United Fire Group, Inc. Reports Third Quarter 2021 Results
United Fire Group reported a net loss of $9.6 million ($0.38 per diluted share) for Q3 2021, an improvement from a loss of $37.2 million in Q3 2020. Year-to-date, net income reached $22.9 million ($0.90 per diluted share), significantly up from a loss of $103.8 million in 2020. The GAAP combined ratio decreased to 109.7% from 124.4%. Despite lower net premiums earned, net investment income rose to $11.6 million, up from $7.2 million. The company declared a $0.15 per share dividend and repurchased 36,417 shares.
- Net income for year-to-date increased to $22.9 million compared to a net loss of $103.8 million in 2020.
- GAAP combined ratio improved to 109.7% from 124.4% in Q3 2020.
- Net investment income for Q3 2021 increased to $11.6 million, up from $7.2 million in the previous year.
- Commercial auto loss ratio improved by 43.7 percentage points in Q3 2021.
- Q3 2021 net loss of $9.6 million impacted by higher-than-average catastrophe losses.
- 7.8% decrease in net premiums earned for Q3 2021 compared to the same period in 2020.
- Underwriting expense ratio for Q3 2021 increased to 36.3% from 33.8% in Q3 2020.
CEDAR RAPIDS, Iowa, Nov. 04, 2021 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (Nasdaq: UFCS),
Consolidated Financial Results - Highlights(1):
| Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||
| Net income (loss) per diluted share | $ | (0.38 | ) | Net income per diluted share | $ | 0.90 | ||
| Adjusted operating income (loss)(2) per diluted share | $ | (0.31 | ) | Adjusted operating income(2) per diluted share | $ | 0.02 | ||
| Net realized investment gains (losses) per diluted share | $ | (0.07 | ) | Net realized investment gains per diluted share | $ | 0.88 | ||
| GAAP combined ratio | 109.7 | % | GAAP combined ratio | 106.1 | % | |||
| Book value per share | $ | 32.48 | ||||||
| Return on equity(3) | 3.7 | % | ||||||
United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) today reported a consolidated net loss, including net realized investment losses and changes in the fair value of equity securities, of
The Company reported a consolidated adjusted operating loss of
"In the third quarter of 2021 we reported strong improvement in our core loss ratio," stated Randy A. Ramlo, President and Chief Executive Officer. "This improvement was offset by higher-than-average catastrophe losses."
"Our core loss ratio, which removes the impact of catastrophe losses and favorable prior year reserve development, improved 10.1 percentage points and 2.6 percentages points, respectively, in the third quarter and year-to-date 2021 as compared to the same periods of 2020. When taking into consideration the recovery of
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(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 taxes, and goodwill impairment. 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.
"The most significant improvement was in our commercial auto loss ratio, which improved 43.7 percentage points and 11.8 percentage points, respectively, in the third quarter and year-to-date 2021 as compared to the same periods of 2020. This improvement is being driven by continuing decreases in the frequency and severity of commercial auto claims and a decrease in the number of commercial auto exposure units. We are pleased with this significant improvement, which is a direct result of our strategic initiatives."
"The continued improvement in our core loss ratio was offset by higher than average catastrophe losses. Pre-tax catastrophe losses added 16.5 percentage points to the combined ratio in third quarter of 2021, compared to our third quarter historical average of 9.2 percentage points added to the combined ratio. In the third quarter of 2021, the most significant catastrophic event on our commercial and personal lines of business was Hurricane Ida and the most significant catastrophic event on our reinsurance assumed line of business was the European floods."
Financial Highlights
Net loss, including net realized investment gains and losses, was
Year-to-date, consolidated net income, including net realized investment gains and losses was
The third quarter of 2020, also included a one-time adjustment to write off goodwill of
Net premiums earned decreased 7.8 percent to
Year-to-date, the overall average renewal pricing increase was 6.3 percent. Excluding the workers' compensation line of business, the overall average renewal pricing increase was 7.6 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 9.5 percent. The commercial property average renewal rate increase was 8.7 percent.
Net investment income was
The Company recognized net realized investment losses of
Losses and loss settlement expenses decreased by 25.2 percentage points and by 14.7 percentage points in the three- and nine-month periods ended September 30, 2021 as compared to the same periods in 2020. For the third quarter and year-to-date 2021, the decrease in losses and loss settlement expenses was primarily due to comparatively lower catastrophe losses and a decrease in frequency and severity of commercial auto liability losses.
