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United Fire Group, Inc. Reports Third Quarter 2021 Results
ソース: Nasdaq GlobeNewswire / 04 11 2021 06:00:03 America/Chicago
CEDAR RAPIDS, Iowa, Nov. 04, 2021 (GLOBE NEWSWIRE) -- United Fire Group, Inc. (Nasdaq: UFCS),
Consolidated Financial Results - Highlights(1):
Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Net income (loss) per diluted share $ (0.38 ) Net income per diluted share $ 0.90 Adjusted operating income (loss)(2) per diluted share $ (0.31 ) Adjusted operating income(2) per diluted share $ 0.02 Net realized investment gains (losses) per diluted share $ (0.07 ) Net realized investment gains per diluted share $ 0.88 GAAP combined ratio 109.7 % GAAP combined ratio 106.1 % Book value per share $ 32.48 Return on equity(3) 3.7 % United Fire Group, Inc. (the "Company" or "UFG") (Nasdaq: UFCS) today reported a consolidated net loss, including net realized investment losses and changes in the fair value of equity securities, of $9.6 million ($0.38 per diluted share) for the three-month period ended September 30, 2021 (the "third quarter of 2021"), compared to a consolidated net loss of $37.2 million ($1.49 per diluted share) for the same period in 2020. For the nine-month period ended September 30, 2021 ("year-to-date"), consolidated net income, including realized investment gains and losses and changes in the fair value of equity securities, was $22.9 million ($0.90 per diluted share), compared to a net loss of $103.8 million ($4.15 per diluted share) for the same period in 2020.
The Company reported a consolidated adjusted operating loss of $0.31 per diluted share for the third quarter of 2021, compared to a consolidated adjusted operating loss of $1.37 per diluted share for the same period in 2020. Year-to-date, consolidated adjusted operating income was $0.02 per diluted share compared to a consolidated adjusted operating loss of $1.58 per diluted share for the same period in 2020.
"In the third quarter of 2021 we reported strong improvement in our core loss ratio," stated Randy A. Ramlo, President and Chief Executive Officer. "This improvement was offset by higher-than-average catastrophe losses."
"Our core loss ratio, which removes the impact of catastrophe losses and favorable prior year reserve development, improved 10.1 percentage points and 2.6 percentages points, respectively, in the third quarter and year-to-date 2021 as compared to the same periods of 2020. When taking into consideration the recovery of $7.1 million and $22.5 million, respectively, in the third quarter and year-to-date 2020, respectively, under our all-lines aggregate reinsurance program, our core loss ratio improved 12.8 percentage points and 5.5 percentage points for the respective periods."
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(1) Per share amounts are after tax.
(2) Adjusted operating income (loss) is a non-GAAP financial measure of net income excluding net realized investment
gains and losses, after applicable taxes, and goodwill impairment. Management evaluates this measure and ratios derived from this measure and the Company provides this information to investors because we believe it better represents the normal, ongoing performance of our business. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income (loss) to net income (loss).
(3) Return on equity is calculated by dividing annualized net income (loss) by average year-to-date stockholders' equity."The most significant improvement was in our commercial auto loss ratio, which improved 43.7 percentage points and 11.8 percentage points, respectively, in the third quarter and year-to-date 2021 as compared to the same periods of 2020. This improvement is being driven by continuing decreases in the frequency and severity of commercial auto claims and a decrease in the number of commercial auto exposure units. We are pleased with this significant improvement, which is a direct result of our strategic initiatives."
"The continued improvement in our core loss ratio was offset by higher than average catastrophe losses. Pre-tax catastrophe losses added 16.5 percentage points to the combined ratio in third quarter of 2021, compared to our third quarter historical average of 9.2 percentage points added to the combined ratio. In the third quarter of 2021, the most significant catastrophic event on our commercial and personal lines of business was Hurricane Ida and the most significant catastrophic event on our reinsurance assumed line of business was the European floods."
