United Fire Group, Inc. and its consolidated subsidiaries and affiliates are
engaged in the business of writing property and casualty insurance and life
insurance and selling annuities through a network of independent agencies. Our
insurance company subsidiaries are currently licensed as a property and casualty
insurer in 46 states, plus the District of Columbia and as a life insurer in
37 states. United Fire & Casualty Company was incorporated in Iowa in January
1946. Our principal executive office is located at 118 Second Avenue SE, Cedar
Rapids, Iowa 52401; telephone: 319-399-5700.
United Fire Group, Inc. owns 100 percent of one subsidiary, United Fire &
Casualty Company. United Fire & Casualty Company owns 100 percent of eight
subsidiaries: United Life Insurance Company, Addison Insurance Company, Lafayette
Insurance Company, United Fire & Indemnity Company, Mercer Insurance Company,
Financial Pacific Insurance Company, UFG Specialty Insurance Company (formerly
known as Texas General Indemnity Company) and United Real Estate Holdings Company,
LLC. Mercer Insurance Company owns 100 percent of two subsidiaries: Franklin
Insurance Company and Mercer Insurance Company of New Jersey, Inc. United Fire
Lloyds is an affiliate of United Fire & Indemnity Company.
We report our operations in two business segments: property and casualty insurance
and life insurance. Our property and casualty insurance segment is comprised
of commercial lines insurance, including surety bonds, personal lines insurance
and assumed reinsurance. Our life insurance segment is comprised of deferred
and immediate fixed annuities, universal life insurance products and traditional
life insurance products.
Liabilities for loss and loss settlement expenses reflect managements best
estimates at a given point in time of what we expect to pay for claims that
have been reported and those that have been incurred but not reported ("IBNR"),
based on known facts, circumstances, and historical trends.
The determination of reserves (particularly those relating to liability lines
of insurance that have relatively longer lag in claim reporting) requires significant
work to reasonably project expected future claim reporting and payment patterns.
If, during the course of our regular monitoring of reserves, we determine that
coverages previously written are incurring higher than expected losses, we will
take action that may include, among other things, increasing the related reserves.
Any adjustments we make to reserves are reflected in operating results in the
year in which we make those adjustments. We engage an independent actuary, Regnier
Consulting Group, Inc. ("Regnier"), to render an opinion as to the
adequacy of our statutory reserves annually. The actuarial opinion is filed
in those states where we are licensed.
On a quarterly basis, United Fires internal actuary performs a detailed actuarial
review of IBNR reserves. This review includes a comparison of results from the
most recent analysis of reserves completed by both our internal and external
actuaries. Senior management meets with our internal actuary to review, on a
regular and quarterly basis, the adequacy of carried reserves based on results
from this actuarial analysis. There are two fundamental types or sources of
IBNR reserves. We record IBNR reserves for "normal" types of claims
and also specific IBNR reserves related to unique circumstances or events. A
major hurricane is an example of an event that might necessitate establishing
specific IBNR reserves because an analysis of existing historical data would
not provide an appropriate estimate.
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