Exhibit



Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
Net income (loss) per diluted share⁽²⁾	$	(0.72	)	Net income per diluted share⁽²⁾	$	0.20
Operating income (loss)⁽³⁾ per diluted share⁽²⁾	$	(0.73	)	Operating income⁽³⁾ per diluted share⁽²⁾	$	0.02
Net realized investment gains per share⁽²⁾	$	0.01		Net realized investment gains per share⁽²⁾	$	0.18
GAAP combined ratio	118.1		%	GAAP combined ratio	107.6		%
				Book value per share	$	37.99
				Return on equity⁽⁴⁾	0.7		%

United Fire Group, Inc. (the “Company” or "UFG") (Nasdaq: UFCS) today reported a consolidated net loss, including net realized investment gains and losses, of $17.9 million ($0.72 per diluted share) for the three-month period ended September 30, 2017 (the "third quarter"), compared to consolidated net income of $12.4 million ($0.48 per diluted share) for the same period in 2016. For the nine-month period ended September 30, 2017 ("year-to-date"), consolidated net income, including net realized investment gains and losses, was $5.0 million ($0.20 per diluted share), compared to $37.9 million ($1.47 per diluted share) for the same period in 2016.

"In the third quarter of 2017, our results were impacted by two items: first, an increase in catastrophe losses, primarily from Hurricane's Harvey, Irma and Maria; and second, continued deterioration in our core loss ratio, primarily from an increase in severity of commercial auto losses," stated Randy A. Ramlo, President and Chief Executive Officer. "During the third quarter, catastrophe losses totaled $30.7 million or 12.0 points on the combined ratio, which is higher than our 10-year historical average for third quarter of 8.9 points on the combined ratio. The majority of these catastrophe losses are from Hurricanes Harvey at $9.6 million, Irma at $7.9 million and Maria at $4.0 million. All of the losses from Hurricane Maria are from assumed reinsurance with losses from Hurricanes Harvey and Irma from a combination of both direct losses and assumed reinsurance."

gains and losses and related federal income taxes. 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 operating income to net income.

"Also, there was further deterioration in our core loss ratio due to an increase in severity of commercial auto losses from current accident year losses and prior period reserve development," continued Ramlo. "As we have stated the last few quarters, we are aggressively implementing many new initiatives to address this deterioration, which we know will take some time before we see the positive benefits in our financial results."

Net investment income was $26.1 million for the third quarter, a decrease of 2.0 percent, as compared to net investment income of $26.7 million for the same period in 2016. Year-to-date, net investment income was $75.8 million, compared to net investment income of $73.4 million for the same period in 2016. The decrease in net investment income for the quarter was driven by the change in the value of our investments in limited liability partnerships and not due to a change in our investment philosophy. The valuation of these investments in limited liability partnerships varies from period to period due to current equity market conditions, specifically related to financial institutions. The increase in net investment income year-to-date was primarily driven by an increase in invested assets and partially due to the change in the valuation of our investments in limited liability partnerships.

Consolidated net unrealized investment gains, net of tax, totaled $172.1 million as of September 30, 2017, an increase of $38.2 million or 28.6 percent from December 31, 2016. The increase in net unrealized investment gains is primarily the result of a decrease in interest rates, which positively impacted the valuation of our fixed maturity security portfolio during 2017 and an increase in the fair value of our equity security portfolio.

Total consolidated assets as of September 30, 2017 were $4.2 billion, which included $3.3 billion of invested assets. The Company's book value per share was $37.99, which is an increase of $0.95 per share or 2.6 percent from December 31, 2016 and is primarily attributed to net income of $5.0 million and an increase in net unrealized investment gains of $38.2 million, net of tax, during the first nine months of 2017, partially offset by shareholder dividends of $20.4 million and share repurchases of $29.8 million.

Our continuing operations excludes our life insurance business, as discussed below. The net loss from continuing operations, including net realized investment gains and losses, totaled $19.1 million ($0.77 per diluted share) for the third quarter, compared to net income from continuing operations of $11.6 million ($0.45 per diluted share) in the same period in 2016. Year-to-date, net loss from continuing operations, including realized investment gains and losses, totaled $0.4 million ($0.01 per diluted share), compared to net income from continuing operations of $37.1 million ($1.44 per diluted share) in the same period of 2016.

