NASDAQ:UFCS United Fire Group Q3 2024 Earnings Report $28.65 +0.85 (+3.06%) Closing price 04:00 PM EasternExtended Trading$28.65 0.00 (0.00%) As of 06:08 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast United Fire Group EPS ResultsActual EPS$0.81Consensus EPS $0.21Beat/MissBeat by +$0.60One Year Ago EPS$0.31United Fire Group Revenue ResultsActual Revenue$322.96 millionExpected Revenue$306.80 millionBeat/MissBeat by +$16.16 millionYoY Revenue GrowthN/AUnited Fire Group Announcement DetailsQuarterQ3 2024Date11/5/2024TimeAfter Market ClosesConference Call DateWednesday, November 6, 2024Conference Call Time10:00AM ETUpcoming EarningsUnited Fire Group's Q2 2025 earnings is scheduled for Tuesday, August 5, 2025, with a conference call scheduled on Wednesday, August 6, 2025 at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by United Fire Group Q3 2024 Earnings Call TranscriptProvided by QuartrNovember 6, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, and welcome to the United Fire Group Insurance 20 24 Third Quarter Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Tim Borst. Operator00:00:36Please go ahead. Speaker 100:00:39Good 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 atufginsurance.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 Leidwanger Executive Vice President and Chief Operating Officer, Julie Stevenson and Executive Vice President and Chief Financial Officer, Eric Martin. Speaker 100:01:05Before 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. Speaker 100:01:42These forward looking statements are based on management's current expectations and 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 ks. 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. Speaker 200:02:14Thank you, Tim. Good morning, everyone, and welcome to our Q3 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. But first, we would like to take a moment to extend our deepest sympathies to those impacted by hurricanes Helene and Milton in recent weeks. Speaker 200:02:36It's been a devastating hurricane season and we wish a swift recovery to the people and communities who were in the path of these storms. Turning to our results, the Q3 reflects our ongoing efforts to improve performance through the execution of our strategic business plan. We generated the highest quarterly net income and operating income in the past 10 quarters, demonstrating our progress in improving underwriting and investment returns by engaging with distribution partners to profitably grow our business, deepening expertise across the company, enhancing our capabilities and leveraging technology to improve efficiency, all while upholding the personal relationships and responsive service our partners and policyholders value. Net rent premiums grew 23 percent to $305,600,000 with growth led by our core commercial and alternative distribution businesses. Core commercial growth remains steady with average renewal premium increases exceeding 12%, stable retention and strong new business production. Speaker 200:03:31Rate increases accelerated to 11.2% exceeding loss trends with all liability lines near or above double digit rate increases. The 3rd quarter GAAP combined ratio improved 3.8 points to 98 point 2 percent from ongoing actions to improve core margins, stable prior period reserve development and catastrophe losses below prior year and historical averages. The 3rd quarter underlying loss ratio of 57.9 percent improved 2.6 points from prior year, reflecting strong earned rate achievement exceeding loss trends, continued underwriting discipline and lower than expected property large loss experience. The 3rd quarter catastrophe loss ratio was 4.4% and below prior year as well as both 5 year and 10 year historical averages. This quarter's results directly reflect our ongoing efforts to optimize our property catastrophe risk profile, including targeted actions in hurricane exposed geographies over the past year that reduced our exposure to events like Hurricane Saline, Debbie and Barrow in the Q3 and Milton in the Q4. Speaker 200:04:33At this time, we expect Hurricane Milton to have no material impact on the Q4 catastrophe loss ratio. Prior period reserve development was neutral overall in the Q3. The pattern of stable to favorable loss emergence allows us to continue reinforcing our position against the future inflationary uncertainty challenging our industry and certain liability lines. The underwriting expense ratio in the Q3 was 35.9%, slightly higher than prior year as a result of stronger business performance during the current quarter and increased technology costs as we invest in continued growth. 