United Fire Group, Inc. reports second quarter 2025 results
Second quarter net income of $0.87 per diluted share and adjusted operating income of $0.90 per diluted share
Second quarter 2025 highlights compared to second quarter 2024, unless otherwise noted:(1)
Net income increased $25.7 million to $22.9 million.
Net investment income increased 20% to $21.7 million.
Combined ratio improved 9.2 points to 96.4%; composed of an underlying loss ratio of 57.6%, catastrophe loss ratio of 5.5%, favorable prior year reserve development of 1.6%, and underwriting expense ratio of 34.9%.
Underlying combined ratio improved 1.9 points to 92.5%.
Net written premium(2) increased 14% to $372.9 million.
Book value per share increased $2.38 to $33.18 as of June 30, 2025, compared to December 31, 2024.
Adjusted book value per share increased $1.29 to $34.93 as of June 30, 2025, compared to December 31, 2024.
CEDAR RAPIDS, Iowa, Aug. 05, 2025 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (UFG) (NASDAQ:UFCS) today reported financial results for the three-month period ended June 30, 2025, with net income increasing $25.7 million over the prior year to $22.9 million ($0.87 per diluted share) and adjusted operating income increasing $25.5 million over the prior year to $23.7 million ($0.90 per diluted share).
In the second quarter, net written premium grew 14% to $372.9 million led by continued strong production in core commercial lines. Rates increased 7.6% and continued to exceed loss cost trends with retention and new business volume strongly above prior year levels.
The second quarter combined ratio improved 9.2 points to 96.4%. The underlying loss ratio improved 1.3 points to 57.6% reflecting the ongoing benefits of strong earned rate achievement and moderating loss trends from continued underwriting discipline. The catastrophe loss ratio improved 5.7 points to 5.5%, significantly outperforming the company's five- and 10-year historical averages as well as the quarterly plan of 8.9%. Catastrophe management actions have improved modeled expectations relative to historical results and are reflected in the annual catastrophe loss ratio plan of 5.7%.
Prior year reserve development was favorable by 1.6% following our annual review of loss adjustment expenses. The underwriting expense ratio improved 0.6 points to 34.9%. Net investment income increased 20% to $21.7 million with a strong increase in fixed maturity income with positive limited partnership returns that were below prior year.
"UFG delivered its best second quarter profit in more than 10 years while growing net written premium to a record $373 million," said President and CEO Kevin Leidwinger. "The strategic steps we have taken to deepen our underwriting expertise, evolve our capabilities, better align with our distribution partners and improve our investment returns continue to materialize in our results. Our strong second quarter results contributed to achieving 10% return on equity through the first six months of 2025, another significant milestone in the company's transformation. While pleased with our results, our work is not done and we remain committed to executing our strategic business plan to achieve superior financial and operational performance."
(1) Underlying loss ratio, underlying combined ratio and adjusted book value per share are non-GAAP financial measures. See Definitions of non-GAAP information and reconciliations to comparable GAAP measures for additional information.(2) Net written premium is a performance measure reflecting the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. See Certain performance measures for additional information.
