United Fire Group, Inc. reported fourth-quarter 2013 operating net income of $1.00 per share, outpacing the Zacks Consensus Estimate of 51 cents substantially by 96.1%. The result also surged from a net operating loss of 12 cents a share reported in the prior-year quarter.
The bottom line was boosted by top line growth and lower total benefits losses and expenses.
Including after-tax net realized investment gains, United Fire reported net income of $1.04 per share, which compared favorably with 10 cents a share reported in the year-ago quarter.
Total revenue of United Fire increased 7.3% year over year to approximately $229 million, driven by an improvement in net premiums earned (up 10% year over year) and higher net investment income (up 5.7%). Total revenue also surpassed the Zacks Consensus Estimate of $218 million by 5%.
United Fire’s net investment income of $30 million increased 18.5% year over year during the quarter.
Total benefits, losses and expenses of United Fire decreased 13.4% year over year to $191.7 million during the quarter. The decline was attributable to lower losses and loss settlement expenses.
Combined ratio improved 2210 basis points from the year-ago quarter to 89% owing to lower catastrophe losses.
Quarterly Segment Update
Property and Casualty: Net premium written for this segment soared 9% year over year to $169 million in the reported quarter.
Total revenue amounted to nearly $195 million in the quarter, increasing 10.8% year over year on the back of higher net earned premiums, net investment income as well as higher net realized investment gains.
Net income of $23.2 million surged from net loss of $4.1 million reported in the comparable prior-year period.
Life Insurance: Net premiums written in the segment were $15 million, down 28.8% from the year-ago quarter.
Total revenue also declined 8.8% year over year to $34 million in the reported quarter due to lower premiums and net realized investment gains.
Net income of $3.3 million registered a year-over-year surge of 95.4% during the quarter.
Full-Year 2013 Highlights
United Fire reported 2013 net operating income of $2.76 per share, a penny short of the Zacks Consensus Estimate of $2.77. However, the number scaled up 91.7% year over year.
The significant improvement in full-year number was attributable to favorable catastrophe losses environment as well as higher premium rates.
Including net realized investment gains and losses, United Fire’s net income came in at $2.98 per share, up 88.6% year over year.
Higher net premiums earned and net realized investment gains drove the 2013 total revenue to $877 million for United Fire, up 7.8% year over year.
As of 2013 end, United Fire had cash and cash investments of $3.14 billion, almost in line with 2012-end level.
Shareholders’ equity as of Dec 31, 2013 was $782.8 million, up 7.4% from $729.2 million as of Dec 31, 2012.
United Fire’s Book value per share increased 6.8% from 2012 end and currently stands at $30.87.
Performances by Other Property and Casualty Insurers
Among other property and casualty insurers, ACE Limited reported operating net earnings of $2.39 per share in the fourth quarter of 2013, surpassing the Zacks Consensus Estimate by 19.5%. Moreover, earnings surged nearly 67% on a year-over-year basis.
American Financial Group Inc. (AFG - Analyst Report) reported fourth-quarter operating earnings per share of $1.28, which comfortably beat the Zacks Consensus Estimate of $1.23. On a year-over-year basis, earnings soared 91%.
The Travelers Companies Inc. (TRV - Analyst Report) reported operating net earnings of $2.68 per share in the fourth quarter, surpassing the Zacks Consensus Estimate by 23.5%. Moreover, earnings improved nearly fourfold on a year-over-year basis.
United Fire presently carries a Zacks Rank #3 (Hold).