AM Best Affirms Credit Ratings of United Fire Group, Inc. and Its Property/Casualty Subsidiaries

AM Best affirms United Fire Group and subsidiary credit ratings with stable outlooks, citing very strong balance sheet strength and improved capitalization.

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OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of the property/casualty (P/C) subsidiaries of United Fire Group, Inc. (UFG) [NASDAQ: UFCS] (collectively known as United Fire & Casualty Group), which operate under an intercompany pooling agreement led by United Fire & Casualty Company. Concurrently, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of UFG and the Long-Term Issue Credit Rating of “bbb-” (Good) on UFG’s $100 million, 9% senior unsecured notes due 2039. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Cedar Rapids, IA. (See below for a detailed listing of the companies and ratings.)

The ratings reflect United Fire & Casualty Group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.

United Fire & Casualty Group’s risk-adjusted capitalization has improved in recent years following capital contributions from the holding company, combined with organic growth in surplus driven by pre-tax operating earnings, and stabilization in the carried reserve position that has resulted in favorable reserve development when viewed in the aggregate. Improved operating results reflect a return to underwriting income in 2025 following management initiatives in recent years focused on restoring profitability while developing a durable underwriting platform that can sustain performance across market cycles. Recent results also have benefited from natural catastrophe losses occurring at lower-than-historical averages in recent years along with prudent rate actions. The ratings also reflect the group’s well-established position within core markets that provide diversification of product offerings within commercial lines. The group benefits from its solid regional franchise, local market knowledge and long-standing agency relationships.

While the group faces competitive market conditions and the insured footprint remains exposed to natural catastrophe events, the stable outlooks reflect AM Best’s expectation that operating performance and balance sheet strength metrics over the near term will be in line with recently reported results.

UFG’s Long-Term ICR recognizes the capital strength of its operating subsidiaries. Financial leverage and interest coverage at the holding company remain modest.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with stable outlooks for United Fire & Casualty Company and its following P/C subsidiaries:

• Lafayette Insurance Company
• Addison Insurance Company
• United Fire & Indemnity Company
• United Fire Lloyds
• Mercer Insurance Company
• Financial Pacific Insurance Company
• Mercer Insurance Company of New Jersey, Inc.
• Franklin Insurance Company
• UFG Specialty Insurance Company

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260918762093/en/

Gordon McLean
Senior Financial Analyst
+1 908 882 2109
gordon.mclean@ambest.com

Rosemarie Mirabella
Director
+1 908 882 2125
rosemarie.mirabella@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com

Source: AM Best

Key Terms

financial strength rating regulatory

A financial strength rating is an assessment of an organization's overall financial health, indicating how well it can meet its financial commitments. Think of it as a report card that shows whether a company or institution is financially stable and capable of withstanding economic challenges. This rating helps investors gauge the level of risk involved in engaging with or investing in that organization.

long-term issuer credit ratings regulatory

Long-term issuer credit ratings are assessments of a borrower's ability to repay debt over a period longer than one year. They help investors understand the level of risk involved in lending to that entity, similar to how a credit score indicates trustworthiness. These ratings influence borrowing costs and investment decisions, guiding investors on the safety and stability of their investments.

intercompany pooling agreement financial

A contract among related companies that sets rules for combining and sharing specific financial items—most commonly insurance risks, premiums and losses, or sometimes cash, credits or tax attributes—so the group treats them as a single pool. It matters to investors because the agreement changes how risk, profit and cash flow are allocated within a corporate group and therefore affects consolidated earnings, balance-sheet exposure and volatility, like family members agreeing to share one umbrella or one piggy bank.

risk-adjusted capitalization financial

Risk-adjusted capitalization is a measure that shows how much financial strength a company has, taking into account the potential risks it faces. It adjusts the total value of a company's capital to reflect the likelihood of losses, helping investors understand how well the company can withstand financial setbacks. Think of it as measuring a building’s strength not just by its size, but also by how well it can handle strong winds or earthquakes.