UFG(UFCS) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter net income increased to $31.4 million, or$1.21 per diluted share, compared to $19.6 million, or$0.77 per diluted share in the same quarter of 2023[1][13] - Full year net written premiums reached $1.2 billion, a 15$1.06 billion in 2023, marking the highest level in the company's history[3][5] - The combined ratio for the fourth quarter improved to 94.4%, a 4.8-point decrease from 99.2% in the previous year, while the full year combined ratio improved by 10.1 points to 99.2%[6][18] - The company reported a return on equity of 8.2% for the full year, a significant improvement from a loss of 4.0% in 2023[14] - Net income for Q4 2024 was $31,442,000, compared to$19,608,000 in Q4 2023, representing a 60.5% increase[34] - Adjusted operating income for the twelve months ended December 31, 2024, was $66,246,000, significantly improved from a loss of$30,706,000 in 2023[34] Investment Income - Net investment income for the fourth quarter was $23.2 million, a 21.2$19.1 million in the same quarter of 2023, and for the full year, it rose to $82.0 million, up 37.5$59.6 million[8][20] - Total investment income for Q4 2024 was $25,719,000, an increase of 20.6$21,448,000 in Q4 2023[21] - Net investment income for the twelve months ended December 31, 2024, was $81,987,000, up 37.5$59,606,000 in 2023[21] - Average yields on fixed income securities pre-tax improved to 4.15% in Q4 2024 from 3.39% in Q4 2023[21] Premiums and Underwriting - Average renewal premiums increased by 11.9% in the fourth quarter, contributing to the growth in net written premiums[15] - Net earned premiums for Q4 2024 reached $308,137, an increase of 16.5$264,366 in Q4 2023[41] - The company’s net written premiums for commercial lines totaled $225,712 in Q4 2024, an increase of 11.9$201,652 in Q4 2023[45] - The underlying loss ratio improved to 55.7% for the fourth quarter and 57.9% for the full year, reflecting better underwriting discipline and favorable claim frequency[6][18] - The net loss ratio for total commercial lines improved to 54.5% in Q4 2024 from 65.7% in Q4 2023[46] Assets and Equity - Invested assets increased to $2,093,094,000 as of December 31, 2024, up from$1,886,494,000 in 2023, reflecting a growth of 11%[22] - Total assets reached $3,488,469,000, an increase of 10.9$3,144,190,000 in the previous year[22] - Total stockholders' equity rose to $781,531,000, up from$733,745,000, marking a 6.5% increase[22] - Book value per share increased by $1.76 to$30.80 as of December 31, 2024, compared to the previous year[4] - Book value per share increased to $30.80, a rise of$1.76 per share or 6.1% from $29.04 as of December 31, 2023[23] Dividends and Expenses - The company declared a cash dividend of$0.16 per share during Q4 2024, continuing a quarterly dividend since March 1968[24] - Total benefits, losses, and expenses for the twelve months ended December 31, 2024, were $1,176,273, compared to$1,135,188 in 2023, reflecting a rise of 3.6%[41] - The company’s federal income tax expense for the twelve months ended December 31, 2024, was $15,077, compared to a benefit of$(10,021) in 2023[41] - The loss settlement expenses for Q4 2024 were $176,486, slightly up from$171,289 in Q4 2023[41] Future Outlook - The company plans to implement a new policy administration system in 2025, which is expected to enhance operational efficiency[7] - The estimated losses from the recent wildfires in Southern California are projected to be between $7 million and$10 million[12]