United Fire Group, Inc. Reports Second Quarter 2014 Results

Company Release - 8/5/2014 6:30 AM ET

CEDAR RAPIDS, Iowa, Aug. 5, 2014 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (Nasdaq:UFCS)

Consolidated Financial Results - Highlights:

Three Months Ended June 30, 2014   Six Months Ended June 30, 2014  
Operating income(1) per diluted share(2) $ 0.35 Operating income(1) per diluted share(2) $ 0.82
Net income per diluted share(2) $ 0.42 Net income per diluted share(2) $ 0.94
Net realized investment gains per share(2) $ 0.07 Net realized investment gains per share(2) $ 0.12
Catastrophe losses(3) per share(2) $ 0.53 Catastrophe losses(3) per share(2) $ 0.61
GAAP combined ratio 101.7% Combined ratio 100.7%
    Book value per share $ 32.74
    Return on equity(4) 6.0%

United Fire Group, Inc. (the "Company") (Nasdaq:UFCS) today reported consolidated operating income(1) of $0.35 per diluted share for the three-month period ended June 30, 2014 (the "second quarter") and $0.82 per diluted share for the six-month period ended June 30, 2014 ("year-to-date"), compared to operating income of $0.50 and $1.34 per diluted share, respectively, for the same periods in 2013.

The Company reported consolidated net income, including net realized investment gains and losses, of $10.7 million ($0.42 per diluted share) for the second quarter and $24.0 million ($0.94 per diluted share) year-to-date, compared to net income of $15.5 million ($0.61 per diluted share) and $37.9 million ($1.49 per diluted share), respectively, for the same periods in 2013.

"Storms, Storms, and More Storms"

"Storms, storms, and more storms is the story this quarter," stated Randy Ramlo, President and Chief Executive Officer. "We were affected by no less than 11 catastrophe-designated convective storms in the quarter. Wind, hail and to a lesser extent, tornadoes dominated. In most instances, no one storm system had a material impact on our operations; however, the sheer number of storms was significant. We expect to process approximately 1,800 claims associated with second quarter catastrophe losses alone, primarily from our commercial property, personal auto and homeowners lines of business."

   
(1) Operating income (loss) is a commonly used non-GAAP financial measure of net income (loss) excluding realized investment gains and losses and related federal income taxes. Because our calculation may differ from similar measures used by other companies, investors should be careful when comparing our measure of operating income to that of other companies. Management evaluates this measure and ratios derived from this measure because we believe it better represents the normal, ongoing performance of our business. See Supplemental Tables - Financial Highlights for a reconciliation of operating income to net income.
(2) Per share amounts are after tax.
(3) Catastrophe losses is a commonly used non-GAAP financial measure that uses the designations of the Insurance Services Office (ISO) and are reported with loss and loss settlement expense amounts net of reinsurance recoverables, unless specified otherwise.
(4) Return on equity is calculated by dividing annualized net income by average year-to-date equity.

The Company recognized consolidated net realized investment gains of $2.7 million during the second quarter and $4.9 million year-to-date, compared to consolidated net realized investment gains of $4.2 million and $6.1 million, respectively, for the same periods in 2013. 

Consolidated net investment income was $27.6 million for the second quarter, a decrease of 4.9 percent, as compared to net investment income of $29.0 million for the same period in 2013. Year-to-date, consolidated net investment income was $54.4 million, a decrease of 2.0 percent, as compared to net investment income of $55.5 million for the same period in 2013 due to the decrease in the reinvestment interest rates from the continued low interest rate environment.

Consolidated net unrealized investment gains, net of tax, totaled $147.9 million as of June 30, 2014, an increase of $31.3 million or 26.8 percent from December 31, 2013. The increase in net unrealized investment gains resulted from an increase in the fair value of the fixed maturity investment portfolio as a result of interest rate declines during the first half of 2014, and, to a lesser extent, an increase in the fair value of our equity investment portfolio due to overall equity market improvement.

Total consolidated assets as of June 30, 2014 were $3.9 billion, which included $3.1 billion of invested assets. The Company's book value per share was $32.74, which is an increase of $1.87 per share or 6.1 percent from December 31, 2013 and is primarily attributed to net income of $24.0 million and an increase in net unrealized investment gains of $31.3 million, net of tax, during the first half of 2014 offset by stockholder dividends of $9.6 million.

