United Fire Group (UFCS) Q4 2024 earnings summary

Executive summary

• Achieved record net written premium above $1.2 billion in 2024, with the highest adjusted operating income since 2015 and best annual combined ratio in nearly a decade.

• Full year net income reached $62 million ($2.39 per diluted share), with return on equity at 8.2%.

• Underwriting profitability returned, driven by improved expertise, capabilities, and investment returns, with catastrophe losses below historical averages.

• Book value per share increased to $30.80; adjusted book value per share rose $1.95 to $33.64.

• Fourth quarter net written premium grew 13%, led by core commercial and assumed reinsurance business.

Financial highlights

• Full-year net written premium grew 15% to $1.231 billion; Q4 net written premium up 13% to $279 million.

• Q4 net income was $31.4 million ($1.21 per diluted share); full-year net income $62 million.

• Net investment income was $23.2 million in Q4 and $82 million for the year, up 21% and 38% year-over-year.

• Q4 combined ratio improved to 94.4%; full-year combined ratio improved over 10 points to 99.2%, best since 2015.

• Q4 underlying loss ratio improved 4.3 points to 55.7%; full-year underlying loss ratio at 57.9%.

Outlook and guidance

• Expect continued benefit from earned rate increases into 2025, with compounding positive margin over loss trends.

• Net investment income projected to grow by $10 million to $80 million in 2025, with further upside from reinvestments at higher rates.

• New policy administration system to be implemented in 2025, with ongoing investments in talent and technology.

• Confident in further performance improvement and well-positioned to navigate industry headwinds.

• Current and future earnings expected to benefit from new money yield of 5.4%, outpacing portfolio yield by over 100 basis points.