Financial Highlights
Net loss, including net realized investment gains and losses, was $9.6 million ($0.38 per diluted share) for the third quarter of 2021, compared to a net loss of $37.2 million ($1.49 per diluted share) for the same period in 2020. The decrease in the net loss reported in third quarter of 2021 as compared to third quarter of 2020 was due to lower losses and loss settlement expenses and higher net investment income partially offset by a decrease in net premiums earned and net realized investment losses in the third quarter of 2021 compared to net realized investment gains in the third quarter of 2020.
Year-to-date, consolidated net income, including net realized investment gains and losses was $22.9 million ($0.90 per diluted share), compared to net loss of $103.8 million ($4.15 per diluted share) for the same period in 2020. The change was primarily due to an increase in net realized investment gains from an increase in the fair value of equity securities as compared to net realized investment losses for the same period in 2020, a decrease in losses and loss settlement expenses, a decrease in other underwriting expenses and an increase in net investment income. These were partially offset by a decrease in net premiums earned.
The third quarter of 2020, also included a one-time adjustment to write off goodwill of $15.1 million . This goodwill related to the acquisition of Mercer Insurance Group, Inc. in 2011.
Net premiums earned decreased 7.8 percent to $238.9 million in the third quarter of 2021, compared to $259.1 million in the same period in 2020. Year-to-date net premiums earned decreased 8.7 percent to $722.8 million compared to $791.5 million in the same period in 2020. The decrease in both the three- and nine-month periods ended September 30, 2021 was primarily due to our focus on improving profitability through non-renewal of underperforming accounts in our commercial auto line of business and our exit of the personal lines business, which began in September 2020.
Year-to-date, the overall average renewal pricing increase was 6.3 percent. Excluding the workers' compensation line of business, the overall average renewal pricing increase was 7.6 percent. The increase in pricing was driven by our commercial auto and commercial property lines of business. Year-to-date, the commercial auto average renewal rate increase was 9.5 percent. The commercial property average renewal rate increase was 8.7 percent.
Net investment income was $11.6 million for the third quarter of 2021, as compared to net investment income of $7.2 million for the same period in 2020. Year-to date, net investment income was $42.4 million, compared to net investment income of $22.3 million for the same period in 2020. The increase in net investment income in the three- and nine-month periods ended September 30, 2021 was primarily due to an increase in the fair value of our investments in limited liability partnerships. The valuation of these investments in limited liability partnerships varies from period to period due to the current equity market conditions, specifically related to financial institutions.
The Company recognized net realized investment losses of $2.3 million during the third quarter of 2021 as compared to net realized investment gains of $15.2 million for the same period in 2020. Year-to-date, the Company recognized net realized investment gains of $28.2 million compared to net realized losses of $62.4 million for the same period in 2020. The change in the three- and nine-month periods ended September 30, 2021 as compared to the same periods in 2020 was primarily due to the change in the fair value of equity securities.
Losses and loss settlement expenses decreased by 25.2 percentage points and by 14.7 percentage points in the three- and nine-month periods ended September 30, 2021 as compared to the same periods in 2020. For the third quarter and year-to-date 2021, the decrease in losses and loss settlement expenses was primarily due to comparatively lower catastrophe losses and a decrease in frequency and severity of commercial auto liability losses.
Consolidated net unrealized investment gains, net of tax, totaled $57.2 million as of September 30, 2021, a decrease of $25.9 million from December 31, 2020. The decrease in net unrealized investment gains was primarily the result of an decrease in invested assets and an increase in interest rates in the first nine months of 2021.
Total consolidated assets as of September 30, 2021 were $3.0 billion, which included $2.1 billion of invested assets. The Company's book value per share was $32.48, which is a decrease of $0.45 per share, or 1.4 percent, from December 31, 2020. This decrease is primarily attributable to a decrease in net unrealized investment gains on fixed maturity securities of $25.9 million, net of tax, and shareholder dividends of $11.3 million offset by net income of $22.9 million.