3rd quarter net investment income of $24,400,000 increased 49% or $8,000,000 above prior year. Speaker 200:05:12Recent actions to reposition portions of our fixed income portfolio resulted in a strong and sustainable increase in fixed maturity investment income to $18,700,000 in the 3rd quarter $78,000,000 on an annualized basis going forward. New purchase yields remain strongly above total portfolio yields, creating potential for further improvement. Improved valuations on our limited partnership portfolio contributed $5,400,000 in pre tax investment income in the 3rd quarter. Eric will provide more color on these investment portfolio management actions and results in his remarks. We continue to make progress in resolving the rating errors in our core commercial business that were identified in the last quarter. Speaker 200:05:53At this time in the last quarter, we were in the early stages of investigating this matter and recorded a contingent liability based on information available at the time. We have since completed our investigation and based upon an evaluation of our findings, the IO Insurance Division elected to take no action nor require refunds. Through the IO Insurance Division, we continue to work with regulators in other states to achieve resolution and have not changed the amount of the pre tax charge reported last quarter. In conclusion, I am pleased with our 3rd quarter results and the cumulative progress we've made over the past 9 months. Our strategic actions continue to materialize in our results and we remain committed to driving ongoing improvements through the strategic execution of our business plan. Speaker 200:06:34I'll now hand it over to Julie Stevenson, our Chief Operating Officer to discuss our underwriting results in more detail. Speaker 300:06:40Thank you, Kevin. Net written premium in our core commercial business, which includes small business, middle market and construction grew 13% to $186,000,000 in the 3rd quarter compared to prior year. Renewal premium change in our core commercial business accelerated to 12.4% with rates up 11.2% and exceeding loss trends. Commercial property premium change remained strong at nearly 20% with pricing accelerating from the Q2 for Commercial Auto and General Liability. Retention remained consistent and within expectations at 81%. Speaker 300:07:14Loss severity trends remain elevated, but are consistent with our expectations and showing signs of stabilization. We continue to see ongoing frequency improvement across the portfolio. Core commercial new business production was strong and well above prior for the quarter with Small Business Middle Market and Construction adding quality accounts delivered through improved alignment with our distribution partners. Alternative distribution, surety and specialty all contributed diversifying and measured growth for the quarter. The 3rd quarter underlying loss ratio of 57.9% improved 2.6 points from Q3 of 2023, continuing the momentum reflected in our 1st and second quarter results. Speaker 300:07:56We saw favorable results across all major lines of business this quarter. Earned rate achievement is impacting the loss ratio to a larger extent than previous quarters and continues to exceed loss trends, while lower than expected large property loss experience seen in the Q2 continued into the Q3. Prior period reserve development was neutral overall in the Q3. Consistent with the 1st 2 quarters of 2024, loss emergence was neutral to favorable across the portfolio. These positive indications enable us to continue to reinforce our position against the future inflationary uncertainty challenging our industry in certain liability lines. Speaker 300:08:34We are pleased with the progress made in our reserve position and will prudently maintain a solid foundation for future success. Our 3rd quarter catastrophe loss ratio of 4.4% was 1.5 points below prior year and below our 5 year and 10 year historical averages by 8 points and 5.5 points respectively. Hurricane Helene had a small impact on our quarterly catastrophe loss ratio, while our non hurricane catastrophe losses were well below expectations. Continue to execute multifaceted strategies to improve our property catastrophe risk profile, leveraging advanced analytical tools to manage and monitor our exposure to severe convective storm and hurricane risks. Specifically, we're more closely managing our geographic concentration and improving risk quality by focusing our risk improvement and deductible actions on roof quality, building age and construction type. Speaker 300:09:30I'll now turn the call over to Eric Martin to discuss the rest of our financial results. Speaker 400:09:36Thank you, Julie. Starting with the investment portfolio, total invested assets and cash ended the 3rd quarter at $2,200,000,000 a high quality portfolio with an overall credit rating of AA- and a duration of approximately 4 years. Total net investment income was $24,400,000 in the 3rd quarter, up $8,000,000 or 49% compared to the Q3 of 2023 due to strong improvement in both fixed income and alternative asset portfolio returns. These 3rd quarter results show how the actions taken since transitioning management of our fixed income portfolio to our partners at New England Asset Management are delivering increasing benefits. Continued repositioning out of tax exempt municipals into high quality assets offering more attractive tax equivalent yields in order to take advantage of the current elevated interest rate environment are significantly and sustainably increasing investment income. Speaker 400:10:36As you may recall, in