UNITED FIRE GROUP INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
UFCS$47.73+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0000101199-25-000072
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000101199-26-000031
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 148 current paragraphs.
92 unchanged; 41 reworded; 13 added; 23 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
(2) Commercial lines "Surety" previously referred to as "Fidelity and surety."
Current report
Net written premium increased by 12.4% in the three-month period ended March 31, 2026 as compared to the same period in 2025. Core commercial lines net written premium increased 11.4% due to increases in new business, retention and average renewal pricing. Overall, average renewal premiums increased 6.0% with rates increasing 4.3% and exposure changes of 1.7%. Excluding the workers' compensation line of business, the overall average increase in renewal premiums was 6.5%, with 4.8% from rate increases and 1.6% from exposure changes.
Current report
Net Earned Premium
Current report
Net earned premium increased by 11.2% in the three-month period ended March 31, 2026 as compared to the same period in 2025. This increase in net earned premium was consistent with the trend in net written premium.
Current report
(2) Commercial lines "Surety" previously referred to as "Fidelity and surety."
Current report
The net loss ratio improved 6.6 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The result was driven by less prior year development in 2026 compared to 2025. Prior year development in 2026 was neutral.
Current report
The net loss ratio deteriorated 2.4 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The result was driven by less favorable prior year development and a higher catastrophe ratio, partially offset by improvement in the underlying loss ratio driven by rate attainment versus trends. The 2025 catastrophe ratio was impacted by favorable prior year development.
Current report
The net loss ratio deteriorated 1.4 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The result was driven by less favorable prior year development in 2026 compared to 2025, partially offset by a favorable underlying result.
Current report
Surety
Current report
The net loss ratio deteriorated 8.0 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The result was driven overall by higher pricing ratios on several accounts and changes in mix within the assumed book.
Current report
The expense ratio improved 3.0 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The decrease in expense ratio was driven by business growth and non-recurring expenses in the prior period associated with the final stages of development of a new policy administration system.
Current report
Net cash flows provided by operating activities were $56.6 million and $35.7 million for the three-month periods ended March 31, 2026 and 2025, respectively. The primary cash inflows from operating activities include insurance premiums and net investment income. The primary cash outflows from operating activities are comprised of payment of losses and loss settlement expenses, taxes and operating expenses. Our cash flows from operating activities were sufficient to meet our liquidity needs for the three-month periods ended March 31, 2026 and 2025.
Current report
Net cash flows used in financing activities were $7.6 million and $4.8 million for the three-month periods ended March 31, 2026 and 2025, respectively. The net cash flows used in financing activities for the three-month periods ended March 31, 2026 and 2025 are primarily related to the payment of cash dividends of $5.1 million and $4.1 million, respectively.
Removed paragraphs (23)
Previous report
Our business consists primarily of commercial lines property and casualty insurance, including surety bonds. In 2020, the Company announced its intent to withdraw as a direct writer of personal lines insurance. As of September 30, 2025, no exposure to direct personal lines of business remain.
Previous report
Personal lines direct business was discontinued in 2020, and as of September 30, 2025 no exposure to direct personal lines of business remain.
Previous report
See "Premiums" below for a description of the changes in premiums for the periods presented.
Previous report
Premiums
Previous report
Direct Premiums
Previous report
Direct premiums are the total policy premiums, net of cancellations, associated with policies issued and underwritten by the Company. Direct premiums increased $35.8 million and $116.4 million in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024 driven by growth in our core commercial lines resulting from substantial new business production, increased pricing and improved retention.
Previous report
Assumed Premiums
Previous report
Assumed premiums are the total premiums associated with the insurance risk transferred to us by other insurance and reinsurance companies pursuant to reinsurance contracts. Assumed premiums decreased $5.1 million and $5.4 million in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024 due to targeted management actions of exiting certain reinsurance programs.
Previous report
Ceded Premiums
Previous report
Ceded premiums are the portion of direct premiums that we cede to reinsurers under our reinsurance contracts. Ceded premiums increased $2.4 million and $28.0 million in the three- and nine-month periods ended September 30, 2025, respectively, compared to the same periods in 2024 due primarily to growth in the subject premium base and ceded reinsurance premium adjustments.
Previous report
Net investment income was $26.0 million for the third quarter of 2025, an increase of $1.5 million compared to the same period in 2024. The increase was primarily from our fixed income portfolio increase of $3.2 million as a result of portfolio management actions and investing at higher rates and increased income on cash and cash equivalents, offset by lower income on other long-term investments.
