UFG(UFCS) - 2025 Q1 - Quarterly Results

Financial Performance - Net income for Q1 2025 increased by 31% to $17.7 million, or $0.67 per diluted share, compared to Q1 2024[2] - Adjusted operating income rose by 27% to $18.3 million, or $0.70 per diluted share, compared to the same period last year[2] - Net income for Q1 2025 was $17,700,000, an increase of 31.5% compared to $13,502,000 in Q1 2024[26] - Adjusted operating income for Q1 2025 was $18,296,000, up 26.5% from $14,452,000 in Q1 2024[26] - Total revenues for Q1 2025 were $331,115,000, reflecting a 12.0% increase from $295,999,000 in Q1 2024[33] Premiums and Underwriting - Net written premium grew by 4% to a record $335.4 million, despite unusual ceded reinsurance premium adjustments reducing growth by 3 points[3][6] - Net written premium for Q1 2025 was $335,376,000, an increase of 4.4% compared to $321,271,000 in Q1 2024[34] - Net earned premium increased to $308,411,000 in Q1 2025, a rise of 9.8% from $280,859,000 in Q1 2024[33] - Core commercial renewal premiums increased by 11.7%, with rates rising by 9.7%[4][12] Investment Income - Net investment income surged by 44% to $23.5 million, attributed to strong fixed maturity income and improved limited partnership valuations[3][13] - The company reported net investment income of $23,458,000 in Q1 2025, up 43.3% from $16,342,000 in Q1 2024[33] Loss Ratios and Expenses - The combined ratio for Q1 2025 was 99.4%, an increase of 0.5 points from 98.9%, driven by a catastrophe loss ratio of 5.0%[3][15] - The underlying loss ratio improved by 2.9 points to 56.5%, reflecting favorable rate achievement and lower frequency[15] - The underlying loss ratio for Q1 2025 was 61.5%, compared to 64.0% in Q1 2024, indicating improved operational efficiency[38] - Losses and loss settlement expenses totaled $189,696,000 in Q1 2025, compared to $179,646,000 in Q1 2024[33] - The underwriting expense ratio increased by 3.0 points to 37.9%, mainly due to non-recurring expenses related to a new policy administration system[15] Shareholder Equity and Book Value - Book value per share increased by $1.33 to $32.13 as of March 31, 2025, representing a 4.3% increase from the end of 2024[17] - Adjusted book value per share rose to $34.16 as of March 31, 2025, from $33.64 as of December 31, 2024[30] - The company’s shareholders' equity increased to $817,662,000 as of March 31, 2025, from $781,531,000 as of December 31, 2024[30] Dividends - The company declared a cash dividend of $0.16 per share, continuing its quarterly dividend payments since March 1968[18]