the second quarter, we invested over 20% of the fixed income portfolio at an average yield of 5.6%. In the 3rd quarter, these actions continued, but to a lesser degree as we invested over 10% of the portfolio at an average yield of approximately 5.2%, which continues to outpace portfolio yield by more than 100 basis points. The benefits of reinvesting over 1 third of our fixed maturity portfolio in the last two quarters contributed to 3rd quarter fixed maturity income increasing 29% or $4,300,000 over prior year to $19,000,000 This high volume of asset purchases at attractive yields will enhance shareholder returns for years to come. Our Q3 fixed maturity portfolio is expected to generate $78,000,000 of fixed maturity income on a prospective annualized basis with additional increases possible from future reinvestment at higher rates. In addition to the improvements in our fixed income portfolio, we also saw increased valuation on limited partnerships and alternative assets. Speaker 400:11:45This part of the portfolio contributed $4,300,000 of the increase in investment income from prior year. Turning to the expense ratio. We continue to make good progress in reducing our overall cost structure, while also investing in the business. We've seen some geography shifts impacting our underwriting expense ratio. Since the beginning of 2023, we have made meaningful changes to the size and composition of the UFG team with total headcount down approximately 20% in that time. Speaker 400:12:17A larger reduction in the size of the claims team combined with significant investments and capabilities supporting long term profitable growth has resulted in a shift in the geography of our overall expense. This shift has contributed to an increase in underwriting expenses, but a larger decrease in claims which benefits our loss ratio. However, our expense ratio remains too high and we'll continue to focus on bringing this down over time. This quarter was impacted by improved business performance that drove slightly higher expenses as well as an increase in technology spending compared to the same quarter last year. 3rd quarter net income was $0.76 per diluted share with a non GAAP adjusted operating gain of $0.81 per diluted share. Speaker 400:13:05These results, along with a significant decrease in the unrealized loss position, resulted in book value per common share increasing to $31.01 Adjusted book value per share, which excludes the impact of unrealized investment losses, increased to $32.42 From a capital management perspective, during the Q3, we declared and paid a $0.16 per share cash dividend to shareholders of record as of August 30, 2024. This concludes our prepared remarks. I will now have the operator open the line for questions. Operator00:13:43We will now begin the question and answer session. Our first question today comes from Paul Newsome with Piper Sandler. Please go ahead. Speaker 500:14:20Good morning. I've got a few quick questions here, I think. First, I want to ask you about the sustainability of the combined ratio excluding catastrophe losses and reserve developments. It looked like you had some good guys at least in the catastrophe loss ratio. Were there any sort of good or bad guys that you would like to call out as we think about the current level being the proper run rate? Speaker 600:14:59Hi, Paul. Of course, I think we see overall improvement across all lines of business. And I think as we continue to drive strong rate achievement and that rate achievement earns through, we believe that the loss ratio that we're seeing on these lines will continue to be favorable. We also have continued to see frequency decline and it looks as if severity is showing some signs of stabilization. So all of those things suggest that the loss ratio improvement we've seen is sustainable over time. Speaker 600:15:38And of course, we are continuing to take measures to continually improve the risk profile of the business we're putting on the books. Speaker 500:15:47And then maybe turning to the top line growth, maybe some additional color on what's happening there. I was hoping you could kind of slice it maybe 2 different ways. One, looking at sort of rate versus exposure versus unit growth and then maybe some thoughts about sort of specifically where you're growing from a product perspective as well and where you think the opportunities are? Speaker 200:16:16Hi, Paul. We missed the first part of the question. Could you just clarify the intro? We need the context to be able to answer your question. Speaker 500:16:23I'd like you to talk about your premium revenue line, the top line. And I'd like you to hopefully talk about it in 2 different ways. 1 would be rate versus exposure versus unit growth. And the other way I was hoping you could talk about it would be from a product perspective and where you think the best advantages are. Speaker 600:16:47Certainly. And I'll take that, Paul. I mean, yes, thank you for the clarification. I think we were really pleased this quarter to see growth across all of our business units. It had been a while since we were able to do that. Speaker 