United Fire posts lower earnings

Storms slashed second-quarter earnings at United Fire Group in Cedar Rapids.

The insurer, hit with 11 catastrophe-designated convective storms, expects to process approximately 1,800 claims associated with second-quarter losses.

United Fire posted net income of $10.7 million, or 42 cents per share, for the quarter that ended on June 30, compared with net income of $15.5 million, or 61 cents per share, for the same quarter in 2013.

Randy Ramlo, United Fire president and chief executive officer, said wind, hail and to a lesser extent, tornadoes dominated the quarter.

'In most instances, no one storm system had a material impact on our operations. However, the sheer number of storms was significant,” Ramlo said.

Catastrophe losses totaled $20.6 million, or 53 cents per share after tax, for the second quarter, compared with $14.2 million, or 36 cents per share after tax, for the same period in 2013.

'Second quarters historically have a catastrophe load of approximately 8 percentage points due to the potential for large convective spring storms in those states where we conduct much of our business,” Ramlo said. 'However, second quarter 2014 catastrophe losses added 11 percentage points to the combined ratio and reduced operating earnings for the quarter by 53 cents per share.”

Net income for United Fire's property and casualty insurance segment totaled $9.5 million, or 37 cents per share, in the second quarter, compared with $13.2 million, or 52 cents per share, in the same quarter of 2013.

Net premiums earned increased 10.1 percent to $187.8 million in the second quarter, compared with $170.5 million in the same period last year.

'We are beginning to see slight signs of competitive market conditions on some renewals,” Ramlo said. "We remain optimistic about our ability to get rate increases for the next quarter or two, but at moderated levels compared to previous quarters.”