The annualized return on equity was 6.0 percent as of June 30, 2014. 

P&C Segment

Net income for the property and casualty insurance segment, including net realized investment gains and losses, totaled $9.5 million ($0.37 per diluted share) for the second quarter and $21.4 million ($0.83 per diluted share) year-to-date, compared to net income of $13.2 million ($0.52 per diluted share) and $33.9 million ($1.33 per diluted share), respectively, in the same periods in 2013.

Net premiums earned increased 10.1 percent to $187.8 million in the second quarter, compared to $170.5 million in the same period in 2013. Year-to-date, net premiums earned increased 10.2 percent to $367.3 million, compared to $333.2 million in 2013.

"Some renewals are slightly more competitive, but still getting rate increases."

"We are beginning to see slight signs of competitive market conditions on some renewals," stated Ramlo, "although we continue to request and receive rate increases, especially in geographic areas heavily affected by U.S. storms and within our workers' compensation line of business. Commercial lines renewal pricing increased during the quarter with average percentage increases in the low- to mid-single digits on most small and mid-market accounts, but remained flat or tolerated small percentage increases for larger profitable accounts. Personal auto lines renewal pricing increases during the quarter decelerated slightly with average percentage increases in the mid-single digits, while homeowners pricing experienced average percentage increases in the high-single digits. We remain optimistic about our ability to get rate increases for the next quarter or two, but at moderated levels compared to previous quarters. Competitive market conditions persisted on new business during the quarter."

"Premiums written from new business remained strong, although down somewhat from the last quarter and down slightly from the same quarter a year ago," continued Ramlo. "Our success ratio on quoted accounts increased slightly and remains strong as new business pricing held steady."

Catastrophe losses totaled $20.6 million ($0.53 per share after tax) for the second quarter, compared to $14.2 million ($0.36 per share after tax) for the same period in 2013. Year-to-date, catastrophe losses totaled $23.9 million ($0.61 per share after tax), compared to $18.7 million ($0.48 per share after tax) in 2013.

"Catastrophe losses added 11.0 percentage points to the combined ratio and reduced operating earnings by $0.53 per share."

"Second quarters historically have a catastrophe load of approximately 8.0 percentage points due to the potential for large convective spring storms in those states where we conduct much of our business," stated Ramlo. "However, second quarter 2014 catastrophe losses added 11.0 percentage points to the combined ratio and reduced operating earnings for the quarter by $0.53 per diluted share. At 6.5 percentage points, our year-to-date catastrophe impact is only slightly above our expected catastrophe load of 6.0 percentage points, due in part to more favorable weather conditions during the first quarter."

The property and casualty insurance segment experienced $11.3 million of favorable development in our net reserves for prior accident years during the second quarter, compared to $16.4 million of favorable reserve development in the same period in 2013. Year-to-date, the segment experienced $25.8 million of favorable reserve development, compared to $40.5 million in 2013. Development amounts can vary significantly from quarter-to-quarter and year-to-year depending on a number of factors, including the number of claims settled and the settlement terms, and are subject to reallocation between accident years and lines of business. During the second quarter, the decrease in favorable reserve development is attributable to the timing of paid claims; however, year-to-date the decline in favorable reserve development also reflects adverse development of large claims from prior accident years, primarily relevant to 2013 large losses that further developed in the first quarter of 2014. At June 30, 2014, our total reserves remained relatively flat and within our actuarial estimates.

The GAAP combined ratio increased 2.2 percentage points to 101.7 percent for the second quarter, compared to 99.5 percent for the same period of 2013. Year-to-date, the GAAP combined ratio increased 5.7 percentage points to 100.7 percent, compared to 95.0 percent for the same period in 2013.

Expense Levels

The expense ratio for the second quarter was 29.6 percentage points, compared to 31.8 percentage points for the second quarter of 2013. Year-to-date, the expense ratio was 31.5 percentage points compared to 32.7 percentage points in 2013.

"Second quarter underwriting expenses benefited from additional acquisition expenses being deferred due to improved loss experience and continued premium growth," stated Ramlo. "However, in 2014, the expense ratio will continue to be adversely impacted by a dual rent obligation associated with the relocation of our Galveston, Texas branch facility and an increase in premium taxes and assessments due to premium growth in specific lines of business. Therefore, our current expectation is a gradual return to a more favorable expense ratio consistent with our history as we continue to reap the benefit of economies of scale and the ultimate completion of the Mercer Insurance transaction. As a result, our year-to-date 31.5 percentage point underwriting expense ratio remains higher than our long-term expectations."