600:17:02As you know, we took a chance to rebuild our surety organization, rebuild our specialty organization under a new leader and certainly have taken measures to bring a higher degree of specialization to core commercial. And so I think all of those things you're beginning to see the result of in this favorable growth. As an account solution provider in core commercial, getting the business mix and line of business mix right is a priority. We think that we're heading in the right direction and that we're well poised to grow. Also taking a lot of opportunity to reinforce our relevance with our distribution partners. Speaker 600:17:44And as they understand more about where we are headed, we feel very confident that we will continue to see a nice flow of the quality of new business that we want. From a rate perspective, as I mentioned before, we still are seeing some rate acceleration. We hope that will continue. We saw a bit of leveling off in property, but acceleration well above trend in auto, which we think will continue and solid rate achievement in GL. So in the current conditions, we hope that, that will continue into future quarters. Speaker 600:18:17From a count perspective, policy counts are remaining relatively stable. The profile of our business is changing a little bit as we are looking to write more sophisticated insureds. We may see a slight decrease in the number of clients that we're adding, but nothing material. It would all be based on the fact that we're just writing larger accounts. Speaker 500:18:45Thank you. Appreciate the help.Read morePowered by Key Takeaways UFG generated its highest quarterly net income and operating income in the past 10 quarters, with net written premiums up 23% to $305.6 million. The GAAP combined ratio improved 3.8 points to 98.2%, driven by an underlying loss ratio of 57.9% (down 2.6 points) and a catastrophe loss ratio of 4.4%, both reflecting targeted underwriting discipline and optimized property catastrophe exposure. Renewal premiums in the core commercial business increased 12.4% (rates up 11.2%), with stable 81% retention and strong new business production across small business, middle market and specialty lines. Total net investment income rose 49% to $24.4 million, as UFG repositioned its fixed income portfolio into higher-yielding securities (averaging 5.2%–5.6%) and achieved an annualized $78 million in fixed maturity income. UFG reduced headcount by ~20% since early 2023 while investing in technology, resulting in a 35.9% underwriting expense ratio, and ended Q3 with book value per share of $31.01 (adjusted $32.42) plus a $0.16/share dividend. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallUnited Fire Group Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) United Fire Group Earnings HeadlinesUnited Fire Group, Inc. declares quarterly cash dividend of $0.16 per shareMay 21, 2025 | globenewswire.comUnited Fire Group, Inc. reports on annual meeting of shareholdersMay 21, 2025 | globenewswire.comElon just did WHAT!?As you may recall, Biden and the Fed were working on a central bank digital currency, or CBDC. Had they gotten away with it, the Fed and U.S. banks could have seized control of our financial lives forever. But Trump stopped them cold on January 23rd, 2025, when he outlawed CBDCs… Paving the way for Elon Musk's secret master plan.May 27, 2025 | Brownstone Research (Ad)United Fire Group’s Positive Earnings Call Highlights GrowthMay 12, 2025 | tipranks.comUnited Fire Group, Inc. (UFCS) Q1 2025 Earnings Call TranscriptMay 10, 2025 | seekingalpha.comUnited Fire Group, Inc. 2025 Q1 - Results - Earnings Call PresentationMay 9, 2025 | seekingalpha.comSee More United Fire Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like United Fire Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on United Fire Group and other key companies, straight to your email. Email Address About United Fire GroupUnited Fire Group (NASDAQ:UFCS), together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and reinsurance coverage for property and casualty insurance. Its commercial lines include fire and allied lines, other liability, automobile, workers' compensation, fidelity and surety coverage, and other insurance products; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners, as well as provides assumed reinsurance products. The company sells its products through a network of independent agencies. 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There are 7 speakers on the call. Operator00:00:00Good day, and welcome to the United Fire Group Insurance 20 24 Third Quarter Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Tim Borst. Operator00:00:36Please go ahead. Speaker 100:00:39Good 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 atufginsurance.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 Leidwanger Executive Vice President and Chief Operating Officer, Julie Stevenson and Executive Vice President and Chief Financial Officer, Eric Martin. Speaker 100:01:05Before 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. Speaker 100:01:42These forward looking statements are based on management's current expectations and 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 ks. 