The annualized return on equity was 3.7 percent year-to-date compared to negative 16.0 percent for the same period in 2020. The change in the annualized return on equity was primarily driven by net income of $22.9 million year-to-date compared to a net loss of $103.8 million in the same period in 2020.
Reserve Development
The Company experienced favorable development in its net reserves for prior accident years of $11.1 million in the third quarter of 2021, compared to favorable development of $6.3 million in the same period in 2020. Year-to-date, favorable development in our net reserves for prior accident years was $26.1 million, compared to $30.0 million favorable development in the same period in 2020. The favorable prior accident year reserve development in the three- and nine-month periods ended September 30, 2021 came primarily from our commercial auto, workers' compensation and commercial fire and allied lines of business all partially offset by our other liability line of business. Development amounts can vary significantly from quarter to quarter depending on a number of factors, including the number of claims settled and the settlement terms. At September 30, 2021, the Company's total reserves were within its actuarial estimates.
GAAP Combined Ratio
The GAAP combined ratio decreased by 14.7 percentage points to 109.7 percent for the third quarter of 2021, compared to 124.4 percent in the same period in 2020. For the nine-month period ended September 30, 2021, the GAAP combined ratio decreased 7.4 percentage points to 106.1 percent compared to 113.5 percent for the nine-month period ended September 30, 2020. The decrease in the combined ratio during the three- and nine-month periods ended September 30, 2021 as compared to the same period in 2020 was primarily driven by a decrease in the net loss ratio.
Net Loss Ratio
The GAAP net loss ratio decreased 17.2 percentage points during the third quarter of 2021 as compared to the same period in 2020. Year-to-date, the GAAP net loss ratio decreased 5.2 percentage points to 73.9 percent compared to 79.1 percent for the nine-month period ended September 30, 2020. The decrease in the net loss ratio during the three- and nine-month periods ended September 30, 2021 as compared to the same period in 2020 was primarily due to comparatively lower catastrophe losses and a decrease in the frequency and severity of commercial auto liability losses.
Pre-tax catastrophe losses in the third quarter of 2021 were higher than our 10-year historical average for the third quarter but lower than third quarter of 2020. Catastrophe losses added 16.5 percentage points to the combined ratio in third quarter of 2021, as compared to 21.4 percentage points in the same period of 2020. The most significant catastrophe losses in the third quarter of 2021 were from Hurricane Ida on our commercial and personal lines of business and from the European floods on our reinsurance assumed line of business. In the third quarter of 2020, the most significant catastrophe losses were from the August Midwest derecho and Hurricane Laura. Our 10-year historical average for third quarter catastrophe losses is 9.2 percentage points added to the combined ratio. Year-to-date, catastrophe losses totaled $90.3 million ($2.81 per diluted share) compared to $121.3 million ($3.83 per diluted share) for the same period in 2020.
Underwriting Expense Ratio
The underwriting expense ratio for the third quarter of 2021 was 36.3 percent compared to 33.8 percent for the third quarter in 2020. Year-to-date, the underwriting expense ratio was 32.2 percent compared to 34.4 percent in the same period in 2020. For the third quarter of 2021, we did see an increase in the expense ratio of 2.5 points as compared to the third quarter of 2020 primarily due to improved performance in our book of business resulting in additions to profit sharing for our agents, employees, and program business. The decrease in the underwriting expense ratio year-to-date as compared to the same periods in 2020 was primarily due to the change in the design of our employee post-retirement benefit plans and a decrease in the acceleration of the amortization of our deferred acquisition costs due to improved profitability in our commercial auto line of business.
Capital Management
During the third quarter of 2021, we declared and paid a $0.15 per share cash dividend to shareholders of record as of September 3, 2021. We have paid a quarterly dividend every quarter since March 1968. During the third quarter of 2021, the Company repurchased 36,417 shares of its common stock for a total purchase price of approximately $1.0 million. Year-to-date, the Company repurchased 67,651 shares of its common stock for a total purchase price of approximately $2.0 million.
