10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34257

________________________

 UNITED FIRE GROUP INC.

(Exact name of registrant as specified in its charter)

Iowa	45-2302834
(State of incorporation)	(I.R.S. Employer Identification No.)

118 Second Avenue SE
Cedar Rapids	Iowa	52401
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (319) 399-5700

Securities Registered Pursuant to Section 12(b) of the Exchange Act of 1934:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	UFCS	The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No ☒

As of November 1, 2021, 25,080,923 shares of common stock were outstanding.

United Fire Group, Inc.

Index to Quarterly Report on Form 10-Q

September 30, 2021

	Page
Forward-Looking Information	1
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	3
Consolidated Statements of Income and Comprehensive Income (unaudited) for the three- and nine-month periods ended September 30, 2021 and 2020	4
Consolidated Statement of Stockholders’ Equity (unaudited) for the three- and nine-month periods ended September 30, 2021 and 2020	5
Consolidated Statements of Cash Flows (unaudited) for the three- and nine-month periods ended September 30, 2021 and 2020	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3. Quantitative and Qualitative Disclosures About Market Risk	53
Item 4. Controls and Procedures	53
Part II. Other Information
Item 1. Legal Proceedings	54
Item 1A. Risk Factors	54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3. Defaults Upon Senior Securities	54
Item 4. Mine Safety Disclosures	54
Item 5. Other Information	54
Item 6. Exhibits	56
Signatures	57

FORWARD-LOOKING INFORMATION

This report 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 (the "Securities Act") and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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 United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our"), 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. See Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our other filings with the Securities and Exchange Commission ("SEC") for more information concerning factors that could cause actual results to differ materially from those in the forward-looking statements.

Risks and uncertainties that may affect the actual financial condition and results of the Company include, but are not limited to, the following:

•The frequency and severity of claims, including those related to catastrophe losses and the impact those claims have on our loss reserve adequacy; the occurrence of catastrophic events, including international events, significant severe weather conditions, climate change, acts of terrorism, acts of war and pandemics, including the ongoing impact of the novel coronavirus (COVID-19) pandemic (including the emergence of variant strains);

•The adequacy of our reserves for property and casualty insurance losses and loss settlement expenses;

•Geographic concentration risk in our property and casualty insurance business;

•The potential disruption of our operations and reputation due to unauthorized data access, cyber-attacks or cyber-terrorism and other security breaches;

•Developments in general economic conditions, domestic and global financial markets, interest rates and other-than-temporary impairment losses that could affect the performance of our investment portfolio;

•Litigation or regulatory actions that could require us to pay significant damages, fines or penalties or change the way we do business;

•Our ability to effectively underwrite and adequately price insured risks;

•Changes in industry trends, an increase in competition and significant industry developments;

•Lowering of one or more of the financial strength ratings of our operating subsidiaries or our issuer credit ratings and the adverse impact such action may have on our premium writings, policy retention, profitability and liquidity;

•Governmental actions, policies and regulations, including, but not limited to, domestic health care reform, financial services regulatory reform, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and other federal stimulus relief legislation, corporate governance, new laws or regulations or court decisions interpreting existing laws and regulations or policy provisions; changes in laws, regulations and stock exchange requirements relating to corporate governance and the cost of compliance;

•Our relationship with and the financial strength of our reinsurers; and

•Competitive, legal, regulatory or tax changes that affect the distribution cost or demand for our products through our independent agent/agency distribution network.

These are representative of the risks, uncertainties, and assumptions that could cause actual outcomes and results to differ materially from what is expressed in 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 report 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