Consolidated net unrealized investment gains, net of tax, totaled
Total consolidated assets as of September 30, 2021 were
The annualized return on equity was 3.7 percent year-to-date compared to negative 16.0 percent for the same period in 2020. The change in the annualized return on equity was primarily driven by net income of
Reserve Development
The Company experienced favorable development in its net reserves for prior accident years of
GAAP Combined Ratio
The GAAP combined ratio decreased by 14.7 percentage points to 109.7 percent for the third quarter of 2021, compared to 124.4 percent in the same period in 2020. For the nine-month period ended September 30, 2021, the GAAP combined ratio decreased 7.4 percentage points to 106.1 percent compared to 113.5 percent for the nine-month period ended September 30, 2020. The decrease in the combined ratio during the three- and nine-month periods ended September 30, 2021 as compared to the same period in 2020 was primarily driven by a decrease in the net loss ratio.
Net Loss Ratio
The GAAP net loss ratio decreased 17.2 percentage points during the third quarter of 2021 as compared to the same period in 2020. Year-to-date, the GAAP net loss ratio decreased 5.2 percentage points to 73.9 percent compared to 79.1 percent for the nine-month period ended September 30, 2020. The decrease in the net loss ratio during the three- and nine-month periods ended September 30, 2021 as compared to the same period in 2020 was primarily due to comparatively lower catastrophe losses and a decrease in the frequency and severity of commercial auto liability losses.
Pre-tax catastrophe losses in the third quarter of 2021 were higher than our 10-year historical average for the third quarter but lower than third quarter of 2020. Catastrophe losses added 16.5 percentage points to the combined ratio in third quarter of 2021, as compared to 21.4 percentage points in the same period of 2020. The most significant catastrophe losses in the third quarter of 2021 were from Hurricane Ida on our commercial and personal lines of business and from the European floods on our reinsurance assumed line of business. In the third quarter of 2020, the most significant catastrophe losses were from the August Midwest derecho and Hurricane Laura. Our 10-year historical average for third quarter catastrophe losses is 9.2 percentage points added to the combined ratio. Year-to-date, catastrophe losses totaled
Underwriting Expense Ratio
The underwriting expense ratio for the third quarter of 2021 was 36.3 percent compared to 33.8 percent for the third quarter in 2020. Year-to-date, the underwriting expense ratio was 32.2 percent compared to 34.4 percent in the same period in 2020. For the third quarter of 2021, we did see an increase in the expense ratio of 2.5 points as compared to the third quarter of 2020 primarily due to improved performance in our book of business resulting in additions to profit sharing for our agents, employees, and program business. The decrease in the underwriting expense ratio 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 third quarter of 2021, we declared and paid a
Earnings Call Access Information
An earnings call will be held at 9:00 a.m. Central Time on November 4, 2021 to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company's third 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 November 18, 2021. The replay access information is toll-free 1-877-344-7529; conference ID no. 10160591.
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/ufcs211103. The archived audio webcast will be available until November 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 Interim Co-Chief Financial Officer, 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, and goodwill impairment 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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| (In Thousands, Except Per Share Data) | 2021 | 2020 | Change % | 2021 | 2020 | Change % | ||||||||||||||
