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Section 1: 8-K (8-K)

Document
false0000101199 0000101199 2020-05-06 2020-05-06


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 6, 2020
403887526_ufglogo2017color600.gif

 United Fire Group Inc.
(Exact name of registrant as specified in its charter)
 
Iowa
001-34257
45-2302834
(State of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
118 Second Avenue SE
Cedar Rapids
Iowa
52401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (319399-5700
_______________________N/A________________________
(Former name or former address, if changed since last report)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.001 par value
UFCS
The NASDAQ Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02. Results of Operations and Financial Condition.
 
On May 6, 2020, United Fire Group, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2020. The release is attached as Exhibit 99.1 hereto and is incorporated herein by reference. The information in this Current Report and the exhibit attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 8.01. Other Events.

United Fire Group, Inc. is updating its risk factors contained in Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on February 28, 2020, as follows:
Our business, financial condition, results of operations and liquidity may be negatively impacted by the coronavirus (COVID-19) pandemic.
On January 30, 2020, the World Health Organization declared a global emergency with respect to the COVID-19 outbreak. Several countries, including the United States, as well as several states within the United States, have initiated travel restrictions and other limitations that have impacted individuals and businesses worldwide. We are closely monitoring developments related to the COVID-19 pandemic to assess its impact on our business. The effects of the COVID-19 pandemic continue to evolve and have the potential to materially impact our business, results of operations, financial condition, liquidity, capital position, the value of the investments we hold in our investment portfolio, premiums and demand for our products, and our ability to collect premiums on a timely basis or the requirement to return premiums to policyholders. The extent to which the coronavirus impacts our business will depend on future developments, which are highly uncertain and cannot be predicted at this time, including the duration and severity of the coronavirus and the actions taken to contain the coronavirus or treat its impact, among others. Additionally, if established written contract policy exclusions of business interruption coverage for losses attributable to this COVID-19 pandemic are voided or changed through legislation, regulations or interpretations by the courts, such changes have the potential to materially increase claims, losses and legal expenses which will impact our business, financial condition, results of operations or liquidity. To the extent we experience adverse effects from the COVID-19 pandemic, it may also have the effect of heightening many of the other risks described in Part I, Item 1A, Risk Factors, of the Annual Report on Form 10-K for the year ended December 31, 2019.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished herewith:
Exhibit 99.1
Exhibit 104

Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
United Fire Group, Inc.
 
 
 
(Registrant)
 
 
 
 
Dated:
May 6, 2020
 
/s/ Randy A. Ramlo
 
 
 
Randy A. Ramlo, Chief Executive Officer


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
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United Fire Group, Inc. Reports First Quarter 2020 Results

CEDAR RAPIDS, Iowa - (GLOBE NEWSWIRE) - United Fire Group, Inc. (Nasdaq: UFCS),
May 6, 2020 - FOR IMMEDIATE RELEASE

Consolidated Financial Results - Highlights(1):
Three Months Ended March 31, 2020
 
Net income (loss) per diluted share
$(2.90)
Adjusted operating income(2) per diluted share 
$0.05
Net realized investment gains (losses) per diluted share
$(2.95)
GAAP combined ratio
105.2%
Book value per share
$33.30
Return on equity(3)
(33.3)%

United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) today reported consolidated net loss, including net realized investment gains and losses and changes in the fair value of equity securities, of $72.5 million ($2.90 per diluted share) for the three-month period ended March 31, 2020 (the "first quarter of 2020"), compared to consolidated net income of $44.5 million ($1.74 per diluted share) for the same period in 2019.

The Company reported consolidated adjusted operating income of $0.05 per diluted share for the first quarter of 2020, compared to consolidated adjusted operating income of $0.91 per diluted share for the same period in 2019.