1

any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

United Fire Group, Inc.
Consolidated Balance Sheets

(In Thousands, Except Share Data)	September 30, 2021		December 31, 2020
	(unaudited)
ASSETS
Investments
Fixed maturities
Available-for-sale, at fair value (amortized cost $1,655,228 in 2021 and $1,720,291 in 2020; allowance for credit losses $— in 2021 and $5 in 2020)	$	1,727,601	$	1,825,438
Equity securities at fair value (cost $81,797 in 2021 and $49,085 in 2020)	200,876		206,685
Mortgage loans	47,325		47,690
Less: allowance for mortgage loan losses	71		76
Mortgage loans, net	47,254		47,614
Other long-term investments	80,162		69,305
Short-term investments available-for-sale, at fair value (amortized cost $175 in 2021 and $175 in 2020)	175		175
	2,056,068		2,149,217
Cash and cash equivalents	132,772		87,948
Accrued investment income	13,947		14,615
Premiums receivable (net of allowance for doubtful accounts of $894 in 2021 and $687 in 2020)	325,072		317,292
Deferred policy acquisition costs	95,060		87,094
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $58,709 in 2021 and $55,141 in 2020)	136,196		129,874
Reinsurance receivables and recoverables (net of allowance for credit losses of $98 in 2021 and $190 in 2020)	121,290		160,540
Prepaid reinsurance premiums	9,312		12,965
Intangible assets	6,211		6,743
Income taxes receivable	69,074		66,194
Other assets	45,652		37,196
TOTAL ASSETS	$	3,010,654	$	3,069,678
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Losses and loss settlement expenses	$	1,567,650	$	1,578,131
Unearned premiums	458,931		464,845
Accrued expenses and other liabilities	101,447		126,624
Long term debt	50,000		50,000
Deferred tax liability	18,097		24,929
TOTAL LIABILITIES	$	2,196,125	$	2,244,529
Stockholders’ Equity
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,080,923 and 25,055,479 shares issued and outstanding in 2021 and 2020, respectively	$	25	$	25
Additional paid-in capital	203,014		202,359
Retained earnings	567,411		555,854
Accumulated other comprehensive income, net of tax	44,079		66,911
TOTAL STOCKHOLDERS’ EQUITY	$	814,529	$	825,149
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,010,654	$	3,069,678

The Notes to unaudited Consolidated Financial Statements are an integral part of these statements.

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United Fire Group, Inc.

Consolidated Statements of Income and Comprehensive Income (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands, Except Share Data)	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) (includes reclassifications for net unrealized investment gains/(losses) on available-for-sale securities of $214 and $(453) in 2021 and $54 and $13 in 2020; previously included in accumulated other comprehensive income)	(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 (includes reclassifications for employee benefit costs of $1,586 and $4,899 in 2021 and $1,072 and $3,217 in 2020; previously included in accumulated other comprehensive income)	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) (includes reclassifications of $285 and $1,122 in 2021 and $213 and $672 in 2020; previously included in accumulated other comprehensive income)	(4,834)		(17,987)		1,690		(52,176)
Net Income (loss)	$	(9,593)	$	(37,241)	$	22,859	$	(103,815)
Other comprehensive income (loss)
Change in net unrealized appreciation on investments	$	(12,230)	$	4,116	$	(33,231)	$	44,586
Change in liability for underfunded employee benefit plans	(3,765)		—		(1,025)		—
Other comprehensive income (loss), before tax and reclassification adjustments	$	(15,995)	$	4,116	$	(34,256)	$	44,586
Income tax effect	3,359		(864)		7,194		(9,363)
Other comprehensive income (loss), after tax, before reclassification adjustments	$	(12,636)	$	3,252	$	(27,062)	$	35,223
Reclassification adjustment for net realized investment losses included in income	$	(214)	$	(54)	$	453	$	(13)
Reclassification adjustment for employee benefit costs included in expense	1,586		1,072		4,899		3,217
Total reclassification adjustments, before tax	$	1,372	$	1,018	$	5,352	$	3,204
Income tax effect	(285)		(213)		(1,122)		(672)
Total reclassification adjustments, after tax	$	1,087	$	805	$	4,230	$	2,532
Comprehensive income (loss)	$	(21,142)	$	(33,184)	$	27	$	(66,060)
Diluted weighted average common shares outstanding	25,092,167		25,031,234		25,427,318		25,023,401
Earnings (loss) per common share:
Basic	$	(0.38)	$	(1.49)	$	0.91	$	(4.15)
Diluted	(0.38)		(1.49)		0.90		(4.15)

The Notes to unaudited Consolidated Financial Statements are an integral part of these statements.

4

United Fire Group, Inc.

Consolidated Statement of Stockholders’ Equity (Unaudited)

