By CBJ News Staff
United Fire Group reported a loss of $2.90 per share for the quarter ended March 31, as the COVID-19 driven stock market sell-off hammered investments and two big events caused a spike in claims.
President and CEO Randy Ramlo said the company believes the business impact of COVID-19 on UFG will be manageable. UFG saw continued improvement in its commercial auto claims and exposure, which have been a challenge, but had larger claims due to an explosion at an insured manufacturing business in Houston, and due to a hail storm in Jefferson City, Missouri, during the last week of March.
UFG’s net loss totaled $72.5 million, or $2.90 per share, compared to net income of $44.5 million, or $1.74 per share, in the same quarter of 2019.
Mr. Ramlo said the severity of claims also increased in several additional insurance lines – other liability, commercial fire and allied and workers’ compensation. Despite showing improvement, UFG’s loss ratio for commercial auto lines remains at a higher than acceptable level, Mr. Ramlo said.
“Much like many of our industry peers have experienced, the COVID-19 pandemic significantly impacted the financial markets, and in turn the value of our investments in equities,” Mr. Ramlo said in a statement. “However, through the first quarter of 2020, there was not a significant impact to our core insurance operations. Depending on the duration of the suppressed economy in the second quarter and beyond, we anticipate that there could be an adverse impact to our business, including lower premiums and demand for our products.”
Nearly all UFG policies contain contract language that specifically excludes business interruption coverage for losses due to viruses such as the COVID-19 pandemic, Mr. Ramlo said, but UFG is continuing to carefully scrutinize each claim and will be affording coverage when appropriate. CBJ