United Fire Group (UFCS) risk factors, FY2024 10-K

Other

1. 01The success of our strategy may be adversely impacted by various internal and external factors
2. 02Our core insurance business is dependent on strong and beneficial relationships with a large network of independent insurance agents and not maintaining these relationships could result in loss of sufficient business opportunities within our expertise and stated risk appetite
3. 03Our geographic concentration ties our performance to the business, economic and regulatory conditions of certain states
4. 04We will be at a competitive disadvantage if, over time, our competitors are more effective in pricing their products, development of new product offering, implementation of technology and data analytics
5. 05Our strategy's success could be affected by our timely ability to recognize and adapt to our position in the insurance cycle
6. 06Our success depends primarily on our ability to underwrite risks effectively and adequately price the risks we insure
7. 07(5) Changes in the regulatory market, applicable legal liability standards and in the civil litigation system generally
8. 08We may be unable to predict the rising cost of insurance claims resulting from changing societal expectations that lead to increasing litigation, broader definitions of liability, broader contract interpretations, more plaintiff-friendly legal decisions and larger compensatory jury awards
9. 09(7) Adverse changes in loss cost trends, including inflationary pressure in medical cost and automobile repair costs
10. 10Our reserves for property and casualty insurance losses and loss settlement expenses are based on estimates and may be inadequate, adversely impacting our financial results
11. 11Insurance reserves represent our best estimate at a given point in time. They are not an exact calculation of liability but instead are complex estimates, which are a product of actuarial expertise and projection techniques based on assumptions and expectations about future events, many of which are highly uncertain
12. 12(8) The level of insurance fraud
13. 13We insure property that is exposed to various natural perils that can give rise to significant claims costs
14. 14We are subject to certain risks related to our investment portfolio that could negatively affect our profitability
15. 15A downgrade in our financial strength or issuer credit ratings could result in a loss of business and could have a material adverse effect on our financial condition, results of operations and liquidity
16. 16Our reinsurance strategy seeks to protect the Company from extremely adverse underwriting outcomes as well as unnecessary volatility in underwriting results. We purchase conservative levels of reinsurance as measured by our property catastrophe models, our economic capital model, and benchmarking with our peers
17. 17We may be unable to attract, retain or effectively manage the succession of key personnel
18. 18Changing weather patterns and climate change add to the unpredictability, frequency and severity of catastrophe losses and may adversely affect the results of our operations, liquidity and financial condition
19. 19(1) Physical Risk: The cost of natural perils may change. This is a concern for our property insurance underwriting strategy and, to a lesser extent, our real estate costs
20. 20Unauthorized data access, cyber-attacks and other security breaches could have an adverse impact on our business and reputation
21. 21We are subject to comprehensive laws and regulations, changes to which may have an adverse effect on our financial condition and results of operations
22. 22Macroeconomic conditions could materially and adversely affect our business, results of our operations, financial condition, and growth
23. 23Our stock price could become more volatile, and your investment could lose value
24. 24Efforts to disrupt the structure, management or ownership of the Company could diminish the value of our common stock
25. 25The ability of our subsidiaries to pay dividends to UFG may affect our liquidity and ability to pay dividends to shareholders