Core Insights - United Fire Group, Inc. (UFG) reported a net income of $39.2 million for Q3 2025, an increase of $19.4 million compared to Q3 2024, resulting in earnings of $1.49 per diluted share [1][7] - Adjusted operating income for the same period was $39.5 million, up $18.4 million year-over-year, translating to $1.50 per diluted share [1][7] - The company achieved a record net written premium of $328.2 million, reflecting a 7% growth driven by strong performance in core commercial lines [2][10] Financial Performance - The combined ratio improved by 6.3 points to 91.9%, marking the best third quarter combined ratio in nearly 20 years [3][4] - The underlying loss ratio improved by 1.9 points to 56.0%, indicating favorable trends in rate achievement and loss experience [3][11] - Net investment income increased by 6.3% to $26.0 million, supported by a 17% growth in fixed maturity income [3][11] Premium Growth - Net written premium grew by 7% to $328.2 million, with core commercial lines seeing a significant increase of 22% [2][10] - Average renewal premiums rose by 7.1%, with rates increasing by 5.8% and exposure changes contributing 1.2% [10] Underwriting and Expense Management - The underwriting expense ratio improved by 1.3 points to 34.6%, reflecting disciplined expense management [3][11] - Catastrophe loss ratio improved by 3.1 points to 1.3%, indicating relatively light catastrophe activity during the quarter [3][11] Balance Sheet and Equity - Book value per share increased by $4.42 to $35.22 as of September 30, 2025, a 14.4% increase from December 31, 2024 [15][14] - Total stockholders' equity rose to $898.7 million, up from $781.5 million at the end of 2024 [14][15] Strategic Outlook - The company is well-positioned to navigate evolving industry dynamics and maintain momentum into 2026, as stated by President and CEO Kevin Leidwinger [4]

Core Points - United Fire Group, Inc. (UFG) will release its third quarter 2025 earnings results after market close on November 4, 2025 [1] - An earnings call is scheduled for November 5, 2025, at 9 a.m. CT for analysts, shareholders, and interested parties to discuss the results [1] Teleconference Details - Dial-in information for the earnings call includes a toll-free number 1-844-492-3723 (international 1-412-542-4184) [2] - The event will be archived and available for digital replay until November 12, 2025, with replay access at toll-free 1-855-669-9658 (international 1-412-317-0088) [2] Webcast Information - A webcast of the teleconference can be accessed at the provided URLs, and the archived audio will be available for one year [3] - A transcript of the teleconference will be available on the company's website shortly after the event [3] Company Overview - United Fire Group, founded in 1946, operates in property and casualty insurance and is licensed in all 50 states and the District of Columbia [4] - The company is represented by approximately 1,000 independent agencies and has an "A-" (Excellent) rating from A.M. Best Company [4]

Core Insights - Commercial insurers are experiencing a prolonged period of strong pricing power, known as a "hard market," which has generally benefited the industry [1] - This pricing power is increasingly being challenged by rising claims costs driven by materials inflation and social factors [1] Industry Overview - The current hard market has provided commercial insurers with favorable conditions, allowing them to maintain higher premiums [1] - However, the sustainability of this pricing power is under pressure due to escalating costs associated with claims [1]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, particularly in the financial sector, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Company Overview: United Fire Group (UFCS) - United Fire Group is highlighted as a recommended growth stock based on its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 19.5%, with projected EPS growth of 18.4% this year, significantly outperforming the industry average of 11.6% [4] Key Growth Metrics - **Earnings Growth**: The focus on earnings growth is critical, with double-digit growth being a strong indicator of future stock price gains [3] - **Asset Utilization Ratio**: United Fire's asset utilization ratio is 0.37, indicating it generates $0.37 in sales for every dollar in assets, surpassing the industry average of 0.34 [5] - **Sales Growth**: The company's sales are projected to grow by 9.4% this year, compared to the industry average of 4.8% [6] Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for United Fire, with the current-year earnings estimates increasing by 10.6% over the past month, which correlates with potential stock price movements [7] Conclusion - United Fire has achieved a Zacks Rank 1 and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [9]

