United Fire Group (UFCS 7.16%), a property and casualty insurance provider focused on independent agency distribution, reported Q2 2025 earnings on August 5, 2025. The standout news was adjusted earnings per share of $0.90 (non-GAAP), beating analyst estimates of $0.54 by $0.36 (non-GAAP), marking a dramatic turnaround from a loss in the second quarter of the prior year. Revenue (GAAP) reached $314.8 million, above the consensus of $314.38 million, and up from $301.17 million (GAAP) in Q2 2024. Profitability and premium growth rebounded strongly, and the quarter represents a major improvement in profitability and underwriting outcomes for the insurer.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.90 | $0.54 | ($0.07) | NM |
| EPS (GAAP) | N/A | ($0.11) | NM | |
| Revenue (GAAP) | $335.47 million | $314.38 million | $301.17 million | 11.4% |
| Net Written Premium | $372.88 million | $326.12 million | 14.3 % | |
| Combined Ratio | 96.4 % | 105.6 % | (9.2) pp | |
| Net Investment Income | $21.67 million | $18.03 million | 20.2 % |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
United Fire Group specializes in property and casualty insurance, with a business model based on selling policies through a network of independent agencies. Its mainstay offerings include commercial insurance for businesses, along with smaller exposures in personal and surety lines.
The company’s focus has remained on disciplined underwriting, maintaining strong agency relationships, and investing in technology to improve efficiency. Recent strategic efforts center on strengthening risk selection, ensuring pricing matches potential losses, and expanding its core commercial insurance, especially through specialized products and reinsurance partnerships. Its ability to compete depends on keeping loss ratios low, managing catastrophe exposure, and adapting to shifting industry conditions.
Quarterly Performance Breakdown
The quarter saw a broad-based improvement in the company’s core metrics. Net written premium rose 14% to $372.9 million, driven mainly by a 20% increase in core commercial lines. This reflects both a 7.6% rise in pricing and high retention on policy renewals, with renewal premium increases averaging 9.4% and growth outpacing loss trends.
The combined ratio—a key measure in insurance that compares losses and expenses to premiums—fell 9.2 points to 96.4%. A combined ratio under 100 % means the company made an underwriting profit, indicating its core insurance activities were profitable for the quarter. Several factors drove this improvement: the catastrophe loss ratio fell to 5.5%, much lower than the prior year’s 11.2% and below both company forecasts and the company’s five- and 10-year historical averages. The net loss ratio (GAAP) improved to 61.5%.
The underwriting expense ratio declined to 34.9%, 0.6 points better than the prior year. Favorable reserve development—money set aside for future claim payouts—added 1.6 points of benefit, signaling prior estimates were either conservative or certain claims cost less than expected. No new major business lines were introduced during the period, with the efforts clearly trained on deepening capability and profitability in existing markets.
Net investment income improved by 20% to $21.67 million, reflecting the impact of repositioning into higher-yielding fixed maturity investments. Portfolio yields advanced from 3.62% to 4.32% year over year, creating a boost to earnings even as returns from alternative investments such as limited partnerships lagged behind last year. Total assets (GAAP) reached $3.66 billion as of June 30, 2025. Shareholders’ equity (GAAP) increased to $846 million as of June 30, 2025. Book value per share (GAAP) improved to $33.18. The company’s 57-year track record of quarterly dividends continued with a declared $0.16 per share for the period.
Looking Ahead
United Fire Group’s management did not provide specific full-year or future financial guidance in this earnings release. The company reiterated a focus on continuing its turnaround plan and executing on core strategy, noting a 10.0% return on equity for the first half of 2025, calling it a significant milestone.
Investors are likely to be watching expense ratios closely in coming quarters, as leadership pointed to expectations for gradual normalization once major technology projects reach completion and as premium growth provides scale benefits. How the company sustains recent underwriting and catastrophe management improvements, along with its ability to maintain pricing power amid industry competition, will be critical. The declared quarterly dividend remained steady at $0.16 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
