UFG(US:UFCS)2025-05-07 18:44Financial Performance - Net premiums earned for Q1 2025 were $308,411,000, an increase of 9.8% from $280,859,000 in Q1 2024[141] - Total revenues for Q1 2025 reached $331,115,000, reflecting an 11.9% growth compared to $295,999,000 in Q1 2024[141] - Net income for Q1 2025 was $17,700,000, a 31.1% increase from $13,502,000 in Q1 2024[141] - Direct written premium increased by 16.7% to $331,927,000 in Q1 2025 from $284,498,000 in Q1 2024[144] - Net written premium for Q1 2025 was $335,376,000, a 4.4% increase from $321,271,000 in Q1 2024[144] - Direct earned premium increased by 15.7% to $300,577,000 for the three months ended March 31, 2025, compared to $259,850,000 in 2024[146] - Net earned premium rose by 9.8% to $308,411,000 in Q1 2025 from $280,859,000 in Q1 2024[146] - Adjusted operating income for Q1 2025 was $18.3 million, up from $14.5 million in Q1 2024, driven by a $27.6 million increase in net earned premium and a 2.9-point decrease in the underlying loss ratio to 56.5%[179] Losses and Expenses - Losses and loss settlement expenses for Q1 2025 were $189,696,000, up 5.6% from $179,646,000 in Q1 2024[141] - The underlying loss ratio (non-GAAP) improved to 56.5% in Q1 2025 from 59.4% in Q1 2024[141] - Loss and loss settlement expenses increased by $10.1 million to $189,696,000 in Q1 2025, with a net loss ratio improving to 61.5% from 64.0% in Q1 2024[154] - The expense ratio rose to 37.9% in Q1 2025 from 34.9% in Q1 2024, primarily due to non-recurring expenses related to a new policy administrative system[174] - The underwriting expense ratio increased by 3.0 points to 37.9% in Q1 2025, primarily due to non-recurring expenses related to the development of a new policy administrative system[179] Investment Performance - Investment income, net of investment expenses, rose by 43.5% to $23,458,000 in Q1 2025 from $16,342,000 in Q1 2024[141] - Net investment income increased by $7.1 million to $23.5 million in Q1 2025, driven by higher income from fixed income portfolios[150] - The investment portfolio increased to $2.2 billion as of March 31, 2025, from $2.1 billion at December 31, 2024, reflecting a $72 million increase[183] - The weighted average effective duration of the fixed maturity securities portfolio was 4.11 years as of March 31, 2025, down from 4.22 years at December 31, 2024[189] - Net unrealized investment losses improved to $51.7 million as of March 31, 2025, compared to $72.2 million at December 31, 2024, due to a slight decrease in bond market interest rates[190] Cash Flow and Dividends - Cash provided by operating activities was $35.7 million for Q1 2025, compared to $36.2 million for Q1 2024, driven by premium and investment income[200] - Net cash flows used in investing activities were $48.2 million for Q1 2025, compared to cash inflows of $83.9 million for Q1 2024, with investment purchases totaling $122.9 million in Q1 2025[203] - Dividends paid to shareholders totaled $4.1 million in Q1 2025, slightly up from $4.0 million in Q1 2024, continuing a practice of quarterly cash dividends since March 1968[206] - The company has the ability to make a maximum of $51.9 million in dividend payments without prior regulatory approval as of March 31, 2025[209] - Shareholder dividends amounted to $4.1 million in the first quarter of 2025[211] Market and Risk Factors - Approximately 49.1% of property and casualty premiums were written in Texas, California, Iowa, Missouri, and New Jersey for the three-month period ended March 31, 2025[134] - Catastrophe losses in Q1 2025 were $15.4 million, contributing 5.0 percentage points to the combined ratio, which is below the five-year historical average[158] - There were no material changes in market risk components for the three-month period ended March 31, 2025[213] Equity and Book Value - Stockholders' equity increased to $817.7 million at March 31, 2025, up from $781.5 million at December 31, 2024[211] - The Company's book value per share rose to $32.13, an increase of $1.33 per share, or 4.3 percent, from December 31, 2024[211] - Net income for the first three months of 2025 was $17.7 million, contributing to the increase in stockholders' equity[211] - There was a reduction in net unrealized losses of $20.5 million on fixed maturity securities during the same period[211] - The remaining potential contractual obligation for capital contributions was $22.0 million as of March 31, 2025[210] Management and Agreements - The company entered into an investment management agreement with New England Asset Management effective February 1, 2024, to provide investment management services[182]