UFCS - Earnings call 3 2023 | United Fire Group, Inc.

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Operator

Good morning. My name is Anthony, and I will be your conference operator today. At this time, I would like to welcome everyone to the UFG Insurance Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

Thank you. the Relations, to Tim turn Director VP now Investor of Borst. will call UFG over and I

You may now go ahead.

Tim Borst

results. press Good joining morning, visit slides on our a releases ufginsurance.com. document, Investors tab. are this for a our release and call. Yesterday website of and afternoon, we please thank this To find you located Press the copy at issued under

Officer, Chief on President Executive call Officer, President Stephenson; Operating Officer, and Leidwinger; today are Financial the me Vice and Joining Executive Vice Kevin Executive Chief Chief President Julie and UFG and Martin. Eric

the over turn I a Before call couple of reminders. Kevin, to

are that First, that risks and forward-looking and note of our use some also may Litigation differ management's forward-looking that Private statements SEC statements are may comparable include uncertainties Securities to The of on guarantee based not forward-looking may statements current investors as most results discussion we Reform materially These measures. which please Act please today, expectations. The future filings. Also, and in and in are due our variety GAAP the our actual note any presentation non-GAAP in available are XXXX. performance. to factors, the release our SEC measures include press press defined of of a today cautions described release measures these Reconciliations a filings. company financial in

over Leidwinger, to time, Kevin of call this Insurance. turn Mr. the At I will UFG CEO

Kevin Leidwinger

third everyone. I'll begin this a Thank of high-level providing Welcome our call. quarter and conference morning you, to results. Tim, good our third morning, by quarter overview

will our detail, discuss our financial and Stephenson results. Julie Eric results underwriting comments, will in my more discuss Martin Following

operational the are I continue yesterday's performance. remain as As and deliver to pleased release, we indicated superior progress financial press we with positioning UFG making in

results of broad quarter our continue show execute to while we strategies improvement signs range to third of strengthen Our a company.

million loss was XXXX quarter to XXX.X% of quarter compared in ratio improved XXXX, $XX XXX.X% to on as core premium in the to combined the to while improve year. compared flat as $X.X portfolio. quarter action reinsurance commercial a by million underwriting underperforming written the Net Net points the the in profile third the third third work business same to segments growth was and targeted continuously of we income of our in X.X improved last offset assumed quarter

net The by the XX% in was addition, increases to impacted reinsurance property increased led premiums. accelerated core outpacing growth written premium increases acceleration by third was surety of rate in reinstatement renewal Average commercial trends. cost XX%. quarter, In loss premium

loss point underlying and the XXXX in to of third The approximately and ratio in the impact of our from improvement reinsurance a quarter number reinstatement well losses X.X was quarter, approximately the and third XX%, XX.X% X.X% Catastrophe quarter, of below points combined associated premiums a and small in surety third contributed business. included averages our which of losses X XX% respectively. X- the ratio over XX-year large

We made neutral and actions with helps quarter. actuarial lines our environments. enhanced adjustments quickly in and small expectations our relatively changing line is following development trends the emerging as the reserve Prior-period more across taken business evaluate overall of second us in process

a which of because to the ratio quarter, would point quarter X.X X.X the a reinstatement basis XX.X% year-over-year up our point Surety ratio, management expense ongoing on to was The declined in have expense reinsurance added otherwise second compared ago. premiums third efforts. year expense

expense will a quarter XXXX. focus by benefits accelerated in improving retirement off introducing the ratio well the to changes ratio in paid third provide Our intense expense time as package that early voluntary as was our additional on policy

will we're making deliver the improvement consistent the as confident we believe in the I quarter create remain our We for the with executing combined fully path as While well forward. and ratio, in our not profitability pleased long-term progress value satisfied strategies with shareholders. am in

over to Chief to I'll our underwriting hand With Julie Operating that, Stephenson, results it more in Officer, discuss detail. Julie? our

Julie Stephenson

growth, business, middle written market, in Starting which accelerated the change third premium our net business Kevin. commercial XX% to compared core core and third of small commercial XXXX. in includes you, grew million our $XXX with in Renewal to quarter premium the Thank to quarter. X% business

of highest Commercial on XX% the third increases with business. to level was of workers' of from the excluding We property across increase, largest adequacy business, renewal including at focused achievement exposure since with remain rate were all quarter compensation, property increases X%. diligently quarter of rate across total change and up lines price XXXX. premium all rate Average increases contributor this second the of XX%, lines

