Core Insights - In the current economic climate, new analyst coverage is increasingly valuable for investors navigating volatility, with the Federal Reserve maintaining interest rates and signaling potential cuts in 2025, amid rising concerns about stagflation as GDP growth slows to 1.4% and inflation rises to 3% [1][2] Analyst Coverage Importance - New analyst coverage provides timely insights, updated models, and context on how companies may perform amid inflationary pressures, cost volatility, and weakening demand [2][3] - Analysts possess specialized knowledge and expertise, offering critical insights into a company's financial health, growth potential, competitive standing, and industry trends, which are often difficult for individual investors to acquire independently [3][5] - Coverage initiation on a stock typically indicates higher investor interest, as investors believe that the company under coverage holds significant value [4][6] Market Impact of Analyst Coverage - New analyst coverage can lead to immediate stock price volatility, with positive ratings attracting bullish sentiment and driving share prices higher, while neutral or negative ratings may trigger sell-offs [8] - Favorable coverage from multiple analysts can enhance investor confidence, leading to sustained upward momentum in valuation [8][10] Recent Stock Highlights - Recent analyst coverage on Karooooo Ltd. (KARO), OppFi Inc. (OPFI), QXO, Inc. (QXO), and United Fire Group, Inc. (UFCS) reflects analyst confidence despite economic uncertainty, with each stock seeing recent EPS estimate hikes [10] - Karooooo shares have gained 36.4% in the past three months, with a fiscal 2026 EPS estimate increase to $1.87, indicating 14.7% year-over-year growth [14] - OppFi shares have gained 73.2% in the past three months, with a 2025 EPS estimate increase to $1.23, indicating 29.5% year-over-year growth [15] - QXO shares have gained 78% in the past three months, with a 2025 EPS estimate improving to 39 cents from a loss of 12 cents [16] - United Fire Group shares have gained 9.4% in the past three months, with a 2025 EPS estimate increase to $3.50, indicating a 2.4% year-over-year decline [17] Screening Criteria for Stocks - Stocks with increased analyst coverage and improving average ratings are prioritized, with additional parameters including a stock price greater than or equal to $5 and an average daily volume greater than or equal to 100,000 shares [11][12]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, focusing on companies believed to be undervalued based on fundamental analysis [2][3]. Group 1: Investment Metrics - United Fire Group (UFCS) holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4]. - UFCS has a P/E ratio of 10.92, significantly lower than the industry average of 28.39, suggesting it may be undervalued [4]. - The stock's Forward P/E has fluctuated between 10.36 and 20.43 over the past year, with a median of 13.71 [4]. - UFCS's P/B ratio stands at 0.88, compared to the industry average of 1.56, indicating an attractive valuation [5]. - The P/B ratio for UFCS has ranged from 0.62 to 1.02 in the past year, with a median of 0.83 [5]. - The P/S ratio for UFCS is 0.56, well below the industry average of 1.29, reinforcing its undervalued status [6]. - UFCS's P/CF ratio is 9.72, lower than the industry average of 10.90, further indicating potential undervaluation [7]. - Over the past 52 weeks, UFCS's P/CF has varied from -87.76 to 13.42, with a median of 9.83 [7]. Group 2: Overall Assessment - The combination of favorable metrics suggests that UFCS is likely undervalued at present, supported by a strong earnings outlook [8].

Industry Overview - The property and casualty insurance industry is projected to grow despite an increase in catastrophic events, driven by personalized products and digital innovation [1] - Higher premium volumes from solid policyholder retention, broader exposure, and favorable pricing are sustaining profitability for insurers [1] Kingstone Companies (KINS) - KINS is the 12th largest homeowner insurer in New York with a 2.1% market share in 2024, positioned to expand as the Northeastern U.S. commercial insurance market is expected to grow by 12.3% through 2025 [3] - The company is focusing on core operations and exiting underperforming segments while adhering to disciplined underwriting practices [4] - KINS has raised prices ahead of inflation, expecting direct written premiums from its core business to grow between 15% and 25% in 2025 [5] - The company aims to lower its net underwriting expense ratio, projecting an improved combined ratio of 81% to 85% in 2025 [6] - KINS has shown continuous improvement in net margin, expanding by 2560 basis points over the last two years, with a return on equity of 31.9%, significantly above the industry average of 7.8% [7] United Fire Group, Inc. (UFCS) - UFCS offers a diverse range of products and has a strong presence in the Midwestern U.S., though it faces geographic concentration risks [8] - The company is finalizing a new policy administration system to enhance efficiency and product management, with full implementation expected across various business units [9] - Core commercial new business production is growing, driven by prudent pricing and risk selection [10] - UFCS is experiencing continuous improvement in net margin, which expanded by 640 basis points in the last two years, with a return on equity of 9%, also above the industry average [12][11] Financial Estimates - The Zacks Consensus Estimate for KINS' 2025 revenues and EPS indicates a year-over-year increase of 31% and 37.9%, respectively [13] - For UFCS, the 2025 revenue estimate implies a 6.7% increase, while EPS indicates a 2.4% decline, although EPS estimates have improved recently [14] Valuation - KINS is trading at a price-to-book multiple of 2.68, above its five-year median of 0.82, while UFCS's price-to-book multiple is at 0.88, slightly above its median of 0.81 [15] - UFCS is considered more affordable than KINS, with both stocks carrying a Value Score of A [16] Conclusion - KINS is strategically positioned to tap into a market opportunity exceeding $200 million, focusing on core business expansion and improving pricing efficiency [17] - UFCS is viewed as a value opportunity with a diversified portfolio and steady premium growth, appealing to investors seeking stable, dividend-paying regional insurers [18]

