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UNITED FIRE GROUP, INC.
ANNUAL REPORT
2O23
United Fire Group, Inc. 2023 Annual Report
About UFG Insurance
Founded in 1946, UFG Insurance is a successful publicly traded company with over 75 years of local market
expertise and a growing national footprint. We offer commercial insurance, excess and surplus lines and surety
bonds, partnering with approximately 1,000 independent agency partners across the country.
Our company is headquartered in Cedar Rapids, Iowa, with offices in Arizona, California, Colorado, New Jersey
and Texas. With more than 850 employees, we pride ourselves on delivering deep expertise, personal relationships
and responsive service to our agents and policyholders.
At UFG, we are committed to achieving superior financial and operational performance, using our nearly eight
decades of experience to successfully guide us through market cycles and industry challenges. We hold a financial
strength rating of    A-    (Excellent) from AM Best Company that was affirmed in August 2023, reflecting our long-term
balance sheet strength.
Annual meeting of shareholders
United Fire Group, Inc.   s (UFG) annual meeting of shareholders will be held at 10 a.m. CT on Wednesday, May 15, 2024.
The meeting is being held virtually online via live audio webcast from the company   s headquarters at 118 2nd Ave SE,
Cedar Rapids, IA 52401. You will be able to attend virtually, submit questions and vote online by logging on to
https://meetnow.global/MZUWQ5V.
Our Annual Report on Form 10-K for 2023 is filed with the Securities and Exchange Commission and is available
(without exhibits) to shareholders, free of charge, upon written or oral request to:
Investor Relations
United Fire Group, Inc.
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone: 319-399-5700
or
Registrar and Transfer Agent
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Board of directors
James W. Noyce, Chairman of the Board
John-Paul E. Besong
Scott L. Carlton
Brenda K. Clancy
Christopher R. Drahozal
Matthew R. Foran
Mark A. Green
Kevin J. Leidwinger
Lura E. McBride
George D. Milligan
Susan E. Voss
United Fire Group, Inc. 2023 Annual Report
Letter to shareholders
Dear fellow shareholders,
process improvement. In early 2024, we combined
our information technology and business enablement
teams under a new chief administrative officer to
further improve how we leverage technology across
our business, streamline processes and drive
efficiency across UFG.
2023 was not without its share of challenges for our
company, but we persevered through each quarter and
made significant progress in positioning UFG to deliver
superior financial and operational performance over time.
In last year   s letter, I discussed the strategic actions taken
at UFG in the years prior to my appointment as CEO in
August 2022. From exiting the subscale personal lines
business to completing a re-underwriting exercise of the
core commercial business, these actions were effective
in laying the groundwork for our ongoing evolution.

In 2023, we continued to build a strong foundation for
growth and profitability, taking numerous actions aimed
at deepening our expertise, driving operational efficiency,
and evolving for the future, including:





Strengthening our engagement with distribution
partners to restore growth across the core
commercial portfolio while continuing to act on
underperforming accounts across our business
units for improved profitability.
Appointing UFG   s first chief actuary to introduce
greater actuarial rigor and strategic decision-making
into our processes. Over the past year, the actuarial
team added new leaders for pricing, reserving, and
reinsurance, allowing for deeper insights and more
informed portfolio management.
Establishing small business, middle market, and
construction business units to better serve the needs
of UFG   s agents and policyholders. Additionally, we
strengthened our field organization with the creation
of a new head of field operations role focused
on driving underwriting execution and fostering
productive distribution relationships.
Bolstering our home office underwriting organization
with the appointment of a new chief underwriting
officer, as well as industry segment and line of
business leaders, to deepen our technical skills,
enhance our industry segment knowledge, and
improve our products.
Creating a business enablement organization
focused on underwriting governance, quality
assurance, applied tools and technology, and




