United Fire earnings decline in 2014

United Fire Group posted higher operating income and revenue in the final quarter of 2014, but saw a lower operating profit on higher revenue for the year.

The Cedar Rapids-based insurer on Tuesday reported fourth-quarter operating income of $33.9 million, or $1.34 per share, up 34 percent from $25.6 million, or $1 per share, in the same quarter of 2013.

Revenue rose 9.4 percent to $250.5 million in the fourth quarter of 2014, from $229 million in the same period of 2013.

For the year, United Fire Group posted operating income of $54.4 million, or $2.32 per share, down 22.3 percent from $76.1 million, or $2.98 per share, in 2013. Revenue rose 7.4 percent to $941.9 million in 2014 from $877 million in 2013.

United Fire Group's fourth-quarter operating income per share missed analysts' consensus estimate by 1 cent per share, according to Thomson Reuters. Revenue for the fourth quarter topped analysts' consensus forecast by $11.7 million.

Randy Ramlo, United Fire Group president and CEO, said the company benefited from modest rate increases in the fourth quarter, as well as a lack of significant catastrophic events, lower claims and favorable reserve development on prior accident year claims.

Kevin Helbing, United Fire Group interim principal financial officer, said catastrophe losses totaled $2.5 million, or 6 cents per share after tax, in the fourth quarter and $49.7 million, or $1.27 per share after tax, for the year that ended on Dec. 31, 2014.

'During the second quarter, we reported a large loss due to fire which destroyed an entire city block,” Helbing said on a conference call with analysts. 'During the second and third quarters of 2014, we reported an increase in the number of property lines claims.

'While storms caused some of these losses, the big driver was large fires.”