United Fire Group, Inc.
) reported fourth-quarter 2013 operating net income of $1.00 per
share, outpacing the Zacks Consensus Estimate of 51 cents
substantially by 96.1%. The result also surged from a net
operating loss of 12 cents a share reported in the prior-year
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The bottom line was boosted by top line growth and lower total
benefits losses and expenses.
Including after-tax net realized investment gains, United Fire
reported net income of $1.04 per share, which compared favorably
with 10 cents a share reported in the year-ago quarter.
Total revenue of United Fire increased 7.3% year over year to
approximately $229 million, driven by an improvement in net
premiums earned (up 10% year over year) and higher net investment
income (up 5.7%). Total revenue also surpassed the Zacks
Consensus Estimate of $218 million by 5%.
United Fire's net investment income of $30 million increased
18.5% year over year during the quarter.
Total benefits, losses and expenses of United Fire decreased
13.4% year over year to $191.7 million during the quarter. The
decline was attributable to lower losses and loss settlement
Combined ratio improved 2210 basis points from the year-ago
quarter to 89% owing to lower catastrophe losses.
Quarterly Segment Update
Property and Casualty:
Net premium written for this segment soared 9% year over year to
$169 million in the reported quarter.
Total revenue amounted to nearly $195 million in the quarter,
increasing 10.8% year over year on the back of higher net earned
premiums, net investment income as well as higher net realized
Net income of $23.2 million surged from net loss of $4.1 million
reported in the comparable prior-year period.
Net premiums written in the segment were $15 million, down 28.8%
from the year-ago quarter.
Total revenue also declined 8.8% year over year to $34 million in
the reported quarter due to lower premiums and net realized
Net income of $3.3 million registered a year-over-year surge of
95.4% during the quarter.
Full-Year 2013 Highlights
United Fire reported 2013 net operating income of $2.76 per
share, a penny short of the Zacks Consensus Estimate of $2.77.
However, the number scaled up 91.7% year over year.
The significant improvement in full-year number was attributable
to favorable catastrophe losses environment as well as higher
Including net realized investment gains and losses, United Fire's
net income came in at $2.98 per share, up 88.6% year over year.
Higher net premiums earned and net realized investment gains
drove the 2013 total revenue to $877 million for United Fire, up
7.8% year over year.
As of 2013 end, United Fire had cash and cash investments of
$3.14 billion, almost in line with 2012-end level.
Shareholders' equity as of Dec 31, 2013 was $782.8 million, up
7.4% from $729.2 million as of Dec 31, 2012.
United Fire's Book value per share increased 6.8% from 2012 end
and currently stands at $30.87.
Performances by Other Property and Casualty
Among other property and casualty insurers,
) reported operating net earnings of $2.39 per share in the
fourth quarter of 2013, surpassing the Zacks Consensus Estimate
by 19.5%. Moreover, earnings surged nearly 67% on a
American Financial Group Inc.
) reported fourth-quarter operating earnings per share of $1.28,
which comfortably beat the Zacks Consensus Estimate of $1.23. On
a year-over-year basis, earnings soared 91%.
The Travelers Companies Inc.
) reported operating net earnings of $2.68 per share in the
fourth quarter, surpassing the Zacks Consensus Estimate by 23.5%.
Moreover, earnings improved nearly fourfold on a year-over-year
United Fire presently carries a Zacks Rank #3 (Hold).