Earnings Call Access Information
An earnings call will be held at 9:00 a.m. Central Time on November 4, 2021 to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company's third quarter of 2021 results.
Teleconference: Dial-in information for the call is toll-free 1-844-492-3723. The event will be archived and available for digital replay through November 18, 2021. The replay access information is toll-free 1-877-344-7529; conference ID no. 10160591.
Webcast: An audio webcast of the teleconference can be accessed at the Company's investor relations page at http://ir.ufginsurance.com/event or https://services.choruscall.com/links/ufcs211103. The archived audio webcast will be available until November 18, 2021.
Transcript: A transcript of the teleconference will be available on the Company's website soon after the completion of the teleconference.
About UFG
Founded in 1946 as United Fire & Casualty Company, UFG, through its insurance company subsidiaries, is engaged in the business of writing property and casualty insurance.
Through our subsidiaries, we are licensed as a property and casualty insurer in 50 states, plus the District of Columbia, and we are represented by approximately 1,000 independent agencies. A.M. Best Company assigns a rating of “A” (Excellent) for members of the United Fire & Casualty Group.
For more information about UFG, visit www.ufginsurance.com or contact:
Randy Patten, AVP and Interim Co-Chief Financial Officer, 319-286-2537 or IR@unitedfiregroup.com.
Disclosure of Forward-Looking Statements
This release may contain forward-looking statements about our operations, anticipated performance and other similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under the Securities Act of 1933 and the Securities Exchange Act of 1934 for forward-looking statements. The forward-looking statements are not historical facts and involve risks and uncertainties that could cause actual results to differ from those expected and/or projected. Such forward-looking statements are based on current expectations, estimates, forecasts and projections about the Company, the industry in which we operate, and beliefs and assumptions made by management. Words such as "expect(s)," "anticipate(s)," "intend(s)," "plan(s)," "believe(s)," "continue(s)," "seek(s)," "estimate(s)," "goal(s)," "remain(s) optimistic," "target(s)," "forecast(s)," "project(s)," "predict(s)," "should," "could," "may," "will," "might," "hope," "can" and other words and terms of similar meaning or expression in connection with a discussion of future operations, financial performance or financial condition, are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Information concerning factors that could cause actual outcomes and results to differ materially from those expressed in the forward-looking statements is contained in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission ("SEC") on February 26, 2021. The risks identified in our Annual Report on Form 10-K and in our other SEC filings are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release or as of the date they are made. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures
The Company prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Management also uses certain non-GAAP measures to evaluate its operations and profitability. As further explained below, management believes that disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. Non-GAAP financial measures disclosed in this report include: adjusted operating income (loss) and net premiums written. The Company has provided the following definitions and reconciliations of the non-GAAP financial measures:
Adjusted operating income (loss): Adjusted operating income (loss) is calculated by excluding net realized investment gains and losses, after applicable federal and state income taxes, and goodwill impairment from net income. Management believes adjusted operating income (loss) is a meaningful measure for evaluating insurance company performance and a useful supplement to GAAP information because it better represents the normal, ongoing performance of our business. Investors and equity analysts who invest and report on the insurance industry and the Company generally focus on this metric in their analyses.