XX% Retention our year above for accounts with core prior business and commercial and at our portfolio. rate our we pursued as pruned expectations additional remained from consistent increases underperforming

on risks that focused remain to and expectations. meet evaluating individual terms away walk from underwriters longer Our no pricing, and empowered are risk our selection, conditions,

business of million new the third mix XXXX was commercial the XXXX. we adding are remain and third in compared $XX portfolio. I with new pleased line segment quarter industry quality, quarter of the million $XX business of Core to the in business of

we Net surplus underperforming segments composition. declined portfolio ago improve specialty in and perform business our targeted written actions from premium a to lines excess as year on

continue written diversifying net deliver XX% alternative to as quarter in to our growth third we profitable Our strategy execute the portfolio to premium distribution the grew organization.

short-term we market by construction third well quarter, quarter expertise. conditions a reinsurance challenges industry. large highly for impacted declined in last XXXX in to the broader of surety compared competitive experienced affecting underwriting premiums because increased surety, to Similar as the economic as few staffing a premiums of Surety reinstatement losses

and lines surety loss to umbrella, rate quarter points ratio, improvement have reinstatement total associated visibility seeing into large enhanced in approximately historic profit losses our outlook. X levels premiums third where underlying profit these of reinsurance standard added namely While incremental business, we're increased and metrics other

impact catastrophe catastrophe on losses. the of combined quarter, to third we loss points Turning ratio. experienced In the X.X

geographies we quarter as X in range broad portfolio. catastrophe such While to ratio actions driving a and optimize take high-risk across lowest continue and we third experienced reduce raising profiles, risk the our catastrophe property to our pricing years, improving of in loss exposure increases deductibles

I our will discuss of financial Eric to call over the results. Martin to now the turn rest

Eric Martin

Thank quarter ratio I provide additional first Julie. from third of which ago. will the expense X.X increased point XX.X%, you, on some commentary year a

focused As the expense corporate you broader been know, profitable deliver sustainable, growth. we have ratio on intensely part reducing our of strategies as to

the impacts of added the to reinstatement beginning quarter, X.X significant is decline the headcount premium of The the surety impact most In of in the reinsurance since XXXX. the point XX% quarter fourth of a these expense ratio. third

we our a from outweighed to design change growing basis. to that and XXXX expense a of post-retirement year, have our These benefits the this have the dissipated of earlier impacting year-over-year the year-over-year benefits addition, items ratio the comparison. on actions are sustainably in expense reduce In employee benefits mentioned ratio since

below the net expect expense QX beginning of enterprise accelerated ongoing offering we XXXX package Combined the attrition, of actions in approximately benefits quarter, by In management thoughtful people expense early headcount, our at reduction ratio will people started impact actions efforts from we the these when that taking to XXX X,XXX with to management beginning reduce additional deliver expense an third XXXX. of the us XXXX. retirement in to the further

policy, in XXXX. restructured also moving time policy and a off off paid we'll be our time We to discretionary

to $X.X continue XX% billion, an income investment third of high-quality earnings equities third book. quarter equities, conditions continued of the these is allocated of we The attractive way on fixed fixed results. at portfolio, executing as to high-quality exposure Within assets attractive public strategic intend Invested trade in to capital a to shrank requirements long exist. and to We this is reallocation quarter. to reducing reduce the to Turning as which volatility. X% ended our public income our which assets

the investment quarter XXXX. up in was XX% the compared income third to Net $XX.X million of quarter, third

rate We a of continue X.X%, with money increase the in a relative exceeding ago. income yields interest maturity to benefits helping investing fixed new environment to realize year higher

reduced of positive also Realized core limited $X impacts our portfolio the quarter. out our driven valuation million of quarter portfolio, third equity investment in We by in of changes losses valuation million, third results. $X the rounded experienced partnership on

quarter share. saw $X.XX and value income diluted the that Third $XX.XX. X.X%, and on decreased in negative equity returns per share investment operating share loss $X.XX our in book diluted return adjusted per a was of in deterioration and we to underwriting year-to-date net quarter of income Annualized position third per common resulted non-GAAP unrealized

During dividends March dating the now history to quarter, remarks. our we dividend Operator? will share of concludes declared our XXXX. questions. for September and XX-year paying continuing X, prepared paid a to of the cash $X.XX per open line of back as I record This XXXX, shareholders

Operator

any to session. closing turn there no questions. [Operator concludes are Kevin would Leidwinger to for Instructions] back appears I conference over like the our It remarks. question-and-answer This

Kevin Leidwinger

you, Thank to seeing we next look and quarter. you forward

Operator

today's Thank presentation. has attending conference you The concluded. now for

may disconnect. now You

United Fire (UFCS) 2 Nov 232023 Q3 Earnings call transcript