Previous report
For the nine-month period ended September 30, 2025, our loss and loss settlement expenses were $3.5 million, or 0.6%, higher than the same period in 2024, and our net loss ratio improved 5.3 points compared to the same period in 2024. This was driven by improvement in the underlying loss ratio, $5.1 million of favorable prior year reserve development on non-catastrophe losses, and a catastrophe ratio below the five-and ten-year historical averages. The underlying loss ratio improvement was driven by rate achievement and continued favorable frequency in most major lines.
Previous report
The Company experienced favorable reserve development of $0.1 million and $5.1 million, excluding catastrophe losses, for prior accident years during the three- and nine-month periods ended September 30, 2025, respectively. The nine- month development was driven by better than expected loss adjustment expense payments. Adverse development in commercial other liability reflects the Company's continued response to increased loss settlements resulting from the impact of economic and social inflation, including increased litigation activity. This was offset by improvement in several other core commercial lines.
Previous report
NM = Not meaningful
Previous report
The net loss ratio improved 6.2 and 6.7 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. For both the three- and nine-month periods, the result was driven by improvement in the underlying loss ratio and favorable prior year development in 2025 compared to 2024.
Previous report
The net loss ratio improved 16.5 and 11.6 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. For the three-month period, the result was driven by improvement in the underlying ratio including favorable large loss experience, coupled with a favorable catastrophe result. For the nine-month period, the result was driven in part by the underlying loss ratio, better favorable prior year development in 2025 compared to 2024, and a favorable catastrophe result.
Previous report
The net loss ratio deteriorated 20.8 and improved 2.0 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. The three-month result was driven by less favorable prior year development in 2025 compared to 2024 and the catastrophe ratio. The catastrophe ratio for the three-month period in 2025 was higher than 2024, with the 2024 ratio impacted by favorable emergence on prior period catastrophes. The nine-month result was driven in part by consistent pricing increases throughout 2024 and continued favorable frequency trends associated with more restrictive underwriting guidelines and exposure appetite.
Previous report
The net loss ratio improved 35.2 and 8.4 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. Both the three- and nine-month improvement was driven by prior period favorable development in 2025.
Previous report
Fidelity and Surety
Previous report
The expense ratio decreased 1.3 points and increased 0.3 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease in the third quarter of 2025, compared to the same period in 2024, was mainly driven by continued focus on disciplined expense management and business growth. The increase in the nine-month period ended September 30, 2025, compared to the same period in 2024, was driven by non-recurring expenses associated with the final stages of development of a new policy administrative system in the first quarter of 2025, offset by continued focus on disciplined expense management and business growth.
Previous report
Our cash flows were sufficient to meet our liquidity needs for the nine-month periods ended September 30, 2025 and 2024 and we anticipate they will be sufficient to meet our future liquidity needs. We also have the ability to draw on our credit facility if needed.
Previous report
Net cash flows provided by operating activities were $149.9 million and $184.0 million for the nine-month periods ended September 30, 2025 and 2024, respectively. For the nine-month period ended September 30, 2025, the net operating cash inflows were driven by premium and investment income offsetting loss and expense outflows.
Previous report
Net cash flows provided by financing activities were $16.4 million for the nine-month period ended September 30, 2025, compared to $54.4 million provided by financing activities in the nine-month period ended September 30, 2024. The decrease of $37.9 million in net cash flows from financing activities was a result of our successful completion of a $30 million private placement offering of senior unsecured notes completed in the third quarter of 2025, compared to the $70 million private placement offering of senior unsecured notes completed in the second quarter of 2024.
Reworded paragraphs (41)
Previous wording
Originally founded in 1946 as United Fire & Casualty Company, United Fire Group, Inc. ("UFG," the "Company," "we," "us," or "our") and its consolidated insurance subsidiaries provide insurance protection for individuals and businesses through several regional companies. Our property and casualty insurance company subsidiaries are licensed in 50 states and the District of Columbia and are represented by approximately 1,000 independent agencies.
Current wording
Originally founded in 1946 as United Fire & Casualty Company, United Fire Group, Inc. ("UFG," the "Company," "we," "us," or "our") and its consolidated insurance subsidiaries provide insurance protection for individuals and businesses through several regional companies. Our property and casualty insurance company subsidiaries are licensed in 50 states and the District of Columbia and are represented by approximately 850 independent property and casualty agencies, along with contract surety and commercial surety bonds offered through approximately 160 surety agencies.
