United Fire Group, Inc. ($UFCS)

Hello, and welcome to the Annual Meeting of Shareholders of United Fire Group, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Jim Noyce, Chairperson of the Board of Directors of United Fire Group, Inc. Mr. Noyce, the floor is yours.

The meeting will please come to order. Good morning, and welcome to the Annual Meeting of Shareholders of United Fire Group, Inc., and thank you all for attending. I am Jim Noyce, Chairperson of the Board of Directors. And in accordance with our bylaws, I will be presiding at this meeting. Today's meeting is being broadcast by live audio webcast. We believe this virtual meeting option will maximize participation of shareholders regardless of their location. Thank you very much to those who are participating virtually today. We will conduct our meeting in 2 parts. First, we will address our formal business -- our formal items of business, followed by a question-and-answer session. You may submit questions through the virtual meeting website. An agenda that outlines the order of business for the meeting has been made available. The matters on which the shareholders at the meeting are voting include: election of the 5 Class A directors identified in the proxy statement; ratification of the Audit Committee's appointment of Ernst & Young LLP as our independent registered public accounting firm for 2026, approval on an advisory basis of the compensation of the company's named executive officers; and approval of the amendment and extension of the 2021 Nonemployee Director Stock Plan. Sarah Madson, Senior Vice President, Chief Legal Officer and Corporate Secretary, will serve as Secretary of the meeting. Computershare, the registrar and transfer agent for our common stock, will be acting as the Inspector of Election for this meeting. Now I'd like to take this opportunity to introduce a few members of the UFG executive team, including Kevin Leidwinger, President and Chief Executive Officer and also a Director; Julie Stevenson, Executive Vice President and Chief Operating Officer; and Eric Martin, Executive Vice President and Chief Financial Officer. I would also like to introduce you to my fellow Direct -- Operating Officer and Eric Martin, Executive Vice President and Chief Financial Officer. I would also like to introduce you to my fellow directors participating in today's meeting: John Paul Bijan, Scott Carlton; Brenda Clancy; Christopher Drahozal; Matthew Ferran, Mark Green, Laura McBride, George Milligan; Gil dispenser and Susan Boss. Following today's meeting, our long-standing Board member, John Paul Bijan will retire after 13 years of dedicated service having reached the age limit for board service as set forth in our bylaws. On behalf of the Board of Directors, I thank JP for his commitment to USG and our valued shareholders. As well as his many contributions to our audit and risk management committees. We have benefited greatly from JP's technological expertise and business insights over the years and we congratulate him on a well-deserved retirement. Chris Yuka and Saad Raza of Ernst & Young LLP, are also attending virtually and are available to make a statement if desired, and answer questions concerning our financial statements. I call your attention to the rules of conduct for this meeting. These are made available to each shareholder in the Document section in the top right corner of the screen upon entering the virtual meeting room. To conduct an orderly meeting, we ask you to buy by these rules. If you need a copy of the annual report or proxy statement, please refer to the company's website or the hyperlinks provided with the proxy materials. Corporate Secretary, Sarah Matson has delivered an affidavit of mailing from Computershare establishing that notice of this meeting was duly given. A copy of the notice of meeting and the affidavit of mailing will be incorporated into the minutes of this meeting. All shareholders of record at the close of business on March 23, 2026, are entitled to vote at this meeting. Inspector of Election has the shareholder list of the company as of the close of business on March 23, 2026, the record date for the meeting, which shows the shareholders and their respective number of shares entitled to vote at this meeting. I am advised by the Inspector of Election that no less than a majority of the outstanding shares of common stock, which constitutes a quorum are present virtually by live webcast or by proxy at the meeting. So I declare the meeting duly and lawfully convened. We will now begin the formal business of the meeting. The polls are open for voting on the 4 proposals before the meeting. If you have not voted or wish to change your vote, you may do so now through the virtual meeting website. Any shareholder who has already voted by proxy and does not want to change their vote, should not take any further action. There are 4 proposals on the agenda for this year's Annual Meeting of Shareholders. Our articles of incorporation require that our Board of Directors be divided into 3 classes. A, B and C with 1 class elected at each annual meeting. The Board of Directors must consist of no more than 15 and no less than 9 members with the exact number fixed by the Board of Directors. The membership of our Board of Directors will be fixed at 11 directors following today's meeting and the retirement of JP Bijan, with 5 directors in Class A, 2 directors in Class B and 4 directors in Class C. The first proposal is the election of 5 Class A directors to serve a term expiring in 2029. The Board of Directors recommends a vote for the election of each of the following director nominees as Class A directors. Scott Carlton, Brenda Clancy, Kevin Lidwinger, Gilda Spencer and Susan Boss. The second proposal is the ratification of the Audit Committee's appointment of Ernst & Young LLP as our independent registered public accounting firm for 2026. The Board of Directors recommends a vote for this proposal. The third proposal is the approval on an advisory basis of the compensation of our named executive officers. The Board of Directors recommends a vote for this proposal. The fourth proposal is the approval of the amendment of the 2021 nonemployee director stock plan to increase the number of shares of United Fire Group, Inc.'s common stock available for issuance thereunder to nonemployee directors and to extend the life of the plan from December 31, 2029 to December 31, 2034. The Board of Directors recommends a vote for this proposal. No other matters for consideration at this meeting were brought to the company's attention by our shareholders in accordance with the requirements set forth in our bylaws or the applicable rules of the SEC. If you have not yet completed delivery of your proxies or ballots online, please do so now as we will be closing the polls for voting at this time. The online voting will now be closed. Based on our preliminary count, the inspector of election has informed me that -- all director nominees have been elected, the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2026 has been ratified. The advisory resolution relating to the compensation of our named executive officers has been approved, and the amendment and extension of the 2021 nonemployee director stock plan has been approved. A final vote count with respect to the matters voted on today will be reported on a Form 8-K as required by the SEC. I hereby request that the final report of the Inspector of Election be filed with the minutes of this meeting. I now turn this meeting over to UFG President and CEO, Kevin Leidwinger, for an update.

