United Fire Group, Inc. Reports Third Quarter 2019 Results

Company Release - 11/6/2019 7:00 AM ET

CEDAR RAPIDS, Iowa, Nov. 06, 2019 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (Nasdaq: UFCS),

Consolidated Financial Results - Highlights(1):

Three Months Ended September 30, 2019  Nine Months Ended September 30, 2019 
Net income (loss) per diluted share$(0.09) Net income per diluted share$1.48 
Adjusted operating income (loss)(2) per diluted share$(0.40) Adjusted operating income (loss)(2) per diluted share$(0.06)
Net realized investment gains per diluted share$0.31  Net realized investment gains per diluted share$1.54 
GAAP combined ratio110.0% GAAP combined ratio106.0%
   Book value per share$38.44 
   Return on equity(3)5.5%

United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) today reported consolidated net loss, including net realized investment gains and losses and changes in the fair value of equity securities, of $2.3 million ($0.09 per diluted share) for the three-month period ended September 30, 2019 (the "third quarter of 2019"), compared to a consolidated net income of $11.1 million ($0.43 per diluted share) for the same period in 2018(4). For the nine-month period ended September 30, 2019 ("year-to-date"), consolidated net income, including realized investment gains and losses and changes in the fair value of equity securities, was $38.0 million ($1.48 per diluted share), compared to $57.0 million ($2.23 per diluted share) for the same period in 2018.

The Company reported consolidated adjusted operating loss of $0.40 per diluted share for the third quarter, compared to a consolidated adjusted operating income of less than $0.01 per diluted share for the same period in 2018. Year-to-date, consolidated adjusted operating loss was $0.06 per diluted share compared to consolidated adjusted operating income of $0.96 per diluted share for the same period in 2018.

_________________
(1) Per share amounts are after tax.
(2) Adjusted operating income (loss) is a non-GAAP financial measure of net income (loss) excluding net realized investment
gains and losses, changes in the fair value of equity securities and related federal 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 regular, ongoing performance of our business. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income to net income.
(3) Return on equity is calculated by dividing annualized net income by average year-to-date stockholders' equity.
(4) Consolidated financial results for 2018 include both continuing operations and discontinued life insurance operations and the one-time gain on the sale of discontinued operations.

"Catastrophe losses, an increase in severity of losses and current accident year reserve additions in our commercial auto and liability lines of business are the primary drivers of the net loss reported in the third quarter of 2019," stated Randy A. Ramlo, President and Chief Executive Officer. "The increase in catastrophe losses is not uncommon for the third quarter, which, along with the second quarter, have historically been our most volatile quarters. In the third quarter of 2019, we had an increase in catastrophe losses from 17 events, of which four events accounted for the majority of the losses."

"In the third quarter, we also incurred an increase in severity of losses and added additional reserves in the current accident year primarily in our commercial auto and liability lines of business. The reserve strengthening is due to an increase in losses from a continuation of the challenging litigious environment, particularly in commercial auto and liability lines of business in the States of Texas and Florida. As a reminder, commercial auto is our largest line of business, with Texas being the state with our highest concentration of commercial auto business."

"Although the reported results do not yet reflect our strategic initiatives to improve profitability, it remains our primary focus and we are encouraged by the continued improvement we are experiencing in our underlying operations. Examples include a decrease in claim counts despite an increase in catastrophe claims, strong commercial pricing increases and an improvement in the core loss ratio of 3.1 points year-to-date. In addition, the third quarter marks the fourth consecutive quarter of flat or declining frequency of auto claims."

Consolidated net unrealized investment gains, net of tax, totaled $51.6 million as of September 30, 2019, an increase of $60.9 million from December 31, 2018. The increase in net unrealized investment gains is primarily the result of lower interest rates year-to-date when compared to the same period in 2018.

Total consolidated assets as of September 30, 2019 were $3.0 billion, which included $2.1 billion of invested assets. The Company's book value per share was $38.44, which is an increase of $3.04 per share, or 8.6 percent from December 31, 2018. This increase is primarily attributed to net income of $38.0 million and an increase in net unrealized investment gains on fixed maturity securities of $60.9 million, net of tax, over the prior year period, partially offset by shareholder dividends of $24.4 million during the first nine months of 2019.

The annualized return on equity was 5.5 percent year-to-date compared to 7.3 percent for the same period in 2018.