Previous wording
Our core commercial products support a wide variety of customers including small business owners and middle market businesses operating in industries such as construction, services, retail trade, financial and manufacturing, along with contract surety and commercial surety bonds offered through approximately 1,000 independent property and casualty agencies. We also provide specialty and surplus lines coverage written exclusively through wholesale brokers on an admitted and non-admitted basis. The Company also participates as a member of Lloyd's of London syndicates through our insurance subsidiary, McIntyre Cedar Corporate Member LLP. Additionally, the Company offers reinsurance coverage for property and casualty insurance through traditional treaty reinsurance channels. The reinsurance operation supports primarily commercial lines of business but also assumes risk in professional, financial and personal lines of insurance. We also partner with Management General Agents ("MGAs") to offer delegated underwriting programs providing niche products including marine specialty, professional liability and earthquake coverages.
Current wording
Our business consists primarily of commercial lines property and casualty insurance, including surety bonds. Our core commercial products support a wide variety of customers including small business owners and middle market businesses operating in industries such as construction, services, retail trade, financial and manufacturing, along with contract surety and commercial surety bonds offered through approximately 850 independent property and casualty agencies. We also provide specialty and surplus lines coverage written exclusively through wholesale brokers on an admitted and non-admitted basis. The Company also participates as a member of Lloyd's of London syndicates through our insurance subsidiary, McIntyre Cedar Corporate Member LLP. Additionally, the Company offers reinsurance coverage for property and casualty insurance through traditional treaty reinsurance channels. The reinsurance operation supports primarily commercial lines of business but also assumes risk in professional, financial and personal lines of insurance. We also partner with Management General Agents ("MGAs") to offer delegated underwriting programs providing niche products including marine specialty, professional liability and earthquake coverages.
Previous wording
Fidelity and surety - contract and commercial surety bond coverage which guarantees performance and payment by our bonded principals, protects owners from failure to perform on the part of our principals, and protects material suppliers and subcontractors from nonpayment by our contractors. Proportional reinsurance on these lines is also included.
Current wording
Surety - contract and commercial surety bond coverage which guarantees performance and payment by our bonded principals, protects owners from failure to perform on the part of our principals, and protects material suppliers and subcontractors from nonpayment by our contractors. Proportional reinsurance on these lines is also included.
Previous wording
Commercial other - commercial theft coverage, boiler and machinery and ocean marine business managed by an MGA partner.
Current wording
Commercial miscellaneous - commercial theft coverage, boiler and machinery and ocean marine business managed by an MGA partner.
Previous wording
The Company is a member of Lloyd's through its insurance subsidiary, McIntyre Cedar Corporate Member LLP. Lloyd's operates as an insurance marketplace whereby members join syndicates to underwrite property and casualty and reinsurance business through a managing agent in return for receiving premiums. The Company participates in Syndicate 1492, Syndicate 1729, Syndicate 1969, Syndicate 1971, Syndicate 4747, Syndicate 2988, Syndicate 1699, Syndicate 5623, Syndicate 2358, Syndicate 1955 and Syndicate 1609. The Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support participation in these syndicates.
Current wording
The Company is a member of Lloyd's through its insurance subsidiary, McIntyre Cedar Corporate Member LLP. Lloyd's operates as an insurance marketplace whereby members join syndicates to underwrite property and casualty and reinsurance business through a managing agent in return for receiving premiums. The Company participates in 13 syndicates as of March 31, 2026. The Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support participation in these syndicates.
Previous wording
For the nine-month period ended September 30, 2025, approximately 48.9 percent of our property and casualty premiums were written in Texas, California, Iowa, Missouri, and New Jersey.
Current wording
For the three-month period ended March 31, 2026, approximately 50 percent of our property and casualty premiums were written in Texas, California, New Jersey, Iowa, and Missouri.
