United Fire Group, Inc

Good morning. My name is Nick, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the UFG Insurance fourth quarter 2025 financial results conference call. 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 a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. Thank you. I will now turn the call over to UFG Vice President of Investor Relations, Tim Borst. 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 statement includes 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 the company 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 thank you for joining us today. I'll cover a few highlights this morning, then Julie Stevenson will discuss our underwriting results, and Eric Martin will discuss our financial results in more detail. Over the past three years, UFG has undergone significant transformation as we've deepened our underwriting expertise, evolved our capabilities to attract a more expansive customer base, enhanced our actuarial insights, and improved alignment with our distribution partners. I'm proud to see the cumulative effect of our work reflected not only in our strong fourth quarter and full year 2025 results, but also in the company's significantly improved financial performance since 2022. In 2025, we grew our business to record size while delivering the best annual underwriting profit, investment income, and return on equity in a decade or longer. Underwriting profit grew from $9 million in 2024 to $67 million in 2025. Net investment income grew by nearly 20%, while our full-year operating earnings per share improved by 80%, and book value per share grew by more than $6. Full-year net written premium grew by 9% to more than $1.3 billion from record new business production, strong retention in our core commercial business, and continued renewal premium increases as our underwriters remain diligent in an evolving market. The annual combined ratio improved to 94.8% with ongoing improvement in the underlying loss ratio, catastrophe loss ratio, and expense ratio. Consistent execution of our reserving philosophy across the year has afforded us the opportunity to deliver stability in financial results while advancing to a more conservative position in our range of actuarial estimates that reinforces the portfolio and strengthens our balance sheet. Improved underwriting profit and sustainable growth in net investment income contributed to an annual return on equity of 13.7%, the best in nearly two decades. At the same time, our strategic investments in technology are improving operational efficiency and expanding our underwriting capabilities, allowing our people to focus on delivering the strong personal relationships and responsive service our partners and policyholders value. A few examples include our new policy administration system, underwriter workbench, and artificial intelligence-based tools, augmenting processes to better serve our customers today. We believe these investments will generate significant operational efficiencies as our capabilities mature. With 2025's record year behind us and our focus squarely on 2026, our 80th year in business, I could not be more pleased with the progress we've made since our transformation began in late 2022. I'd like to take a moment to highlight some key financial measures that illustrate how far the company's progressed over the last three years. Between 2022 and 2025, Netwritten Premium has grown from $984 million to $1.3 billion, an 11% compounded annual growth rate, as our distribution partners have embraced UFG's transformation. Our combined ratio has improved from 101.4% to 94.8%, rebounding from an underwriting loss to an underwriting profit of $67 million. Our annual investment income has more than doubled from $45 million to $98 million. Operating earnings per share has increased more than fourfold from $1.09 to $4.60. Return on equity has climbed from 2% to 13.7%, and book value per share has increased over 25% from $29.36 to $36.88. In addition, we've greatly enhanced the company's reserve position since 2022 as part of our ongoing commitment to maintaining strong and stable reserves. We're excited about the company's improved financial performance and momentum we've established with our distribution partners. As we focus on the strategic execution of our business plan in 2026, we believe UFG is well positioned to deliver continued profitable growth as a disciplined, solution-oriented underwriting company capable of more broadly serving our distribution partners than ever before. With confidence in our future financial performance and an enduring commitment to creating long-term value for our shareholders, I'm pleased to share that the Board of Directors has declared a 25% increase in our quarterly cash dividend from 16 cents per share to 20 cents per share. And with that, I'll hand the call to Julie Stevenson to discuss our underwriting results in more detail.