Net premiums earned from continuing operations increased 6.8 percent to $255.8 million in the third quarter, compared to $239.5 million in the same period of 2016. Year-to-date, net premiums earned from continuing operations increased 6.6 percent to $737.4 million, compared to $692.0 million in the same period of 2016. The increases in both the three- and nine-month periods ended September 30, 2017 were due to continued organic growth from new business writings and geographical expansion.

Overall average renewal pricing change for commercial lines increased slightly, driven by commercial auto, with pricing varying depending on the region and size of the account. Commercial auto and commercial property rate increases continue to be in the mid to upper single digits with negative rate changes for our workers compensation line of business. Overall average renewal pricing increased slightly for personal lines, with increases in the low single digits.

We experienced unfavorable development in our net reserves for prior accident years of $3.2 million in the three-month period ended September 30, 2017, compared to favorable development $0.7 million in the same period in 2016. Year-to-date, favorable development in our net reserves for prior accident years was $38.0 million, compared to $27.1 million in the same period of 2016. The unfavorable development in the three-month period ended September 30, 2017 is primarily from two lines of business, commercial automobile and other liability, partially offset by favorable development in workers compensation. The favorable reserve development in the nine-month period ended September 30, 2017 is primarily from two lines of business, other liability and workers compensation, partially offset by reserve strengthening in our commercial fire and allied and commercial automobile lines of business. Development amounts can vary significantly from quarter-to-quarter and year-to-year depending on a number of factors, including the number of claims settled and the settlement terms. At September 30, 2017, our total reserves were within our actuarial estimates.

The GAAP combined ratio increased by 17.2 percentage points to 118.1 percent for the third quarter, compared to 100.9 percent for the same period in 2016. Year-to-date, the GAAP combined ratio increased by 8.1 percentage points to 107.6 compared to 99.5 percent for the same period in 2016. The increase in the combined ratio is primarily driven by an increase in catastrophe losses from hurricanes in the third quarter and a deterioration in our core loss ratio in our commercial automobile line of business, which experienced an increase in the number of severe losses from prior period reserve development.

"Our expense ratio increased slightly this quarter due to two items. First, deterioration in the profitability of the commercial and personal auto lines of business, which accelerates the amortization of our deferred acquisition costs. Second, we have invested in a new multi-year project to upgrade our technology platform to enhance core underwriting decisions and productivity. These were both partially offset by a decrease in post-retirement benefit expenses and a decrease in contingent commission expenses," commented Ramlo. "Despite the slight increase this quarter, our expense ratio continues to meet our expectations."

Net income from discontinued operations was $1.2 million ($0.05 per diluted share) for the third quarter, compared to a net income of $0.7 million ($0.03 per diluted share) for the third quarter of 2016. Year-to-date, net income from discontinued operations totaled $5.4 million ($0.21 per share) compared to $0.8 million ($0.03 per share). The change in net income in both the third quarter and year-to-date was primarily due to a decrease in underwriting expenses and a smaller increase in liability for future benefits offset by a decrease in net premiums earned and an increase in losses and loss settlement expenses. The decrease in underwriting expenses was due to strategic changes made at the beginning of 2017 to increase profitability of our life products through pricing changes and restructuring of our commissions. This strategic change resulted in a decrease in net premiums earned, primarily in sales of single premium whole life policies, which in turn reduced the increase in liability for future benefits. Also impacting the results, was an increase in death benefits paid compared to the same periods in the prior year.

Under our share repurchase program, we may purchase the Company's common stock from time to time on the open market or through privately negotiated transactions. The amount and timing of any purchases will be at management's discretion and will depend upon a number of factors, including the share price, general economic and market conditions, and corporate and regulatory requirements. As of September 30, 2017, we were authorized by the Board of Directors to purchase an additional 2,236,572 shares of common stock under our share repurchase program, which expires in August 2018. During the third quarter, 205,291 shares were repurchased under the program at a total cost of $8.6 million and an average share price of $41.89.