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. Speaker 200:02:14Thank you, Tim. Good morning, everyone, and welcome to our Q3 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. But first, we would like to take a moment to extend our deepest sympathies to those impacted by hurricanes Helene and Milton in recent weeks. Speaker 200:02:36It's been a devastating hurricane season and we wish a swift recovery to the people and communities who were in the path of these storms. Turning to our results, the Q3 reflects our ongoing efforts to improve performance through the execution of our strategic business plan. We generated the highest quarterly net income and operating income in the past 10 quarters, demonstrating our progress in improving underwriting and investment returns by engaging with distribution partners to profitably grow our business, deepening expertise across the company, enhancing our capabilities and leveraging technology to improve efficiency, all while upholding the personal relationships and responsive service our partners and policyholders value. Net rent premiums grew 23 percent to $305,600,000 with growth led by our core commercial and alternative distribution businesses. Core commercial growth remains steady with average renewal premium increases exceeding 12%, stable retention and strong new business production. Speaker 200:03:31Rate increases accelerated to 11.2% exceeding loss trends with all liability lines near or above double digit rate increases. The 3rd quarter GAAP combined ratio improved 3.8 points to 98 point 2 percent from ongoing actions to improve core margins, stable prior period reserve development and catastrophe losses below prior year and historical averages. The 3rd quarter underlying loss ratio of 57.9 percent improved 2.6 points from prior year, reflecting strong earned rate achievement exceeding loss trends, continued underwriting discipline and lower than expected property large loss experience. The 3rd quarter catastrophe loss ratio was 4.4% and below prior year as well as both 5 year and 10 year historical averages. This quarter's results directly reflect our ongoing efforts to optimize our property catastrophe risk profile, including targeted actions in hurricane exposed geographies over the past year that reduced our exposure to events like Hurricane Saline, Debbie and Barrow in the Q3 and Milton in the Q4. Speaker 200:04:33At this time, we expect Hurricane Milton to have no material impact on the Q4 catastrophe loss ratio. Prior period reserve development was neutral overall in the Q3. The pattern of stable to favorable loss emergence allows us to continue reinforcing our position against the future inflationary uncertainty challenging our industry and certain liability lines. The underwriting expense ratio in the Q3 was 35.9%, slightly higher than prior year as a result of stronger business performance during the current quarter and increased technology costs as we invest in continued growth. 3rd quarter net investment income of $24,400,000 increased 49% or $8,000,000 above prior year. Speaker 200:05:12Recent actions to reposition portions of our fixed income portfolio resulted in a strong and sustainable increase in fixed maturity investment income to $18,700,000 in the 3rd quarter $78,000,000 on an annualized basis going forward. New purchase yields remain strongly above total portfolio yields, creating potential for further improvement. Improved valuations on our limited partnership portfolio contributed $5,400,000 in pre tax investment income in the 3rd quarter. Eric will provide more color on these investment portfolio management actions and results in his remarks. We continue to make progress in resolving the rating errors in our core commercial business that were identified in the last quarter. Speaker 200:05:53At this time in the last quarter, we were in the early stages of investigating this matter and recorded a contingent liability based on information available at the time. We have since completed our investigation and based upon an evaluation of our findings, the IO Insurance Division elected to take no action nor require refunds. Through the IO Insurance Division, we continue to work with regulators in other states to achieve resolution and have not changed the amount of the pre tax charge reported last quarter. In conclusion, I am pleased with our 3rd quarter results and the cumulative progress we've made over the past 9 months. Our strategic actions continue to materialize in our results and we remain committed to driving ongoing improvements through the strategic execution of our business plan. Speaker 200:06:34I'll now hand it over to Julie Stevenson, our Chief Operating Officer to discuss our underwriting results in more detail. Speaker 300:06:40Thank you, Kevin. Net written premium in our core commercial business, which includes small business, middle market and construction grew 13% to $186,000,000 in the 3rd quarter compared to prior year. Renewal premium change in our core commercial business accelerated to 