United Fire Group (UFCS) Q1 2025 earnings summary

Executive summary

• Net income rose 31% year-over-year to $17.7 million ($0.67 per diluted share), with adjusted operating income up 27% to $18.3 million ($0.70 per diluted share) in Q1 2025.

• Achieved third consecutive quarter of underwriting profitability, record net written premium of $335.4 million (up 4%), and strong net income growth despite elevated catastrophe losses and higher expense ratio.

• Combined ratio was 99.4%, up 0.5 points year-over-year, with underlying loss ratio improving 2.9 points to 56.5%.

• Catastrophe losses contributed five points to the combined ratio, including $8.2 million and 2.6 points from California wildfires.

• Core commercial net written premium grew 6% year-over-year, with renewal premium change at 11.7% and rates up 9.7%.

Financial highlights

• Net investment income surged 44% to $23.5 million, driven by higher fixed maturity income and improved portfolio credit quality.

• Net earned premium increased 10% to $308.4 million; net written premium up 4% to $335.4 million.

• Book value per share increased to $32.13; adjusted book value per share reached $34.16.

• Return on equity improved to 8.9% from 7.3% year-over-year.

• First-quarter net income was $0.67 per diluted share; non-GAAP adjusted operating income was $0.70 per diluted share.

Outlook and guidance

• Expense ratio expected to normalize as one-time system development costs subside and agent compensation returns to historical averages.

• Management expects continued execution of its strategic business plan for improved financial and operational performance throughout 2025.

• Focus remains on disciplined pricing, stable retention, and increased new business production.

• Portfolio positioned to reinvest at higher rates, with duration maintained at approximately four years and new purchase yield on fixed maturities at 5.3%.

• Management expects sufficient liquidity to meet future needs, supported by strong cash flows and access to credit facilities.