United Fire Group (UFCS) risk factors, FY2025 10-K

Other

1. 01The success of our strategy may be adversely impacted by various internal and external factors37% rewritten
2. 02Our core insurance business is dependent on strong and beneficial relationships with a large network of independent insurance agents. A strain in these relationships could result in loss of sufficient business opportunities within our expertise and stated risk appetite
3. 03We 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 or data analytics44% rewritten
4. 04Our strategy's success could be affected by our timely ability to recognize and adapt to our position in the insurance cycle
5. 05Changing 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
6. 06(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
7. 07Our success depends primarily on our ability to underwrite risks effectively and adequately price the risks we insure
8. 08(5) Changes in the regulatory market, applicable legal liability standards and in the civil litigation system generally
9. 09We 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
10. 10(7) Adverse changes in loss cost trends, including inflationary pressure in medical cost and automobile repair costs
11. 11Our reserves for property and casualty insurance losses and loss settlement expenses are based on estimates and may be inadequate, adversely impacting our financial results
12. 12Insurance 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
13. 13(8) The level of insurance fraud
14. 14We insure property that is exposed to various natural perils that can give rise to significant claims costs
15. 15We are subject to certain risks related to our investment portfolio that could negatively affect our profitability
16. 16A 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
17. 17Our 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
18. 18We may be unable to attract, retain or effectively manage the succession of key personnel
19. 19Unauthorized data access, cyber attacks and other security breaches could have an adverse impact on our business and reputation
20. 20We are subject to comprehensive laws and regulations, which may have an adverse effect on our financial condition and results of operations31% rewritten
21. 21Macroeconomic conditions could materially and adversely affect our business, results of our operations, financial condition, and growth
22. 22Our stock price could become more volatile, and your investment could lose value
23. 23Efforts to disrupt the structure, management or ownership of the Company could diminish the value of our common stock86% rewritten
24. 24The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations55% rewritten
25. 25other hand, require prior regulatory approval by the insurance subsidiaries' domiciliary state insurance regulator before they can be madeNew