Transitioning our claims structure from a regional
operating model segmented by geographic location
to a specialized operating model segmented by claim
type. This new structure has led to improvements
in key operational metrics. We also elevated the
customer experience by establishing a claims
advocate team dedicated to assisting our agent
partners and insureds with their claims needs.
Reducing and optimizing the company   s catastrophe
footprint by refining our underwriting guidelines and
risk limits for property exposed to Florida hurricanes
and California earthquakes, resulting in significant
reinsurance cost savings. We also succeeded in
growing our property business in geographies that
are less exposed to severe convective storms.
Evolving our capital management, premium planning,
and expense budget frameworks to manage the
business more effectively. In addition to disciplined
vacancy management, we completed a voluntary
early retirement program in the fourth quarter
that contributed to a 22% reduction in enterprise
workforce at the end of 2023, which we expect will
provide more impactful benefits to the expense ratio
in 2024.
Investing in technology and staffing for our enterprise
risk management framework, enabling the company
to more comprehensively manage our enterprise risk
profile in compliance with regulatory requirements.
Modernizing our technology with the introduction
of a new small business quoting platform and
accompanying business owners policy (BOP) to
agents in 12 additional states in 2023, with remaining
states planned for launch in 2024. By the end of 2024,
we also plan to implement a new policy administration
system at UFG, with all core commercial product lines
to be fully enabled by the end of 2025.
United Fire Group, Inc. 2023 Annual Report
Collectively, these accomplishments demonstrate our
commitment to advancing UFG   s five strategic pillars
of long-term profitability, diversified growth, continuous
innovation, retaining and attracting talent, and expense
management in everything we do.
In addition, we understand that to achieve superior
financial and operational performance, we must skillfully
navigate the ever-changing economic and industry
landscapes, as well as embrace a continuous change
mindset. As these initiatives take hold at UFG, we
expect them to position us to operate as a more agile
and nimble company and deliver positive, sustainable
financial results.
2023 FINANCIAL PERFORMANCE
UFG achieved strong premium growth and investment
results throughout 2023, yet our full-year financial results
were below expectations with a reported net loss of $1.18
per diluted share, primarily due to reserve strengthening
and elevated surety losses. We were pleased to end
the year with improved results in the fourth quarter,
delivering the highest level of quarterly profit and lowest
underlying loss ratio of 2023, reflecting early signs of
profit improvement in our core commercial lines.
To recap our full year results compared to 2022,
net premiums written increased 8.4%, led by our
core commercial and assumed reinsurance business
units. The overall average change in renewal premiums
was 9.6%, with 7.1% from rate increases and 2.5%
from exposure changes as we remain focused on
price adequacy across all lines of business. Renewal
price increases were higher when excluding the
workers compensation line of business, with average
change in renewal premiums of 10.7%, with 8.3%
from rate changes and 2.4% from exposure changes.
On an annual basis, premium retention was 82.6%,
compared to 77.8% in 2022, which we believe
supports healthy growth while allowing our underwriters
to address accounts that no longer meet our pricing
needs or risk profile.
The combined ratio was 109.3% in 2023, compared to
101.5% in 2022, driven primarily by a 7.4-point increase
in the loss ratio from 67.0% to 74.4%. The loss ratio
was impacted by 6.0% due to reserve strengthening
associated with our excess and surplus lines excess
casualty business, as well as adverse pressure from the
continued impact of social inflation on the liability lines
of business. Catastrophe losses contributed 6.2% to
the loss ratio in 2023, an improvement from 7.7% in
2022. The underlying loss ratio increased by 3.0 points
to 62.2% in 2023 as improving profitability from our core
commercial lines was offset by elevated losses in our
surety business.
The underwriting expense ratio of 34.9% for 2023
was 0.4 points higher than last year, primarily due to
changes to our post-retirement benefit plans that
provided a non-recurring benefit post-2022 and
increased reinsurance premiums in 2023. These were
primarily offset by our ongoing actions to sustainably
reduce expenses and drive premium growth.
Full-year net investment income of $59.6 million rose
32.7% from 2022, driven largely by higher interest rates
increasing interest income on fixed maturities and