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 our company, the industry in which we operate, and beliefs and assumptions made by management. Words such as

"expect(s)," "anticipate(s)," "intends(s)," "plan(s)," "believe(s)" "continue(s)," "seek(s)," "estimate(s)," "goal(s)," "remain 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, 2016, filed with the Securities and Exchange Commission ("SEC") on February 28, 2017. The risks identified in our Form 10-K 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. In addition, we can provide no assurance of the satisfaction of the conditions precedent to the consummation of the sale of our life insurance subsidiary, including the receipt of regulatory approval. 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.

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: operating income and net premiums written. The Company has provided the following definitions and reconciliations of the non-GAAP financial measures:

Operating income: Operating income is calculated by excluding net realized investment gains and losses after applicable federal and state income taxes from net income. Management believes operating income is a meaningful measure for evaluating insurance company performance. Investors and equity analysts who invest and report on the insurance industry and the Company generally focus on this metric in their analyses because it represents the results of the Company's normal, ongoing performance. The Company recognizes that operating income is not a substitute for measuring GAAP net income, but believes it is a useful supplement to GAAP information.



Net Income (Loss) Reconciliation
	Three Months Ended September 30,							Nine Months Ended September 30,
(In Thousands, Except Per Share Data and Ratios)	2017			2016		Change %		2017		2016		Change %
Income Statement Data
Net income (loss)	$	(17,864	)	$	12,368	(244.4	)%	$	5,030	$	37,909	(86.7	)%
Less: after-tax net realized investment gains	236			1,684		(86.0	)%	4,548		4,057		12.1	%
Operating income (loss)	$	(18,100	)	$	10,684	(269.4	)%	$	482	$	33,852	(98.6	)%
Diluted Earnings Per Share Data
Net income (loss)	$	(0.72	)	$	0.48	(250.0	)%	$	0.20	$	1.47	(86.4	)%
Less: after-tax net realized investment gains	0.01			0.07		(85.7	)%	0.18		0.15		20.0	%
Operating income (loss)	$	(0.73	)	$	0.41	(278.0	)%	$	0.02	$	1.32	(98.5	)%

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)	2017			2016			Change %		2017			2016			Change %
Premiums:
Net premiums earned	$	269,988		$	260,069		3.8	%	$	783,423		$	754,854		3.8	%
Less: change in unearned premiums	11,907			7,163			66.2	%	(46,635		)	(53,688		)	13.1	%
Less: change in prepaid reinsurance premiums	(146		)	(151		)	3.3	%	39			211			(81.5	)%
Net premiums written	$	258,227		$	253,057		2.0	%	$	830,019		$	808,331		2.7	%



Consolidated Financial Highlights
	Three Months Ended September 30,								Nine Months Ended September 30,
(In Thousands, Except Per Share Data and Ratios)	2017			2016			Change %		2017			2016			Change %
Revenue Highlights
Net premiums earned	$	269,988		$	260,069		3.8	%	$	783,423		$	754,854		3.8	%
Net investment income	26,146			26,690			(2.0	)%	75,791			73,421			3.2	%
Total revenues	296,671			289,494			2.5	%	866,709			834,952			3.8	%
Income Statement Data
Net income (loss)	(17,864		)	12,368			(244.4	)%	5,030			37,909			(86.7	)%
After-tax net realized investment gains	236			1,684			(86.0	)%	4,548			4,057			12.1	%
Operating income (loss)⁽¹⁾	$	(18,100	)	$	10,684		(269.4	)%	$	482		$	33,852		(98.6	)%

Diluted Earnings Per Share Data
Net income (loss)	$	(0.72	)	$	0.48		(250.0	)%	$	0.20		$	1.47		(86.4	)%
After-tax net realized investment gains	0.01			0.07			(85.7	)%	0.18			0.15			20.0	%
Operating income (loss)⁽¹⁾	$	(0.73	)	$	0.41		(278.0	)%	$	0.02		$	1.32		(98.5	)%