| Income Statement Data | ||||||||||||||||||||
| Net income (loss) | $ | (9,593 | ) | $ | (37,241 | ) | 74.2 | % | $ | 22,859 | $ | (103,815 | ) | 122.0 | % | |||||
| Less: after-tax net realized investment gains (losses) | (1,792 | ) | 12,017 | (114.9 | )% | 22,312 | (49,309 | ) | 145.2 | % | ||||||||||
| Less: goodwill impairment | — | (15,091 | ) | 100.0 | % | — | (15,091 | ) | 100.0 | % | ||||||||||
| Adjusted operating income (loss) | $ | (7,801 | ) | $ | (34,167 | ) | 77.2 | % | $ | 547 | $ | (39,415 | ) | 101.4 | % | |||||
| Diluted Earnings Per Share Data | ||||||||||||||||||||
| Net income (loss) | $ | (0.38 | ) | $ | (1.49 | ) | 74.5 | % | $ | 0.90 | $ | (4.15 | ) | 121.7 | % | |||||
| Less: after-tax net realized investment gains (losses) | (0.07 | ) | 0.48 | (114.6 | )% | 0.88 | (1.97 | ) | 144.7 | % | ||||||||||
| Less: goodwill impairment | — | (0.60 | ) | 100.0 | % | — | (0.60 | ) | 100.0 | % | ||||||||||
| Adjusted operating income (loss) | $ | (0.31 | ) | $ | (1.37 | ) | 77.4 | % | $ | 0.02 | $ | (1.58 | ) | 101.3 | % | |||||
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) | 2021 | 2020 | Change % | 2021 | 2020 | Change % | ||||||||||||||
| Premiums: | ||||||||||||||||||||
| Net premiums earned | $ | 238,909 | $ | 259,061 | (7.8 | )% | $ | 722,837 | $ | 791,519 | (8.7 | )% | ||||||||
| Less: change in unearned premiums | 15,240 | 31,072 | (51.0 | )% | 5,915 | 5,433 | 8.9 | % | ||||||||||||
| Less: change in prepaid reinsurance premiums | (3,039 | ) | (2,222 | ) | (36.8 | )% | (3,653 | ) | 2,734 | (233.6 | )% | |||||||||
| Net premiums written | $ | 226,708 | $ | 230,211 | (1.5 | )% | $ | 720,575 | $ | 783,352 | (8.0 | )% | ||||||||
Supplemental Tables
| Consolidated Financial Highlights | |||||||||||||||||||
| (unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| (In Thousands, Except Share and Per Share Data and Ratios) | 2021 | 2020 | Change % | 2021 | 2020 | Change % | |||||||||||||
| Revenue Highlights | |||||||||||||||||||
| Net premiums earned | $ | 238,909 | $ | 259,061 | (7.8 | )% | $ | 722,837 | $ | 791,519 | (8.7 | )% | |||||||
| Net investment income | 11,571 | 7,244 | 59.7 | % | 42,447 | 22,303 | 90.3 | % | |||||||||||
| Net realized investment gains (losses) | (2,269 | ) | 15,212 | (114.9 | )% | 28,243 | (62,416 | ) | 145.2 | % | |||||||||
| Other income (loss) | 332 | 604 | (45.0 | )% | 163 | 6,323 | (97.4 | )% | |||||||||||
| Total revenues | 248,543 | 282,121 | (11.9 | )% | $ | 793,690 | $ | 757,729 | 4.7 | % | |||||||||
| Income Statement Data | |||||||||||||||||||
| Net income (loss) | (9,593 | ) | (37,241 | ) | 74.2 | % | $ | 22,859 | $ | (103,815 | ) | 122.0 | % | ||||||
| After-tax net realized investment gains (losses) | (1,792 | ) | 12,017 | (114.9 | )% | 22,312 | (49,309 | ) | 145.2 | % | |||||||||
| Goodwill impairment | — | (15,091 | ) | 100.0 | % | — | (15,091 | ) | 100.0 | % | |||||||||
| Adjusted operating income (loss)(1) | $ | (7,801 | ) | $ | (34,167 | ) | 77.2 | % | $ | 547 | $ | (39,415 | ) | 101.4 | % | ||||
| Diluted Earnings Per Share Data | |||||||||||||||||||
| Net income (loss) | $ | (0.38 | ) | $ | (1.49 | ) | 74.5 | % | $ | 0.90 | $ | (4.15 | ) | 121.7 | % | ||||
| After-tax net realized investment gains (losses) | (0.07 | ) | 0.48 | (114.6 | )% | 0.88 | (1.97 | ) | 144.7 | % | |||||||||
| Goodwill impairment | — | (0.60 | ) | 100.0 | % | — | (0.60 | ) | 100.0 | % | |||||||||
| Adjusted operating income (loss)(1) | $ | (0.31 | ) | $ | (1.37 | ) | 77.4 | % | $ | 0.02 | $ | (1.58 | ) | 101.3 | % | ||||
| Catastrophe Data | |||||||||||||||||||