Life Segment

Net income for the life insurance segment totaled $1.1 million ($0.05 per share) for the second quarter, compared to $2.3 million ($0.09 per share) for the second quarter of 2013. Year-to-date, net income for the life insurance segment totaled $2.7 million, as compared to $4.0 million for the same period in 2013. The decline in net income for the segment is due to a decrease in net investment income and net premiums earned and an increase in losses and loss settlement expenses. The segment also experienced a decrease in interest on policyholders' accounts, which is due to a decline in the amount of expense associated with the payment of interest to policyholders on annuity accounts, and to a lesser extent universal life policies.

Net premiums earned decreased 11.6 percent to $14.0 million for the second quarter, compared to $15.8 million for the second quarter of 2013. Year-to-date, net premiums earned decreased 7.1 percent to $27.8 million, compared to $30.0 million in the same period of 2013. The decrease in net premiums earned was primarily due to prudent rate increases that negatively impacted the sales of single premium whole life policies.

Net investment income decreased 5.8 percent to $15.8 million for the second quarter, compared to $16.7 million for the second quarter of 2013. Year-to-date, net investment income decreased 4.1 percent to $31.4 million, compared to $32.7 million in the same period of 2013. The decrease is due to a continuation of the low interest rate environment.

Losses and loss settlement expenses increased $2.3 million for the second quarter and $3.5 million year-to-date due to an increase in death benefits paid. Fluctuations in the timing of death benefits occur from quarter-to-quarter and year-to-year. This increase in death benefits does not appear to be a trend but we will continue to monitor the situation.

The increase in liability for future policy benefits improved in the second quarter, compared to the same period in 2013 due to net withdrawals of annuity products and the decline in sales of our single premium whole life product.

Deferred annuity deposits increased 154.8 percent for the second quarter and 178.8 percent year-to-date, compared with the same periods in 2013. Guaranteed interest rates have periodically increased over the course of the last year resulting in more favorable retention of maturing deferred annuity deposits as opposed to lapse of policies due to maturity, as well as increased deposits due to additional annuity sales.

Net cash outflow related to our annuity business was $15.7 million for the second quarter and $26.8 million year-to-date compared to a net cash outflow of $20.2 million and $46.1 million in the same periods in 2013. We attribute this to the activity previously described.

Capital Management

During the second quarter, we declared and paid a $0.20 per share cash dividend to stockholders of record on June 2, 2014. We have paid a quarterly dividend every quarter since March 1968.

Under our share repurchase program, we may purchase United Fire common stock from time to time on the open market or through privately negotiated transactions. The amount and timing of any purchases will be at management's discretion and will depend upon a number of factors, including the share price, general economic and market conditions, and corporate and regulatory requirements. We are authorized by the Board of Directors to purchase an additional 868,601 shares of common stock under our share repurchase program, which expires in August 2014. During the second quarter, 201,516 shares were repurchased under the program at a total cost of $5.6 million and an average share price of $27.63.

Earnings Call Access Information

An earnings call will be held at 9:00 am Central Daylight Time on August 5, 2014 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company's 2014 second quarter results and its expectations for 2014.

Teleconference: Dial-in information for the call is toll-free 1-877-407-8291. The event will be archived and available for digital replay through August 19, 2014. The replay access information is toll-free 1-877-660-6853; conference ID no. 13585490.

Webcast: An audio webcast of the teleconference can be accessed at the Company's investor relations page at http://ir.unitedfiregroup.com/events.cfm. The archived audio webcast will be available until August 19, 2014.

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

About United Fire Group, Inc.

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

Through our subsidiaries, we are licensed as a property and casualty insurer in 43 states, plus the District of Columbia, and we are represented by approximately 1,200 independent agencies. The United Fire pooled group is rated an "A" (Excellent) by A.M. Best Company.

Our subsidiary, United Life Insurance Company, is licensed in 37 states, represented by approximately 1,000 independent life agencies and rated an "A-" (Excellent) by A.M. Best Company.

