United Fire Lifts Profit as Catastrophe Losses Ease
Net written premium rose 9% to a record $406.4 million.
United Fire Group (UFCS), a property-and-casualty insurer, reported a 45% increase in second-quarter net income as lower catastrophe losses and stronger investment returns lifted results. Net income reached $33.4 million, or $1.29 a diluted share, from $22.9 million, or $0.87 a share, while adjusted operating income rose 42% to $33.7 million, or $1.30 a share.
Profit increased from $30.1 million, or $1.15 a share, in the first quarter, extending the improvement into the middle of the year. It remained below the $38.4 million earned in the fourth quarter of 2024 and the $39.2 million reported in the preceding quarter.
Net earned premium rose 12.5% to $354.1 million. Written-premium growth moderated from 12% in the first quarter, while the dollar total increased from $376.9 million as commercial business expanded. Pricing also eased, with average core-commercial renewal premium up 4.6%, compared with a 6.3% increase in the fourth quarter of 2024.
The combined ratio improved 1.1 percentage points to 95.3%, chiefly because the catastrophe-loss ratio declined 2.8 points to 2.7%. The underlying combined ratio edged 0.1 point higher from a year earlier to 92.6% and rose from 91.9% in the first quarter, continuing a deterioration from 90.6% in the third quarter of 2024.
Core-commercial earned premium increased to $296.0 million from $262.5 million, while its loss ratio improved to 59.5% from 61.9%. Assumed-reinsurance earned premium climbed to $52.2 million, though its loss ratio worsened to 65.6% from 61.5%. Within commercial lines, better other-liability and fire results were offset by weaker automobile, workers’ compensation, and surety loss ratios.
Net investment income rose 33% to $28.9 million from $21.7 million and increased from $27.0 million in the first quarter, sustaining the portfolio’s recent upward income trajectory. Fixed-maturity income gained $5.0 million to $26.3 million as portfolio growth and reinvestment at higher yields raised the average pretax fixed-income yield to 4.57% from 4.32%.
The underwriting expense ratio rose 0.5 point from both a year earlier and the first quarter to 35.4%, partly reflecting actions to reduce United Fire’s real-estate footprint and future expenses. Six-month return on equity reached 13.2%, up from 10.0% a year earlier, while adjusted book value increased to $39.72 a share from $37.87 at year-end.