Capitalcube gives United Fire Group, Inc. a score of 43.
Our analysis is based on comparing United Fire Group, Inc. with the following peers – Loews Corporation, Cincinnati Financial Corporation, Travelers Companies, Inc., CNA Financial Corporation, American Financial Group, Inc., White Mountains Insurance Group Ltd, RLI Corp., Arch Capital Group Ltd., Hanover Insurance Group, Inc. and Erie Indemnity Company Class A (L-US, CINF-US, TRV-US, CNA-US, AFG-US, WTM-US, RLI-US, ACGL-US, THG-US and ERIE-US).
United Fire Group, Inc. has a fundamental score of 43 and has a relative valuation of UNDERVALUED.
- It trades at a lower Price/Book multiple (1.10) than its peer median (1.40).
- The market expects UFCS-US‘s earnings to grow at about the same rate as its chosen peers and also does not seem to expect much improvement in its below peer median returns.
- UFCS-US has relatively low net profit margins while its capital efficiency is relatively high.
- Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
- Over the last five years, UFCS-US‘s return on equity has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
- While UFCS-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
- The company is likely overinvesting in a business with only median returns.
- UFCS-US currently does not have any debt.
Drivers of Margin
- Margins suggest relatively less discipline in both writing policies and controlling operating costs.
- The company’s comparatively low underwriting margins (i.e. premiums earned minus insurance losses, expressed as a percentage of premiums earned) of 24.10% versus a peer median of 30.59% suggests that it follows a non-differentiated strategy and/or has not been conservative in writing policies. In addition, UFCS-US‘s pre-tax margins are below the peer median (pre-tax margin of 4.66% compared to 14.32%) suggesting relatively high operating costs.
Quadrant label definitions. Hover to know more
United Fire Group, Inc. operates as a holding company, which is engaged in the business of writing property, casualty insurance, life insurance and selling annuities through a network of independent agencies. It provides insurance protection to individuals, businesses and organizations. The company operates its business through two segments: Property and Casualty Insurance, and Life Insurance. The Property and Casualty Insurance segment is comprised of commercial lines insurance, including surety bonds, personal lines insurance and assumed reinsurance. The Life Insurance segment is comprised of deferred and immediate fixed annuities, universal life insurance products and traditional life insurance products. United Fire Group was founded in January 1946 and is headquartered in Cedar Rapids, IA.