For more information about United Fire Group, Inc. visit www.unitedfiregroup.com or contact:
Anita Novak, Director of Investor Relations, 319-399-5251 or alnovak@unitedfiregroup.com

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 our 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 optimistic," "target(s)," "forecast(s)," "project(s)," "predict(s)," "should," "could," "may," "will continue," "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 IA "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission ("SEC") on March 5, 2014. The risks identified in our Form 10-K 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.

Supplemental Tables

 
Financial Highlights
  Three Months Ended June 30, Six Months Ended June 30,
(In Thousands, Except Per Share Data and Ratios) 2014 2013 Change % 2014 2013 Change %
Revenue Highlights            
Net premiums earned  $ 201,827  $ 186,367 8.3%  $ 395,168  $ 363,184 8.8%
Net investment income 27,603 29,019 (4.9)% 54,365 55,483 (2.0)%
Total revenues 232,673 219,719 5.9% 455,577 425,024 7.2%
Income Statement Data            
Operating income 8,925 12,798 (30.3)% 20,830 33,950 (38.6)%
After-tax net realized investment gains 1,760 2,698 (34.8)% 3,186 3,939 (19.1)%
Net income  $ 10,685  $ 15,496 (31.0)%  $ 24,016  $ 37,889 (36.6)%
Diluted Earnings Per Share Data            
Operating income  $ 0.35  $ 0.50 (30.0)%  $ 0.82  $ 1.34 (38.8)%
After-tax net realized investment gains 0.07 0.11 (36.4)% 0.12 0.15 (20.0)%
Net income  $ 0.42  $ 0.61 (31.1)%  $ 0.94  $ 1.49 (36.9)%
Catastrophe Data            
Pre-tax catastrophe losses  $ 20,603  $ 14,221 44.9%  $ 23,878  $ 18,732 27.5%
Effect on after-tax earnings per share 0.53 0.36 47.2% 0.61 0.48 27.1%
Effect on combined ratio 11.0% 8.3% 32.5% 6.5% 5.6% 16.1%
             
Favorable reserve development experienced on prior accident years  $ 11,264  $ 16,370 (31.2)%  $ 25,765  $ 40,471 (36.3)%
             
Combined ratio 101.7% 99.5% 2.2% 100.7% 95.0% 6.0%
Return on equity       6.0% 10.4% (42.6)%
Cash dividends declared per share  $ 0.20  $ 0.18 11.1%  $ 0.38  $ 0.33 15.2%
Diluted weighted average shares outstanding 25,556,627 25,472,302 0.3% 25,591,258 25,414,392 0.7%
 
 
 
Consolidated Income Statement
  Three Months Ended June 30, Six Months Ended June 30,
(In Thousands) 2014 2013 2014 2013
Revenues        
Net premiums written (1)  $ 236,050  $ 214,204  $ 449,240  $ 405,437
Net premiums earned  $ 201,827  $ 186,367  $ 395,168  $ 363,184
Investment income, net of investment expenses 27,603 29,019 54,365 55,483
Net realized investment gains 2,708 4,151 4,902 6,060
Other income 535 182 1,142 297
Total Revenues  $ 232,673  $ 219,719  $ 455,577  $ 425,024
         
Benefits, Losses and Expenses        
Losses and loss settlement expenses  $ 142,716  $ 120,435  $ 267,953  $ 217,905
Increase in liability for future policy benefits 8,077 9,869 15,898 18,105
Amortization of deferred policy acquisition costs 40,196 36,708 79,730 74,789
Other underwriting expenses 20,776 23,308 47,204 45,656
Interest on policyholders' accounts 7,852 9,081 15,839 18,401
Total Benefits, Losses and Expenses  $ 219,617  $ 199,401  $ 426,624  $ 374,856
         
Income before income taxes 13,056 20,318 28,953 50,168
Federal income tax expense 2,371 4,822 4,937 12,279
Net income  $ 10,685  $ 15,496  $ 24,016  $ 37,889
(1) Data prepared in accordance with statutory accounting practices, which is a comprehensive basis of accounting other than U.S. GAAP.
 