Property and Casualty Insurance Business

Net loss from the property and casualty insurance business, including net realized investment gains and losses, totaled $2.3 million ($0.09 per diluted share) for the third quarter of 2019, compared to net income of $11.1 million ($0.43 per diluted share) in the same period in 2018. The decrease in net income was primarily due to an increase in losses and loss settlement expenses and lower realized investment gains, partially offset by an increase in net premiums earned. The increase in losses and loss settlement expenses was due to an increase in catastrophe losses, an increase in severity of losses and reserve additions in the current accident year in our commercial auto and liability lines of business.

Year-to-date, net income, including net realized investment gains and losses, totaled $38.0 million ($1.48 per diluted share) compared to $31.6 million ($1.23 per diluted share) in the same period in 2018. The change in net income was primarily due to an increase in the value of equity securities and an increase in net premiums earned offset by an increase in losses and loss settlement expenses from an increase in catastrophe losses and a decrease in prior year favorable reserve development from reserve strengthening in our commercial auto and liability reserves.

Net premiums earned increased 3.9 percent to $274.9 million in the third quarter of 2019, compared to $264.7 million in the same period in 2018. Year-to-date net premiums earned increased 6.1 percent to $813.7 million compared to $766.8 million in the same period in 2018. The increase in the three- and nine-month periods ended September 30, 2019 was primarily due to rate increases, premium audits and endorsements.

The average renewal pricing change for commercial lines increased 7.0 percent in the third quarter of 2019 compared to 6.6 percent in the second quarter of 2019. The renewal pricing increases continue to be driven by commercial auto rate increases. During the third quarter of 2019, filed commercial auto rate increases averaged in the high-single digits. Personal lines filed rate and renewal pricing increases also remained in the mid-single digits.

Reserve Development

We experienced favorable development in our net reserves for prior accident years of $5.5 million in the third quarter of 2019, compared to unfavorable development of $0.7 million in the same period in 2018. The change in prior year reserve development in the third quarter of 2019 came primarily from favorable development in workers' compensation offset by prior year reserve strengthening in commercial liability line of business. Year-to-date, favorable development in our net reserves for prior accident years was $0.8 million, compared to $47.7 million favorable development in the same period in 2018. The change in prior year reserve development in the nine-month period ended September 30, 2019 came primarily from reserve strengthening in our commercial auto and commercial liability lines of business in our Gulf Coast region offset by favorable development in workers' compensation. 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 September 30, 2019, our total reserves were within our actuarial estimates.

GAAP Combined Ratio

The GAAP combined ratio increased by 4.5 percentage points to 110.0 percent for the third quarter, compared to 105.5 percent in the same period in 2018. Year-to-date, the GAAP combined ratio increased 3.5 percentage points to 106.0 percent compared to 102.5 percent in 2018. The increases in the combined ratios in the three-month and nine-month periods ended September 30, 2019 as compared to the same periods in 2018 are primarily driven by an increase in the loss ratio from a combination of an increase in severity of losses, reserve strengthening and an increase in catastrophe losses.

Pre-tax catastrophe losses in the third quarter of 2019 were higher when compared to third quarter of 2018, with catastrophe losses adding 7.0 percentage points to the combined ratio in 2019 as compared to 4.6 percentage points in 2018. Our 10-year historical average for third quarter catastrophe losses is 7.3 percentage points added to the combined ratio. Year-to-date, catastrophe losses totaled $44.9 million ($1.38 per diluted share) compared to $30.7 million ($0.95 per diluted share) for the same period in 2018.

Expense Ratio

The expense ratio for the third quarter was 33.0 percentage points, compared to 32.3 percentage points for the third quarter in 2018. The increase in the expense ratio during the third quarter of 2019 is primarily due to quarterly fluctuations in expenses for our multi-year Oasis project to upgrade our technology platform to enhance core underwriting decisions, selection of risks and productivity. Year-to-date, the expense ratio was 32.7 percentage points, compared to 33.7 percentage points in the same period in 2018. The decrease is primarily due to lower employee benefit accruals and expenses caused by post-retirement benefit plan amendments made at the end of 2018.

Investment Income and Realized Investment Gains and Losses

Net investment income was $13.3 million for the third quarter of 2019, a slight increase, as compared to net investment income of $13.2 million for the same period in 2018. Year-to date, net investment income was $43.9 million, flat compared to the same period in 2018.

The Company recognized net realized investment gains of $9.8 million during the third quarter of 2019, compared to $14.0 million for the same period in 2018. Year-to-date, the Company recognized net realized investment gains of $50.1 million compared to $7.4 million in the same period in 2018. The change in both the three- and nine-month periods ended September 30, 2019, as compared to the same periods in 2018, was primarily due to changes in the fair value of equity securities.

