United Fire Group (Nasdaq: UFCS) reported Q2 2026 total revenue of $383.7 million, up about 14% from $335.5 million a year earlier, while diluted EPS increased to $1.29 from $0.87. Net income rose 45% to $33.4 million as lower catastrophe losses, higher earned premium and increased investment income supported results for the quarter ended June 30, 2026.
Core Earnings Data
Net earned premium increased 12.5%, while net written premium rose 9.0% on growth in the core commercial business. Underwriting also improved on a reported basis, with the combined ratio declining 1.1 points to 95.3%.
Investment income provided another meaningful contribution. Net investment income climbed 33% to $28.9 million, helping adjusted operating income increase 42% to $33.7 million.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Total revenue | $383.7 million | $335.5 million | About 14% higher |
| Net earned premium | $354.1 million | $314.8 million | 12.5% higher |
| Net written premium | $406.4 million | $372.9 million | 9.0% higher |
| Combined ratio | 95.3% | 96.4% | Improved 1.1 points |
| Net investment income | $28.9 million | $21.7 million | 33% higher |
| Net income | $33.4 million | $22.9 million | 45% higher |
| Diluted EPS | $1.29 | $0.87 | About 48% higher |
| Adjusted operating income | $33.7 million | $23.7 million | 42% higher |
| Adjusted operating EPS | $1.30 | $0.90 | About 44% higher |
Adjusted operating income and adjusted operating EPS are non-GAAP measures that exclude after-tax net investment gains and losses.
Business and Product-Line Performance
Core commercial renewal premium increased 4.6%, consisting of a 2.9% rate increase and 1.7% exposure growth. Excluding workers’ compensation, average renewal premium rose 5.0%, including 3.5% from rates and 1.5% from exposure changes.
Commercial automobile, workers’ compensation and surety recorded the fastest written-premium growth, while commercial fire and allied lines declined.
| Net written premium by business | Q2 2026 | Q2 2025 | Approximate change |
|---|---|---|---|
| Other liability | $130.8 million | $116.8 million | 12% higher |
| Fire and allied commercial lines | $67.9 million | $74.6 million | 9% lower |
| Commercial automobile | $97.7 million | $86.7 million | 13% higher |
| Workers’ compensation | $28.3 million | $22.2 million | 27% higher |
| Surety | $23.4 million | $15.8 million | 48% higher |
| Total commercial lines | $348.2 million | $316.5 million | 10% higher |
| Personal lines | $5.4 million | $6.9 million | 21% lower |
| Assumed reinsurance | $52.7 million | $49.5 million | 6% higher |
The commercial-lines net loss ratio improved to 59.5% from 61.9%. Results varied by product: the other-liability loss ratio fell to 65.7% from 78.7%, but commercial automobile increased to 65.5% from 57.9% and workers’ compensation rose to 71.1% from 56.1%.
Lower Catastrophe Losses Drove the Headline Underwriting Improvement
The reported combined ratio improvement came primarily from catastrophe losses, which declined to 2.7% of earned premium from 5.5%. The underlying loss ratio also improved modestly, falling 0.4 points to 57.2%, reflecting lower claim frequency and earned rate increases in core commercial lines.
However, the underlying combined ratio edged up 0.1 point to 92.6%. A 0.5-point increase in the underwriting expense ratio to 35.4% offset the lower underlying loss ratio. UFG attributed part of the expense increase to actions intended to reduce its real estate footprint and future expense ratio, along with normal variability.
Prior-year reserve development was neutral in Q2 2026, compared with 1.6 points of favorable development in the prior-year quarter. Consequently, the reported combined ratio benefited from fewer catastrophe losses even though the underlying measure was nearly unchanged.
Investment Income and Balance Sheet
Fixed-maturity investment income rose by $5.0 million to $26.3 million because of portfolio growth and reinvestment at higher yields. The average pretax yield on fixed-income securities increased to 4.57% from 4.32%. Income from other long-term investments also rose to $2.3 million from $0.1 million due to higher underlying valuations.
Stockholders’ equity and book value increased from year-end, although larger unrealized investment losses partially offset retained earnings from net income.
| Balance-sheet metric | June 30, 2026 | Dec. 31, 2025 | Change |
|---|---|---|---|
| Invested assets | $2.535 billion | $2.465 billion | About 3% higher |
| Cash | $139.4 million | $156.3 million | About 11% lower |
| Total stockholders’ equity | $977.3 million | $941.2 million | About 4% higher |
| Net unrealized investment losses, after tax | $43.7 million | $25.3 million | Loss increased by $18.4 million |
| Book value per share | $38.02 | $36.88 | 3.1% higher |
| Adjusted book value per share | $39.72 | $37.87 | About 4.9% higher |
UFG said the increase in book value primarily reflected net income, partially offset by unrealized fixed-maturity investment losses and shareholder dividends. The company paid a quarterly cash dividend of $0.20 per share.
Management’s View
President and CEO Kevin Leidwinger described the quarter as UFG’s best second-quarter combined ratio in more than 15 years and cited record net income and net written premium. Management attributed the results to deeper underwriting expertise, stronger distribution relationships and improved investment returns. It plans to continue pursuing growth opportunities while maintaining underwriting discipline during the second half of 2026.
Recent Insider Transactions
The supplied insider data lists a purchase by director George D. Milligan as the most recent transaction. The source did not provide a share count, execution price or unit for the reported amount, so no conclusion can be drawn about the transaction’s scale relative to his holdings.
| Date | Insider | Position | Transaction | Reported amount |
|---|---|---|---|---|
| June 5, 2026 | George D. Milligan | Director | Purchase | 203,535, unit not provided |
The data also lists nine director stock awards dated May 20, 2026, each with a reported amount of 100,019 in an unspecified unit. Stock awards are compensation-related grants and are distinct from purchases.
Risks Investors Should Monitor
- Dependence on lower catastrophe losses: The 1.1-point improvement in the reported combined ratio was primarily driven by the catastrophe loss ratio falling 2.8 points. Future catastrophe experience could reverse that benefit.
- Limited underlying ratio improvement: The underlying combined ratio increased slightly to 92.6% because higher underwriting expenses offset the improvement in the underlying loss ratio.
- Deterioration in selected commercial lines: Loss ratios increased materially in commercial automobile and workers’ compensation even as written premium grew in both categories.
- Investment valuation pressure: After-tax unrealized investment losses widened by $18.4 million from year-end, reducing the benefit of net income to reported book value.
- Assumed reinsurance losses: The assumed-reinsurance loss ratio increased to 65.6% from 61.5%, even as written premium in the business grew.
Summary
UFG’s Q2 2026 earnings benefited from commercial premium growth, lower catastrophe losses and higher investment income, producing a lower combined ratio and a 45% increase in net income. The main follow-up issues are whether underlying underwriting performance can improve beyond its current level, whether expense actions produce future savings, and whether higher loss ratios in automobile, workers’ compensation and assumed reinsurance persist.
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