Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of property and casualty insurer United Fire Group (Nasdaq: UFCS) were red hot today, gaining as much as 16% in intraday trading after the company reported second-quarter earnings.

So what: It was bulls-eyes across the board for United Fire's second quarter. The company delivered $0.58 in earnings per share, which was a big turnaround from last year's $0.69 loss. The quarter lapped a tough 2011 quarter that included losses from the Joplin, Missouri tornado, and the earthquake and tsunami in Japan. Total revenue was up 10% from last year, to $200 million.

United Fire managed to top analysts' expectations on both the top and bottom line, as they estimated earnings per share of $0.23 on $197 million in revenue.  It's questionable how much investors should read into that "beat" though, because there are only two analysts that cover the company.

Now what: Providing property and casualty insurance, particularly when it comes to catastrophe business, can be a volatile one -- as United Fire investors saw last year with the big losses. With big losses expected occasionally, investors need to keep a keen eye on the big picture to make sure that over the longer term, the company is getting compensated for the risks that it's assuming. This quarter looked good, but it's only one data point in the broad view that investors should maintain.

Looking ahead for United Fire, one notable risk that it doesn't assume is crop insurance, as it pointed out in its earnings release. That means that the company will dodge the claims that other insurers will have to shoulder after the severe droughts in the U.S.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.