United Fire Group, Inc

Good day and welcome to the United Fire Group Insurance 2025 first quarter conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Tim Borst, Investor Relations. Please go ahead.

Good morning, and thank you for joining this call. Yesterday afternoon, we issued a press release on our results. To find a copy of this document, please visit our website at ufginsurance.com. Press releases and slides are located under the Investors tab. Joining me today on the call are UFG President and Chief Executive Officer Kevin Leidwinger, Executive Vice President and Chief Operating Officer Julie Stevenson, and Executive Vice President and Chief Financial Officer Eric Martin. Before I turn the call over to Kevin, a couple of reminders. First, please note that our presentation today may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates, forecasts, and projections about the company, the industry in which we operate, and beliefs and assumptions made by management. The company cautions investors that any forward-looking statements include risks and uncertainties and are not a guarantee of future performance. Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. These forward-looking statements are based on management's current expectations, and United Fire Group assumes no obligation to update any forward-looking statements. The actual results may differ materially due to a variety of factors which are described in our press release and SEC filings, discussed specifically in our most recent annual report on Form 10-K. Also, please note that in our discussion today, we may use some non-GAAP financial measures. Reconciliations of these measures to the most comparable GAAP measures are also available in our press release and SEC filings. At this time, I will turn the call over to Mr. Kevin Leidwinger, CEO of UFG Insurance.

Thank you, Tim. Good morning, everyone, and welcome to our first quarter conference call. I'll begin this morning by providing a high-level overview of our results. Following my comments, Julie Stevenson will discuss our underwriting results, and Eric Martin will discuss our financial results in more detail. 2025 is off to a promising start. Through the continued execution of our strategic business plan, we achieved our third consecutive quarter of underwriting profitability, record net written premium, and a significant increase in net income, despite elevated industry catastrophe losses and a higher expense ratio in the quarter. Turning now to the specifics. Net written premium grew 4% to $335.4 million. However, our growth rate was not reflective of the disciplined pricing, stable retention, and increased new business production we achieved across the portfolio as a few unusual seeded reinsurance premium adjustments reduced net written premium growth by three points. First quarter combined ratio was 99.4%, a half a point increase over the first quarter of 2024. The underlying loss ratio improved 2.9 points to 56.5% as a result of ongoing strong earned rate achievement that exceeded loss trends, improving frequency trends, and disciplined portfolio management. Prior year reserve development remained neutral overall for the fifth quarter in a row. Catastrophe losses contributed five points to the combined ratio and include $8.2 million of losses from California wildfires. The outcome is just below the midpoint of the $7 to $10 million range we provided in February and is consistent with what we know to be our exposure to this event. The underwriting expense ratio increased three points to 37.9% and includes additional costs associated with the final stages of development of our new policy administration system, as well as increased performance-based compensation for agents as a result of strong prior year performance. Net investment income improved to $23.5 million in the first quarter. The majority of this improvement was due to a sustainable increase in fixed maturity income that grew to $21 million in the quarter, while we also benefited from improved valuations on our limited partnership portfolio. Reported book value per share improved to $32.13 in the first quarter as a result of positive earnings and a decrease in interest rates, with adjusted book value per share growing to $34.16 on continued positive earnings. Before I turn the call over to Julie Stevenson, just a word about tariffs. We continue to monitor the issue closely, and while there is significant uncertainty with respect to the ultimate outcome, we expect any impact from tariffs to be manageable on our business. I'll now hand the call over to Julie Stevenson, our Chief Operating Officer, to discuss our underwriting results in more detail.