12.4% with rates up 11.2% and exceeding loss trends. Commercial property premium change remained strong at nearly 20% with pricing accelerating from the Q2 for Commercial Auto and General Liability. Retention remained consistent and within expectations at 81%. Speaker 300:07:14Loss severity trends remain elevated, but are consistent with our expectations and showing signs of stabilization. We continue to see ongoing frequency improvement across the portfolio. Core commercial new business production was strong and well above prior for the quarter with Small Business Middle Market and Construction adding quality accounts delivered through improved alignment with our distribution partners. Alternative distribution, surety and specialty all contributed diversifying and measured growth for the quarter. The 3rd quarter underlying loss ratio of 57.9% improved 2.6 points from Q3 of 2023, continuing the momentum reflected in our 1st and second quarter results. Speaker 300:07:56We saw favorable results across all major lines of business this quarter. Earned rate achievement is impacting the loss ratio to a larger extent than previous quarters and continues to exceed loss trends, while lower than expected large property loss experience seen in the Q2 continued into the Q3. Prior period reserve development was neutral overall in the Q3. Consistent with the 1st 2 quarters of 2024, loss emergence was neutral to favorable across the portfolio. These positive indications enable us to continue to reinforce our position against the future inflationary uncertainty challenging our industry in certain liability lines. Speaker 300:08:34We are pleased with the progress made in our reserve position and will prudently maintain a solid foundation for future success. Our 3rd quarter catastrophe loss ratio of 4.4% was 1.5 points below prior year and below our 5 year and 10 year historical averages by 8 points and 5.5 points respectively. Hurricane Helene had a small impact on our quarterly catastrophe loss ratio, while our non hurricane catastrophe losses were well below expectations. Continue to execute multifaceted strategies to improve our property catastrophe risk profile, leveraging advanced analytical tools to manage and monitor our exposure to severe convective storm and hurricane risks. Specifically, we're more closely managing our geographic concentration and improving risk quality by focusing our risk improvement and deductible actions on roof quality, building age and construction type. Speaker 300:09:30I'll now turn the call over to Eric Martin to discuss the rest of our financial results. Speaker 400:09:36Thank you, Julie. Starting with the investment portfolio, total invested assets and cash ended the 3rd quarter at $2,200,000,000 a high quality portfolio with an overall credit rating of AA- and a duration of approximately 4 years. Total net investment income was $24,400,000 in the 3rd quarter, up $8,000,000 or 49% compared to the Q3 of 2023 due to strong improvement in both fixed income and alternative asset portfolio returns. These 3rd quarter results show how the actions taken since transitioning management of our fixed income portfolio to our partners at New England Asset Management are delivering increasing benefits. Continued repositioning out of tax exempt municipals into high quality assets offering more attractive tax equivalent yields in order to take advantage of the current elevated interest rate environment are significantly and sustainably increasing investment income. Speaker 400:10:36As you may recall, in the second quarter, we invested over 20% of the fixed income portfolio at an average yield of 5.6%. In the 3rd quarter, these actions continued, but to a lesser degree as we invested over 10% of the portfolio at an average yield of approximately 5.2%, which continues to outpace portfolio yield by more than 100 basis points. The benefits of reinvesting over 1 third of our fixed maturity portfolio in the last two quarters contributed to 3rd quarter fixed maturity income increasing 29% or $4,300,000 over prior year to $19,000,000 This high volume of asset purchases at attractive yields will enhance shareholder returns for years to come. Our Q3 fixed maturity portfolio is expected to generate $78,000,000 of fixed maturity income on a prospective annualized basis with additional increases possible from future reinvestment at higher rates. In addition to the improvements in our fixed income portfolio, we also saw increased valuation on limited partnerships and alternative assets. Speaker 400:11:45This part of the portfolio contributed $4,300,000 of the increase in investment income from prior year. Turning to the expense ratio. We continue to make good progress in reducing our overall cost structure, while also investing in the business. We've seen some geography shifts impacting our underwriting expense ratio. Since the beginning of 2023, we have made meaningful changes to the size and composition of the UFG team with total headcount down approximately 20% in that time. Speaker 400:12:17A larger reduction in the size of the claims team combined with significant investments