Previous wording
Underlying loss ratio represents the net loss ratio less the impacts of catastrophes and non-catastrophe prior period reserve development. The underlying combined ratio represents the combined ratio less the impacts of catastrophes and non-catastrophe prior period reserve development. The Company believes that the underlying loss ratio and underlying combined ratio are meaningful measures to understand the underlying trends in the core business in the current accident year, removing the volatility of catastrophes and impact of prior period reserve development. Management believes separate discussions on catastrophe losses and prior period reserve development are important to understanding how the Company is managing catastrophe risk and in identifying developments in longer-tailed business. Catastrophe losses is an operational measure that utilizes the designations of the Insurance Services Office ("ISO") and is reported with losses and loss adjustment expense amounts net of reinsurance recoverables, unless specified otherwise. In addition to ISO catastrophes, we also include as catastrophes those events ("non-ISO catastrophes"), which may include U.S. or international losses, that we believe are, or will be, material to our operations, either in amount or in number of claims made. Catastrophes are not predictable and are unique in terms of timing and financial impact. While management estimates catastrophe losses as incurred, due to the inherently unique nature of catastrophe losses, the impact in a reporting period is inclusive of catastrophes that occurred in the reporting period, as well as development on catastrophes that may have occurred in prior periods. Prior period reserve development is the increase (unfavorable) or decrease (favorable) in incurred loss and loss adjustment expense reserves at the valuation dates for losses which occurred in previous calendar years. This measure excludes development on catastrophe losses.
Current wording
Catastrophe losses is an operational measure that utilizes the designations of the Insurance Services Office ("ISO") and is reported with losses and loss adjustment expense amounts net of reinsurance recoverables, unless specified otherwise. In addition to ISO catastrophes, we also include as catastrophes those events which may include U.S. or international losses, that we believe are, or will be, material to our operations, either in amount or in number of claims made. Catastrophes are not predictable and are unique in terms of timing and financial impact. While management estimates catastrophe losses as incurred, due to the inherently unique nature of catastrophe losses, the impact in a reporting period is inclusive of catastrophes that occurred in the reporting period, as well as development on catastrophes that may have occurred in prior periods.
Previous wording
The following table includes the consolidated results of our operations for the three- and nine-month periods ended September 30, 2025 and 2024, with more detailed components and discussion in the sections that follow. Discussions of the components of net income are presented on a pre-tax basis, unless otherwise noted.
Current wording
The following table includes the consolidated results of our operations for the three-month periods ended March 31, 2026 and 2025, with more detailed components and discussion in the sections that follow. Discussions of the components of net income are presented on a pre-tax basis, unless otherwise noted.
Previous wording
Net written premium is the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Net written premium is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Management believes net written premium is a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net written premium for an insurance company consists of direct written premium and assumed premiums, less ceded premiums. The following shows our written premium for the three- and nine-month periods ended September 30, 2025 and 2024.
Current wording
Net written premium is the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Net written premium is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Management believes net written premium is a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net written premium for an insurance company consists of direct written premium and assumed premiums, less ceded premiums. The following shows our written premium for the three-month periods ended March 31, 2026 and 2025.
Previous wording
Net earned premium is calculated on a pro-rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of written premium applicable to the unexpired terms of the insurance policies in force. The difference between net earned premium and net written premium is the change in unearned premium and the change in prepaid reinsurance premiums. Direct earned premium is recognized ratably over the life of a policy and differs from direct written premium, which is recognized on the effective date of the policy. The following shows our earned premium for the three- and nine-month periods ended September 30, 2025 and 2024.
Current wording
Net earned premium is calculated on a pro-rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of written premium applicable to the unexpired terms of the insurance policies in force. The difference between net earned premium and net written premium is the change in unearned premium and the change in prepaid reinsurance premiums. Direct earned premium is recognized ratably over the life of a policy and differs from direct written premium, which is recognized on the effective date of the policy. The following shows our earned premium for the three-month periods ended March 31, 2026 and 2025.
Previous wording
Net investment income was $71.1 million for the nine-month period ended September 30, 2025, an increase of $12.3 million compared to the same period in 2024. The increase was primarily from the fixed income portfolio increase of $14.5 million as a result of portfolio management actions and investing at higher rates, offset by lower income on other long-term investments
Current wording
Net investment income was $27.0 million for the three-month period ended March 31, 2026, an increase of $3.6 million compared to the same period in 2025. The increase was primarily from our fixed income portfolio increase of $3.8 million as a result of portfolio growth and reinvestment at higher yields. The pre-tax average yield on fixed income securities was 4.43% as of March 31, 2026 compared to 4.34% for the same period in 2025.
Previous wording
Net investment losses were $0.4 million and $2.2 million for the three- and nine-month periods ended September 30, 2025, respectively, as compared to net investment losses of $1.7 million and $4.1 million for the same periods in 2024. The primary reason for the change relates to portfolio management actions taken during the year ended December 31, 2024 and an increase in the allowance for credit losses related to mortgage loans during the nine-month period ended September 30, 2025.
Current wording
Net investment losses were $0.3 million for the three-month period ended March 31, 2026 as compared to net investment losses of $0.8 million for the same period in 2025. The primary reason for the change relates to opportunistic trading within the fixed maturity portfolio.