Consolidated financial highlights:
Consolidated financial highlights(1)
(Unaudited)
Three months ended June 30,
Six months ended June 30,
(In thousands, except ratios and per share data)
2025
2024
2025
2024
Net earned premium
$
314,802
$
287,569
$
623,213
$
568,428
Net written premium
372,884
326,119
708,260
647,390
Combined ratio:
Net loss ratio
61.5
%
70.1
%
61.5
%
67.0
%
Underwriting expense ratio
34.9
%
35.5
%
36.4
%
35.2
%
Combined ratio
96.4
%
105.6
%
97.9
%
102.2
%
Additional ratios:
Net loss ratio
61.5
%
70.1
%
61.5
%
67.0
%
Catastrophes
5.5
%
11.2
%
5.3
%
7.9
%
Reserve development
(1.6
)%
—
%
(0.8
)%
—
%
Underlying loss ratio (non-GAAP)
57.6
%
58.9
%
57.0
%
59.1
%
Underwriting expense ratio
34.9
%
35.5
%
36.4
%
35.2
%
Underlying combined ratio (non-GAAP)
92.5
%
94.4
%
93.4
%
94.3
%
Net investment income
$
21,673
$
18,029
$
45,131
$
34,371
Net investment gains (losses)
(1,002
)
(1,229
)
(1,756
)
(2,431
)
Net income (loss)
22,947
(2,735
)
40,647
10,767
Adjusted operating income (loss)
23,739
(1,764
)
42,034
12,688
Net income (loss) per diluted share
$
0.87
$
(0.11
)
$
1.54
$
0.42
Adjusted operating income (loss) per diluted share
0.90
(0.07
)
1.60
0.49
Return on equity(2)
10.0
%
2.9
%
(1) Underlying loss ratio, underlying combined ratio and adjusted operating income (loss) are non-GAAP financial measures. See Definitions of non-GAAP information and reconciliations to comparable GAAP measures for additional information.(2) Return on equity is calculated by dividing annualized net income by average stockholders' equity, which is calculated using a simple average of the beginning and ending balances for the period.
Second quarter 2025 results:(All comparisons vs. second quarter 2024, unless noted otherwise)
Net written premium and net earned premium increased by 14% and 9%, respectively. Core commercial lines net written premium increased 20% supported by increased pricing, improved retention, and higher new business. Overall, average renewal premiums increased 9.4% with rates increasing 7.6% and exposure changes of 1.7%. Excluding the workers compensation line of business, the overall average increase in renewal premiums was 10.3%, with 8.5% from rate increases and 1.6% from exposure changes.
The second quarter combined ratio improved 9.2 points to 96.4% compared to 105.6% in the prior year quarter, driven by the following:
The underlying loss ratio improved 1.3 points to 57.6%, reflecting overall continued favorable frequency trends and rate achievement.
Catastrophe losses added 5.5 points to the combined ratio, a decrease of 5.7 points and below both the five-year and 10-year historical averages.
Prior year reserve development, excluding catastrophe losses, was favorable by 1.6 points driven by lower loss adjustment expenses compared to prior expectations.
The underwriting expense ratio of 34.9% improved 0.6 points mainly driven by scale benefits of growth.
Net investment income was $21.7 million for the second quarter of 2025, an increase of $3.6 million or 20.2%. Income from the fixed maturity portfolio increased by $5.4 million due to portfolio management actions taken during the year-ended December 31, 2024. This was partially offset by $0.5 million lower income on other long-term investments driven by better returns in the second quarter of 2024 and $0.8 million lower other income driven by lower interest on cash and cash equivalents due to redeployment of cash into fixed maturities.
Investment results
(Unaudited)
Three months ended June 30,
Six months ended June 30,
(In thousands, except average yields)
2025
2024
2025
2024
Investment income:
Interest on fixed maturities
$
21,302
$
15,947
$
42,426
$
31,107
Dividends on equity securities
—
—
—
341
Income (loss) on other long-term investments
136
623
1,929
381
Other
3,415
4,188
7,034
8,086
Total investment income
$
24,853
$
20,758
$
51,389
$
39,915
Less investment expenses
3,180
2,729
6,258
5,544
Net investment income
$
21,673
$
18,029
$
45,131
$
34,371
Average yields on fixed income securities pre-tax(1)
4.32
%
3.62
%
4.32
%
3.43
%
(1) Fixed income securities yield excluding net unrealized investment gains/losses and expenses.
Balance sheet
June 30, 2025
December 31, 2024
(In thousands, except per share data)
(unaudited)
Invested assets
$
2,199,897
$
2,093,094
Cash
202,149
200,949
Total assets
3,661,130
3,488,469
Losses and loss settlement expenses
1,860,131
1,796,782
Total liabilities