increased valuation on limited partnership investments.
While the year fell short of our expectations from
a profitability standpoint, we are pleased with the
incremental progress we made throughout 2023.
We firmly believe the actions we have taken are not
yet fully reflected in our financial results and remain
confident in the path ahead as we continue to execute
strategies for improved profitability.
BALANCE SHEET STRENGTH
As of December 31, 2023, our balance sheet remained
strong, with $3.1 billion in total assets, $734 million in
total stockholders    equity and a $1.9 billion investment
portfolio, of which 89% is allocated to a high-quality
fixed income book. Book value per common share was
$29.04 as of December 31, 2023.
Although our financial strength rating was downgraded
from    A    (Excellent) to    A-    (Excellent) in August 2023,
AM Best recognized our    very strong    balance
sheet and revised our outlook to    stable    given the
initiatives underway to improve performance. We are
fully committed to achieving the level of performance
commensurate with an    A    rating and will work diligently
to regain our longstanding    A    (Excellent) financial
strength rating with AM Best in the years ahead.
United Fire Group, Inc. 2023 Annual Report
As we work to continually strengthen the balance sheet,
I am pleased to share that we successfully renewed our
core excess of loss, property catastrophe, and surety
reinsurance programs for 2024. Overall, we reduced our
all-perils property catastrophe retention to $20.0 million
by fully placing the first treaty layer and further reduced
our California earthquake retention to $10.0 million,
improving other terms and conditions with a modest
increase in risk adjusted pricing that outperformed
our expectations.
We also started the new year with the announcement of
our partnership with New England Asset Management
(NEAM) to oversee our investment portfolio. Partnering
with NEAM enables us to uphold our conservative
investment practices and high-quality investment portfolio,
while benefiting from a cost-effective and scalable way
to manage assets and maximize returns going forward.
In 2023, we paid total quarterly dividends totaling $0.64
per share, returning $16.2 million to our shareholders
over the course of the year. UFG has a 56-year history
of paying dividends to our shareholders, with the first
quarter of 2024 marking our 224th consecutive quarter.
COMMUNITY SUPPORT
Ingrained in our culture is an important promise of
community support that we fulfill through the UFG
Foundation, a private foundation devoted to enhancing
communities. Since its establishment 24 years ago, the
UFG Foundation has awarded more than $16.0 million in
nonprofit grants and scholarship awards, showing that
insurance is not our only passion at UFG.
Each year, we are also pleased to celebrate the noble
volunteer work of our employees and agents with the
   Scotty McIntyre Jr. Go Beyond    award, named in honor
Sincerely,
Kevin J. Leidwinger
UFG President and CEO
of our company   s founding family and their legacy of
giving. This award recognizes individuals for their
outstanding community service, with UFG donating
$5,000 to a charity of the winner   s choice.
Since 2016, UFG employees have volunteered more
than 11,000 hours at over 100 organizations across the
country, inspiring us with their commitment to making a
positive difference in their communities.
CARRYING POSITIVE MOMENTUM INTO 2024
As I reflect on my 18+ months at the helm of UFG,
I remain tremendously proud of our people for their
dedication and adaptability during our ongoing evolution.
Within our walls, we have blended new talent and
knowledge with existing leadership and insight, allowing
us to evolve for the future while preserving our company   s
deeply valued culture.
Looking ahead to 2024, we are committed to achieving
superior performance by delivering deep underwriting
expertise to our partners and policyholders with the
personal relationships and responsive service that truly
set us apart in the industry today.
We made significant progress on our strategic journey
in 2023 and aim to carry this positive momentum into
2024. Through continued robust execution of our strategic
initiatives and strong adherence to our core strategic
pillars, we believe we are exceptionally well positioned
to deliver improved performance in the year ahead.
Whether you are our employee, distribution partner,
policyholder, or shareholder, I thank you for choosing
UFG. We are grateful for your trust and confidence and
are excited to continue to move our company boldly
forward in the year ahead.
 • shareholder letter icon 4/2/2024 Letter Continued (Full PDF)
 • stockholder letter icon 4/4/2023 UFCS Stockholder Letter
 • stockholder letter icon More "Insurance Brokers" Category Stockholder Letters
 • Benford's Law Stocks icon UFCS Benford's Law Stock Score = 93


