NASDAQ$UFCS

United Fire Group Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Reported mixed results with progress in positioning UFG for superior financial and operational performance.

United Fire Group reported a net income of $0.7 million, or $0.03 per diluted share, and an adjusted operating income of $0.08 per diluted share for the first quarter of 2023. Net premiums written increased by 13.4%, driven by growth in core commercial lines, surety, and assumed reinsurance business.

  • Net income was $0.7 million.
  • Net premiums written increased 13.4% compared to Q1 2022, representing four consecutive quarters of growth.
  • GAAP combined ratio was 104.0%, including an underlying loss ratio of 63.5%, catastrophe loss ratio of 4.6%, and unfavorable prior period reserve development of 0.1%.
  • Net investment income increased 12.8% compared to Q1 2022, totaling $12.7 million.

Headline financials

Total Revenue

$267M

Previous: $245M+9.0%
EPS (adj)

$0.08

Previous: $1.13-92.9%
Combined Ratio

104.0%

Previous: 89.5%+16.2%
Underlying Combined Ratio

99.3%

No prior period
Book Value Per Share

$29.80

No prior period
Free Cash Flow

$694K

Previous: $28.3M-97.6%
Net Income

$694K

Previous: $28.3M-97.6%
Operating Income

-$2.47M

Previous: $32.4M-107.6%
Gross Profit

$32.7M

Previous: $64.2M-49.1%
Cash & Equivalents

$53.2M

Previous: $110M-51.4%
Total Assets

$2.9B

Previous: $2.93B-1.1%
Stock-Based Comp

$1.08M

Previous: $979K+9.9%

Revenue & EPS history

United Fire Group · Revenue · Quarterly

$267M

Q1 2023+9%vs Q1 2022
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

United Fire Group · $211M total across 2 segments · Q1 2023

  • Commercial Lines
    $209M+1.8%
  • Personal Lines
    $1.96M+102.4%

Forward guidance

UFG will continue to execute its strategic plan throughout 2023, focusing on delivering superior financial and operational performance over time.

Tailwinds

  • Strategic plan designed to achieve long-term profitability.
  • Strategic plan designed to achieve diversified growth.
  • Strategic plan designed to achieve continuous innovation.
  • Intense focus on reducing the expense ratio.
  • Attracting and retaining talent to evolve into a top-performing commercial lines insurer.

Headwinds

  • The combined loss and expense ratio deteriorated 15 points compared to the first quarter of 2022.
  • Increase in the underlying loss ratio impacted by emerging loss trends.
  • Adverse prior period development in the third and fourth quarters of 2022.
  • Increased ceded reinsurance costs and higher retentions across the broader portfolio.
  • Expense ratio increased 2 points compared to the first quarter of 2022 due to strategic talent investment and higher technology costs.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

-0.0%

Avg return

Earnings day

+1.1%

Avg return

5 days after

+2.4%

Avg return

30 days after

43%

28 / 65 earnings

Positive

+27.4%

Q3 2024

Best reaction

-14.6%

Q4 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+8.0%+21.7%+13.4%
Q4 2025+7.2%+8.9%+2.0%
Q3 2025+14.7%+17.3%+13.0%
Q1 2025-4.6%-2.4%-0.7%
Q4 2024+2.2%+5.7%+16.2%
Q3 2024+27.4%+25.3%+62.4%
Q2 2024-9.4%-8.1%-1.6%
Q1 2024+1.4%+1.8%-8.8%
Q4 2023+12.0%+9.1%-2.6%
Q3 2023-2.5%-1.2%+5.4%
Q2 2023-3.2%-4.4%-8.5%
Q1 2023-10.1%-10.6%-14.0%
Q4 2022-6.4%+1.0%-7.9%
Q3 2022-4.3%+3.4%+6.9%
Q2 2022-13.8%-9.4%-9.6%
Q1 2022-2.3%-4.7%+4.4%
Q4 2021+26.2%+26.8%+23.7%
Q3 2021-3.9%-2.3%-4.1%
Q2 2021+3.9%+9.5%+3.4%
Q1 2021+7.0%+5.4%+1.3%
Q4 2020-2.6%-4.3%+12.9%
Q3 2020-7.7%+0.7%+12.7%
Q2 2020+4.4%+12.1%-4.7%
Q1 2020-0.9%-1.7%+15.7%
Q4 2019-0.0%-3.4%-31.1%
Q3 2019-4.7%-5.7%-7.6%
Q2 2019-10.2%-11.5%-12.3%
Q1 2019+6.6%+6.2%+9.0%
Q4 2018-8.9%-13.3%-21.3%
Q3 2018-8.3%-9.9%-2.3%
Q2 2018-11.9%-11.5%-9.8%
Q1 2018+3.5%+1.4%+13.7%
Q4 2017+8.0%+10.9%+18.9%
Q3 2017+1.4%+0.1%+0.1%
Q2 2017-1.4%-1.8%-5.6%
Q1 2017-0.9%-1.8%+0.9%
Q4 2016-14.6%-14.3%-10.0%
Q3 2016-3.3%-1.7%+15.2%
Q2 2016-0.3%+1.3%+3.6%
Q1 2016-11.7%
Q4 2015+8.2%
Q3 2015+8.3%
Q2 2015+3.0%
Q1 2015+0.7%
Q4 2014-1.6%
Q3 2014-3.9%
Q2 2014-0.8%
Q1 2014-2.0%
Q4 2013+9.4%
Q3 2013-9.6%
Q2 2013+4.9%
Q1 2013+2.1%
Q4 2012+0.8%
Q3 2012-5.3%
Q2 2012+14.3%
Q1 2011+0.8%
Q1 2012+1.8%
Q4 2009-0.7%
Q4 2011-0.7%
Q4 2010-0.7%
Q3 2010+1.8%
Q3 2011+1.8%
Q2 2011-8.7%
Q2 2010-8.7%
Q1 2010-1.6%

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