United Fire Group 1st-quarter earnings, revenue increase

Higher first-quarter earnings and revenue were reported Tuesday by United Fire Group, a Cedar Rapids-based property and casualty and life insurance company.

United Fire reported net income of $22.4 million, or 88 cents per share, for the quarter that ended on March 31, up 16.7 percent from $19.2 million, or 75 cents per share, for the same period in 2012. First-quarter revenue was $205.3 million, a 6 percent improvement from $193.7 million in the first quarter of 2012.

United Fire President and CEO Randy Ramlo said the first quarter was solid in terms of more than just higher earnings and revenue.

"We continue to seek and receive rate increases in most lines of business, policy retention remains strong and within our comfort range, and we are seeing a fair amount of new business opportunities," Ramlo said. "The market as a whole continues to firm due to weather-related losses in the past few years and the continuing low investment rate environment.

"We believe these economic and market trends will continue throughout 2013."

Consolidated net unrealized investment gains, net of tax, totaled $152.7 million as of March 31, an increase of $8.6 million or 6.0 percent from Dec. 31, 2012. The increase in unrealized gains was driven by an increase in the fair value of the equity portfolios.

"We continue to see signs of improvement in the investment environment as evidenced by our equity portfolios," Ramlo said. "Our equity portfolio return was 11.4 percent for the quarter, compared with the S&P 500 return of 10.6 percent for the quarter. However, equities are only approximately 6 percent of our total investment portfolio."

United Fire experienced a decline in first-quarter catastrophic losses to $4.5 million, or 12 cents per share after tax, for the three-month period that ended on March 31, compared with $14.1 million, or 36 cents per share after tax, for the same period in 2012.

"Over the last decade or so, our first-quarter catastrophic losses averaged about 2.9 percentage points of the combined ratio," Ramlo said. "First-quarter 2012 catastrophic losses included losses associated with the Branson, Mo., EF5 tornado and therefore, was well beyond the norm."