| Pre-tax catastrophe losses | $ | 39,467 | $ | 55,361 | (28.7 | )% | $ | 90,326 | $ | 121,261 | (25.5 | )% | |||||||
| Effect on after-tax earnings per share | 1.24 | 1.75 | (29.1 | )% | 2.81 | 3.83 | (26.6 | )% | |||||||||||
| Effect on combined ratio | 16.5 | % | 21.4 | % | (22.9 | )% | 12.5 | % | 15.3 | % | (18.3 | )% | |||||||
| Favorable reserve development experienced on prior accident years | $ | 11,075 | $ | 6,269 | 76.7 | % | $ | 26,099 | $ | 30,038 | (13.1 | )% | |||||||
| GAAP combined ratio | 109.7 | % | 124.4 | % | (11.8 | )% | 106.1 | % | 113.5 | % | (6.5 | )% | |||||||
| Return on equity | 3.7 | % | (16.0 | )% | 123.1 | % | |||||||||||||
| Cash dividends declared per share | $ | 0.15 | $ | 0.33 | (54.5 | ) | $ | 0.45 | $ | 0.99 | (54.5 | )% | |||||||
| Diluted weighted average shares outstanding | 25,092,167 | 25,031,234 | 0.2 | % | 25,427,318 | 25,023,401 | 1.6 | % | |||||||||||
(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 September 30, | Nine Months Ended September 30, | |||||||||||||
| (In Thousands, Except Ratios) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Revenues | |||||||||||||||
| Net premiums earned | $ | 238,909 | $ | 259,061 | $ | 722,837 | $ | 791,519 | |||||||
| Investment income, net of investment expenses | 11,571 | 7,244 | 42,447 | 22,303 | |||||||||||
| Net realized investment gains (losses) | (2,269 | ) | 15,212 | 28,243 | (62,416 | ) | |||||||||
| Other income (loss) | 332 | 604 | 163 | 6,323 | |||||||||||
| Total Revenues | $ | 248,543 | $ | 282,121 | $ | 793,690 | $ | 757,729 | |||||||
| Benefits, Losses and Expenses | |||||||||||||||
| Losses and loss settlement expenses | $ | 175,444 | $ | 234,693 | $ | 533,981 | $ | 626,169 | |||||||
| Amortization of deferred policy acquisition costs | 51,261 | 52,095 | 150,533 | 158,440 | |||||||||||
| Other underwriting expenses | 35,468 | 35,470 | 82,236 | 114,020 | |||||||||||
| Goodwill impairment | — | 15,091 | — | 15,091 | |||||||||||
| Interest expense | 797 | — | 2,391 | — | |||||||||||
| Total Benefits, Losses and Expenses | $ | 262,970 | $ | 337,349 | $ | 769,141 | $ | 913,720 | |||||||
| Income (loss) before income taxes | (14,427 | ) | (55,228 | ) | 24,549 | (155,991 | ) | ||||||||
| Federal income tax expense (benefit) | (4,834 | ) | (17,987 | ) | 1,690 | (52,176 | ) | ||||||||
| Net income (loss) | $ | (9,593 | ) | $ | (37,241 | ) | $ | 22,859 | $ | (103,815 | ) | ||||
| GAAP combined ratio: | |||||||||||||||
| Net loss ratio - excluding catastrophes | 56.9 | % | 69.2 | % | 61.4 | % | 63.8 | % | |||||||
| Catastrophes - effect on net loss ratio | 16.5 | 21.4 | 12.5 | 15.3 | |||||||||||
| Net loss ratio | 73.4 | % | 90.6 | % | 73.9 | % | 79.1 | % | |||||||
| Underwriting expense ratio | 36.3 | 33.8 | 32.2 | 34.4 | |||||||||||
| GAAP combined ratio | 109.7 | % | 124.4 | % | 106.1 | % | 113.5 | % | |||||||
| Balance Sheet | |||||||
| September 30, 2021 | December 31, 2020 | ||||||
| (In Thousands) | |||||||
| (unaudited) | |||||||
| Invested assets | $ | 2,056,068 | $ | 2,149,217 | |||
| Cash | 132,772 | 87,948 | |||||
| Total assets | 3,010,654 | 3,069,678 | |||||
| Losses and loss settlement expenses | 1,567,650 | 1,578,131 | |||||
| Total liabilities | 2,196,125 | 2,244,529 | |||||
| Net unrealized investment gains, after-tax | 57,177 | 83,070 | |||||
| Total stockholders’ equity | 814,529 | 825,149 | |||||
| Net Premiums Written by Line of Business | |||||||||||||||
| (unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (In Thousands) | |||||||||||||||
| Net Premiums Written(1) | |||||||||||||||
| Commercial lines: | |||||||||||||||
| Other liability(2) | $ | 68,751 | $ | 71,140 | $ | 223,265 | $ | 238,330 | |||||||
| Fire and allied lines(3) | 59,880 | 54,766 | 180,857 | 185,769 | |||||||||||
