United Fire Group (UFCS) 2022年年度報告「NASDAQ」.pdf

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1、United Fire Group,Inc.2022 Annual ReportAbout UFG InsuranceFounded in 1946,UFG Insurance is a successful publicly traded company with over 75 years of local market expertise and a growing national footprint.We offer commercial insurance,excess and surplus lines and surety bonds,partnering with appro

2、ximately 1,000 independent agency partners across the country.Our company is headquartered in Cedar Rapids,Iowa,with branch offices in Arizona,California,Colorado,New Jersey and Texas.With more than 1,000 employees,we pride ourselves on delivering outstanding people-centered service to our agents an

3、d policyholders.At UFG,we are committed to achieving superior financial and operational performance,using our seven decades of experience to successfully guide us through market cycles and industry challenges.We hold a financial strength rating of“A”(Excellent)from AM Best Company,which was affirmed

4、 for the 29th consecutive year in December 2022.Annual meeting of shareholdersUnited Fire Group,Inc.s(UFG)annual meeting of shareholders will be held at 10 a.m.CT on Wednesday,May 17,2023.The meeting is being held virtually online via live audio webcast,from the companys headquarters at 118 2nd Ave

5、SE,Cedar Rapids,IA 52401.You will be able to attend virtually,submit questions and vote online by logging on to www.meetnow.global/M5Y2PNQ.Our Annual Report on Form 10-K/A for 2022 is filed with the Securities and Exchange Commission and is available(without exhibits)to shareholders,free of charge,u

6、pon written or oral request to:Investor RelationsUnited Fire Group,Inc.118 Second Avenue SECedar Rapids,Iowa 52401Telephone:319-399-5700Registrar and Transfer AgentComputershareP.O.Box 505000Louisville,KY 40233-5000orBoard of directorsJames W.Noyce,Chairman of the Board Kyle D.Skogman*,Vice Chairman

7、 of the Board John-Paul E.Besong Scott L.Carlton Brenda K.Clancy Christopher R.Drahozal Matthew R.Foran Mark A.Green Kevin J.Leidwinger Lura E.McBride George D.Milligan Susan E.Voss *Kyle Skogman tendered his resignation from the board of directors,effective May 17,2023,due to the age limit in our b

8、ylaws.United Fire Group,Inc.2022 Annual ReportDear UFG shareholders,Last August,I had the honor of becoming the sixth leader in UFGs history.After 30 years in the insurance industry,I was drawn to UFG for several reasons,including its proud history of doing business and treating people the right way

9、,as well as its inspiring corporate vision built on delivering promises.As I have stepped into the role of CEO over the past several months,I continue to be grateful for the support shown to me by my fellow board members,the management team and my incredible UFG colleagues across the country.Since t

10、aking over leadership,I am pleased with our progress and especially proud of our people.They have worked tirelessly to fulfill our promises as an insurance company while executing on our strategy to achieve superior financial and operational performance.UFG has taken significant actions in recent ye

11、ars to improve profitability,diversify growth,strengthen underwriting governance and reduce volatility and we have emerged as a much stronger company.These actions included:?Exiting subscale personal lines business through a renewal rights agreement,which provided our independent insurance agents th

12、e opportunity to transfer their personal lines policies to Nationwide Mutual Insurance Company,to reduce our catastrophe exposure and earnings volatility.?Executing a re-underwriting exercise of our core commercial book of business to improve portfolio fundamentals,with a specific focus on non-renew

13、ing underperforming accounts and rightsizing the automobile line of business to 20%of the portfolio.?Centralizing underwriting strategy and governance to improve the consistency and quality of our underwriting decisions.?Introducing predictive models to improve pricing and risk selection.?Transformi

14、ng claims to a specialized line of business operating model to maximize our adjusters expertise and resolve claims more efficiently.?Diversifying our portfolio through carefully curated assumed reinsurance transactions.?Restructuring our reinsurance program to reduce volatility.?Establishing regular

15、 feedback procedures across the organization to improve information sharing.Today,these actions are either completed or well underway at UFG,but they tell the important story of where we have been as a company and where we are heading as part of our ongoing transformation.With better data and deeper

16、 insights,I believe we are well-positioned to move UFG boldly forward in the right direction effectively managing our portfolio;responsibly and profitably growing our business;and swiftly responding to changing markets and trends,including the hardening reinsurance market,ongoing economic and social

