United Fire Group, Inc · NASDAQ:UFCS

United Fire — Investor Presentation (August 2011)

29 slides from United Fire's investor presentation, Aug 30, 2011

  1. Slide 1: Form 8-K Current Report

    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): August 30, 2011 United Fire & Casualty Company (Exact

  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 August 30, 2011. During this presentation, management will discuss the proposed formation of a new holding company structure for the organization proposed (“Reorganiza

  3. Slide 3: Item 8.01 Other Events and Exhibits

    Item 8.01. Other Events United Fire & Casualty Company (aka “United Fire Group”) will give an investor presentation on June 29, 2011. Exhibit 99.1 is a copy of the booklet presented at, and posted in the Investor Relations section of our website (www.unitedfiregroup.com) under Reports, for a period

  4. Slide 4: Exhibit Index

    EXHIBIT INDEX Exhibit Description of Exhibit Number 99.1 Investor presentation of United Fire Group, dated August 30, 2011. 99.2 Investor handout of United Fire Group, dated August 30, 2011.

  5. Slide 5: United Fire Group: protecting dreams

    protecting dreams Exhibit 99.1 protecting dreams UNITED FIRE GROUP U N I T E D F I R E G R O U P® Investor Presentation Investor presentation September 2011

  6. Slide 6: Forward-Looking Statements

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

  7. Slide 7: Company Overview

    protecting dreams Company Overview  Regional R i l provider id off a complete l li off insurance line i products, d i l di traditional including di i l commercial i l andd personal P&C insurance, niche specialty programs (e.g. waste haulers, religious institutions, surety bonds) and life insurance

  8. Slide 8: Expanded Geographic Footprint

    protecting dreams EXPANDED Geographic Footprint WA ME ND MT MN VTNH MA OR WI NY ID MI CT SD RI WY NJ PA IA NE IN OH MD NV IL DE 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 6

  9. Slide 9: Acquisition of Mercer Insurance Group

    protecting dreams Acquisition of Mercer Insurance Group  The acquisition q of Mercer Insurance GGroup p enhances U United Fire’s strategy gy of pproviding g pprotection to individuals,, businesses and organizations through regional insurance companies operating through a network of independent agen

  10. Slide 10: Operating Segment Premium Analysis

    protecting dreams OPERATING SEGMENT PREMIUM ANALYSIS(1) 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

  11. Slide 11: Disciplined Underwriting

    protecting dreams DISCIPLINED UNDERWRITING Rate Change Comparison 2% 0% -2% -4% Median: -0.9% -6% 6% -6.7% 6 7% MarketScout -6.1% -8% CIAB 1 -10% UFG 2 3 -12% -14% -16% 16% -18% 2007 2008 2009 2010 2Q11 (1) Quarterly rate change for U.S. based property and casualty accounts. (2) Quarterly rate chang

  12. Slide 12: CAT Management

    protecting dreams CAT MANAGEMENT 100-Year Probable Maximum Losses ((PMLs)) Exposure p Reduction(1) ($ 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/

  13. Slide 13: 2008-2009 Underperformance

    protecting dreams 2008-2009 UNDERPERFORMANCE Reinsurance Program E t in Events i 2008-2009 2008 2009  2011 Catastrophe program  Hurricane Katrina development of $65 million due to unfavorable court rulings  $20 million retention  95% excess of $20 million  Record number of catastrophe events in

  14. Slide 14: Initiatives and Strategies Moving Forward

    protecting dreams INITIATIVES AND STRATEGIES MOVING FORWARD 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 10

  15. Slide 15: Financial Overview

    protecting dreams -DRAFT- FINANCIAL OVERVIEW Investor presentation

  16. Slide 16: Financial Summary

    protecting dreams FINANCIAL SUMMARY (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 $467,427 $463,892 $248,185 $295,3

  17. Slide 17: Historical Performance - Book Value Growth

    protecting dreams HISTORICAL PERFORMANCE - 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

  18. Slide 18: Operating Segment Financial Highlights

    protecting dreams OPERATING SEGMENT FINANCIAL HIGHLIGHTS (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

  19. Slide 19: Historical Performance - Return Profile

    protecting dreams HISTORICAL PERFORMANCE - RETURN PROFILE 10 Year Return On Equity 10-Year 19 % 18 % Average: 17 % 16 % 7.3% 15 % 15 % 14 % 14 % 7.7% 10 % 9% 6% 7% 6% 1% ( ) (1)% (0)% (2)% (2)% (3)% (4)%(1) '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 6/30/11 ROE Operating ROE (1) Six months ended June 3

  20. Slide 20: Historical Performance - Underwriting Profile

    protecting dreams HISTORICAL PERFORMANCE – UNDERWRITING PROFILE Statutory Combined Ratio 113% 113% 114% 107% (1) 105% 102% 105% 101% 103% 100% 101% 100% 98% 96% 93% 92% 90% 86% 82% Average: 99.8% 100.8% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 UFG Industry (1) AM Best estimate for industry’s statutor

  21. Slide 21: Historical Performance - Strength of Reserves

    protecting dreams HISTORICAL PERFORMANCE - STRENGTH OF RESERVES N tR Net Reserve R Redundancy d d (D (Deficiency) fi i ) 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 Overview

    protecting dreams INVESTMENT PORTFOLIO OVERVIEW(1) Total Portfolio Breakdown (%) T t l Portfolio Total P tf li Breakdown B kd ($) Equity Other(2) Securities 2% Investment Value (in millions) 6% Bonds $2,285 Equity securities $150 Other (2) $48 Bonds 92% Total $2,483 Average duration 5.2 years Fixed

  23. Slide 23: Capital Management

    protecting dreams CAPITAL MANAGEMENT  Strong St economic i capital it l position iti (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 Comp

  24. Slide 24: Key Investment Considerations

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

  25. Slide 25: Investor Concerns and United Fire Responses

    protecting dreams Investor Concerns and United Fire Responses Investor C Concerns United Fire Responses U p Uncertainty  Transaction closed on March 28, 2011 Regarding Mercer  Integration efforts are proceeding as planned with merger expenses less than originally budgeted Acquisition and  Substan

  26. Slide 26: Additional Information

    protecting dreams Additional Information United U it d Fire Fi & Casualty C lt Company C has h filed fil d with ith the th SEC a preliminary li i proxy statement/prospectus t t t/ t on Form F S-4 S 4 andd other th relevant l t documents related to approval of the proposed holding company formation.

  27. Slide 27: Thank You

    protecting dreams thank you Investor presentation UNITED FIRE GROUP

  28. Slide 28: Reasons for Forming a Holding Company

    Exhibit 99.2 United Fire & Casualty Company shareholders will have an opportunity to approve formation of a new holding company structure at a special shareholder meeting scheduled for 1:00 P.M. on November 17, 2011. Reasons for forming a Holding Company  Future Strategic and Business Flexibility –

  29. Slide 29: Additional Information

    Additional Information United Fire & Casualty Company has filed with the SEC a preliminary proxy statement/prospectus on Form S-4 and other relevant documents related to approval of the proposed holding company formation. United Fire & Casualty will be filing a final proxy statement/prospectus with

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