 
Consolidated Balance Sheet
     
(In Thousands)  June 30, 2014  December 31, 2013
Total invested assets:    
Property and casualty segment  $ 1,519,110  $ 1,446,287
Life insurance segment 1,625,988 1,603,850
Total cash and investments 3,235,374 3,142,330
Total assets 3,851,910 3,720,672
Future policy benefits and losses, claims and loss settlement expenses  $ 2,452,574  $ 2,432,783
Total liabilities 3,025,644 2,937,839
Net unrealized investment gains, after-tax  $ 147,858  $ 116,601
Total stockholders' equity 826,266 782,833
     
Property and casualty insurance statutory capital and surplus (1) (2)  $ 670,132  $ 665,772
Life insurance statutory capital and surplus(2) 163,640 157,974
(1) Because United Fire & Casualty Company owns United Life Insurance Company, property and casualty insurance statutory capital and surplus includes life insurance statutory capital and surplus and therefore represents our total consolidated statutory capital and surplus.
(2) Data prepared in accordance with statutory accounting practices, which is a comprehensive basis of accounting other than U.S. GAAP.
 
 
Property & Casualty Insurance Financial Results
  Three Months Ended June 30, Six Months Ended June 30,
(In Thousands, Except Ratios) 2014 2013 2014 2013
Revenues        
Net premiums written (1)  $ 222,061  $ 198,363  $ 421,390  $ 375,482
Net premiums earned  $ 187,832  $ 170,527  $ 367,326  $ 333,228
Investment income, net of investment expenses 11,838 12,288 23,001 22,773
Net realized investment gains 2,337 3,560 3,704 4,589
Other income 315 72 795 84
Total Revenues  $ 202,322  $ 186,447  $ 394,826  $ 360,674
         
Benefits, Losses and Expenses        
Losses and loss settlement expenses  $ 135,493  $ 115,528  $ 254,149  $ 207,621
Amortization of deferred policy acquisition costs 38,502 34,993 76,378 71,349
Other underwriting expenses 17,104 19,220 39,364 37,635
Total Benefits, Losses and Expenses  $ 191,099  $ 169,741  $ 369,891  $ 316,605
         
Income before income taxes  $ 11,223  $ 16,706  $ 24,935  $ 44,069
Federal income tax expense 1,683 3,511 3,584 10,145
Net income  $ 9,540  $ 13,195  $ 21,351  $ 33,924
         
GAAP combined ratio:        
Net loss ratio - excluding catastrophes 61.1% 59.4% 62.7% 56.7%
Catastrophes - effect on net loss ratio 11.0 8.3 6.5 5.6
Net loss ratio 72.1% 67.7% 69.2% 62.3%
Expense ratio 29.6 31.8 31.5 32.7
Combined ratio 101.7% 99.5% 100.7% 95.0%
         
Statutory combined ratio:(1)        
Net loss ratio - excluding catastrophes 61.9% 59.8% 63.2% 57.0%
Catastrophes - effect on net loss ratio 11.0 8.3 6.5 5.6
Net loss ratio 72.9% 68.1% 69.7% 62.6%
Expense ratio 30.0 28.3 30.9 30.9
Combined ratio 102.9% 96.4% 100.6% 93.5%
(1) Data prepared in accordance with statutory accounting practices, which is a comprehensive basis of accounting other than U.S. GAAP.
 
 
Life Insurance Financial Results
  Three Months Ended June 30, Six Months Ended June 30,
(In Thousands) 2014 2013 2014 2013
Revenues        
Net premiums written (1)  $ 13,989  $ 15,841  $ 27,850  $ 29,955
Net premiums earned  $ 13,995  $ 15,840  $ 27,842  $ 29,956
Investment income, net of investment expenses 15,765 16,731 31,364 32,710
Net realized investment gains 371 591 1,198 1,471
Other income 220 110 347 213
Total Revenues  $ 30,351  $ 33,272  $ 60,751  $ 64,350
         
Benefits, Losses and Expenses        
Losses and loss settlement expenses  $ 7,223  $ 4,907  $ 13,804  $ 10,284
Increase in liability for future policy benefits 8,077 9,869 15,898 18,105
Amortization of deferred policy acquisition costs 1,694 1,715 3,352 3,440
Other underwriting expenses 3,672 4,088 7,840 8,021
Interest on policyholders' accounts 7,852 9,081 15,839 18,401
Total Benefits, Losses and Expenses  $ 28,518  $ 29,660  $ 56,733  $ 58,251
         
Income before income taxes  $ 1,833  $ 3,612  $ 4,018  $ 6,099
Federal income tax expense 688 1,311 1,353 2,134
Net income  $ 1,145  $ 2,301  $ 2,665  $ 3,965
(1) Net premiums written is a financial measure prepared in accordance with statutory practices, which is a comprehensive basis of accounting other than U.S. GAAP.
         