"The net loss reported in the first quarter 2020 was driven primarily by the decrease in the value of our investments in equity securities, an increase in severity of catastrophe and non-catastrophe losses and a decrease in net investment income," stated Randy A. Ramlo, President and Chief Executive Officer. "During the first quarter, our higher catastrophe loss results stemmed from two events: a large explosion in January at a manufacturing business in Houston, Texas, classified as a catastrophe by the Insurance Services Office, and a hail storm in Jefferson City, Missouri, during the last week of March. We also experienced an increase in severity in our other liability, commercial fire and allied and workers' compensation lines of business. We continue to make progress in our commercial auto line of business, reporting an improvement in our commercial auto loss ratio of 10.1 points with a decrease in the frequency of commercial auto claims and a reduction in commercial auto exposure units for the first quarter of 2020. Although we saw improvement, our loss ratio for commercial auto remains at a higher than acceptable level. The decline in equity markets also drove a decrease in the quarterly net investment income derived from our investments in limited liability partnerships."





______________
(1) Per share amounts are after tax.
(2) Adjusted operating income is a non-GAAP financial measure of net income excluding net realized investment
gains and losses, changes in the fair value of equity securities and related federal income taxes. Management evaluates this measure and ratios derived from this measure and the Company provides this information to investors because we believe it better represents the normal, ongoing performance of our business. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income to net income.
(3) Return on equity is calculated by dividing annualized net income by average year-to-date stockholders' equity.




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"Much like many of our industry peers have experienced, the COVID-19 pandemic significantly impacted the financial markets, and in turn the value of our investments in equities. However, through the first quarter of 2020, there was not a significant impact to our core insurance operations. Depending on the duration of the suppressed economy in the second quarter and beyond, we anticipate that there could be an adverse impact to our business, including lower premiums and demand for our products. Nearly all of the policies we have issued contain contract language that specifically excludes business interruption coverage for losses due to viruses such as the COVID-19 pandemic, but we continue to carefully scrutinize each claim and will be affording coverage when appropriate. Based on information we have available at this time, we expect the effect of the COVID-19 pandemic on claims currently under our policy coverage to be manageable. At this time, we cannot determine how any changes in legislation, regulations and interpretations by the courts will impact the Company in the future."

"With the exception of our essential services employees, UFG has dispatched its staff to work remotely for the safety, health and well-being of our employees and as some of the states in which we have operations have issued "shelter in place" or similar directives. We are fully operational, but have limited travel for non-essential employees and certain routine work completed by our field claims and loss control representatives, such as premium audits and inspections, has been delayed or is being completed remotely to comply with social distancing recommendations. We are and will continue monitoring the state and federal responses to the pandemic and, when appropriate, will adjust our operations in response." 

Financial Highlights

Net loss, including net realized investment gains and losses, totaled $72.5 million ($2.90 per diluted share) for the first quarter of 2020, compared to net income of $44.5 million ($1.74 per diluted share) in the same period in 2019. The decrease in net income was primarily due to a decrease in the fair value of equity securities, an increase in losses and loss settlement expenses and a decrease in net investment income. In the first quarter of 2020, the fair value of equity securities decreased $90.6 million compared to an increase of $24.6 million in the same period in 2019, or a change of $115.2 million. The increase in losses and loss settlement expenses was due to an increase in severity of catastrophe and non-catastrophe losses. The decrease in net investment income is primarily from the change in value of our limited liability partnership investments.

Net premiums earned increased 2.5 percent to $268.8 million in the first quarter of 2020, compared to $262.3 million in the same period in 2019. The increase in the three-month period ended March 31, 2020 was primarily due to rate increases, premium audits and endorsements.

The average renewal pricing change for commercial lines increased 7.6 percent in the first quarter of 2020 compared to 6.6 percent in the fourth quarter of 2019. The renewal pricing increases continue to be driven by commercial auto rate increases. During the first quarter of 2020, the commercial auto effective rate change remained in the low-double digits. Personal lines renewal pricing increases remained in the mid-single digits.