Core Viewpoint - United Fire Group (UFCS) has shown strong stock performance, with a 3.2% increase over the past month and an 11.3% gain since the start of the year, outperforming the Zacks Finance sector and the Zacks Insurance - Property and Casualty industry [1] Financial Performance - United Fire has consistently beaten earnings estimates, reporting EPS of $0.9 against a consensus estimate of $0.57 in its last earnings report [2] - For the current fiscal year, United Fire is projected to achieve earnings of $3.03 per share on revenues of $1.37 billion, reflecting an 18.36% increase in EPS and a 9.45% increase in revenues [3] - The next fiscal year is expected to see earnings of $3.1 per share on revenues of $1.51 billion, indicating a year-over-year change of 2.31% in EPS and 10.12% in revenues [3] Valuation Metrics - United Fire's stock trades at 10.5X current fiscal year EPS estimates, below the peer industry average of 11.6X, and at 10.4X trailing cash flow compared to the peer group's average of 12.2X, positioning it favorably for value investors [7] - The company has a Value Score of A, with Growth and Momentum Scores of B and C respectively, resulting in a combined VGM Score of A [6] Zacks Rank - United Fire holds a Zacks Rank of 1 (Strong Buy), supported by a solid earnings estimate revision trend, making it a suitable choice for investors looking for strong performance [8] Industry Comparison - The Insurance - Property and Casualty industry is performing well, ranking in the top 13% of all industries, providing favorable conditions for both United Fire and its peer, Donegal Group, Inc. (DGICA) [11] - Donegal Group has also shown strong performance, beating consensus estimates by 19.44% and is expected to post earnings of $2.10 per share on revenues of $982.2 million for the current fiscal year [10]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - United Fire Group (UFCS) is currently highlighted as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 19.5%, with projected EPS growth of 18.4% this year, significantly outperforming the industry average of 11.6% [4] Group 2: Financial Metrics - United Fire's asset utilization ratio (sales-to-total-assets ratio) stands at 0.37, indicating greater efficiency compared to the industry average of 0.34 [5] - The company's sales are expected to grow by 9.4% this year, again surpassing the industry average of 4.8% [6] Group 3: Earnings Estimates - The Zacks Consensus Estimate for United Fire's current-year earnings has increased by 21.2% over the past month, reflecting a positive trend in earnings estimate revisions [8] - This upward revision trend contributes to United Fire's Zacks Rank of 1 (Strong Buy) and a Growth Score of B, suggesting it is a solid choice for growth investors [10]

Company Performance - United Fire Group (UFCS) shares have increased by 18.1% over the past month, reaching a new 52-week high of $32.13 [1] - Year-to-date, the stock has gained 11.6%, outperforming the Zacks Finance sector's 13% gain and the Zacks Insurance - Property and Casualty industry's 7.5% return [1] Earnings and Revenue Expectations - United Fire has consistently exceeded earnings estimates, reporting EPS of $0.9 against a consensus estimate of $0.57 in its last earnings report on August 5, 2025 [2] - For the current fiscal year, the company is expected to post earnings of $2.74 per share on revenues of $1.37 billion, reflecting a 7.03% change in EPS and a 9.45% change in revenues [3] - For the next fiscal year, earnings are projected to be $2.85 per share on revenues of $1.51 billion, indicating a year-over-year change of 4.01% in EPS and 10.12% in revenues [3] Valuation Metrics - United Fire has a Value Score of A, a Growth Score of A, and a Momentum Score of C, resulting in a combined VGM Score of A [6] - The stock trades at 11.6X current fiscal year EPS estimates, below the peer industry average of 12.9X, and at 10.4X trailing cash flow compared to the peer group's average of 12.2X, positioning it favorably for value investors [7] Zacks Rank - United Fire holds a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, making it a strong candidate for investors [8] Industry Comparison - The Insurance - Property and Casualty industry is performing well, ranking in the top 13% of all industries, providing favorable conditions for both United Fire and its peer, CNA Financial Corporation [11]