Life Insurance Business

On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company, to Kuvare US Holdings, Inc. and on March 30, 2018, the sale transaction was completed. As a result, the life insurance business is presented as discontinued operations in all periods presented in this press release.

Capital Management

During the third quarter of 2019, we declared and paid a $0.33 per share cash dividend to shareholders of record as of August 30, 2019. We have paid a quarterly dividend every quarter since March 1968. During the third quarter we repurchased 177,249 shares of our common stock for a total purchase price of approximately $8.1 million.

Earnings Call Access Information

An earnings call will be held at 9:00 a.m. Central Time on November 6, 2019 to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company's third quarter 2019 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 November 20, 2019. The replay access information is toll-free 1-877-344-7529; conference ID no. 10135573.

Webcast: An audio webcast of the teleconference can be accessed at the Company's investor relations page at
http://ir.ufginsurance.com/event or http://services.choruscall.com/links/ufcs191106. The archived audio webcast will be available until November 20, 2019.

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 46 states, plus the District of Columbia, and we are represented by approximately 1,100 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, Corporate Finance, 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)," "intends(s)," "plan(s)," "believe(s)" "continue(s)," "seek(s)," "estimate(s)," "goal(s)," "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, 2018, filed with the Securities and Exchange Commission ("SEC") on February 28, 2019. The risks identified in our Form 10-K 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 and net premiums written. The Company has provided the following definitions and reconciliations of the non-GAAP financial measures:

Adjusted operating income: Adjusted operating income is calculated by excluding net realized investment gains and losses and the one-time gain from the sale of discontinued operations after applicable federal and state income taxes from net income. Management believes adjusted operating income 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 September 30, Nine Months Ended September 30,
(In Thousands, Except Per Share Data)2019 2018Change % 2019 2018Change %
Income Statement Data         
Net income (loss)$(2,342) $11,070 NM $37,983  $56,986 (33.3)%
Less: gain on sale of discontinued operations, net of tax   %   27,307 (100.0)%
Less: after-tax net realized investment gains7,760  11,037 NM 39,600  5,014 NM
Adjusted operating income (loss)$(10,102) $33 NM $(1,617) $24,665 (106.6)%
Diluted Earnings Per Share Data         
Net income (loss)$(0.09) $0.43 NM $1.48  $2.23 (33.6)%
Less: gain on sale of discontinued operations, net of tax   %   1.07 (100.0)%
Less: after-tax net realized investment gains0.31  0.43 (27.9)% 1.54  0.20 NM
Adjusted operating income (loss)$(0.40) $ NM $(0.06) $0.96 (106.3)%

NM = Not meaningful.

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 September 30, Nine Months Ended September 30,
(In Thousands, Except Ratios)2019 2018Change % 2019 2018Change %
Premiums:         
Net premiums earned$274,942  $264,747 3.9% $813,742  $779,770 4.4%
Less: change in unearned premiums11,766  8,884 32.4% (35,296) (43,459)18.8%
Less: change in prepaid reinsurance premiums(163) 953 (117.1)% 886  2,105 (57.9)%
Net premiums written$263,339  $254,910 3.3% $848,152  $821,124 3.3%



Supplemental Tables

Consolidated Financial Highlights
 Three Months Ended September 30, Nine Months Ended September 30,
(In Thousands, Except Share and Per Share Data and Ratios)2019 2018Change % 2019 2018Change %
Revenue Highlights         
Net premiums earned:         
P&C continuing operations$274,942  $264,747 3.9% $813,742  $766,767 6.1%
Life discontinued operations   %   13,003 (100.0)%
Consolidated net premiums earned274,942  264,747 3.9% 813,742  779,770 4.4%
Net investment income:         
P&C continuing operations13,291  13,192 0.8% 43,923  43,933 %
Life discontinued operations   %   12,663 (100.0)%
Consolidated net investment income13,291  13,192 0.8% 43,923  56,596 (22.4)%
Total revenues:         
P&C continuing operations298,055  291,910 2.1% 907,791  818,104 11.0%
Life discontinued operations   %   24,755 (100.0)%
Total revenues298,055  291,910 2.1% 907,791  842,859 7.7%
Income Statement Data         
Net income (loss)(2,342) 11,070 NM 37,983  56,986 (33.3)%
Gain on sale of discontinued operations, net of tax   %   27,307 (100.0)%
After-tax net realized investment gains7,760  11,037 (29.7)% 39,600  5,014 NM
Adjusted operating income (loss)(1)$(10,102) $33 NM $(1,617) $24,665 (106.6)%
          