Net Income Reconciliation Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, Except Per Share Data) 2021 2020 Change % 2021 2020 Change % Income Statement Data Net income (loss) $ (9,593 ) $ (37,241 ) 74.2 % $ 22,859 $ (103,815 ) 122.0 % Less: after-tax net realized investment gains (losses) (1,792 ) 12,017 (114.9 )% 22,312 (49,309 ) 145.2 % Less: goodwill impairment — (15,091 ) 100.0 % — (15,091 ) 100.0 % Adjusted operating income (loss) $ (7,801 ) $ (34,167 ) 77.2 % $ 547 $ (39,415 ) 101.4 % Diluted Earnings Per Share Data Net income (loss) $ (0.38 ) $ (1.49 ) 74.5 % $ 0.90 $ (4.15 ) 121.7 % Less: after-tax net realized investment gains (losses) (0.07 ) 0.48 (114.6 )% 0.88 (1.97 ) 144.7 % Less: goodwill impairment — (0.60 ) 100.0 % — (0.60 ) 100.0 % Adjusted operating income (loss) $ (0.31 ) $ (1.37 ) 77.4 % $ 0.02 $ (1.58 ) 101.3 % Net premiums written: While not a substitute for any GAAP measure of performance, net premiums written is frequently used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies. Net premiums written are the amount charged for insurance policy contracts issued and recognized on an annualized basis at the effective date of the policy. Management believes net premiums written are a meaningful measure for evaluating insurance company sales performance and geographical expansion efforts. Net premiums written for an insurance company consists of direct premiums written and reinsurance assumed, less reinsurance ceded. Net premiums earned is calculated on a pro rata basis over the terms of the respective policies. Unearned premium reserves are established for the portion of premiums written applicable to the unexpired term of insurance policy in force. The difference between net premiums earned and net premiums written is the change in unearned premiums and change in prepaid reinsurance premiums.
Net Premiums Earned Reconciliation Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, Except Ratios) 2021 2020 Change % 2021 2020 Change % Premiums: Net premiums earned $ 238,909 $ 259,061 (7.8 )% $ 722,837 $ 791,519 (8.7 )% Less: change in unearned premiums 15,240 31,072 (51.0 )% 5,915 5,433 8.9 % Less: change in prepaid reinsurance premiums (3,039 ) (2,222 ) (36.8 )% (3,653 ) 2,734 (233.6 )% Net premiums written $ 226,708 $ 230,211 (1.5 )% $ 720,575 $ 783,352 (8.0 )% Supplemental Tables
Consolidated Financial Highlights (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, Except Share and Per Share Data and Ratios) 2021 2020 Change % 2021 2020 Change % Revenue Highlights Net premiums earned $ 238,909 $ 259,061 (7.8 )% $ 722,837 $ 791,519 (8.7 )% Net investment income 11,571 7,244 59.7 % 42,447 22,303 90.3 % Net realized investment gains (losses) (2,269 ) 15,212 (114.9 )% 28,243 (62,416 ) 145.2 % Other income (loss) 332 604 (45.0 )% 163 6,323 (97.4 )% Total revenues 248,543 282,121 (11.9 )% $ 793,690 $ 757,729 4.7 % Income Statement Data Net income (loss) (9,593 ) (37,241 ) 74.2 % $ 22,859 $ (103,815 ) 122.0 % After-tax net realized investment gains (losses) (1,792 ) 12,017 (114.9 )% 22,312 (49,309 ) 145.2 % Goodwill impairment — (15,091 ) 100.0 % — (15,091 ) 100.0 % Adjusted operating income (loss)(1) $ (7,801 ) $ (34,167 ) 77.2 % $ 547 $ (39,415 ) 101.4 % Diluted Earnings Per Share Data Net income (loss) $ (0.38 ) $ (1.49 ) 74.5 % $ 0.90 $ (4.15 ) 121.7 % After-tax net realized investment gains (losses) (0.07 ) 0.48 (114.6 )% 0.88 (1.97 ) 144.7 % Goodwill impairment — (0.60 ) 100.0 % — (0.60 ) 100.0 % Adjusted operating income (loss)(1) $ (0.31 ) $ (1.37 ) 77.4 % $ 0.02 $ (1.58 ) 101.3 % Catastrophe Data Pre-tax catastrophe losses $ 39,467 $ 55,361 (28.7 )% $ 90,326 $ 121,261 (25.5 )% Effect on after-tax earnings per share 1.24 1.75 (29.1 )% 2.81 3.83 (26.6 )% Effect on combined ratio 16.5 % 21.4 % (22.9 )% 12.5 % 15.3 % (18.3 )% Favorable reserve development experienced on prior accident years $ 11,075 $ 6,269 76.7 % $ 26,099 $ 30,038 (13.1 )% GAAP combined ratio 109.7 % 124.4 % (11.8 )% 106.1 % 113.5 % (6.5 )% Return on equity 3.7 % (16.0 )% 123.1 % Cash dividends declared per share $ 0.15 $ 0.33 (54.5 ) $ 0.45 $ 0.99 (54.5 )% Diluted weighted average shares outstanding 25,092,167 25,031,234 0.2 % 25,427,318 25,023,401 1.6 % (1) Adjusted operating income (loss) is a non-GAAP financial measure of net income (loss). See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of adjusted operating income (loss) to net income (loss).