and capabilities supporting long term profitable growth has resulted in a shift in the geography of our overall expense. This shift has contributed to an increase in underwriting expenses, but a larger decrease in claims which benefits our loss ratio. However, our expense ratio remains too high and we'll continue to focus on bringing this down over time. This quarter was impacted by improved business performance that drove slightly higher expenses as well as an increase in technology spending compared to the same quarter last year. 3rd quarter net income was $0.76 per diluted share with a non GAAP adjusted operating gain of $0.81 per diluted share. Speaker 400:13:05These results, along with a significant decrease in the unrealized loss position, resulted in book value per common share increasing to $31.01 Adjusted book value per share, which excludes the impact of unrealized investment losses, increased to $32.42 From a capital management perspective, during the Q3, we declared and paid a $0.16 per share cash dividend to shareholders of record as of August 30, 2024. This concludes our prepared remarks. I will now have the operator open the line for questions. Operator00:13:43We will now begin the question and answer session. Our first question today comes from Paul Newsome with Piper Sandler. Please go ahead. Speaker 500:14:20Good morning. I've got a few quick questions here, I think. First, I want to ask you about the sustainability of the combined ratio excluding catastrophe losses and reserve developments. It looked like you had some good guys at least in the catastrophe loss ratio. Were there any sort of good or bad guys that you would like to call out as we think about the current level being the proper run rate? Speaker 600:14:59Hi, Paul. Of course, I think we see overall improvement across all lines of business. And I think as we continue to drive strong rate achievement and that rate achievement earns through, we believe that the loss ratio that we're seeing on these lines will continue to be favorable. We also have continued to see frequency decline and it looks as if severity is showing some signs of stabilization. So all of those things suggest that the loss ratio improvement we've seen is sustainable over time. Speaker 600:15:38And of course, we are continuing to take measures to continually improve the risk profile of the business we're putting on the books. Speaker 500:15:47And then maybe turning to the top line growth, maybe some additional color on what's happening there. I was hoping you could kind of slice it maybe 2 different ways. One, looking at sort of rate versus exposure versus unit growth and then maybe some thoughts about sort of specifically where you're growing from a product perspective as well and where you think the opportunities are? Speaker 200:16:16Hi, Paul. We missed the first part of the question. Could you just clarify the intro? We need the context to be able to answer your question. Speaker 500:16:23I'd like you to talk about your premium revenue line, the top line. And I'd like you to hopefully talk about it in 2 different ways. 1 would be rate versus exposure versus unit growth. And the other way I was hoping you could talk about it would be from a product perspective and where you think the best advantages are. Speaker 600:16:47Certainly. And I'll take that, Paul. I mean, yes, thank you for the clarification. I think we were really pleased this quarter to see growth across all of our business units. It had been a while since we were able to do that. Speaker 600:17:02As you know, we took a chance to rebuild our surety organization, rebuild our specialty organization under a new leader and certainly have taken measures to bring a higher degree of specialization to core commercial. And so I think all of those things you're beginning to see the result of in this favorable growth. As an account solution provider in core commercial, getting the business mix and line of business mix right is a priority. We think that we're heading in the right direction and that we're well poised to grow. Also taking a lot of opportunity to reinforce our relevance with our distribution partners. Speaker 600:17:44And as they understand more about where we are headed, we feel very confident that we will continue to see a nice flow of the quality of new business that we want. From a rate perspective, as I mentioned before, we still are seeing some rate acceleration. We hope that will continue. We saw a bit of leveling off in property, but acceleration well above trend in auto, which we think will continue and solid rate achievement in GL. So in the current conditions, we hope that, that will continue into future quarters. Speaker 600:18:17From a count perspective, policy counts are remaining relatively stable. The profile of our business is changing a little bit as we are looking to write more sophisticated insureds. We may see a slight decrease in the number of clients that we're adding, but nothing material. It would all be based on the fact that we're just writing larger accounts. Speaker 500:18:45Thank you. Appreciate the help.Read morePowered by