17、 inflation,and elevated weather events.OUR PERFORMANCEThroughout 2022,our team worked together as one to deliver on our strategic priorities of long-term profitability,diversified growth,continuous innovation,expense management and people development,all of which I view as foundational to our long-t

18、erm success.To recap our financial results in 2022,we produced net income of$0.59 per diluted share,a combined ratio of 101.4%,and return on equity of 1.9%.The combined ratio was impacted by 7.7 points of catastrophe loss activity,a 2.5-point improvement over 2021.Full-year net investment income of$

19、45 million was down$11 million from 2021,a result of lower long-term partner-ship valuations in the first half of the year that decreased investment income by$17 million.This decrease more than offset increased fixed maturity income of$5.5 million for the full year as the increased earnings power of

20、 reinvesting cash and other fixed maturities at higher interest rates was realized in the second half of the year.At UFG,we are committed to delivering underwriting profitability despite the challenges we face in our industry.Although we did not meet that objective in 2022,I am Letter to shareholder

21、sUnited Fire Group,Inc.2022 Annual Reportpleased to note we showed continued improvement in our underlying loss ratio,which we view as a key measure of our core profitability.For the full year of 2022,our underlying loss ratio was 59.2%a 5-point improvement over the full year of 2021 and the lowest

22、reported underlying loss ratio in 10 years.This is a testament to the quality of our portfolio,as well as the relentless discipline by our people when selecting risks,pricing policies,servicing accounts and adjusting claims.In 2022,we achieved net written premium growth of 4.6%to$984 million,with th

23、e fourth quarter marking the third consecutive quarter of year-over-year premium growth.Growth was driven by our specialty,surety and assumed reinsurance businesses,while our core commercial business continues to recover from past years re-underwriting actions.Our core commercial business,which incl

24、udes our construction,middle market,small business and marine lines of business,was down slightly for the year.However,we were encouraged to see improved renewal retention and increased new business production in the fourth quarter of 2022.Within our core commercial business,the average renewal prem

25、ium change was 8.3%for the year,with rate increases of 5.2%and exposure increases of 3.1%as we continue to focus on adequate property valuation considering the current inflationary environment.We expect the core commercial business to return to profitable growth in the coming quarters as we deepen o

26、ur partnerships with existing agents in 2023 and continue our transformation from a generalist to a specialist underwriting company.At UFG,we consistently strive to deliver simple insurance solutions to our agents to enhance ease-of-doing-business.One example of the many ways we are innovating our c

27、ompany for the future is the launch of our new Pro-Quote platform for quoting and binding small business.This seamless new platform is currently available to agents in 10 states and is scheduled to be rolled out in additional states in 2023.We also constantly look for ways to improve the customer jo

28、urney and better meet policyholders changing preferences.To that end,we recently expanded our claims payment options by providing a faster alternative to paper checks for our policyholders and claimants following a loss.Although weve made significant progress in many areas of our company,we recogniz

29、e our expense ratio of 34.4%at year-end 2022 is not sustainable in the long term.Through disciplined expense management,we will apply the same level of intensity to improving the expense ratio as we did the loss ratio in previous years,while continuing to invest in our future.We were pleased to note

30、 slight improvement in the expense ratio in the fourth quarter of 2022,as early benefits of our expense management actions began to take effect.We expect improvements in our expense ratio going forward.Finally,at UFG,we understand our people are essential to our success.To continue to retain and att

31、ract top talent,we support our employees with paths to success through career development,continuous learning,leadership opportunities and work-life balance.Were also proud of our growing network of employee resource groups,illustrating the inclusive workplace culture that exists at UFG.We are equal

32、ly passionate about supporting the communities where our people live and work,carrying forward a decades-long legacy of corporate giving at UFG.In addition to providing our employees with paid time off to volunteer,we are pleased to present our “Scotty McIntyre Jr.Go Beyond”award annually to both an

33、 employee and agent.This award honors individuals for their community service,with UFG proudly donating$5,000 to a charity of the winners choice.OUR STRENGTH2022 ended on a positive note with AM Bests affirmation of our“A”financial strength rating for the 29th consecutive year.AM Best ratings are a

34、meaningful measure in the insurance industry,with an“A”rating given to companies that have an excellent ability to meet their ongoing insurance obligations.The outlook of our rating remains negative as we continue to execute our strategic plan for improved performance.As of December 31,2022,our bala

