
% |
|
Reinsurance assumed |
$ |
23,618 |
|
|
$ |
17,248 |
|
|
|
73.0 |
|
% |
|
$ |
12,076 |
|
|
$ |
8,063 |
|
|
66.8 |
% |
|
Total |
$ |
483,928 |
|
|
$ |
358,537 |
|
|
|
74.1 |
|
% |
|
$ |
532,458 |
|
|
$ |
391,476 |
|
|
73.5 |
% |
NM = Not meaningful
United Fire (NASDAQ:UFCS)
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From Apr 2023 to Apr 2024