Core Points - United Fire Group, Inc. (UFG) declared a quarterly cash dividend of $0.16 per share, payable on June 20, 2025, to shareholders of record as of June 6, 2025 [1] - This marks the 229th consecutive quarterly dividend paid by UFG, continuing a history of dividend payments dating back to March 1968 [1] Company Overview - UFG was founded in 1946 as United Fire & Casualty Company and operates in the property and casualty insurance sector [2] - The company is licensed to operate in all 50 states and the District of Columbia, represented by approximately 1,000 independent agencies [2] - UFG has received an "A-" (Excellent) rating from AM Best for its insurance subsidiaries [2]

Group 1 - United Fire Group, Inc. (UFG) announced the election of three Class B directors to its board at the 2025 annual meeting, with terms expiring in 2028 [1] - UFG is engaged in writing property and casualty insurance and is licensed in all 50 states and the District of Columbia [2] - The company has approximately 1,000 independent agencies representing its insurance products [2] Group 2 - AM Best assigns a rating of "A-" (Excellent) to members of the United Fire & Casualty Group [2] - The appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025 was ratified [3] - Shareholders approved, on an advisory basis, the compensation of the company's named executive officers [3]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-34257 ________________________ UNITED FIRE GROUP, INC. (Exact name of registrant as specified in its charter) Iowa 45-2302834 (State of incorporation) (I.R ...

United Fire Group (UFCS) Q1 2025 Earnings Call May 07, 2025 11:00 AM ET Company Participants Tim Borst - Head of Corporate Development, Capital Management, and Investor RelationsKevin Leidwinger - President & CEOJulie Stephenson - EVP & Chief Operating OfficerEric Martin - EVP & CFOMatthew Erdner - Director Operator day, and welcome to the United Fire Group Insurance twenty twenty five First Quarter Conference Call. All participants will be in listen only mode. After today's presentation, there will be an o ...

Financial Data and Key Metrics Changes - Net written premium grew 4% to $335.4 million, although growth was impacted by unusual ceded reinsurance premium adjustments [7] - The first quarter combined ratio was 99.4%, a 0.5 point increase from Q1 2024, while the underlying loss ratio improved by 2.9 points to 56.5% [7][18] - Net investment income increased to $23.5 million, primarily due to a rise in fixed maturity income [10][21] - Reported book value per share improved to $32.13, with adjusted book value per share growing to $34.16 [11][24] Business Line Data and Key Metrics Changes - Core Commercial businesses saw net written premium growth of 6%, with renewal premium change remaining strong at 11.7% [14] - Rate changes for general liability exceeded 9%, while automobile and umbrella lines produced double-digit rate changes [14][15] - Specialty and surety businesses performed in line with expectations, contributing to overall growth [16] Market Data and Key Metrics Changes - Catastrophe losses contributed five points to the combined ratio, with $8.2 million attributed to California wildfires [10][19] - The company experienced a strong underwriting profit despite elevated industry catastrophe losses [20] Company Strategy and Development Direction - The company is in the final stages of developing a new policy administration system, which is expected to improve process efficiency and product management [12] - Focus remains on disciplined pricing, stable retention, and increased new business production across the portfolio [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential impacts from material and labor cost inflation through disciplined pricing and regular trend evaluations [26][27] - The company anticipates that the elevated underwriting expense ratio will normalize over time as new systems and personnel are fully integrated [30][33] Other Important Information - The company declared and paid a cash dividend of $0.16 per share to shareholders [24] - The investment portfolio is well-positioned against market uncertainties, with a focus on improving credit quality and diversification [21][22] Q&A Session Summary Question: Current pricing power and impact of material and labor cost inflation - Management is closely monitoring the situation and believes that current rates exceed net loss trends, allowing for a cushion in estimates [26][27] Question: Underwriting expense ratio and potential levers to reduce it - The elevated expense ratio is partly due to one-time costs associated with the new policy administration system, which is expected to decrease over time [29][30] Question: Expectations for expense ratio normalization as the company grows - Management indicated that fixed costs provide leverage with premium growth, and the expense ratio is expected to normalize as new agents reach historical production averages [33]

Financial Performance - Net written premium increased by 4% from $321 million to $335 million[5] - Net earned premium increased by 10% from $281 million to $308 million[5] - Net income increased by 31% and adjusted operating income increased by 27% compared to the prior year[7] - Net investment income increased by 44% to $23 million due to strong improvement in fixed maturity income[7, 5] Ratios and Book Value - The net loss ratio decreased by 2.5 points from 64% to 61.5%[5] - The underwriting expense ratio increased by 3 points from 34.9% to 37.9%[5, 13] - The underlying loss ratio improved by 2.9 points to 56.5%[7, 5, 13] - Book value per common share increased to $32.13 and adjusted book value per share increased to $34.16[7] P&C Trends - Core commercial net written premium grew 6% in Q1[13] - The catastrophe loss ratio was 5%, including 2.6 points for California wildfires[13] Investment Portfolio - Invested assets totaled $2.2 billion, with 89% in fixed income securities[20] - Fixed maturity income grew 39% due to portfolio management and reinvestment at higher yields[24, 21]

United Fire Group (UFCS) came out with quarterly earnings of $0.70 per share, beating the Zacks Consensus Estimate of $0.62 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.90%. A quarter ago, it was expected that this property and casualty insurance company would post earnings of $0.66 per share when it actually produced earnings of $1.25, delivering a surprise of 89.39%.Over th ...