United Fire Group, Inc. (NASDAQ:UFCS) Q3 2023 Earnings Call Transcript

Within our portfolio, we continued reducing our exposure to public equities which shrank to 3% of assets in the third quarter. The strategic reallocation of public equities to high-quality fixed income is an attractive way to reduce capital requirements and earnings volatility. We intend to continue executing on this trade as long as these attractive conditions exist. Net investment income was $16.5 million in the third quarter, up 42% compared to the third quarter of 2022. We continue to realize the benefits of investing in a higher interest rate environment with new money yields exceeding 5.5%, helping increase fixed maturity income relative to a year ago. We also experienced positive valuation impacts on our limited partnership portfolio of $1 million in the third quarter.

Realized losses of $2 million, driven by changes in the valuation of our reduced core equity portfolio, rounded out third quarter investment results. Third quarter underwriting and investment returns resulted in net income of $0.25 per diluted share and non-GAAP adjusted operating income of $0.31 per diluted share. Annualized year-to-date return on equity in the third quarter was negative 9.5% and we saw a deterioration in our unrealized loss position that decreased book value per common share to $25.53. During the quarter, we declared and paid a $0.16 per share cash dividend to shareholders of record as of September 1, 2023, continuing our 55-year history of paying dividends dating back to March 1968. This concludes our prepared remarks. I will now open the line for questions.

Operator?

Operator:

Kevin Leidwinger: Thank you and we look forward to seeing you next quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.