Net investment income was $2.4 million for the first quarter of 2020 as compared to net investment income of $16.5 million for the same period in 2019. The decrease in net investment income was due to a decrease in the fair value of our investments in limited liability partnerships. The valuation of these investments in limited liability partnerships varies from period to period due to the current equity market conditions, specifically related to financial institutions.

The Company recognized net realized investment losses of $93.4 million during the first quarter of 2020, compared to net realized investment gains of $26.7 million for the same period in 2019. The change in the three-month period ended March 31, 2020, as compared to the same period in 2019, was primarily due to the decrease in the fair value of equity securities as mentioned previously.

Consolidated net unrealized investment gains, net of tax, totaled $51.8 million as of March 31, 2020, an increase of $4.5 million from December 31, 2019. The increase in net unrealized investment gains is primarily the result of a decrease in interest rates in the first quarter of 2020.

Total consolidated assets as of March 31, 2020 were $2.9 billion, which included $2.0 billion of invested assets. The Company's book value per share was $33.30, which is a decrease of $3.10 per share, or 8.5 percent from December 31,




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2019. This decrease is primarily attributed to a net loss of $72.5 million, shareholder dividends of $8.2 million and share repurchases of $2.7 million, partially offset by an increase in net unrealized investment gains on fixed maturity securities of $4.5 million, net of tax, during the first three months of 2020.

The annualized return on equity was (33.3) percent year-to-date compared to 19.3 percent for the same period in 2019. The change in the annualized return on equity was primarily driven by the change in the value of equity securities in the first three months of 2020 compared to the same period in 2019.

Reserve Development

We experienced favorable development in our net reserves for prior accident years of $13.7 million in the first quarter of 2020, compared to favorable development of $4.6 million in the same period in 2019. The change in prior year reserve development in the first quarter of 2020 came primarily from favorable development in workers' compensation and commercial fire and allied lines of business, partially offset by other liability lines of business. Development amounts can vary significantly from quarter-to-quarter depending on a number of factors, including the number of claims settled and the settlement terms. At March 31, 2020, our total reserves were within our actuarial estimates.

GAAP Combined Ratio

The GAAP combined ratio increased by 9.6 percentage points to 105.2 percent for the first quarter of 2020, compared to 95.6 percent in the same period in 2019. The increase in the combined ratio was primarily driven by an increase in the loss ratio due to an increase in severity of losses of both catastrophe and non-catastrophe losses, and an increase in the expense ratio.

Pre-tax catastrophe losses in the first quarter of 2020 were higher when compared to first quarter of 2019, with catastrophe losses adding 5.7 percent percentage points to the combined ratio in 2020 as compared to 1.4 percentage points in 2019. Our 10-year historical average for first quarter catastrophe losses is 2.9 percentage points added to the combined ratio.

Expense Ratio

The expense ratio for the first quarter of 2020 was 35.8 percentage points, compared to 33.0 percentage points for the first quarter in 2019. The increase in the expense ratio during the first quarter of 2020 is primarily due to the acceleration of the amortization of our deferred acquisition costs in our under-performing commercial auto line of business and personal lines of business from lower than expected profitability. The increase in the expense ratio was also driven by our continued investment in our multi-year Oasis project, an upgrade to our technology platform designed to enhance core underwriting decisions, selection of risks and productivity.

Capital Management

During the first quarter of 2020, we declared and paid a $0.33 per share cash dividend to shareholders of record as of March 6, 2020. We have paid a quarterly dividend every quarter since March 1968. During the first quarter of 2020 we repurchased 70,467 shares of our common stock for a total purchase price of approximately $2.7 million.

Earnings Call Access Information

An earnings call will be held at 9:00 a.m. Central Time on May 6, 2020 to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company's first quarter 2020 results.

Teleconference: Dial-in information for the call is toll-free 1-844-492-3723. The event will be archived and available for digital replay through May 20, 2020. The replay access information is toll-free 1-877-344-7529; conference ID no. 10141758.