Thank you, Jim. Good morning, everyone, and thank you for joining us today. 2025 was a banner year for UFG, marking our second year in a row of delivering an underwriting profit as part of our ongoing transformation. GFG's strong performance was driven by the strategic execution of our business plan, strength and distribution of our partnerships and the exceptional efforts of my colleagues in positioning the company for superior financial and operational performance. In 2025, we grew our business to record size while delivering the best combined ratio, investment income and return on equity in a decade or longer. We also produced a record level of new business last year as our distribution partners have embraced the company's transformation. By anchoring our transformation to UFG's overarching strategic pillars of long-term profitability, diversified growth, continuous innovation, people development and expense management, we believe we have laid a strong foundation for the future as reflected in the company's financial turnaround between 2022 and 2025. During this time period, we delivered an 11% compounded annual growth rate in net rig premium and a 6.6 point improvement in the combined ratio, moving us from an underwriting loss to an underwriting profit. In addition, annual investment income more than doubled, earnings per share increased more than sevenfold. Return on equity improved more than 11 points and book value per share increased over 25%. We've also greatly enhanced the company's reserve position during this time as part of our ongoing commitment to maintaining strong and stable reserves. These milestone achievements reflect the strategic actions we've taken over the past 3 years to position UFG for long-term profitable growth, including deepening our underwriting expertise, evolving capabilities, enhancing our actuarial insights and improving alignment with our distribution partners. We've also invested in technology to process business more efficiently and effectively launching a new policy administration system, underwriting work bench and renewal underwriting center in 2025. We believe these investments will generate significant operational efficiencies as our capabilities mature. Turning to the balance sheet. We ended 2025 with $3.8 billion in total assets, $941.2 million in total stockholders' equity and a $2.5 billion investment portfolio. As a follow-up to our 2024 capital raise of $70 million, we successfully issued a $30 million of Series B notes in 2025 to further support our long-term growth strategies. I'm also pleased to share that A.M. Best reaffirmed our financial strength rating of A excellent with a stable outlook in August of 2025, reflecting UFG's long-term balance sheet strength. Throughout 2025, we paid quarterly dividends totaling $0.64 per share, returning $16.3 million to our shareholders over the course of the year. This aligns with our capital management priorities of funding profitable growth in the business and returning excess capital to shareholders. Community support is another important priority at UFG and ported who we are as a company. In 2025, UFG Foundation proudly awarded $1 million in grants and scholarships, benefiting over 70 nonprofit organizations in our Eastern Iowa headquarters as well as our regional locations across the country. Since its establishment in 1999, the Foundation has awarded more than $18 million in community support. With 2025 behind us, we've now turned our full attention to focus in 2026. Earlier this month, we released our first quarter financial results, producing a net income of $1.15 per diluted share, a combined ratio of 95.6% and a return on equity of 12.7% to start the year. In addition to generating record quarterly net written premium, improved underwriting profitability and increased investment income in the first quarter, we delivered our highest first quarter earnings per share in 7 years, carrying forward our positive momentum into 2026. As of March 31, 2026, UFG's book value per share increased to $37.06 up $0.18 compared to the December 31, 2025. The -- as I reflect on our progress over the past 3 years, it's clear to me that our transformation has taken hold at UFG, braced by both our people and our partners. Our strategic actions have transformed UFG into a disciplined solution-oriented underwriting company positioned to more broadly serve our distribution partners with deepened expertise and expanded capabilities, underpinned by the personal relationships and responsive service they value when doing business with us. 2026 marks UFG's 80th year in business, a testament to our company's legacy of strength and stability, a legacy I'm committed of holding as CEO. Though I've been part of BFG for only a brief chapter in its 8-year story my admiration for its history, my pride in our current accomplishments and my excitement for the future keeping each day. Looking ahead, we'll remain focused on thoughtfully, responsibly and profitably growing our business, while navigating the complexities of an evolving market. I have every confidence in our ability to continue to move the company forward through the ongoing strategic execution of our business plan and the collective efforts of our UFG team. In closing, I'm grateful for the dedication of our employees, the support of our Board of Directors the loyalty of our distribution partners and the enduring trust of our shareholders as we work to deliver on our company's promises and continue our pursuit of superior financial and operational performance. Thank you. Jim?

