UFG(US:UFCS)2025-11-05 18:07Financial Performance - Net premiums earned for Q3 2025 were $328,431,000, an increase of 9.4% from $300,185,000 in Q3 2024[129]. - Total revenues for the nine months ended September 30, 2025, reached $1,020,606,000, up from $920,132,000 in the same period of 2024, reflecting an increase of 10.9%[129]. - For the nine-month period ended September 30, 2025, net income was $79,837,000, compared to $30,515,000 in the same period of 2024, representing a substantial increase of 161.5%[129]. - Direct written premium for the three months ended September 30, 2025, was $311,878,000, an increase of 5.5% compared to $295,729,000 in 2024, while for the nine months, it rose by 11.6% to $1,005,908,000 from $901,286,000[131]. - Net earned premium for the three months ended September 30, 2025, was $328,431,000, reflecting a 9.4% increase from $300,185,000 in 2024, and for the nine months, it increased by 9.6% to $951,644,000 from $868,613,000[133]. - For the nine months ended September 30, 2025, total net earned premium increased to $951.6 million, up from $868.6 million in the same period of 2024, representing an increase of 9.5%[168]. Loss Ratios and Underwriting Performance - The net loss ratio improved to 57.3% in Q3 2025 from 62.3% in Q3 2024, indicating better loss management[129]. - The combined ratio for Q3 2025 was 91.9%, a significant improvement from 98.2% in Q3 2024, demonstrating enhanced underwriting performance[129]. - The underlying loss ratio for Q3 2025 was 56.0%, down from 57.9% in Q3 2024, indicating improved operational efficiency[129]. - The net loss ratio for commercial lines in the three months ended September 30, 2025, was 56.7%, compared to 59.9% in 2024, indicating improved performance across major lines[148]. - The net loss ratio for commercial lines improved to 59.7% in the nine months ended September 30, 2025, compared to 66.1% in the same period of 2024, reflecting a 6.4 percentage point improvement[149]. - The net loss ratio for workers' compensation improved by 35.2 points in the third quarter of 2025 compared to the same period in 2024[156]. - The net loss ratio for fidelity and surety improved by 4.0 points in the third quarter of 2025 compared to the same period in 2024[157]. - The net loss ratio for reinsurance assumed improved by 18.3 points in the third quarter of 2025 compared to the same period in 2024[158]. Investment Performance - Net investment income increased to $25,992,000 in Q3 2025, compared to $24,459,000 in Q3 2024, marking a growth of 6.3%[129]. - Net investment income for the third quarter of 2025 was $26.0 million, an increase of $1.5 million compared to the same period in 2024, while for the nine-month period, it rose to $71.1 million, up by $12.3 million[137][138]. - The investment portfolio increased to $2.3 billion at September 30, 2025, up from $2.1 billion at December 31, 2024, marking a growth of $178 million[168]. - The carrying value of fixed maturity securities as of September 30, 2025, was $2,016.4 million, with AAA rated securities comprising 28.9% and AA rated securities 38.6%[171]. - The weighted average effective duration of the fixed maturity securities portfolio increased to 4.29 years as of September 30, 2025, from 4.22 years at December 31, 2024[174]. - Net unrealized investment losses improved to $28.5 million as of September 30, 2025, compared to $72.2 million at December 31, 2024, due to a decrease in bond market interest rates[175]. Operational Efficiency - The underwriting expense ratio decreased to 34.6% in the third quarter of 2025, down from 35.9% in the same period of 2024, indicating improved operational efficiency[160]. - The company reported a favorable reserve development of (0.5) for the nine months ended September 30, 2025, compared to no unfavorable development in the same period of 2024[129]. - The company experienced favorable reserve development of $0.1 million and $5.1 million for prior accident years during the three- and nine-month periods ended September 30, 2025, respectively[144]. Cash Flow and Equity - Cash provided by operating activities was $149.9 million for the nine-month period ended September 30, 2025, down from $184.0 million in the same period of 2024[186]. - Net cash flows used in investing activities were $133.6 million for the nine-month period ended September 30, 2025, compared to $143.1 million for the same period in 2024[189]. - Stockholders' equity increased to $898.7 million at September 30, 2025, from $781.5 million at December 31, 2024, with a book value per share of $35.22, reflecting a 14.4% increase[195]. - Dividends paid to shareholders remained consistent at $12.2 million for both the nine-month periods ended September 30, 2025, and 2024[192]. - The company anticipates sufficient cash flows to meet future liquidity needs, with cash and cash equivalents including $47.8 million in money market accounts as of September 30, 2025[185]. Strategic Changes - The company has discontinued exposure to direct personal lines of business as of September 30, 2025, following its strategic withdrawal in 2020[112]. - Approximately 48.9% of property and casualty premiums were written in Texas, California, Iowa, Missouri, and New Jersey for the nine-month period ended September 30, 2025[123]. - Assumed premiums decreased by $5.1 million and $5.4 million in the three- and nine-month periods ended September 30, 2025, respectively, due to targeted management actions[135]. - The company has a remaining potential contractual obligation of $17.7 million related to capital contributions for limited liability partnership investments as of September 30, 2025[194].