United Fire Group, Inc · NASDAQ:UFCS
United Fire — United Fire & Casualty — Investor Presentation (August 2011)
23 slides from United Fire's investor presentation, Aug 30, 2011
Slide 1: Investor Presentation September 2011
U N I T E D F I R E G R O U P(r) Investor Presentation September 2011 protecting dreams Investor presentation UNITED FIRE GROUP
Slide 2: Forward-Looking Statements
Forward-Looking 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 forward-looking sta
Slide 3: Company Overview
Company Overview Regional provider of a complete line of insurance 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 rated "A" and United Life Insurance Company r
Slide 4: Expanded Geographic Footprint
EXPANDED Geographic Footprint WV WA OR CA NV ID MT WY UT CO NM OK KS NE SD ND MN IA MO AR LA MS AL GA SC NC TN KY IL IN OH MI WI VA PA MD DE NJ NY VT NH MA RI ME AZ TX FL CO CT DC = UFCS states that individually represent greater than 0.01% of DPW Direct Written Premiums (2010) = Top 6 States by DPW
Slide 5: Acquisition of Mercer Insurance Group
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 expansion of core comme
Slide 6: Operating Segment Premium Analysis
Operating Segment Premium Analysis(1) P & C (90%)(2) Life (10%)(2) DPW by Line of Business DPW by State DPW by Line of Business DPW by State 2010 full year results from United Fire 10-K. Of net premiums earned for the 12 months ended December 31, 2010. 6
Slide 7: Disciplined Underwriting: Rate Change Comparison
Disciplined underwriting Rate Change Comparison 1 2 3 Quarterly rate change for U.S. based property and casualty accounts. Quarterly rate change for the commercial property and casualty market. Quarterly rate change for United Fire per management. 7 -0.9% -6.7% -6.1% Median:
Slide 8: 100-Year Probable Maximum Losses Exposure Reduction
100-Year Probable Maximum Losses (PMLs) Exposure Reduction(1) ($ in Millions) Cat management 8 Decrease: $178mm (62%) Decrease: $188mm (67%)
Slide 9: 2008-2009 Underperformance
2008-2009 Underperformance Hurricane Katrina development of $65 million due to unfavorable court rulings Record number of catastrophe events in 2008 contributed $76 million to United Fire's losses A flood in 2008 forced us from our home office to a temporary location for 11 weeks Hurricanes Ike and
Slide 10: Initiatives and Strategies Moving Forward
Initiatives and strategies moving forward Utilize New underwriting tools Use CATography(tm) to: Improve risk selection process Improve exposure management Use predictive analytics for risk selection and improved profitability 10
Slide 11: Financial Overview
FINANCIAL OVERVIEW
Slide 12: Financial Summary
Financial summary 12 Source: United Fire SEC filings.
Slide 13: Reported Book Value Per Share
Reported Book Value Per Share Historical Performance - Book VALUE GROWTH 13 BVPS CAGR: 7.3% Dividends per Share CAGR: 5.5% (1) (1) Six months ended June 30, 2011 annualized.
Slide 14: Operating Segment Financial Highlights
Operating segment Financial Highlights 14 Source: United Fire SEC filings.
Slide 15: Historical Performance - Return Profile
Historical Performance - RETURN PROFILE 10-Year Return On Equity 15 (1) (1) Six months ended June 30, 2011 annualized. 7.3% 7.7% Average:
Slide 16: Historical Performance - Underwriting Profile
AM Best estimate for industry's statutory combined ratio for 2010. Historical Performance - Underwriting Profile Statutory Combined Ratio 16 (1) 99.8% 100.8% Average:
Slide 17: Historical Performance - Strength of Reserves
Historical Performance - Strength of Reserves Net Reserve Redundancy (Deficiency) 17 6.7% Median:
Slide 18: Investment Portfolio Overview
(2) Investment Portfolio Overview(1) Total Portfolio Breakdown (%) Fixed Income Portfolio Breakdown Fixed Income Portfolio Breakdown by Rating Total Portfolio Breakdown ($) 18 At December 31, 2010. Other is comprised of trading securities, mortgage loans, policy loans, and other long term investment
Slide 19: Capital Management
Capital Management 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 repurchase Extension of existing s
Slide 20: Key Investment Considerations
Key investment considerations Experienced senior management Proactive capital management Financial strength Consistent reserving practices and historically reported loss redundancies Conservative investment philosophy Renewed focus on organic growth Local market knowledge, with decentralized underwr
Slide 21: Investor Concerns and United Fire Responses
United Fire Responses Investor Concerns and United Fire Responses Investor Concerns 21 Greater underwriting discipline than the overall industry The level of rate decreases are slightly moderating Second consecutive year of personal lines rate increases (comprise ~11% of United Fire's P&C writings)
Slide 22: Additional Information
22 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 wi
Slide 23: Thank You
thank you UNITED FIRE GROUP
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