UFCS Shareholder/Stockholder Letter Transcript:

UNITED FIRE GROUP, INC.
ANNUAL REPORT
2O23

United Fire Group, Inc. 2023 Annual Report
About UFG Insurance
Founded in 1946, UFG Insurance is a successful publicly traded company with over 75 years of local market
expertise and a growing national footprint. We offer commercial insurance, excess and surplus lines and surety
bonds, partnering with approximately 1,000 independent agency partners across the country.
Our company is headquartered in Cedar Rapids, Iowa, with offices in Arizona, California, Colorado, New Jersey
and Texas. With more than 850 employees, we pride ourselves on delivering deep expertise, personal relationships
and responsive service to our agents and policyholders.
At UFG, we are committed to achieving superior financial and operational performance, using our nearly eight
decades of experience to successfully guide us through market cycles and industry challenges. We hold a financial
strength rating of    A-    (Excellent) from AM Best Company that was affirmed in August 2023, reflecting our long-term
balance sheet strength.
Annual meeting of shareholders
United Fire Group, Inc.   s (UFG) annual meeting of shareholders will be held at 10 a.m. CT on Wednesday, May 15, 2024.
The meeting is being held virtually online via live audio webcast from the company   s headquarters at 118 2nd Ave SE,
Cedar Rapids, IA 52401. You will be able to attend virtually, submit questions and vote online by logging on to
https://meetnow.global/MZUWQ5V.
Our Annual Report on Form 10-K for 2023 is filed with the Securities and Exchange Commission and is available
(without exhibits) to shareholders, free of charge, upon written or oral request to:
Investor Relations
United Fire Group, Inc.
118 Second Avenue SE
Cedar Rapids, Iowa 52401
Telephone: 319-399-5700
or
Registrar and Transfer Agent
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Board of directors
James W. Noyce, Chairman of the Board
John-Paul E. Besong
Scott L. Carlton
Brenda K. Clancy
Christopher R. Drahozal
Matthew R. Foran
Mark A. Green
Kevin J. Leidwinger
Lura E. McBride
George D. Milligan
Susan E. Voss

United Fire Group, Inc. 2023 Annual Report
Letter to shareholders
Dear fellow shareholders,
process improvement. In early 2024, we combined
our information technology and business enablement
teams under a new chief administrative officer to
further improve how we leverage technology across
our business, streamline processes and drive
efficiency across UFG.
2023 was not without its share of challenges for our
company, but we persevered through each quarter and
made significant progress in positioning UFG to deliver
superior financial and operational performance over time.
In last year   s letter, I discussed the strategic actions taken
at UFG in the years prior to my appointment as CEO in
August 2022. From exiting the subscale personal lines
business to completing a re-underwriting exercise of the
core commercial business, these actions were effective
in laying the groundwork for our ongoing evolution.

In 2023, we continued to build a strong foundation for
growth and profitability, taking numerous actions aimed
at deepening our expertise, driving operational efficiency,
and evolving for the future, including:





Strengthening our engagement with distribution
partners to restore growth across the core
commercial portfolio while continuing to act on
underperforming accounts across our business
units for improved profitability.
Appointing UFG   s first chief actuary to introduce
greater actuarial rigor and strategic decision-making
into our processes. Over the past year, the actuarial
team added new leaders for pricing, reserving, and
reinsurance, allowing for deeper insights and more
informed portfolio management.
Establishing small business, middle market, and
construction business units to better serve the needs
of UFG   s agents and policyholders. Additionally, we
strengthened our field organization with the creation
of a new head of field operations role focused
on driving underwriting execution and fostering
productive distribution relationships.
Bolstering our home office underwriting organization
with the appointment of a new chief underwriting
officer, as well as industry segment and line of
business leaders, to deepen our technical skills,
enhance our industry segment knowledge, and
improve our products.
Creating a business enablement organization
focused on underwriting governance, quality
assurance, applied tools and technology, and