Previous wording
The following is a summary of losses and loss settlement expenses for the three- and nine-month periods ended September 30, 2025 and 2024:
Current wording
The following is a summary of losses and loss settlement expenses for the three-month periods ended March 31, 2026 and 2025:
Previous wording
For the three-month period ended September 30, 2025, our loss and loss settlement expenses were $1.0 million, or 0.6%, higher than the same period in 2024, and our net loss ratio improved 5.0 points compared to the same period in 2024. This was driven by improvement in the underlying loss ratio and a catastrophe ratio below the five-year and 10-year historical averages. The underlying loss ratio improvement was driven by sustained lower frequency and earned rate achievement, as well as favorable large loss experience compared to historical levels.
Current wording
For the three-month period ended March 31, 2026, our loss and loss settlement expenses were $18.4 million, or 9.7%, higher than the same period in 2025, and our net loss ratio improved 0.8 points compared to the same period in 2025. This loss ratio improvement was driven by improvement in the catastrophe ratio, partially offset by a slightly higher underlying loss ratio. The underlying loss ratio increase was driven by assumed business tempered some by improvement in core commercial.
Previous wording
Adjusted operating income increased in the nine-month period ended September 30, 2025, compared to the same period in 2024, primarily due to an increase in net earned premium of $83.0 million combined with an underlying loss ratio improvement of 2.0 points to 56.7%, catastrophe loss ratio improvement of 2.8 points to 3.9% and favorable prior year reserve development, excluding catastrophe losses, of 0.5 points. In addition, net investment income increased by $12.3 million, driven by portfolio repositioning in 2024. The underwriting expense ratio increased 0.3 points to 35.8%.
Current wording
The Company experienced neutral prior year reserve development, excluding catastrophe losses, during the three-month period ended March 31, 2026.
Previous wording
In the three- and nine-month periods ended September 30, 2025, our pre-tax catastrophe losses were $4.3 million and $37.2 million, respectively, a decrease of $9.0 million and $21.1 million, respectively, compared to the same periods in 2024. Our catastrophe losses included 14 new events in the third quarter of 2025. Catastrophe losses in the three- and nine-month periods ended September 30, 2025 added 1.3 and 3.9 points to the combined ratio, respectively, which is below our five-year and 10-year historical averages.
Current wording
In the three-month period ended March 31, 2026, our pre-tax catastrophe losses were $12.7 million, a decrease of $2.8 million compared to the same period in 2025. Catastrophe losses in the three-month period ended March 31, 2026 added 3.7 points to the combined ratio, which is below our five-year and 10-year historical averages. Our catastrophe losses included 21 new events in the three-month period ended March 31, 2026.
Previous wording
DAC is amortized over the period the related premiums are earned. Amortization increased for the three- and nine-month periods ended September 30, 2025, primarily reflecting an increase in deferred underwriting costs over the last year aligned with continued premium expansion.
Current wording
DAC is amortized over the period the related premiums are earned. Amortization expense increased for the three-month period ended March 31, 2026, primarily reflecting an increase in deferred underwriting costs associated with continued premium expansion.
Previous wording
The following tables display our net loss ratio for the three- and nine-month periods ended September 30, 2025:
Current wording
The following tables display our net loss ratio for the three-month periods ended March 31, 2026 and 2025:
Previous wording
The net loss ratio in our commercial lines of business was 56.7% for the third quarter of 2025, compared to 59.9% for the third quarter of 2024. This result was driven by improvement in the underlying loss ratio and favorable catastrophe experience.
Current wording
The net loss ratio in our commercial lines of business was 58.7% for the three-month period ended March 31, 2026, compared to 60.7% for the same period in 2025. This result was driven by improvement in the underlying loss ratio and favorable catastrophe experience.
Previous wording
The net loss ratio improved 18.3 and 1.3 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. The change from 2024 was driven by favorable catastrophe results in 2025 compared to 2024.
Current wording
The net loss ratio improved 7.2 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. The result was driven by favorable prior year development in 2026 compared to 2025, which was neutral, and favorable catastrophe results compared to 2025.
Previous wording
The net loss ratio improved 4.0 and 3.6 points in the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same periods in 2024. When surety losses occur, our loss is determined by estimating the cost to complete the remaining work and to pay the contractor's unpaid bills, offset by contract funds due to the contractor, reinsurance, and the value of any collateral to which we may have access. The change in loss ratio was driven by favorable prior year development in 2025 compared to 2024 on large losses from 2023 and 2022.