35、nce sheet remained strong,with$2.9 billion in total assets,$740 million in United Fire Group,Inc.2022 Annual Reporttotal stockholders equity and a$1.8 billion investment portfolio,of which 84%is allocated to a high-quality fixed income book.Book value per common share was$29.36 as of December 31,202

36、2.In 2022,we paid total quarterly dividends of$0.64 per share,returning$15.9 million to our shareholders over the course of the year.UFG has a 54-year history of paying dividends to our shareholders,with the fourth quarter of 2022 marking our 219th consecutive quarter.A NEW YEAR AT UFGAs I write thi

37、s letter,a promising new year has already begun at UFG.In January,we welcomed our new Executive Vice President and Chief Operating Officer Julie Stephenson to the leadership team,succeeding Michael Wilkins,who retired at the end of September.Julie is an accomplished leader who brings a wealth of ope

38、rational,underwriting and portfolio management experience to our company.We are thrilled to have her onboard with us as she oversees efforts to drive profitable growth across our businesses.Looking ahead to our annual shareholders meeting on May 17,we will bid farewell to our longstanding board memb

39、er Kyle D.Skogman after 22 years of dedicated service.Kyle currently serves as vice chairman of the board and is retiring due to the age limit in our bylaws.Although our time together on the board has been brief,I appreciate Kyles many lasting contributions to UFGs success,as well as his vast knowle

40、dge of our companys history.I congratulate him on a well-deserved retirement and wish him all the best as he closes this chapter of his esteemed career.In the year ahead,I am committed to providing a clear pathway for our people as we advance our strategies centered on long-term profitability,divers

41、ified growth,continuous innovation,expense management and people development.I am confident that our actions will put us in a stronger position for 2023.In closing,I thank our employees for embracing ambitious goals for 2023,our distribution partners for entrusting us with their business,and our val

42、ued shareholders for the trust and confidence youve placed in our company.I am excited for what the new year holds as we continue to position UFG for superior financial and operational performance.Kevin J.Leidwinger,UFG President and CEODisclosure of Forward-Looking StatementsThis release may contai

43、n forward-looking statements about our operations,anticipated performance and other similar matters.The Private Securities Litigation Reform Act of 1995 provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements.The forward-looking

44、statements are not historical facts and involve risks and uncertainties that could cause actual results to differ from those expected and/or projected.Such forward-looking statements are based on current expectations,estimates,forecasts and projections about the Company,the industry in which we oper

45、ate,and beliefs and assumptions made by management.Words such as“expect(s),”“anticipate(s),”“intend(s),”“plan(s),”“believe(s),”“continue(s),”“seek(s),”“estimate(s),”“goal(s),”“remain(s)optimistic,”“target(s),”“forecast(s),”“project(s),”“predict(s),”“should,”“could,”“may,”“will,”“might,”“hope,”“can”a

46、nd other words and terms of similar meaning or expression in connection with a discussion of future operations,financial performance or financial condition,are intended to identify forward-looking statements.These statements are not guarantees of future performance and involve risks,uncertainties an

47、d assumptions that are difficult to predict.Therefore,actual outcomes and results may differ materially from what is expressed in such forward-looking statements.Information concerning factors that could cause actual outcomes and results to differ materially from those expressed in the forward-looki

48、ng statements is contained in Part I,Item 1A“Risk Factors”of our Annual Report on Form 10-K/A for the year ended December 31,2022,filed with the Securities and Exchange Commission(“SEC”)on March 1,2023.The risks identified in our Annual Report on Form 10-K/A and in our other SEC filings are represen

49、tative of the risks,uncertainties,and assumptions that could cause actual outcomes and results to differ materially from what is expressed in the forward-looking statements.Readers are cautioned not to place undue reliance on these forward-looking statements,which speak only as of the date of this r

50、elease or as of the date they are made.Except as required under the federal securities laws and the rules and regulations of the SEC,we do not have any intention or obligation to update publicly any forward-looking statements,whether as a result of new information,future events,or otherwise.118 Seco

51、nd Ave.SE,Cedar Rapids IA 52401,319-399-5700,UNITED FIRE GROUP,INC.United Fire&Casualty CompanyAddison Insurance CompanyFinancial Pacific Insurance CompanyFranklin Insurance CompanyLafayette Insurance CompanyMercer Insurance CompanyMercer Insurance Company of New Jersey,Inc.UFG Specialty Insurance CompanyUnited Fire&Indemnity CompanyUnited Fire Lloyds INSURANCE?This page intentionally left blank.?