Catastrophe Data
Pre-tax catastrophe losses	$	30,705		$	12,531		145.0	%	$	68,766		$	52,397		31.2	%
Effect on after-tax earnings per share	0.80			0.32			150.0	%	1.74			1.32			31.8	%
Effect on combined ratio	12.0		%	5.2		%	130.8	%	9.3		%	7.6		%	22.4	%

Favorable (unfavorable) reserve development experienced on prior accident years	$	(3,214	)	$	710		NM		$	37,988		$	27,072		40.3	%

Combined ratio	118.1		%	100.9		%	17.0	%	107.6		%	99.5		%	8.1	%
Return on equity									0.7		%	5.5		%	(87.1	)%
Cash dividends declared per share	$	0.28		$	0.25		12.0	%	$	0.81		$	0.72		12.5	%
Diluted weighted average shares outstanding	24,960,086			25,815,346			(3.3	)%	25,666,405			25,711,014			(0.2	)%



Income Statement
	Three Months Ended September 30,						Nine Months Ended September 30,
(In Thousands, Except Ratios)	2017			2016			2017			2016
Revenues
Net premiums earned	$	255,758		$	239,469		$	737,424		$	691,976
Investment income, net of investment expenses	13,792			14,027			38,561			35,017
Net realized investment gains	67			2,129			3,397			4,832
Total Revenues	$	269,617		$	255,625		$	779,382		$	731,825

Benefits, Losses and Expenses
Losses and loss settlement expenses	$	223,208		$	169,303		$	568,356		$	475,568
Amortization of deferred policy acquisition costs	52,986			52,240			154,845			151,216
Other underwriting expenses	25,817			20,047			69,900			61,469
Total Benefits, Losses and Expenses	$	302,011		$	241,590		$	793,101		$	688,253

Income (loss) before income taxes from continuing operations	(32,394		)	14,035			(13,719		)	43,572
Federal income tax expense (benefit) from continuing operations	(13,312		)	2,407			(13,330		)	6,489
Net income (loss) from continuing operations	$	(19,082	)	$	11,628		$	(389	)	$	37,083
Net income from discontinued operations	1,218			740			5,419			826
Net income (loss)	$	(17,864	)	$	12,368		$	5,030		$	37,909

GAAP combined ratio:
Net loss ratio - excluding catastrophes	75.3		%	65.5		%	67.8		%	61.1		%
Catastrophes - effect on net loss ratio	12.0			5.2			9.3			7.6
Net loss ratio	87.3		%	70.7		%	77.1		%	68.7		%
Expense ratio	30.8			30.2			30.5			30.8
Combined ratio	118.1		%	100.9		%	107.6		%	99.5		%



Balance Sheet
	September 30, 2017		December 31, 2016
(In Thousands)	September 30, 2017		December 31, 2016
Invested assets - continuing operations	$	1,838,297	$	1,771,783
Cash - continuing operations	98,610		89,194
Total assets:
Continuing operations	$	2,597,987	$	2,449,140
Assets held for sale	1,592,846		1,605,618
Total assets	$	4,190,833	$	4,054,758
Future policy benefits and losses, claims and loss settlement expenses -
Continuing operations	$	1,237,280	$	1,123,896
Total liabilities:
Continuing operations	$	1,883,048	$	1,722,651
Liabilities held for sale	1,363,737		1,390,223
Total liabilities	$	3,246,785	3,112,874
Net unrealized investment gains, after-tax	$	172,122	$	133,892
Total stockholders’ equity	944,048		941,884



Discontinued Operations⁽¹⁾
	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2017		2016		2017		2016
Revenues
Net premiums earned	$	14,230	$	20,600	$	45,999	$	62,878
Investment income, net of investment expenses	12,354		12,663		37,230		38,404
Net realized investment gains	296		461		3,600		1,409
Other income	174		145		498		436
Total Revenues	$	27,054	$	33,869	$	87,327	$	103,127

Benefits, Losses and Expenses
Losses and loss settlement expenses	$	10,506	$	7,252	$	30,679	$	23,527
Increase in liability for future policy benefits	5,481		14,091		19,341		42,645
Amortization of deferred policy acquisition costs	2,156		1,876		5,524		5,716
Other underwriting expenses	2,444		4,527		9,452		14,630
Interest on policyholders’ accounts	4,587		4,983		13,982		15,368
Total Benefits, Losses and Expenses	$	25,174	$	32,729	$	78,978	$	101,886