Webcast: An audio webcast of the teleconference can be accessed at the Company's investor relations page at




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http://ir.ufginsurance.com/event or https://services.choruscall.com/links/ufcs200506. The archived audio webcast will be available until May 20, 2020.

Transcript: A transcript of the teleconference will be available on the Company's website soon after the completion of the teleconference.

About UFG

Founded in 1946 as United Fire & Casualty Company, UFG, through its insurance company subsidiaries, is engaged in the business of writing property and casualty insurance.

Through our subsidiaries, we are licensed as a property and casualty insurer in 46 states, plus the District of Columbia, and we are represented by approximately 1,000 independent agencies. A.M. Best Company assigns a rating of “A” (Excellent) for members of the United Fire & Casualty Group.

For more information about UFG, visit www.ufginsurance.com or contact:

Randy Patten, AVP and Controller, Corporate Finance, 319-286-2537 or [email protected]

Disclosure of Forward-Looking Statements

This release may contain forward-looking statements about our operations, anticipated performance and other similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. The forward-looking statements are not historical facts and involve risks and uncertainties that could cause actual results to differ from those expected and/or projected. Such forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, the industry in which we operate, and beliefs and assumptions made by management. Words such as "expect(s)," "anticipate(s)," "intends(s)," "plan(s)," "believe(s)" "continue(s)," "seek(s)," "estimate(s)," "goal(s)," "remain(s) optimistic," "target(s)," "forecast(s)," "project(s)," "predict(s)," "should," "could," "may," "will," "might," "hope," "can" and other words and terms of similar meaning or expression in connection with a discussion of future operations, financial performance or financial condition, are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Information concerning factors that could cause actual outcomes and results to differ materially from those expressed in the forward-looking statements is contained in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission ("SEC") on February 28, 2020, as supplemented in our Current Report on Form 8-K filed with the SEC on May 6, 2020 and in our other filings with the SEC. The risks identified in our Annual Report on Form 10-K (as supplemented) and in our other SEC filings are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release or as of the date they are made. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.




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Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures

The Company prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Management also uses certain non-GAAP measures to evaluate its operations and profitability. As further explained below, management believes that disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. Non-GAAP financial measures disclosed in this report include: adjusted operating income and net premiums written. The Company has provided the following definitions and reconciliations of the non-GAAP financial measures:

Adjusted operating income: Adjusted operating income is calculated by excluding net realized investment gains and losses after applicable federal and state income taxes from net income. Management believes adjusted operating income is a meaningful measure for evaluating insurance company performance and a useful supplement to GAAP information because it better represents the normal ongoing performance of our business. Investors and equity analysts who invest and report on the insurance industry and the Company generally focus on this metric in their analyses.
Net Income Reconciliation
 
Three Months Ended March 31,
(In Thousands, Except Per Share Data)
2020
 
2019
Change %
Income Statement Data
 
 
 
 
Net income (loss)
$
(72,534
)
 
$
44,521

NM

Less: after-tax net realized investment gains (losses)
(73,792
)
 
21,103

NM

Adjusted operating income
$
1,258

 
$
23,418

(94.6
)%
Diluted Earnings Per Share Data
 
 
 
 
Net income (loss)
$
(2.90
)
 
$
1.74

NM

Less: after-tax net realized investment gains (losses)
(2.95
)
 
0.83

NM

Adjusted operating income
$
0.05

 
$
0.91

(94.5
)%
NM = Not meaningful.

Net premiums written: While not a substitute for any GAAP measure of performance, net premiums written is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Net premiums written are the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Management believes net premiums written are a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net premiums written for an insurance company consists of direct premiums written and reinsurance assumed, less reinsurance ceded. Net premiums earned is calculated on a pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policy in force. The difference between net premiums earned and net premiums written is the change in unearned premiums and change in prepaid reinsurance premiums.
Net Premiums Earned Reconciliation
 
Three Months Ended March 31,
(In Thousands, Except Ratios)
2020
 
2019
Change %
Premiums:
 
 
 
 
Net premiums earned
$
268,849

 
$
262,314

2.5
%
Less: change in unearned premiums
(15,798
)
 
(17,795
)
11.2
%
Less: change in prepaid reinsurance premiums
2,139

 
443

NM

Net premiums written
$
282,508

 
$
279,666

1.0
%
NM = Not meaningful.