Current wording
The net loss ratio deteriorated 16.5 points in the three-month period ended March 31, 2026 as compared to the same period in 2025. When surety losses occur, our loss is determined by estimating the cost to complete the remaining work and to pay the contractor's unpaid bills, offset by contract funds due to the contractor, reinsurance, and the value of any collateral to which we may have access. The change in loss ratio was driven by adverse prior year development in 2026 compared to favorable development in 2025. The net deterioration in 2026 was driven by ceded development on large losses from accident year 2023.
Previous wording
Our long term debt obligations include $50.0 million of private placement notes issued in December 2020 and $70.0 million and $30.0 million of senior unsecured notes issued in May 2024 and July 2025, respectively. Interest expense increased for the three- and nine-month periods ended September 30, 2025 due to the issuance of the senior unsecured notes. Refer to Note 8 "Debt" in Part I, Item 1 for more information on our long term debt.
Current wording
Our long term debt obligations include $50.0 million of private placement notes issued in December 2020 and $70.0 million and $30.0 million of senior unsecured notes issued in May 2024 and July 2025, respectively. Interest expense increased for the three-month period ended March 31, 2026 due to the issuance of the senior unsecured notes. Refer to Note 8 "Debt" in Part I, Item 1 for more information on our long term debt.
Previous wording
The consolidated effective tax rate was 19.5 percent and 19.9 percent for the three- and nine-month periods ended September 30, 2025, respectively. Our effective tax rate for the three- and nine-month periods ended September 30, 2025 is different than the federal statutory rate of 21 percent, due primarily to the net effect of tax-exempt municipal bond interest income, state income taxes and interest on a federal tax refund.
Current wording
The Company's effective tax rate for the three-month periods ended March 31, 2026 and 2025 is different than the federal statutory rate of 21 percent, due primarily to the net effect of tax-exempt municipal bond interest income.
Previous wording
The table below shows the adjustments made to reconcile Net income (loss) to Adjusted operating earnings:
Current wording
The table below shows the adjustments made to reconcile Net income (loss) to Adjusted operating income (loss):
Previous wording
Adjusted operating income increased in the third quarter of 2025, primarily due to an increase in net earned premium of $28.2 million combined with the underlying loss ratio improvement of 1.9 points to 56.0% and catastrophe loss ratio improvement of 3.1 points to 1.3%. In addition, net investment income increased by $1.5 million, driven by portfolio repositioning in 2024. The underwriting expense ratio improved 1.3 points to 34.6%.
Current wording
Adjusted operating income increased in the three-month period ended March 31, 2026, primarily due to an increase in net earned premium of $34.6 million, combined with the catastrophe loss ratio improvement of 1.3 points to 3.7%, slightly offset with the underlying loss ratio increase of 0.5 points to 57.0%. In addition, net investment income increased by $3.6 million, driven by portfolio growth and reinvestment at higher yields. The underwriting expense ratio improved 3.0 points to 34.9%.
Previous wording
Our invested assets totaled $2.3 billion at September 30, 2025, compared to $2.1 billion at December 31, 2024, an increase of $178 million. We utilize a conservative investment philosophy, investing in a diversified portfolio of high-quality, intermediate-term taxable corporate bonds, taxable U.S. government and government agency bonds and tax-exempt U.S. municipal bonds. The composition of our investment portfolio at September 30, 2025 is presented at carrying value in the following table:
Current wording
Our invested assets increased to $2.49 billion at March 31, 2026 from $2.46 billion at December 31, 2025. We utilize a conservative investment philosophy, investing in a diversified portfolio of high-quality, intermediate-term taxable corporate bonds, taxable U.S. government and government agency bonds and tax-exempt U.S. municipal bonds. The composition of our investment portfolio at March 31, 2026 is presented at carrying value in the following table:
Previous wording
(2) As a member of Lloyd's, the Company participates in the syndicate results which include the fair value of the investments. As of December 31, 2024, these investments are included in other long-term investments. The fair value of Lloyd's syndicate investments included in other long-term investments was $116.6 million as of September 30, 2025. Also included in our other long-term investments on the Consolidated Balance Sheets is our interest in limited liability partnerships with a current fair value of $97.3 million at September 30, 2025.