Transitioning our claims structure from a regional
operating model segmented by geographic location
to a specialized operating model segmented by claim
type. This new structure has led to improvements
in key operational metrics. We also elevated the
customer experience by establishing a claims
advocate team dedicated to assisting our agent
partners and insureds with their claims needs.
Reducing and optimizing the company   s catastrophe
footprint by refining our underwriting guidelines and
risk limits for property exposed to Florida hurricanes
and California earthquakes, resulting in significant
reinsurance cost savings. We also succeeded in
growing our property business in geographies that
are less exposed to severe convective storms.
Evolving our capital management, premium planning,
and expense budget frameworks to manage the
business more effectively. In addition to disciplined
vacancy management, we completed a voluntary
early retirement program in the fourth quarter
that contributed to a 22% reduction in enterprise
workforce at the end of 2023, which we expect will
provide more impactful benefits to the expense ratio
in 2024.
Investing in technology and staffing for our enterprise
risk management framework, enabling the company
to more comprehensively manage our enterprise risk
profile in compliance with regulatory requirements.
Modernizing our technology with the introduction
of a new small business quoting platform and
accompanying business owners policy (BOP) to
agents in 12 additional states in 2023, with remaining
states planned for launch in 2024. By the end of 2024,
we also plan to implement a new policy administration
system at UFG, with all core commercial product lines
to be fully enabled by the end of 2025.

United Fire Group, Inc. 2023 Annual Report
Collectively, these accomplishments demonstrate our
commitment to advancing UFG   s five strategic pillars
of long-term profitability, diversified growth, continuous
innovation, retaining and attracting talent, and expense
management in everything we do.
In addition, we understand that to achieve superior
financial and operational performance, we must skillfully
navigate the ever-changing economic and industry
landscapes, as well as embrace a continuous change
mindset. As these initiatives take hold at UFG, we
expect them to position us to operate as a more agile
and nimble company and deliver positive, sustainable
financial results.
2023 FINANCIAL PERFORMANCE
UFG achieved strong premium growth and investment
results throughout 2023, yet our full-year financial results
were below expectations with a reported net loss of $1.18
per diluted share, primarily due to reserve strengthening
and elevated surety losses. We were pleased to end
the year with improved results in the fourth quarter,
delivering the highest level of quarterly profit and lowest
underlying loss ratio of 2023, reflecting early signs of
profit improvement in our core commercial lines.
To recap our full year results compared to 2022,
net premiums written increased 8.4%, led by our
core commercial and assumed reinsurance business
units. The overall average change in renewal premiums
was 9.6%, with 7.1% from rate increases and 2.5%
from exposure changes as we remain focused on
price adequacy across all lines of business. Renewal
price increases were higher when excluding the
workers compensation line of business, with average
change in renewal premiums of 10.7%, with 8.3%
from rate changes and 2.4% from exposure changes.
On an annual basis, premium retention was 82.6%,
compared to 77.8% in 2022, which we believe
supports healthy growth while allowing our underwriters
to address accounts that no longer meet our pricing
needs or risk profile.
The combined ratio was 109.3% in 2023, compared to
101.5% in 2022, driven primarily by a 7.4-point increase
in the loss ratio from 67.0% to 74.4%. The loss ratio
was impacted by 6.0% due to reserve strengthening
associated with our excess and surplus lines excess
casualty business, as well as adverse pressure from the
continued impact of social inflation on the liability lines
of business. Catastrophe losses contributed 6.2% to
the loss ratio in 2023, an improvement from 7.7% in
2022. The underlying loss ratio increased by 3.0 points
to 62.2% in 2023 as improving profitability from our core
commercial lines was offset by elevated losses in our
surety business.
The underwriting expense ratio of 34.9% for 2023
was 0.4 points higher than last year, primarily due to
changes to our post-retirement benefit plans that
provided a non-recurring benefit post-2022 and
increased reinsurance premiums in 2023. These were
primarily offset by our ongoing actions to sustainably
reduce expenses and drive premium growth.
Full-year net investment income of $59.6 million rose
32.7% from 2022, driven largely by higher interest rates
increasing interest income on fixed maturities and
increased valuation on limited partnership investments.
While the year fell short of our expectations from
a profitability standpoint, we are pleased with the
incremental progress we made throughout 2023.
We firmly believe the actions we have taken are not
yet fully reflected in our financial results and remain
confident in the path ahead as we continue to execute
strategies for improved profitability.
BALANCE SHEET STRENGTH
As of December 31, 2023, our balance sheet remained
strong, with $3.1 billion in total assets, $734 million in
total stockholders    equity and a $1.9 billion investment
portfolio, of which 89% is allocated to a high-quality
fixed income book. Book value per common share was
$29.04 as of December 31, 2023.
Although our financial strength rating was downgraded
from    A    (Excellent) to    A-    (Excellent) in August 2023,
AM Best recognized our    very strong    balance
sheet and revised our outlook to    stable    given the
initiatives underway to improve performance. We are
fully committed to achieving the level of performance
commensurate with an    A    rating and will work diligently
to regain our longstanding    A    (Excellent) financial
strength rating with AM Best in the years ahead.