Diluted Earnings Per Share Data         
Net income (loss)$(0.09) $0.43 NM $1.48  $2.23 (33.6)%
Gain on sale of discontinued operations, net of tax   %   1.07 (100.0)%
After-tax net realized investment gains0.31  0.43 (27.9)% 1.54  0.20 NM
Adjusted operating income (loss) (1)$(0.40) $ NM $(0.06) $0.96 (106.3)%
Catastrophe Data         
Pre-tax catastrophe losses$19,292  $12,268 57.3% $44,927  $30,745 46.1%
Effect on after-tax earnings per share0.61  0.38 60.5% 1.38  0.95 45.3%
Effect on combined ratio7.0% 4.6%52.2% 5.5% 4.0%37.5%
          
Favorable (unfavorable) reserve development experienced on prior accident years$5,513  $(712)NM $770  $47,673 (98.4)%
          
Combined ratio110.0% 105.5%4.3% 106.0% 102.5%3.4%
Return on equity     5.5% 7.3%(24.7)%
Cash dividends declared per share$0.33  $3.31 (90.0)% $0.97  $3.90 (75.1)%
Diluted weighted average shares
 outstanding
25,176,334  25,626,951 (1.8)% 25,643,744  25,607,305 0.1%

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
 Three Months Ended September 30, Nine Months Ended September 30,
(In Thousands, Except Ratios)2019 2018 2019 2018
Revenues       
Net premiums earned$274,942  $264,747  $813,742  $766,767 
Investment income, net of investment expenses13,291  13,192  43,923  43,933 
Net realized investment gains (losses)       
Change in the fair value of equity securities9,692  14,381  46,825  5,498 
All other net realized gains (losses)130  (410) 3,301  1,906 
Net realized investment gains9,822  13,971  50,126  7,404 
Total Revenues$298,055  $291,910  $907,791  $818,104 
        
Benefits, Losses and Expenses       
Losses and loss settlement expenses$211,752  $193,667  $596,001  $527,541 
Amortization of deferred policy acquisition costs54,828  51,758  161,842  152,207 
Other underwriting expenses36,003  33,887  104,370  105,994 
Total Benefits, Losses and Expenses$302,583  $279,312  $862,213  $785,742 
        
Income (loss) before income taxes from continuing operations(4,528) 12,598  45,578  32,362 
Federal income tax expense (benefit) from continuing operations(2,186) 1,528  7,595  771 
Net income (loss) from continuing operations$(2,342) $11,070  $37,983  $31,591 
Net loss from discontinued operations      (1,912)
Gain on sale of discontinued operations, net of tax      27,307 
Net income (loss)$(2,342) $11,070  $37,983  $56,986 
        
GAAP combined ratio:       
Net loss ratio - excluding catastrophes70.0% 68.6% 67.8% 64.8%
Catastrophes - effect on net loss ratio7.0  4.6  5.5  4.0 
Net loss ratio77.0% 73.2% 73.3% 68.8%
Expense ratio33.0  32.3  32.7  33.7 
Combined ratio110.0% 105.5% 106.0% 102.5%


Balance Sheet
 September 30, 2019 December 31, 2018
(In Thousands) 
Invested assets$2,125,385  $2,074,123 
Cash129,708  64,454 
Total assets3,014,029  2,816,698 
Losses and loss settlement expenses1,360,539  1,312,483 
Total liabilities2,049,861  1,928,323 
Net unrealized investment gains (losses), after-tax51,588  (9,323)
Total stockholders’ equity964,168  888,375 


Discontinued Operations(1)
 Three Months Ended September 30, Nine Months Ended September 30,
(In Thousands)2019 2018 2019 2018
Revenues       
Net premiums earned$  $  $  $13,003 
Investment income, net of investment expenses      12,663 
Net realized investment losses      (1,057)
Other income      146 
Total Revenues$  $  $  $24,755 
        
Benefits, Losses and Expenses       
Losses and loss settlement expenses$  $  $  $10,823 
Increase in liability for future policy benefits      5,023 
Amortization of deferred policy acquisition costs      1,895 
Other underwriting expenses      3,864 
Interest on policyholders’ accounts      4,499 
Total Benefits, Losses and Expenses$  $  $  $26,104 
        
Loss before income taxes$  $  $  $(1,349)
Federal income tax expense      563 
Net loss$  $  $  $(1,912)

(1) On September 18, 2017, the Company signed a definitive agreement to sell its subsidiary, United Life Insurance Company, to Kuvare US Holdings, Inc. The sale closed on March 30, 2018. The life insurance business is presented as discontinued operations in all periods presented in this table.

