UFG(UFCS) - 2025 Q3 - Quarterly Results

Financial Performance - Net income increased by $19.4 million to $39.2 million, or $1.49 per diluted share, compared to the prior year[2] - Adjusted operating income rose by $18.4 million to $39.5 million, or $1.50 per diluted share[2] - Net income for Q3 2025 was $39.19 million, compared to $19.75 million in Q3 2024, representing a 98.5% increase[26] - Adjusted operating income for Q3 2025 was $39.51 million, up from $21.08 million in Q3 2024, reflecting an increase of 87.2%[26] - Total revenues for the nine months ended September 30, 2025, were $1.02 billion, compared to $920.13 million for the same period in 2024, marking an increase of 11%[33] Premium Growth - Net written premium grew by 7% to $328.2 million, with core commercial lines net written premium increasing by 22%[3][12] - Net written premium for commercial lines in Q3 2025 was $272.83 million, a 11.5% increase from $244.81 million in Q3 2024[35] - For the nine months ended September 30, 2025, total net earned premium reached $951,644,000, up from $868,613,000 in the same period of 2024, marking a 9.5% increase[41] - For the three months ended September 30, 2025, total net earned premium was $328,431,000, an increase from $300,185,000 in the same period of 2024, representing a growth of 9.1%[39] Investment Performance - Net investment income increased by 6.3% to $26.0 million, with fixed maturity income growing by 17%[4][6] - The company reported a net investment loss of $0.41 million in Q3 2025, compared to a loss of $1.68 million in Q3 2024, showing improvement in investment performance[33] Loss Ratios - The combined ratio improved by 6.3 points to 91.9%, driven by an underlying loss ratio of 56.0% and a catastrophe loss ratio of 1.3%[4][13] - The underlying loss ratio improved to 60.5% in Q3 2025 from 62.3% in Q3 2024, indicating better loss management[25] - The net loss ratio for total commercial lines was 56.7% for Q3 2025, compared to 59.9% in Q3 2024, indicating an improvement in loss management[39] - The net loss ratio for total personal lines improved to 45.2% in the first nine months of 2025 from 33.8% in the same period of 2024[41] - The net loss ratio for assumed reinsurance was 63.1% for the nine months ended September 30, 2025, compared to 64.4% in the same period of 2024, showing a slight improvement[41] - The company reported a total net loss ratio of 60.1% for the nine months ended September 30, 2025, down from 65.4% in the same period of 2024, indicating improved overall performance[41] Shareholder Returns - Book value per share increased by $4.42 to $35.22, reflecting a 14.4% increase from December 31, 2024[17] - Adjusted book value per share increased to $36.34 as of September 30, 2025, up from $33.64 at the end of 2024, reflecting a growth of 8.0%[30] - The company declared and paid a cash dividend of $0.16 per share during the third quarter[18] Future Outlook - The company anticipates continued growth in net written premiums and improved profitability in the upcoming quarters, driven by strategic initiatives and market expansion efforts[24]