By Mia MacGregor

Feb 12 - (The Insurer) - United Fire Group $(UFG)$ reported fourth-quarter adjusted operating income of $32.5mn ($1.25 per diluted share) and full-year adjusted operating income of $66.2mn ($2.56 per diluted share), marking its highest annual adjusted operating income since 2015.

• Operating income of $32.5mn in Q4; $66.2mn for FY, the highest since 2015.

• Q4 CR improves 4.8 pts to 94.4 percent, the lowest in 11 quarters

• NWP up 13% in Q4 and 15% for the full year, reaching a record $1.2bn

• UFG estimates $7mn to $10mn in losses from LA wildfires

In the fourth quarter, the Cedar Rapids-based company's combined ratio improved by 4.8 points to 94.4 percent, down from 99.2 percent in the prior-year period.

This was driven by an underlying loss ratio of 55.7 percent, a catastrophe loss ratio of 1.6 percent, no prior-year reserve development, and an underwriting expense ratio of 37.1 percent.

This represented the company’s lowest combined ratio in 11 quarters.

Additionally, UFG’s underlying combined ratio improved by 1.6 points to 92.8 percent from 94.4 percent in the prior-year period, while net written premiums grew 13 percent to $278.5mn, led by growth in its core commercial and assumed reinsurance business.

Core commercial expansion was driven by an 11.9 percent average renewal increase, a significant rise in new business production, and stable retention, the company reported.

For the full year, UFG’s combined ratio improved by 10.1 points to 99.2 percent, with an underlying loss ratio of 57.9 percent, a catastrophe loss ratio of 5.4 percent, no prior-year reserve development, and an underwriting expense ratio of 35.9 percent.

The underlying combined ratio improved by 3.3 points to 93.8 percent, while net written premiums rose 15 percent to $1.2bn – the highest in the company’s 79-year history.

Additionally, UFG estimated wildfire-related losses from southern California to be between $7mn and $10mn.

Commenting on the results, UFG president and CEO Kevin Leidwinger stated: “Our fourth quarter and full year results reflect the continued progress we are making in the execution of our strategic business plan.”

“The actions we have taken over the past two years to deepen our underwriting expertise, evolve our capabilities, better align with our distribution partners and improve our investment returns are materializing in our results,” Leidwinger added.