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Supplemental Tables
Consolidated Financial Highlights
 
Three Months Ended March 31,
(In Thousands, Except Share and Per Share Data and Ratios)
2020
 
2019
Change %
Revenue Highlights
 
 
 
 
Net premiums earned
$
268,849

 
$
262,314

2.5
 %
Net investment income
2,363

 
16,512

(85.7
)%
Net realized investment gains (losses)
(93,407
)
 
26,713

NM

Total revenues
$
177,805

 
$
305,539

(41.8
)%
Income Statement Data
 
 
 
 
Net income (loss)
$
(72,534
)
 
$
44,521

NM

After-tax net realized investment gains (losses)
(73,792
)
 
21,103

NM

Adjusted operating income(1)
$
1,258

 
$
23,418

(94.6
)%
Diluted Earnings Per Share Data
 
 
 
 
Net income (loss)
$
(2.90
)
 
$
1.74

NM

After-tax net realized investment gains (losses)
(2.95
)
 
0.83

NM

Adjusted operating income(1)
$
0.05

 
$
0.91

(94.5
)%
Catastrophe Data
 
 
 
 
Pre-tax catastrophe losses
$
15,267

 
$
3,630

NM

Effect on after-tax earnings per share
0.48

 
0.11

NM

Effect on combined ratio
5.7
 %
 
1.4
%
NM

 
 
 
 
 
Favorable reserve development experienced on prior accident years
$
13,747

 
$
4,649

195.7
 %
 
 
 
 
 
GAAP combined ratio
105.2
 %
 
95.6
%
10.0
 %
Return on equity
(33.3
)%
 
19.3
%
NM

Cash dividends declared per share
$
0.33

 
$
0.31

6.5
 %
Diluted weighted average shares outstanding
25,014,027

 
25,604,268

(2.3
)%
NM = Not meaningful
(1) Adjusted operating income is a non-GAAP financial measure of net income (loss). See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income to net income (loss).






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Income Statement
 
Three Months Ended March 31,
(In Thousands, Except Ratios)
2020
 
2019
Revenues
 
 
 
Net premiums earned
$
268,849

 
$
262,314

Investment income, net of investment expenses
2,363

 
16,512

Net realized investment gains (losses)
 
 
 
Change in the fair value of equity securities
(90,647
)
 
24,634

All other net realized gains (losses)
(2,760
)
 
2,079

Net realized investment gains (losses)
(93,407
)
 
26,713

Total Revenues
$
177,805

 
$
305,539

 
 
 
 
Benefits, Losses and Expenses
 
 
 
Losses and loss settlement expenses
$
186,503

 
$
164,240

Amortization of deferred policy acquisition costs
54,452

 
52,219

Other underwriting expenses
41,849

 
34,403

Total Benefits, Losses and Expenses
$
282,804

 
$
250,862

 
 
 
 
Income (loss) before income taxes
(104,999
)
 
54,677

Federal income tax expense (benefit)
(32,465
)
 
10,156

Net income (loss)
$
(72,534
)
 
$
44,521

 
 
 
 
GAAP combined ratio:
 
 
 
Net loss ratio - excluding catastrophes
63.7
%
 
61.2
%
Catastrophes - effect on net loss ratio
5.7

 
1.4

Net loss ratio
69.4
%
 
62.6
%
Expense ratio
35.8

 
33.0

GAAP combined ratio
105.2
%
 
95.6
%

Balance Sheet
 
March 31, 2020
 
December 31, 2019
(In Thousands)
 