Thank you, Kevin. Before we adjourn the meeting today, I would like to extend my congratulations to Kevin and the UFG leadership team and employees on their delivery of exceptional results in 2025 and a strong start to 2026. And their dedicated execution of the business plan has transformed UFG for the future, and the board looks forward to continued positive momentum from their strategic actions in the year ahead. I would also like to recognize my fellow board members for their invaluable guidance and steadfast commitment to creating long-term value for our shareholders. As Chairman, it is a distinct honor and privilege to lead and serve alongside such a distinguished board. The Board remains confident in the future direction of UFG as the leadership team continues to advance strategies centered on long-term profitability, diversified growth, continuous innovation, people development, and expense management. I will close by extending my sincere thanks to our shareholders for your trust and confidence in UFG to my fellow directors for your esteemed oversight and governance and to the employees of UFG for your unwavering dedication to the company's value proposition of deep expertise, specialized capabilities, personal relationships and responsive service. For 80 years, the company has been committed to delivering on its promises to stakeholders, and I'm confident that the work underway today is positioning UFG for its next 80 years of success. And with that, this concludes the formal business of today's shareholder meeting, and the meeting is hereby adjourned. We will now proceed to the question-and-answer session. We will wait for a few -- for a moment to see if we have any questions. There are no questions. On behalf of the entire Board and management team, I'd like to express our gratitude to all of our shareholders for their continued support. Thank you for attending our meeting today. We look forward to driving continued progress throughout 2026 and beyond.

This concludes the meeting. You may now disconnect.