Core Viewpoint - United Fire Group, Inc. (UFG) has appointed Gilda L. Spencer as a new independent member of its board of directors, effective August 15, 2025, to enhance its governance and risk management capabilities [1][3]. Group 1: Appointment Details - Gilda L. Spencer has been appointed as a Class A director and will serve on the risk management and compensation and human capital committees [1]. - With Spencer's appointment, the UFG board of directors will consist of 12 members [4]. Group 2: Background of Gilda L. Spencer - Spencer has a distinguished career as an attorney and insurance executive, currently serving as an adjunct professor at Loyola University Chicago School of Law [2]. - Between 2012 and 2021, she was senior vice president and deputy general counsel of dispute resolution services for Allstate, managing a team of 60 associates [2]. - Prior to Allstate, Spencer served as vice president and chief litigation counsel for Nationwide Mutual Insurance Company and was an assistant United States attorney for the Southern District of Ohio [2]. Group 3: Company Overview - United Fire Group, founded in 1946, is engaged in writing property and casualty insurance and is licensed in 50 states and the District of Columbia [5]. - The company is represented by approximately 1,000 independent agencies and has an AM Best rating of "A-" (Excellent) [5].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling even higher [1] - The Zacks Momentum Style Score helps define momentum characteristics, with United Fire Group (UFCS) currently holding a Momentum Style Score of B [2] - The Zacks Rank system indicates that stocks rated 1 (Strong Buy) and 2 (Buy) with Style Scores of "A or B" tend to outperform the market [3] Group 2: United Fire Group Performance - UFCS shares have increased by 5.51% over the past week, outperforming the Zacks Insurance - Property and Casualty industry, which rose by 1.06% [5] - Over the last quarter, UFCS shares rose by 10.29%, and over the past year, they increased by 56.19%, compared to the S&P 500's gains of 9.33% and 17.71% respectively [6] - The average 20-day trading volume for UFCS is 143,170 shares, indicating a bullish sign if the stock continues to rise [7] Group 3: Earnings Outlook - In the past two months, one earnings estimate for UFCS has increased, raising the consensus estimate from $2.50 to $2.74 [9] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions during the same period [9] Group 4: Conclusion - Given the positive performance metrics and earnings outlook, UFCS is classified as a 1 (Strong Buy) stock with a Momentum Score of B, making it a potential pick for investors [11]

Part I. Financial Information [Financial Statements and Supplementary Data](index=7&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the unaudited consolidated financial statements for United Fire Group, Inc. as of June 30, 2025, and for the three and six-month periods then ended [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached **$3.66 billion**, liabilities **$2.82 billion**, and stockholders' equity **$845.7 million** as of June 30, 2025 Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Investments** | $2,199,897 | $2,093,094 | | **Total Assets** | $3,661,130 | $3,488,469 | | **Total Liabilities** | $2,815,462 | $2,706,938 | | **Total Stockholders' Equity** | $845,668 | $781,531 | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) The company reported a significant turnaround in profitability, driven by higher net earned premiums and net investment income Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earned Premium | $314,802 | $287,569 | $623,213 | $568,428 | | Total Revenues | $335,473 | $301,169 | $666,588 | $597,168 | | Net Income (Loss) | $22,947 | $(2,735) | $40,647 | $10,767 | | Diluted EPS | $0.87 | $(0.11) | $1.54 | $0.42 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$89.1 million** in H1 2025, with significant cash used in investing and financing activities Six-Month Cash Flow Summary (in thousands) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $89,064 | $127,507 | | Net Cash from Investing Activities | $(78,505) | $(134,604) | | Net Cash from Financing Activities | $(9,359) | $58,481 | | **Net Change in Cash** | **$1,200** | **$51,384** | [Notes to Unaudited Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, investments, and loss reserves, highlighting a **$30 million** debt offering and **$11.9 million** favorable reserve development - The company completed a private offering of **$30 million** in senior unsecured 9.0% Series B notes on July 10, 2025, with proceeds intended for growth and general corporate purposes[33](index=33&type=chunk) - For the six months ended June 30, 2025, the company experienced **$11.9 million** of favorable reserve development, driven by better-than-expected catastrophe experience and lower loss adjustment expense payments[82](index=82&type=chunk) - There have been no changes to significant accounting policies since the 2024 Annual Report on Form 10-K[31](index=31&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting significant net income growth, improved underwriting results, and a lower combined ratio [Results of Operations](index=55&type=section&id=Results%20of%20Operations) Operational results improved substantially in H1 2025, with net income rising to **$40.6 million** and the combined ratio improving to **97.9%** Key Performance Ratios | Ratio | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Loss Ratio | 61.5% | 67.0% | | Underwriting Expense Ratio | 36.4% | 35.2% | | **Combined Ratio** | **97.9%** | **102.2%** | | Underlying Loss Ratio (Non-GAAP) | 57.0% | 59.1% | | Underlying Combined Ratio (Non-GAAP) | 93.4% | 94.3% | - Net written premium increased by **9.4%** for the six months ended June 30, 2025, primarily due to growth in core commercial lines from new business and increased retention[151](index=151&type=chunk)[154](index=154&type=chunk) - Pre-tax catastrophe losses for H1 2025 were **$32.8 million**, a decrease of **$12.1 million** from H1 2024, adding **5.3 points** to the combined ratio, which is below the five-year historical average[168](index=168&type=chunk) [Net Loss Ratios by Line](index=63&type=section&id=Net%20Loss%20Ratios%20by%20Line) Commercial lines net loss ratio improved to **61.9%** in Q2 2025, with significant improvements in Commercial Automobile and Fire and Allied lines Net Loss Ratio by Commercial Line (Q2 2025 vs Q2 2024) | Line of Business | Q2 2025 Net Loss Ratio | Q2 2024 Net Loss Ratio | Point Change | | :--- | :--- | :--- | :--- | | Other liability | 78.7% | 83.3% | -4.6 | | Fire and allied lines | 49.7% | 61.9% | -12.2 | | Automobile | 57.9% | 77.6% | -19.7 | | Workers' compensation | 56.1% | 62.2% | -6.1 | | Fidelity and surety | 36.1% | 47.6% | -11.5 | [Investments](index=70&type=section&id=Investments) The investment portfolio grew to **$2.2 billion**, with net unrealized losses improving to **$44.7 million** due to falling interest rates - The investment portfolio increased by **$107 million** to **$2.2 billion** since December 31, 2024[194](index=194&type=chunk) - Net unrealized investment losses, after tax, decreased from **$72.2 million** at year-end 2024 to **$44.7 million** at June 30, 2025, primarily due to falling bond market interest rates[201](index=201&type=chunk) - The weighted average effective duration of the fixed maturity portfolio was **4.12 years** at June 30, 2025, slightly down from 4.22 years at December 31, 2024[200](index=200&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with **$89.1 million** in operating cash flow and stockholders' equity increasing to **$845.7 million** - Stockholders' equity increased to **$845.7 million** at June 30, 2025, from $781.5 million at December 31, 2024. Book value per share increased by **7.7%** to **$33.18**[223](index=223&type=chunk) - The company has access to a credit facility from FHLB Des Moines with a borrowing capacity of up to **$499.6 million**, with no outstanding balance as of June 30, 2025[107](index=107&type=chunk)[219](index=219&type=chunk) - The company has a remaining potential contractual obligation of **$21.1 million** through 2030 for capital contributions to its limited liability partnership investments[222](index=222&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in the company's market risk components during Q2 2025, as detailed in the 2024 Annual Report - There were no material changes in the company's market risk components for the three-month period ended June 30, 2025[225](index=225&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[226](index=226&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[228](index=228&type=chunk) Part II. Other Information [Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially affect its financial condition or operations - Management believes all pending legal proceedings as of June 30, 2025, are ordinary and routine and are not expected to have a material adverse effect on the Company[230](index=230&type=chunk) [Risk Factors](index=80&type=page&id=Item%201A.%20Risk%20Factors) No material changes occurred to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - The company's business is subject to risks identified in its Annual Report on Form 10-K for the year ended December 31, 2024[231](index=231&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock in Q2 2025, but remains authorized to purchase up to one million shares - The Company did not repurchase any shares of its common stock during the three-month period ended June 30, 2025[233](index=233&type=chunk) - As of June 30, 2025, the company is authorized to purchase up to **one million additional shares** of its common stock[233](index=233&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - During the second quarter of 2025, no directors or officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements[236](index=236&type=chunk) [Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data files