| Automobile | 51,981 | 63,419 | 177,398 | 214,447 | |||||||||||
| Workers’ compensation | 13,305 | 16,325 | 45,568 | 57,481 | |||||||||||
| Fidelity and surety | 9,743 | 7,535 | 27,882 | 23,146 | |||||||||||
| Miscellaneous | 264 | 320 | 955 | 1,127 | |||||||||||
| Total commercial lines | $ | 203,924 | $ | 213,505 | $ | 655,925 | $ | 720,300 | |||||||
| Personal lines: | |||||||||||||||
| Fire and allied lines(4) | $ | 1,234 | $ | 3,065 | $ | 3,000 | $ | 21,205 | |||||||
| Automobile | (35 | ) | 4,838 | 277 | 19,548 | ||||||||||
| Miscellaneous | 23 | 203 | 48 | 813 | |||||||||||
| Total personal lines | $ | 1,222 | $ | 8,106 | $ | 3,325 | $ | 41,566 | |||||||
| Reinsurance assumed | 21,562 | 8,600 | 61,325 | 21,486 | |||||||||||
| Total | 226,708 | 230,211 | $ | 720,575 | $ | 783,352 | |||||||||
(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 September 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 | $ | 75,559 | $ | 47,416 | 62.8 | % | $ | 78,302 | $ | 45,111 | 57.6 | % | |||||||||
| Fire and allied lines | 60,457 | 44,855 | 74.2 | 59,267 | 52,436 | 88.5 | |||||||||||||||
| Automobile | 60,991 | 42,034 | 68.9 | 73,403 | 82,675 | 112.6 | |||||||||||||||
| Workers' compensation | 15,183 | 11,265 | 74.2 | 19,245 | 10,250 | 53.3 | |||||||||||||||
| Fidelity and surety | 7,939 | 909 | 11.4 | 7,356 | (128 | ) | (1.7 | ) | |||||||||||||
| Miscellaneous | 323 | 176 | 54.5 | 378 | 78 | 20.6 | |||||||||||||||
| Total commercial lines | $ | 220,452 | $ | 146,655 | 66.5 | % | $ | 237,951 | $ | 190,422 | 80.0 | % | |||||||||
| Personal lines | |||||||||||||||||||||
| Fire and allied lines | $ | 2,559 | $ | 11,382 | NM | $ | 5,144 | $ | 29,451 | NM | |||||||||||
| Automobile | 734 | 343 | 46.7 | 7,055 | 8,322 | 118.0 | |||||||||||||||
| Miscellaneous | 50 | (9 | ) | (18.0 | ) | 295 | (97 | ) | (32.9 | ) | |||||||||||
| Total personal lines | $ | 3,343 | $ | 11,716 | NM | $ | 12,494 | $ | 37,676 | NM | |||||||||||
| Reinsurance assumed | $ | 15,114 | $ | 17,073 | 113.0 | $ | 8,616 | $ | 6,595 | 76.5 | % | ||||||||||
| Total | $ | 238,909 | $ | 175,444 | 73.4 | % | $ | 259,061 | $ | 234,693 | 90.6 | % | |||||||||
NM = Not Meaningful
| Nine Months Ended September 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 | $ | 225,572 | $ | 134,286 | 59.5 | % | $ | 235,018 | $ | 135,748 | 57.8 | % | |||||||||
| Fire and allied lines | 177,066 | 150,032 | 84.7 | 183,528 | 171,416 | 93.4 | |||||||||||||||
| Automobile | 190,238 | 151,632 | 79.7 | 225,103 | 205,994 | 91.5 | |||||||||||||||
| Workers' compensation | 47,260 | 33,601 | 71.1 | 57,873 | 24,205 | 41.8 | |||||||||||||||
| Fidelity and surety | 22,436 | 3,000 | 13.4 | 20,106 | 14 | 0.1 | |||||||||||||||
| Miscellaneous | 1,007 | 174 | 17.3 | 1,158 | 266 | 23.0 | |||||||||||||||
| Total commercial lines | $ | 663,579 | $ | 472,725 | 71.2 | % | $ | 722,786 | $ | 537,643 | 74.4 | % | |||||||||
| Personal lines | |||||||||||||||||||||
| Fire and allied lines | $ | 13,120 | $ | 22,400 | 170.7 | % | $ | 24,933 | $ | 55,372 | 222.1 | % | |||||||||
| Automobile | 7,069 | 5,904 | 83.5 | 22,203 | 15,935 | 71.8 | |||||||||||||||
| Miscellaneous | 337 | (1,369 | ) | NM | 905 | 2,561 | 283.0 | ||||||||||||||
| Total personal lines | $ | 20,526 | $ | 26,935 | 131.2 | % | $ | 48,041 | $ | 73,868 | 153.8 | % | |||||||||
| Reinsurance assumed | $ | 38,732 | $ | 34,321 | 88.6 | % | $ | 20,692 | $ | 14,658 | 70.8 | % | |||||||||
| Total | $ | 722,837 | $ | 533,981 | 73.9 | % | $ | 791,519 | $ | 626,169 | 79.1 | % | |||||||||
NM = Not meaningful
FAQ
What are the Q3 2021 financial results for UFCS?
How did UFCS's GAAP combined ratio change in Q3 2021?
What was the net investment income for UFCS in Q3 2021?
Did UFCS pay dividends in 2021?
What was the decrease in net premiums for UFCS in Q3 2021?