Net Premiums Written by Line of Business
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
(In Thousands)   
Net Premiums Written(1)       
Continuing operations:       
Commercial lines:       
Other liability(2)$76,090  $75,117  $247,573  $242,574 
Fire and allied lines(3)61,846  58,037  189,361  180,608 
Automobile75,222  70,121  246,801  227,160 
Workers’ compensation18,988  20,806  67,893  72,464 
Fidelity and surety6,644  6,212  20,147  20,224 
Miscellaneous363  398  1,281  1,318 
Total commercial lines$239,153  $230,691  $773,056  $744,348 
        
Personal lines:       
Fire and allied lines(4)$11,255  $11,123  $31,015  $31,131 
Automobile8,396  7,689  24,113  22,872 
Miscellaneous337  304  961  931 
Total personal lines$19,988  $19,116  $56,089  $54,934 
Reinsurance assumed4,198  5,103  19,007  8,837 
Total net premiums written from continuing operations263,339  254,910  848,152  808,119 
Total net premiums written from discontinued operations      13,005 
Total$263,339  $254,910  $848,152  $821,124 

(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, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Three Months Ended September 30,2019 2018
   Net Losses     Net Losses  
   and Loss     and Loss  
 Net Settlement Net Net Settlement Net
(In Thousands, Except Ratios)Premiums Expenses Loss Premiums Expenses Loss
UnauditedEarned Incurred Ratio Earned Incurred Ratio
Commercial lines           
Other liability$80,421  $50,656  63.0% $78,943  $53,581  67.9%
Fire and allied lines61,628  49,628  80.5  59,056  40,514  68.6 
Automobile80,574  85,227  105.8  72,773  68,892  94.7 
Workers' compensation22,041  3,076  14.0  24,127  17,776  73.7 
Fidelity and surety6,755  1,437  21.3  5,929  1,379  23.3 
Miscellaneous428  63  14.7  436  (29) (6.7)
Total commercial lines$251,847  $190,087  75.5% $241,264  $182,113  75.5%
            
Personal lines           
Fire and allied lines$10,370  $13,469  129.9% $10,416  $11,423  109.7%
Automobile7,870  6,946  88.3  7,450  6,731  90.3 
Miscellaneous312  (130) (41.7) 307  25  8.1 
Total personal lines$18,552  $20,285  109.3% $18,173  $18,179  100.0%
Reinsurance assumed$4,543  $1,380  30.4% $5,310  $(6,625) (124.8)%
Total$274,942  $211,752  77.0% $264,747  $193,667  73.2%


Net Premiums Earned, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Nine Months Ended September 30,2019 2018
   Net Losses     Net Losses  
   and Loss     and Loss  
 Net Settlement Net Net Settlement Net
(In Thousands, Except Ratios)Premiums Expenses Loss Premiums Expenses Loss
UnauditedEarned Incurred Ratio Earned Incurred Ratio
Commercial lines           
Other liability$238,300  $146,513  61.5% $230,845  $117,387  50.9%
Fire and allied lines181,417  142,265  78.4  174,451  125,844  72.1 
Automobile234,280  225,564  96.3  209,176  188,929  90.3 
Workers' compensation66,537  18,399  27.7  71,101  46,838  65.9 
Fidelity and surety19,276  536  2.8  17,144  2,328  13.6 
Miscellaneous1,291  63  4.9  1,289  348  27.0 
Total commercial lines$741,101  $533,340  72.0% $704,006  $481,674  68.4%
            
Personal lines           
Fire and allied lines$30,892  $34,137  110.5% $31,250  $28,183  90.2%
Automobile23,050  19,422  84.3  21,686  18,701  86.2 
Miscellaneous920  354  38.5  903  (247) (27.4)
Total personal lines$54,862  $53,913  98.3% $53,839  $46,637  86.6%
Reinsurance assumed$17,779  $8,748  49.2% $8,922  $(770) (8.6)%
Total$813,742  $596,001  73.2% $766,767  $527,541  68.8%

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Source: United Fire Group, Inc
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