Income Statement (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In Thousands, Except Ratios) 2021 2020 2021 2020 Revenues Net premiums earned $ 238,909 $ 259,061 $ 722,837 $ 791,519 Investment income, net of investment expenses 11,571 7,244 42,447 22,303 Net realized investment gains (losses) (2,269 ) 15,212 28,243 (62,416 ) Other income (loss) 332 604 163 6,323 Total Revenues $ 248,543 $ 282,121 $ 793,690 $ 757,729 Benefits, Losses and Expenses Losses and loss settlement expenses $ 175,444 $ 234,693 $ 533,981 $ 626,169 Amortization of deferred policy acquisition costs 51,261 52,095 150,533 158,440 Other underwriting expenses 35,468 35,470 82,236 114,020 Goodwill impairment — 15,091 — 15,091 Interest expense 797 — 2,391 — Total Benefits, Losses and Expenses $ 262,970 $ 337,349 $ 769,141 $ 913,720 Income (loss) before income taxes (14,427 ) (55,228 ) 24,549 (155,991 ) Federal income tax expense (benefit) (4,834 ) (17,987 ) 1,690 (52,176 ) Net income (loss) $ (9,593 ) $ (37,241 ) $ 22,859 $ (103,815 ) GAAP combined ratio: Net loss ratio - excluding catastrophes 56.9 % 69.2 % 61.4 % 63.8 % Catastrophes - effect on net loss ratio 16.5 21.4 12.5 15.3 Net loss ratio 73.4 % 90.6 % 73.9 % 79.1 % Underwriting expense ratio 36.3 33.8 32.2 34.4 GAAP combined ratio 109.7 % 124.4 % 106.1 % 113.5 % Balance Sheet September 30, 2021 December 31, 2020 (In Thousands) (unaudited) Invested assets $ 2,056,068 $ 2,149,217 Cash 132,772 87,948 Total assets 3,010,654 3,069,678 Losses and loss settlement expenses 1,567,650 1,578,131 Total liabilities 2,196,125 2,244,529 Net unrealized investment gains, after-tax 57,177 83,070 Total stockholders’ equity 814,529 825,149 Net Premiums Written by Line of Business (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (In Thousands) Net Premiums Written(1) Commercial lines: Other liability(2) $ 68,751 $ 71,140 $ 223,265 $ 238,330 Fire and allied lines(3) 59,880 54,766 180,857 185,769 Automobile 51,981 63,419 177,398 214,447 Workers’ compensation 13,305 16,325 45,568 57,481 Fidelity and surety 9,743 7,535 27,882 23,146 Miscellaneous 264 320 955 1,127 Total commercial lines $ 203,924 $ 213,505 $ 655,925 $ 720,300 Personal lines: Fire and allied lines(4) $ 1,234 $ 3,065 $ 3,000 $ 21,205 Automobile (35 ) 4,838 277 19,548 Miscellaneous 23 203 48 813 Total personal lines $ 1,222 $ 8,106 $ 3,325 $ 41,566 Reinsurance assumed 21,562 8,600 61,325 21,486 Total 226,708 230,211 $ 720,575 $ 783,352 (1) Net premiums written is a non-GAAP financial measure of net premiums earned. See Definitions of Non-GAAP Information and Reconciliations to Comparable GAAP Measures for a reconciliation of net premiums written to net premiums earned.