Current wording
(2) As a member of Lloyd's, the Company participates in the syndicate results which include the fair value of the investments. The fair value of Lloyd's syndicate investments included in other long-term investments was $137.4 million at March 31, 2026. Also included in our "Other long-term investments" on the Consolidated Balance Sheets is our interest in limited liability partnerships with a current fair value of $100.1 million at March 31, 2026.
Previous wording
The weighted average effective duration of our portfolio of fixed maturity securities was 4.29 years at September 30, 2025 compared to 4.22 years at December 31, 2024. Refer to Note 2 "Investments" in Part I, Item 1 for more information on maturities.
Current wording
The weighted average effective duration of our portfolio of fixed maturity securities was 4.4 years at March 31, 2026 compared to 4.3 years at December 31, 2025. Refer to Note 2 "Investments" in Part I, Item 1 for more information on maturities.
Previous wording
As of September 30, 2025, net unrealized investment losses, after tax, totaled $28.5 million compared to net unrealized losses, after tax, of $72.2 million as of December 31, 2024. The net unrealized investment loss position improved from December 31, 2024 due to the decrease in bond market interest rates during the nine-month period ended September 30, 2025.
Current wording
As of March 31, 2026, net unrealized investment losses, after tax, totaled $39.9 million compared to net unrealized losses, after tax, of $25.3 million as of December 31, 2025. The net unrealized investment loss position deteriorated from December 31, 2025 due to the increase in bond market interest rates during the three-month period ended March 31, 2026.
Previous wording
At September 30, 2025, our fixed maturity watch list included five fixed maturity securities in an unrealized loss position with an amortized cost of $13.2 million, no allowance for credit losses, unrealized losses of $0.6 million and a fair value of $12.5 million.
Current wording
At March 31, 2026, our fixed maturity watch list included four fixed maturity securities in an unrealized loss position with an amortized cost of $12.1 million, no allowance for credit losses, unrealized losses of $0.6 million and a fair value of $11.5 million.
Previous wording
At September 30, 2025, our mortgage loan watch list included one commercial mortgage loan in an unrealized loss position with an amortized cost of $6.6 million, $1.1 million allowance for credit losses, unrealized loss of $0.9 million and a fair value of $5.7 million.
Current wording
At March 31, 2026, our mortgage loan watch list included one commercial mortgage loan with a carrying value of $4.0 million. We have an allowance for future credit loss allowances of $0.3 million on our mortgage loan portfolio.
Previous wording
The following table displays a consolidated summary of cash sources and uses for the nine-month periods ended September 30, 2025 and 2024:
Current wording
The following table displays a consolidated summary of cash sources and uses for the three-month periods ended March 31, 2026 and 2025:
Previous wording
At September 30, 2025, our cash and cash equivalents included $47.8 million related to money market accounts, compared to $23.1 million at December 31, 2024.
Current wording
At March 31, 2026, our cash and cash equivalents included $68.6 million related to money market accounts, compared to $44.8 million at December 31, 2025.
Previous wording
Sales of investments and proceeds from calls or maturities of fixed maturity securities can also provide liquidity. During the next five years, $405.6 million, or 20.1 percent, of our fixed maturity portfolio will mature.
Current wording
Sales of investments and proceeds from calls or maturities of fixed maturity securities can also provide liquidity. During the next five years, $437.1 million, or 19.2 percent, of our fixed maturity portfolio will mature.
Previous wording
Net cash flows used in investing activities were $133.6 million for the nine-month period ended September 30, 2025, compared to net cash flows used in investing activities of $143.1 million for the nine-month period ended September 30, 2024. For the nine-month periods ended September 30, 2025 and 2024, we had cash inflows from scheduled and unscheduled investment maturities, redemptions, prepayments, and sales of investments of $305.2 million and $541.2 million, respectively. Our cash outflows for investment purchases were $432.9 million for the nine-month period ended September 30, 2025, compared to $675.4 million for the same period of 2024.
Current wording
Net cash flows used in investing activities were $43.4 million and $48.2 million for the three-month periods ended March 31, 2026 and 2025, respectively. For the three-month periods ended March 31, 2026 and 2025, we had cash inflows from scheduled and unscheduled investment maturities, redemptions, prepayments, and sales of investments of $148.6 million and $77.3 million, respectively. Our cash outflows for investment purchases were $191.6 million for the three-month period ended March 31, 2026, compared to $122.9 million for the same period of 2025.
Previous wording
In December 2023, UF&C became a member of FHLB Des Moines. Membership allows access to loans or advances pursuant to the terms of FHLB Des Moines' standard Advances, Pledge and Security Agreement (the "Advances Agreement"). As of September 30, 2025, there were no advances outstanding under the Advances Agreement. For further information regarding the agreement with FHLB Des Moines, see Note 8 "Debt" contained in Part I, Item 1.