Invested assets
$
2,029,725

 
$
2,155,099

Cash
120,724

 
120,722

Total assets
2,949,646

 
3,013,472

Losses and loss settlement expenses
1,438,405

 
1,421,754

Total liabilities
2,116,502

 
2,103,000

Net unrealized investment gains, after-tax
51,779

 
47,279

Total stockholders’ equity
833,144

 
910,472






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Net Premiums Written by Line of Business
 
Three Months Ended March 31,
 
2020
 
2019
(In Thousands)
 
Net Premiums Written(1)
 
 
 
Commercial lines:
 
 
 
Other liability(2)
$
84,940

 
$
83,314

Fire and allied lines(3)
66,842

 
62,904

Automobile
79,186

 
82,311

Workers’ compensation
21,739

 
24,458

Fidelity and surety
6,975

 
6,168

Miscellaneous
415

 
465

Total commercial lines
$
260,097

 
$
259,620

 
 
 
 
Personal lines:
 
 
 
Fire and allied lines(4)
$
8,393

 
$
8,921

Automobile
7,566

 
7,666

Miscellaneous
303

 
294

Total personal lines
$
16,262

 
$
16,881

Reinsurance assumed
6,149

 
3,165

Total
$
282,508

 
$
279,666

(1) Net premiums written is a non-GAAP financial measure of net premiums earned. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of net premiums written to net premiums earned.
(2) Commercial lines “Other liability” is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured’s premises and products manufactured or sold.
(3) Commercial lines “Fire and allied lines” includes fire, allied lines, commercial multiple peril and inland marine.
(4) Personal lines “Fire and allied lines” includes fire, allied lines, homeowners and inland marine.
















8



Net Premiums Earned, Net Losses and Loss Settlement Expenses and Net Loss Ratio by Line of Business
Three Months Ended March 31,
2020
 
2019
 
 
 
Net Losses
 
 
 
 
 
Net Losses
 
 
 
 
 
and Loss
 
 
 
 
 
and Loss
 
 
 
Net
 
Settlement
 
Net
 
Net
 
Settlement
 
Net
(In Thousands, Except Ratios)
Premiums
 
Expenses
 
Loss
 
Premiums
 
Expenses
 
Loss
Unaudited
Earned
 
Incurred
 
Ratio
 
Earned
 
Incurred
 
Ratio
Commercial lines
 
 
 
 
 
 
 
 
 
 
 
Other liability
$
79,309

 
$
43,723

 
55.1
%
 
$
78,427

 
$
38,275

 
48.8
 %
Fire and allied lines
61,669

 
51,925

 
84.2

 
59,174

 
36,786

 
62.2

Automobile
78,018

 
65,305

 
83.7

 
75,234

 
70,571

 
93.8

Workers' compensation
19,428

 
7,708

 
39.7

 
21,875

 
5,945

 
27.2

Fidelity and surety
6,418

 
32

 
0.5

 
6,375

 
(251
)
 
(3.9
)
Miscellaneous
395

 
92

 
23.3

 
427

 
(99
)
 
(23.2
)
Total commercial lines
$
245,237

 
$
168,785

 
68.8
%
 
$
241,512

 
$
151,227

 
62.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
Personal lines
 
 
 
 
 
 
 
 
 
 
 
Fire and allied lines
$
9,970

 
$
6,734

 
67.5
%
 
$
10,220

 
$
6,282

 
61.5
 %
Automobile
7,630

 
5,149

 
67.5

 
7,482

 
5,667

 
75.7

Miscellaneous
306

 
2,606

 
851.6

 
301

 
(68
)
 
(22.6
)
Total personal lines
$
17,906

 
$
14,489

 
80.9
%
 
$
18,003

 
$
11,881

 
66.0
 %
Reinsurance assumed
$
5,706

 
$
3,229

 
56.6
%
 
$
2,799

 
$
1,132

 
40.4
 %
Total
$
268,849

 
$
186,503

 
69.4
%
 
$
262,314

 
$
164,240

 
62.6
 %






9
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