United Fire posts 4th-quarter loss on Superstorm Sandy claims
Cedar Rapids-based insurance manages record profit year
Superstorm Sandy pounded United Fire Group with $25 million of claims, saddling the company with a loss in the fourth quarter of 2012.
The Cedar Rapids-based insurance holding company posted a $2.4 million loss, or 10 cents per share, for the quarter that ended on Dec. 31, compared with a net profit of $16.9 million, or 66 cents per share, in the same period of 2011. Fourth-quarter revenue rose 11.4 percent to $213.3 million in the most recent quarter from $191.6 million in the final three months of 2011.
For the year, United Fire Group recorded a net profit of $40.2 million, or $1.58 per share, compared with a net profit of $11,000 in 2011. Revenue rose 15.4 percent from $705 million in 2011 to $813.2 million in 2012.
Randy Ramlo, United Fire Group president and CEO, said the company on Sept. 30 was on track for a more normal catastrophe loss year, but that changed on Oct. 29 when the East Coast was slammed by Super Storm Sandy.
"More than 2,750 claims have been filed as a result of the storm representing $25 million ($20 million direct, $5 million assumed) of incurred losses," Ramlo said. "Our response teams were in the field immediately after the storm and remained until every claim with our company had been visited."
Ramlo said more than 83 percent of the claims have been settled and closed. He added that United Fire Group does not anticipate Sandy having any material negative effects on the company's 2013 results.
"We continue to see signs of improvement in the economy," Ramlo said. "Since the second half of 2011, we have experienced modest growth in premium audit collections and that trend continued through the fourth quarter of 2012.
"Premium from policy changes declined slightly from the previous quarter, but remained positive, and the number of out-of-business policy cancellations varied by region, but remained unchanged overall."Ramlo said integration of Mercer Insurance Group continues to move forward. The company remains on track to convert the East Coast claims processes onto the United Fire Group systems in the current quarter.