 
Net Premiums Written by Line of Business
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
(In Thousands)
Net Premiums Written        
Commercial lines:        
Other liability (1)  $ 68,389  $ 59,193  $ 128,264  $ 111,141
Fire and allied lines (2) 52,128 46,676 100,057 88,160
Automobile 48,244 42,062 89,941 78,254
Workers' compensation 24,288 21,669 51,144 47,437
Fidelity and surety 6,367 5,570 10,656 9,956
Miscellaneous 770 621 1,543 1,319
Total commercial lines  $ 200,186  $ 175,791  $ 381,605  $ 336,267
         
Personal lines:        
Fire and allied lines (3)  $ 11,443  $ 11,786  $ 21,288  $ 20,929
Automobile 5,966 5,815 11,883 11,211
Miscellaneous 269 273 507 495
Total personal lines  $ 17,678  $ 17,874  $ 33,678  $ 32,635
Reinsurance assumed 4,197 4,698 6,107 6,580
Total  $ 222,061  $ 198,363  $ 421,390  $ 375,482
(1) "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.
(2) "Fire and allied lines" includes fire, allied lines, commercial multiple peril and inland marine.
(3) "Fire and allied lines" includes fire, allied lines, homeowners and inland marine.
 
 
Net Premiums Earned, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Three Months Ended June 30, 2014 2013
    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  $ 55,891  $ 24,192 43.3%  $ 49,175  $ 28,618 58.2%
Fire and allied lines 44,467 42,840 96.3 39,416 26,093 66.2
Automobile 40,391 29,353 72.7 36,025 28,777 79.9
Workers' compensation 20,996 16,129 76.8 20,159 14,477 71.8
Fidelity and surety 4,099 1,308 31.9 4,048 (974) (24.1)
Miscellaneous 683 (1) (0.1) 517 45 8.7
Total commercial lines  $ 166,527  $ 113,821 68.3%  $ 149,340  $ 97,036 65.0%
             
Personal lines            
Fire and allied lines  $ 11,070  $ 13,530 122.2%  $ 10,689  $ 10,765 100.7%
Automobile 5,791 6,672 115.2 5,515 4,367 79.2
Miscellaneous 247 (17) (6.9) 235 667 NM
Total personal lines  $ 17,108  $ 20,185 118.0%  $ 16,439  $ 15,799 96.1%
Reinsurance assumed  $ 4,197  $ 1,487 35.4%  $ 4,748  $ 2,693 56.7%
Total  $ 187,832  $ 135,493 72.1%  $ 170,527  $ 115,528 67.7%
NM= Not meaningful            
             
             
Net Premiums Earned, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Six Months Ended June 30, 2014 2013
    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 $ 109,044 $ 54,862 50.3% $ 94,504 $ 49,315 52.2%
Fire and allied lines 87,354 77,498 88.7 80,390 44,694 55.6
Automobile 78,841 51,601 65.4 70,983 54,950 77.4
Workers' compensation 42,026 34,338 81.7 39,267 30,840 78.5
Fidelity and surety 8,559 995 11.6 8,807 (680) (7.7)
Miscellaneous 1,347 10 0.7 562 659 117.3
Total commercial lines $ 327,171 $ 219,304 67.0% $ 294,513 $ 179,778 61.0%
             
Personal lines            
Fire and allied lines $ 22,102 $ 20,385 92.2% $ 21,125 $ 16,966 80.3%
Automobile 11,472 10,966 95.6 10,861 7,562 69.6
Miscellaneous 491 88 17.9 288 901 NM
Total personal lines $ 34,065 $ 31,439 92.3% $ 32,274 $ 25,429 78.8%
Reinsurance assumed $ 6,090 $ 3,406 55.9% $ 6,441 $ 2,414 37.5%
Total $ 367,326 $ 254,149 69.2% $ 333,228 $ 207,621 62.3%
NM= Not meaningful            

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Source: United Fire Group, Inc.
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