United Fire Group, Inc. Reports Estimates for Second Quarter 2023 Results

CEDAR RAPIDS, Iowa, July 31, 2023 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) announced today preliminary earnings estimates for the second quarter 2023 results, including net loss of $2.23 per diluted share, and an adjusted operating loss of $2.27 per diluted share.

The Company expects second quarter 2023 results to include pre-tax reserve strengthening for prior accident years of $53 million representing 20.8 points of earned premium. In addition, the Company expects estimated pre-tax catastrophe losses of $33 million representing 13.0 points of earned premium.

As a result, the GAAP combined ratio is estimated to be 133% in the second quarter of 2023.

“During the second quarter, we increased prior period loss reserves by approximately $53 million to strengthen our position relative to loss trends across a range of commercial liability lines of business,” said UFG President and CEO Kevin Leidwinger. “This action reflects the impact of ongoing economic and social inflation, as well as continued development of actuarial insights that allow us to more confidently assess and respond to potential risks.

“Over the past four quarters, we have significantly advanced the breadth and depth of our reserving analyses, providing a greater understanding of the underlying factors shaping our loss experience. These insights now allow us to react more quickly and assuredly in today’s dynamic loss cost environment. We will continue to invest in the talent and process that is necessary to further enhance our analytical rigor and continuously extract actionable insights that are essential in managing the portfolio to long-term financial success.

“Our second quarter results were also impacted by elevated catastrophe activity from 18 separate weather events. Second quarter catastrophe losses are estimated at approximately $33 million, adding approximately 13.0 points to the combined ratio, which is 2.0 points above our 5-year and 10-year historic average. We continue to take action to improve the risk profile of our property business to reposition the portfolio and reduce volatility. During the second quarter, our property average premium increase was 19%, with rate increases of 12% and exposure increases of 7%.