(2) Commercial lines “Other liability” is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured’s premises and products manufactured or sold.
(3) Commercial lines “Fire and allied lines” includes fire, allied lines, commercial multiple peril and inland marine.
(4) Personal lines “Fire and allied lines” includes fire, allied lines, homeowners and inland marine.Net Premiums Earned, Net Losses and Loss Settlement Expenses and Net Loss Ratio by Line of Business Three Months Ended September 30, 2021 2020 Net Losses Net Losses and Loss and Loss Net Settlement Net Net Settlement Net (In Thousands, Except Ratios) Premiums Expenses Loss Premiums Expenses Loss (unaudited) Earned Incurred Ratio Earned Incurred Ratio Commercial lines Other liability $ 75,559 $ 47,416 62.8 % $ 78,302 $ 45,111 57.6 % Fire and allied lines 60,457 44,855 74.2 59,267 52,436 88.5 Automobile 60,991 42,034 68.9 73,403 82,675 112.6 Workers' compensation 15,183 11,265 74.2 19,245 10,250 53.3 Fidelity and surety 7,939 909 11.4 7,356 (128 ) (1.7 ) Miscellaneous 323 176 54.5 378 78 20.6 Total commercial lines $ 220,452 $ 146,655 66.5 % $ 237,951 $ 190,422 80.0 % Personal lines Fire and allied lines $ 2,559 $ 11,382 NM $ 5,144 $ 29,451 NM Automobile 734 343 46.7 7,055 8,322 118.0 Miscellaneous 50 (9 ) (18.0 ) 295 (97 ) (32.9 ) Total personal lines $ 3,343 $ 11,716 NM $ 12,494 $ 37,676 NM Reinsurance assumed $ 15,114 $ 17,073 113.0 $ 8,616 $ 6,595 76.5 % Total $ 238,909 $ 175,444 73.4 % $ 259,061 $ 234,693 90.6 % NM = Not Meaningful
Nine Months Ended September 30, 2021 2020 Net Losses Net Losses and Loss and Loss Net Settlement Net Net Settlement Net (In Thousands, Except Ratios) Premiums Expenses Loss Premiums Expenses Loss Unaudited Earned Incurred Ratio Earned Incurred Ratio Commercial lines Other liability $ 225,572 $ 134,286 59.5 % $ 235,018 $ 135,748 57.8 % Fire and allied lines 177,066 150,032 84.7 183,528 171,416 93.4 Automobile 190,238 151,632 79.7 225,103 205,994 91.5 Workers' compensation 47,260 33,601 71.1 57,873 24,205 41.8 Fidelity and surety 22,436 3,000 13.4 20,106 14 0.1 Miscellaneous 1,007 174 17.3 1,158 266 23.0 Total commercial lines $ 663,579 $ 472,725 71.2 % $ 722,786 $ 537,643 74.4 % Personal lines Fire and allied lines $ 13,120 $ 22,400 170.7 % $ 24,933 $ 55,372 222.1 % Automobile 7,069 5,904 83.5 22,203 15,935 71.8 Miscellaneous 337 (1,369 ) NM 905 2,561 283.0 Total personal lines $ 20,526 $ 26,935 131.2 % $ 48,041 $ 73,868 153.8 % Reinsurance assumed $ 38,732 $ 34,321 88.6 % $ 20,692 $ 14,658 70.8 % Total $ 722,837 $ 533,981 73.9 % $ 791,519 $ 626,169 79.1 % NM = Not meaningful
