United Fire revenue drops due to increased fire claims in 2014

Multi-million dollar fire claims, rather than hurricanes and other catastrophic events, had an impact on United Fire Group earnings in 2014.

In comments following the company's annual meeting Wednesday, Randy Ramlo, president and CEO of the Cedar Rapids-based insurer, said the property and casualty insurer received a larger-than-normal number of fire claims last year,

'We had more fire losses than we've had in several years,” Ramlo said. 'The only explanation that we can find is that during an economic downturn, people are not very safe. They don't do any maintenance on their equipment because that costs money, so that's one way to save money.

'When the economy improves, people have gotten into the habit of not maintaining equipment. A lot of our fire claims had to do with maintenance that had not been done on equipment.”

Ramlo said United Fire Group experienced eight multi-million dollar fire claims in the third quarter of 2014.

'After three quarters, we were mildly disappointed in 2014, but we had a nice recovery in the final quarter of the year and we had a great first quarter this year,” he said. 'That's two good quarters in a row, so we hope that's a trend.”

Ramlo said United Fire Group has worked to limit its potential future exposure to hurricanes in Florida, Louisiana and Texas.

He said the company will continue to look at expanding coverage into additional states and will need to appoint some new agencies to represent its products.

Ramlo said the insurer also is pursuing 'program” business where it signs up entire organizations, rather than pursuing business with individual members.

United Fire Group's board of directors voted Wednesday to increase its common stock dividend by 10 percent.

The company will pay a dividend of 22 cents per share on June 15 to shareholders of record as of June 1.