United Fire Group, Inc · NASDAQ:UFCS

United Fire — Investor Presentation (September 2011)

27 slides from United Fire's investor presentation, Sep 8, 2011

  1. Slide 1: Form 8-K Current Report - United Fire & Casualty Company

    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 8-K ______________ CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 8, 2011 United Fire & Casualty Company (Exa

  2. Slide 2: Item 7.01 Regulation FD Disclosure

    Item 7.01. Regulation FD Disclosure United Fire & Casualty Company (a/k/a “United Fire Group”) will give an investor presentation on September 8, 2011. A copy of the booklet used in connection with this presentation is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated here

  3. Slide 3: Item 8.01 Other Events and Exhibits

    Item 8.01. Other Events United Fire & Casualty Company (a/k/a “United Fire Group”) will give an investor presentation on September 8, 2011. A copy of the booklet used in connection with this presentation is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by refere

  4. Slide 4: Exhibit Index

    EXHIBIT INDEX Exhibit Description of Exhibit Number 99.1 Investor presentation of United Fire Group, dated September 8, 2011.

  5. Slide 5: United Fire Group - Protecting Dreams

    protecting dreams Exhibit 99.1 protecting dreams UNITED FIRE GROUP investor presentation

  6. Slide 6: Forward-Looking Statements

    protecting dreams FORWARD-LOOKING forwardSTATEMENTS This report may contain forward-looking looking statements about our operations, operations anticipated performance and other similar matters. The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to make cautionary

  7. Slide 7: Company Overview

    COMPANY OVERVIEW protecting dreams  R Regional i l provider id off a complete l t liline off iinsurance products, including traditional commercial and personal P&C insurance, niche specialty programs (e.g. waste haulers, religious institutions, surety bonds) and life insurance  P&C companies i rat

  8. Slide 8: Operating Segment Premium Analysis

    OPERATING SEGMENT PREMIUM ANALYSIS(1) protecting dreams P & C (90%)(2) DPW by Line of Business DPW by State Surety Miscellaneous 4% 1% Workers CA Comp 9% 13% Fire & Allied TX Lines Other 12% Automobile 42% 49% 24% IA 12% Other NJ Liability MO 7% 20% 7% Life (10%)(2) DPW by Line of Business DPW by St

  9. Slide 9: Acquisition of Mercer Insurance Group

    protecting dreams ACQUISITION OF MERCER INSURANCE GROUP  The acquisition of Mercer Insurance Group enhances United Fire’s strategy of providing protection to individuals, businesses and organizations through regional insurance companies operating through a network of independent agents  Provides e

  10. Slide 10: Expanded Geographic Footprint

    EXPANDED GEOGRAPHIC FOOTPRINT protecting dreams WA ME ND MT MN VT NH MA OR NY WI ID MI CT SD RI WY NJ PA IA NE IN OH MD DE NV IL WV UT VA CO KS MO DC KY CA NC TN OK AR SC AZ NM GA MS AL TX LA FL Direct Written Premiums (2010) = UFCS states that individually represent greater than 0.01% of DPW = Top

  11. Slide 11: Investor Concerns and United Fire Responses

    protecting dreams INVESTOR CONCERNS AND UNITED FIRE RESPONSES Investor Concerns United Fire Responses Uncertainty  Transaction closed on March 28, 2011 Regarding Mercer  Integration efforts are proceeding as planned with merger expenses less than originally budgeted Acquisition and  Substantial o

  12. Slide 12: Disciplined Underwriting

    DISCIPLINED UNDERWRITING protecting dreams Rate Change Comparison 2% 0% Median: -2% -0.9% -4% -6.7% -6.1% -6% 6% MarketScout -8% CIAB 1 -10% UFG 2 -12% 3 -14% -16% 16% -18% 2007 2008 2009 2010 2Q11 ( ) Quarterly (1) Q rate change for f U.S.-based S property and casualty accounts. (2) Quarterly rate

  13. Slide 13: CAT Management

    CAT MANAGEMENT protecting dreams 100-Year Probable Maximum Losses ((PMLs)) Exposure p Reduction ($ in Millions) $285 $279 $278 $271 TOTAL O A EXPOSURE OS $196 LOUISIANA EXPOSURE $186 $154 $143 $134 $133 $125 $126 $119 $114 $118 $105 $114 $102 $107 $91 06/06 12/06 06/07 12/07 06/08 12/08 06/09 12/09

  14. Slide 14: 2008-2009 Underperformance

    2008-2009 UNDERPERFORMANCE protecting dreams Events in 2008-2009 Reinsurance Program  Hurricane H i K Katrina ti d development l t off $65 million illi d due tto unfavorable f bl  2011 C Catastrophe t t h program court rulings • $20 million retention  Record number of catastrophe events in 2008 c