Income before income taxes	$	1,880	$	1,140	$	8,349	$	1,241
Federal income tax expense	662		400		2,930		415
Net income	$	1,218	$	740	$	5,419	$	826



Net Premiums Written by Line of Business
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
(In Thousands)
Net Premiums Written⁽¹⁾
Continuing operations:
Commercial lines:
Other liability⁽²⁾	$	73,052	$	70,961	$	242,805	$	230,634
Fire and allied lines⁽³⁾	56,536		55,071		175,742		174,870
Automobile	62,663		54,728		202,614		173,340
Workers’ compensation	22,578		23,061		80,942		83,505
Fidelity and surety	6,116		6,416		19,888		19,674
Miscellaneous	380		401		1,359		1,367
Total commercial lines	$	221,325	$	210,638	$	723,350	$	683,390

Personal lines:
Fire and allied lines⁽⁴⁾	$	11,381	$	12,006	$	32,084	$	33,245
Automobile	7,399		7,047		21,400		20,068
Miscellaneous	306		298		915		874
Total personal lines	$	19,086	$	19,351	$	54,399	$	54,187
Reinsurance assumed	3,592		2,472		6,278		7,887
Total net premiums written from continuing operations	244,003		232,461		784,027		745,464
Total net premiums written from discontinued operations	14,224		20,596		45,992		62,867
Total	$	258,227	$	253,057	$	830,019	$	808,331



Net Premiums Earned, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Three Months Ended September 30,	2017							2016
			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	$	77,955	$	50,836		65.2	%	$	74,784	$	32,714		43.7	%
Fire and allied lines	58,568		45,809			78.2		56,451		47,086			83.4
Automobile	64,470		74,161			115.0		55,111		53,330			96.8
Workers' compensation	26,387		23,357			88.5		26,766		21,772			81.3
Fidelity and surety	6,430		(485		)	(7.5	)	5,711		908			15.9
Miscellaneous	459		111			24.2		453		39			8.6
Total commercial lines	$	234,269	$	193,789		82.7	%	$	219,276	$	155,849		71.1	%

Personal lines
Fire and allied lines	$	10,730	$	9,077		84.6	%	$	10,986	$	6,606		60.1	%
Automobile	6,878		8,250			119.9		6,386		6,328			99.1
Miscellaneous	294		150			51.0		277		(276		)	(99.6	)
Total personal lines	$	17,902	$	17,477		97.6	%	$	17,649	$	12,658		71.7	%
Reinsurance assumed	$	3,587	$	11,942		NM		$	2,544	$	796		31.3	%
Total	$	255,758	$	223,208		87.3	%	$	239,469	$	169,303		70.7	%



Net Premiums Earned, Losses and Loss Settlement Expenses and Loss Ratio by Line of Business
Nine Months Ended September 30,	2017						2016
			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	$	228,250	$	73,597	32.2	%	$	215,572	$	101,378	47.0	%
Fire and allied lines	168,506		156,702		93.0		164,503		133,823		81.3
Automobile	183,688		208,346		113.4		157,106		140,397		89.4
Workers' compensation	78,092		55,569		71.2		77,009		53,106		69.0
Fidelity and surety	18,041		207		1.1		16,221		432		2.7
Miscellaneous	1,374		278		20.2		1,292		357		27.6
Total commercial lines	$	677,951	$	494,699	73.0	%	$	631,703	$	429,493	68.0	%

Personal lines
Fire and allied lines	$	32,300	$	31,361	97.1	%	$	32,794	$	25,442	77.6	%
Automobile	20,031		22,909		114.4		18,686		16,872		90.3
Miscellaneous	860		80		9.3		808		319		39.5
Total personal lines	$	53,191	$	54,350	102.2	%	$	52,288	$	42,633	81.5	%
Reinsurance assumed	$	6,282	$	19,307	307.3	%	$	7,985	$	3,442	43.1	%
Total	$	737,424	$	568,356	77.1	%	$	691,976	$	475,568	68.7	%