Current wording
UF&C is a member of FHLB Des Moines. Membership allows access to loans or advances pursuant to the terms of FHLB Des Moines' standard Advances, Pledge and Security Agreement (the "Advances Agreement"). As of March 31, 2026, there were no advances outstanding under the Advances Agreement. For further information regarding the agreement with FHLB Des Moines, see Note 8 "Debt" contained in Part I, Item 1.
Previous wording
Dividends paid to shareholders totaled $12.2 million in each of the nine-month periods ended September 30, 2025 and 2024. Our practice has been to pay quarterly cash dividends, which we have paid every quarter since March 1968. Payments of any future dividends and the amounts of such dividends will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors out of legally available funds.
Current wording
Dividends paid to shareholders totaled $5.1 million and $4.1 million in each of the three-month periods ended March 31, 2026 and 2025, respectively. Payments of any future dividends and the amounts of such dividends will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors out of legally available funds.
Previous wording
As a holding company with no independent operations of its own, UFG relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31 less any dividends paid in the previous 12 months, or net income of the preceding calendar year on a statutory basis less any dividends paid in the previous 12 months, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at September 30, 2025, UFG's sole direct insurance company subsidiary, UF&C, is able to make a maximum of $51 million in dividend payments without prior regulatory approval. These restrictions are not expected to have a material impact in meeting the cash obligations of UFG.
Current wording
As a holding company with no independent operations of its own, UFG relies on dividends received from its insurance company subsidiaries in order to pay dividends to its common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31 less any dividends paid in the previous 12 months, or net income of the preceding calendar year on a statutory basis less any dividends paid in the previous 12 months, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at March 31, 2026, UFG's sole direct insurance company subsidiary, UF&C, is able to make a maximum of $66.4 million in dividend payments without prior regulatory approval. These restrictions are not expected to have a material impact in meeting our cash obligations.
Previous wording
Pursuant to agreements with our limited liability partnership investments, we are contractually committed through 2030 to make capital contributions upon request of the partnerships. The timing of these additional contributions is unknown and based upon the timing of when investments and agreements are executed or signed compared to when the actual commitments are funded or closed. Our remaining potential contractual obligation was $17.7 million at September 30, 2025.
Current wording
Pursuant to agreements with our limited liability partnership investments, we are contractually committed through 2030 to make capital contributions upon request of the partnerships. The timing of these additional contributions is unknown and based upon the timing of when investments and agreements are executed or signed compared to when the actual commitments are funded or closed. Our remaining potential contractual obligation was $15.3 million at March 31, 2026.
Previous wording
Stockholders' equity increased to $898.7 million at September 30, 2025, from $781.5 million at December 31, 2024. The Company's book value per share was $35.22, which is an increase of $4.42 per share, or 14.4 percent, from December 31, 2024. The increase is primarily attributable to net income of $79.8 million and reduction in net unrealized losses of $43.7 million on fixed maturity securities, slightly offset by shareholder dividends of $12.2 million during the first nine months of 2025.
Current wording
Stockholders' equity increased to $950.6 million at March 31, 2026, from $941.2 million at December 31, 2025. The Company's book value per share was $37.06, which is an increase of $0.18 per share, or 0.5 percent, from December 31, 2025. The increase is primarily attributable to net income of $30.1 million, partially offset by an increase in net unrealized losses of $14.6 million on fixed maturity securities and shareholder dividends of $5.1 million during the first three months of 2026.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Underlying loss ratio represents the net loss ratio less the impacts of catastrophes and non-catastrophe prior period reserve development. The underlying combined ratio represents the combined ratio less the impacts of catastrophes and non-catastrophe prior period reserve development. The Company believes that the underlying loss ratio and underlying combined ratio are meaningful measures to understand the underlying trends in the core business in the current accident year, removing the volatility of catastrophes and prior period impacts. Management believes separate discussions on catastrophe losses and prior period reserve development are important to understanding how the Company is managing catastrophe risk and in identifying developments in longer-tailed business.
Current report — wording carried from elsewhere
Prior period reserve development is the increase (unfavorable) or decrease (favorable) in incurred loss and loss adjustment expense reserves at the valuation dates for losses which occurred in previous calendar years. This measure excludes development on catastrophe losses.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(1) Reinsurance assumed includes Lloyd's of London.