United Fire Group, Inc. 2023 Annual Report
As we work to continually strengthen the balance sheet,
I am pleased to share that we successfully renewed our
core excess of loss, property catastrophe, and surety
reinsurance programs for 2024. Overall, we reduced our
all-perils property catastrophe retention to $20.0 million
by fully placing the first treaty layer and further reduced
our California earthquake retention to $10.0 million,
improving other terms and conditions with a modest
increase in risk adjusted pricing that outperformed
our expectations.
We also started the new year with the announcement of
our partnership with New England Asset Management
(NEAM) to oversee our investment portfolio. Partnering
with NEAM enables us to uphold our conservative
investment practices and high-quality investment portfolio,
while benefiting from a cost-effective and scalable way
to manage assets and maximize returns going forward.
In 2023, we paid total quarterly dividends totaling $0.64
per share, returning $16.2 million to our shareholders
over the course of the year. UFG has a 56-year history
of paying dividends to our shareholders, with the first
quarter of 2024 marking our 224th consecutive quarter.
COMMUNITY SUPPORT
Ingrained in our culture is an important promise of
community support that we fulfill through the UFG
Foundation, a private foundation devoted to enhancing
communities. Since its establishment 24 years ago, the
UFG Foundation has awarded more than $16.0 million in
nonprofit grants and scholarship awards, showing that
insurance is not our only passion at UFG.
Each year, we are also pleased to celebrate the noble
volunteer work of our employees and agents with the
   Scotty McIntyre Jr. Go Beyond    award, named in honor
Sincerely,
Kevin J. Leidwinger
UFG President and CEO
of our company   s founding family and their legacy of
giving. This award recognizes individuals for their
outstanding community service, with UFG donating
$5,000 to a charity of the winner   s choice.
Since 2016, UFG employees have volunteered more
than 11,000 hours at over 100 organizations across the
country, inspiring us with their commitment to making a
positive difference in their communities.
CARRYING POSITIVE MOMENTUM INTO 2024
As I reflect on my 18+ months at the helm of UFG,
I remain tremendously proud of our people for their
dedication and adaptability during our ongoing evolution.
Within our walls, we have blended new talent and
knowledge with existing leadership and insight, allowing
us to evolve for the future while preserving our company   s
deeply valued culture.
Looking ahead to 2024, we are committed to achieving
superior performance by delivering deep underwriting
expertise to our partners and policyholders with the
personal relationships and responsive service that truly
set us apart in the industry today.
We made significant progress on our strategic journey
in 2023 and aim to carry this positive momentum into
2024. Through continued robust execution of our strategic
initiatives and strong adherence to our core strategic
pillars, we believe we are exceptionally well positioned
to deliver improved performance in the year ahead.
Whether you are our employee, distribution partner,
policyholder, or shareholder, I thank you for choosing
UFG. We are grateful for your trust and confidence and
are excited to continue to move our company boldly
forward in the year ahead.



shareholder letter icon 4/2/2024 Letter Continued (Full PDF)
 

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