  15. Slide 15: Initiatives & Strategies Moving Forward

    INITIATIVES & STRATEGIES MOVING FORWARD protecting dreams Utilize New underwriting tools  Use CATography™ to: • Improve risk selection process • Improve exposure management  Use predictive analytics for risk selection and improved profitability investor presentation 11

  16. Slide 16: Financial Summary

    FINANCIAL SUMMARY protecting dreams (GAAP results results, $ in thousands except per share values) At or For the 12 Months At or For the 6 Months Ended December 31, Ended June 30, 2008 2009 2010 2010 2011 Selected Income Statement Items Net Premiums Written $496,897) $496,897 $467,427) $467,427 $463

  17. Slide 17: Operating Segment Financial Highlights

    OPERATING SEGMENT FINANCIAL HIGHLIGHTS protecting dreams (GAAP results, $ in 000s) At or For the 12 Months At or For the Six Months Ended December 31, Ended June 30, 2008 2009 2010 2010 2011 Property & Casualty Segment Commercial Net Premiums Earned $420,769 $394,000 $370,479 $184,012 $211,114 Loss

  18. Slide 18: Historical Performance: Book Value Growth

    HISTORICAL PERFORMANCE protecting dreams Book Value Growth Reported Book Value Per Share $27.63 Book Value Per Share $27.35 $27.23 Dividends Per Share $25.35 $24.62 $24.10 $0.60 $0.60 $0.60 $0.60 (1) (1) Six months ended June 30, 2011 annualized. $22.46 $0.56 $21.20 $0.50 $0.48 $18.62 $0.42 $0.38 $0

  19. Slide 19: Historical Performance: Return Profile

    HISTORICAL PERFORMANCE protecting dreams Return Profile 10-Year Return on Equity Excluding Hurricane Katrina Average: 9.5% 23% 23% 9.7% 18% 17% 16% 15% 15% 14% 13% 13% 9% 9% 9% 6% 6% 5% 3% 2% 1% 6/30/2011 0% 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 -2% -3% ROE Operating ROE Note: Six months

  20. Slide 20: Historical Performance: Underwriting Profile

    HISTORICAL PERFORMANCE protecting dreams Underwriting Profile Statutory Combined Ratio Excluding Hurricane Katrina Average: 93.1% 101.9% 116% 105% 107% 107% 105% 106% 102% 101% 103% 100% 99% 100% 98% 96% 93% 92% 86% 82% 80% 72% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 UFG Industry investor

  21. Slide 21: Historical Performance: Strength of Reserves

    HISTORICAL PERFORMANCE protecting dreams Strength of Reserves Net Reserve Redundancy (Deficiency) 14% 14% 10% 9% 8% Median: 3% 6.7% 5% 3% 0% -5% 5% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 investor presentation 17

  22. Slide 22: Investment Portfolio

    INVESTMENT PORTFOLIO protecting dreams Overview(1) Total Portfolio Breakdown (%) Total Portfolio Breakdown ($) Equity Other(2) Securities 2% Investment Value (in millions) 6% Bonds $2,285 Equity securities $150 (2) Other $48 Bonds 92% Total $2,483 Average duration 5.2 years Fixed Income Portfolio Br

  23. Slide 23: Capital Management

    CAPITAL MANAGEMENT protecting dreams  Strong economic capital position (BCAR)  Prudent reinsurance programs  Modest debt-to-capital ratio (12%)  Conservative investment portfolio  History of consistently conservative reserves  Use of capital – acquisition of Mercer Insurance Company  Share re

  24. Slide 24: Key Investment Considerations

    KEY INVESTMENT CONSIDERATIONS protecting dreams  Experienced senior management  Proactive capital management  Financial strength  Consistent reserving practices and historically reported t d loss l redundancies d d i  Conservative investment philosophy  Renewed focus on organic growth  Local

  25. Slide 25: Thank You

    protecting dreams thank you investor presentation UNITED FIRE GROUP

  26. Slide 26: GAAP to Non-GAAP Reconciliation

    GAAP TO NON-GAAP RECONCILIATION protecting dreams Net Income to Operating Income Excluding Hurricane Katrina ((In Thousands)) 6/30/11 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Net income (loss) excluding Hurricane $(20,468) $53,088 $14,244 $4,244 $115,513 $108,719 $125,967 $78,817 $55,574 $1

  27. Slide 27: GAAP to Non-GAAP Reconciliation

    GAAP TO NON-GAAP RECONCILIATION protecting dreams N t IIncome tto O Net Operating ti Income I At or For the 12 Months At or For the 6 Months Ended December 31, Ended June 30, (In Thousands) 2008 2009 2010 2010 2011 Net income (loss) $(13,064) $(10,441) $47,513 $33,044 $(12,104) After-tax realized in

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