	Common Stock
(In Thousands, Except Share Data)	Shares outstanding	Common stock		Additional paid-in capital		Retaining Earnings		Accumulated other comprehensive income		Total
Balance, January 1, 2021	25,055,479	$	25	$	202,359	$	555,854	$	66,911	$	825,149
Net income	—	—		—		18,702		—		18,702
Shares repurchased	(207)	—		(7)		—		—		(7)
Stock based compensation	64,583	—		522		—		—		522
Dividends on common stock ($0.15 per share)	—	—		—		(3,767)		—		(3,767)
Change in net unrealized investment appreciation(1)	—	—		—		—		(23,456)		(23,456)
Change in liability for underfunded employee benefit plans(2)	—	—		—		—		6,456		6,456
Balance, March 31, 2021	25,119,855	$	25	$	202,874	$	570,789	$	49,911	$	823,599
Net income	—	$	—	$	—	$	13,750	$	—	$	13,750
Shares repurchased	(31,027)	—		(1,000)		—		—		(1,000)
Stock based compensation	28,512	—		1,180		—		—		1,180
Dividends on common stock ($0.15 per share)	—	—		—		(3,772)		—		(3,772)
Change in net unrealized investment appreciation(1)	—	—		—		—		7,391		7,391
Change in liability for underfunded employee benefit plans(2)	—	—		—		—		(1,674)		(1,674)
Balance, June 30, 2021	25,117,340	$	25	$	203,054	$	580,767	$	55,628	$	839,474
Net income (loss)	—	$	—	$	—	$	(9,593)	$	—	$	(9,593)
Shares repurchased	(36,417)	—		(1,001)		—		—		(1,001)
Stock based compensation	—	—		960		—		—		960
Dividends on common stock ($0.15 per share)	—	—		—		(3,763)		—		(3,763)
Change in net unrealized investment appreciation(1)	—	—		—		—		(9,828)		(9,828)
Change in liability for underfunded employee benefit plans(2)	—	—		—		—		(1,721)		(1,721)
Balance, September 30, 2021	25,080,923	$	25	$	203,014	$	567,411	$	44,079	$	814,529

(1)The change in net unrealized appreciation is net of reclassification adjustments and income taxes.

(2)The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes.

5

	Common Stock
(In Thousands, Except Share Data)	Shares outstanding		Common stock		Additional paid-in capital		Retaining Earnings		Accumulated other comprehensive income		Total
Balance, January 1, 2020	25,015,963		$	25	$	200,179	$	697,116	$	13,152	$	910,472
Net income (loss)	—		—		—		(72,534)		—		(72,534)
Shares repurchased	(70,467)		—		(2,741)		—		—		(2,741)
Stock based compensation	70,597		—		879		—		—		879
Dividends on common stock $0.33 per share)	—		—		—		(8,249)		—		(8,249)
Change in net unrealized investment appreciation(1)	—		—		—		—		4,500		4,500
Change in liability for underfunded employee benefit plans(2)	—		—		—		—		847		847
Cumulative effect of change in accounting principle	—		—		—		(30)		—		(30)
Balance, March 31, 2020	25,016,093		$	25	$	198,317	$	616,303	$	18,499	$	833,144
Net income	—		$	—	$	—	$	5,960	$	—	$	5,960
Stock based compensation	15,141		—		1,479		—		—		1,479
Dividends on common stock $0.33 per share)	—		—		—		(8,267)		—		(8,267)
Change in net unrealized investment appreciation(1)	—		—		—		—		27,504		27,504
Change in liability for underfunded employee benefit plans(2)	—		—		—		—		847		847
Balance, June 30, 2020	25,031,234		$	25	$	199,796	$	613,996	$	46,850	$	860,667
Net income (loss)	$	—	$	—	$	—	$	(37,241)	$	—	$	(37,241)
Stock based compensation	—		—		1,053		—		—		1,053
Dividends on common stock $0.33 per share)	—		—		—		(8,254)		—		(8,254)
Change in net unrealized investment appreciation(1)	—		—		—		—		3,209		3,209
Change in liability for underfunded employee benefit plans(2)	—		—		—		—		848		848
Balance, September 30, 2020	25,031,234		$	25	$	200,849	$	568,501	$	50,907	$	820,282

(1)The change in net unrealized appreciation is net of reclassification adjustments and income taxes.

(2)The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes.

The Notes to unaudited Consolidated Financial Statements are an integral part of these statements.

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United Fire Group, Inc.

Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended September 30,
(In Thousands)	2021		2020
Cash Flows From Operating Activities
Net income (loss)	$	22,859	$	(103,815)
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Net accretion of bond premium	10,546		7,719
Depreciation and amortization	4,887		5,009
Goodwill impairment	—		15,091
Stock-based compensation expense	3,074		3,979
Net realized investment (gains) losses	(28,243)		62,416
Net cash flows from equity and trading investments	34,504		37,552
Deferred income tax benefit	248		(21,824)
Changes in:
Accrued investment income	668		154
Premiums receivable	(7,780)		5,482
Deferred policy acquisition costs	(7,966)		69
Reinsurance receivables	39,250		(127,551)
Prepaid reinsurance premiums	3,653		(2,734)
Income taxes receivable	(2,880)		(38,198)
Other assets	(8,456)		(11,616)
Losses and loss settlement expenses	(10,481)		133,329
Unearned premiums	(5,914)		(5,432)
Accrued expenses and other liabilities	(21,348)		4,593
Deferred income taxes	(1,009)		7,713
Other, net	(7,424)		15,196
Cash from operating activities	(4,671)		90,947
Net cash provided by (used in) operating activities	$	18,188	$	(12,868)
Cash Flows From Investing Activities
Proceeds from sale of available-for-sale investments	$	170,637	$	16,907
Proceeds from call and maturity of available-for-sale investments	214,702		239,438
Proceeds from sale of other investments	3,616		5,391
Purchase of investments in mortgage loans	—		(5,564)
Purchase of investments available-for-sale	(331,644)		(216,001)
Purchase of other investments	(6,021)		(4,829)
Net purchases and sales of property and equipment	(10,932)		(15,506)
Net cash provided by investing activities	$	40,358	$	19,836
Cash Flows From Financing Activities
Issuance of common stock	$	(412)	$	(568)
Repurchase of common stock	(2,008)		(2,741)
Payment of cash dividends	(11,302)		(24,777)
Net cash used in financing activities	$	(13,722)	$	(28,086)
Net Change in Cash and Cash Equivalents	$	44,824	$	(21,118)
Cash and Cash Equivalents at Beginning of Period	87,948		120,722
Cash and Cash Equivalents at End of Period	$	132,772	$	99,604

The Notes to unaudited Consolidated Financial Statements are an integral part of these statements.

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UNITED FIRE GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share amounts or as otherwise noted)

NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Business

United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance through a network of independent agencies. Our insurance company subsidiaries are licensed as property and casualty insurers in 50 states and the District of Columbia.

Basis of Presentation

The unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X promulgated by the SEC. Certain financial information that is included in our Annual Report on Form 10-K for the year ended December 31, 2020, including certain financial statement footnote disclosures, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; loss settlement expenses; and pension and post-retirement benefit obligations.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Management of UFG believes the accompanying unaudited Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. All significant intercompany transactions have been eliminated in consolidation. The results reported for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020.

Segment Information

Our property and casualty insurance business is reported as one business segment. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. We will continue to evaluate our operations on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP.

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Lloyd's Syndicates

On January 1, 2021, the Company became a member of Lloyd's of London ("Lloyd's"). As a member of Lloyd's, the Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support underwriting of property and casualty and reinsurance business by Syndicate 1492, Syndicate 1729, Syndicate 1969, Syndicate 1971 and Syndicate 4747. At September 30, 2021, the Company's FAL investments were comprised of cash of $21,331 on deposit with Lloyd's in order to satisfy these FAL requirements.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, cash on deposit and held at Lloyd's and non-negotiable certificates of deposit with original maturities of three months or less.

Deferred Policy Acquisition Costs ("DAC")

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred. The following table is a summary of the components of DAC, including the related amortization recognized for the nine-month period ended September 30, 2021.

	Total
Recorded asset at beginning of period	$	87,094
Underwriting costs deferred	158,499
Amortization of deferred policy acquisition costs	(150,533)
Recorded asset at September 30, 2021	$	95,060

Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned.

Goodwill

Goodwill assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill assets relate to the acquisition of Mercer Insurance Group, Inc. on March 28, 2011. We evaluate goodwill assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill assets may exceed their implied fair value. Any impairment is recognized in the period that the impairment is identified. During the third quarter of 2020, we completed a quantitative analysis of our goodwill as a result of the following factors: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, as a result of the COVID-19 pandemic and due to the current year weather related catastrophes; and (ii) the fair value of our stock trading significantly below book value. As a result of the quantitative analysis, we recorded an impairment charge of $15,091 as of September 30, 2020. The impairment charge was determined based on completion of both a discounted cash flow and market value analysis.

Other Intangible Assets

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized using the straight-line method over periods ranging from two years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized.

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Long Term Debt

The Company executed a private placement debt transaction on December 15, 2020 between United Fire & Casualty Company ("UF&C"), and Federated Mutual Insurance Company, a mutual insurance company domiciled in Minnesota ("Federated Mutual"), and Federated Life Insurance Company, an insurance company domiciled in Minnesota ("Federated Life” and, together with Federated Mutual, the "Note Purchasers").

UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes. The notes are presented as a long term debt liability in the Consolidated Balance Sheets and as a financing activity in the Consolidated Statement of Cash Flows.

Interest payments under the surplus notes are paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor’s) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date. For the nine-month period ended September 30, 2021, interest totaled $2,391 and is included in accrued expenses and other liabilities in the Consolidated Balance Sheets and as Interest expense in the Consolidated Statements of Income and Comprehensive Income. Payment of interest is subject to approval by the Iowa Insurance Division.

Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss ("NOL") carryovers and carrybacks to offset 100 percent of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has considered the implications of the CARES Act on its tax provision. As of September 30, 2021, there was no income tax benefit as a result of the CARES Act. As of September 30, 2020, there was an income tax benefit of $17,768 as a result of the CARES Act.

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

We reported consolidated federal income tax expense of $1,690 for the nine-month period ended September 30, 2021 compared to an income tax benefit of $52,176 during the same period of 2020. Our effective tax rate for 2021 and 2020 is different than the federal statutory rate of 21 percent, due principally to the net effect of tax-exempt municipal bond interest income. Our effective tax rate for 2020 is also different than the federal statutory rate of 21 percent, due principally to the impact of the provisions of the CARES Act.

The Company performs a quarterly review of its tax positions and makes a determination of whether it is more likely than not that the tax position will be sustained upon examination. If, based on this review, it appears not more likely than not that the positions will be sustained, the Company will calculate any unrecognized tax benefits and, if necessary, calculate and accrue any related interest and penalties. We did not recognize any liability for unrecognized tax benefits at September 30, 2021 or December 31, 2020. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

For the nine-month periods ended September 30, 2021 and 2020, we made payments for income taxes totaling $5,345 and $125, respectively. We did not receive a tax refund during the nine-month periods ended September 30, 2021 and 2020.

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We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2017.

Leases

The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases consists of operating leases which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The Company's operating leases consist of office space, vehicles, computer equipment and office equipment. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. Short-term leases of 12 months or less are recorded on the Consolidated Balance Sheets and lease payments are recognized on the Consolidated Statements of Income and Comprehensive Income. For more information on leases refer to Note 10 "Leases."

Variable Interest Entities

The Company and certain related parties are equity investors in one investment which the Company determined is a variable interest entity ("VIE") as a result of participation in the risks and rewards of the VIE based on the objectives and strategies of the VIE. The VIE is a limited liability company that primarily invests in commercial real estate. The Company and certain related parties are not the primary beneficiary largely due to their inability to influence management or direct the activities that most significantly impact the VIE's economic performance. Based on these facts and circumstances, the Company has a variable interest in the VIE, but has not consolidated the VIE's financial results as it is not the primary beneficiary. The Company's investment is reported in other long-term investments in the Consolidated Balance Sheets and accounted for under the equity method of accounting. The fair value of the VIE at September 30, 2021 was $3,030 and there are no future funding commitments.

Credit Losses

The Company recognizes credit losses for our available-for-sale fixed-maturity portfolio, reinsurance receivables, mortgage loans and premium receivables by setting up allowances which are remeasured each reporting period and recorded in the Consolidated Statements of Income and Comprehensive Income.

For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. For more information on credit losses and the allowance for credit losses for available-for-sale fixed-maturity portfolio, see Note 2 "Summary of Investments."

An allowance for mortgage loan losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments which have similar risk characteristics. To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. On a quarterly basis, quantitative credit risk metrics, including for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations. This allowance is presented as a separate line in the Consolidated Balance Sheets beneath the asset value as well as presented net and recorded through "Net realized investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income. For more information on credit losses and the allowance for credit losses for our investment in mortgage loans see Note 3 "Fair Value of Financial Instruments."

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For reinsurance receivables, the Company's model estimates expected credit loss by multiplying the exposure at default by both the probability of default and loss given default ("LGD"). The LGD is estimated by the rating of the reinsurer, historical relationship with UFG, existence of letters of credit and known regulation the Company may be held accountable for. The ultimate LGD percentage is estimated after considering Moody’s experience with unsecured year 1 bond recovery rates from 1983-2017. The allowance calculated as of September 30, 2021 is recorded through the line "Reinsurance receivables and recoverables" in the Consolidated Balance Sheets and through the line "Other underwriting expenses" in the Consolidated Statements of Income and Other Comprehensive Income. As of September 30, 2021, the Company had a credit loss allowance for reinsurance receivables of $98.

Rollforward of credit loss allowance for reinsurance receivable:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	190
Current-period provision for expected credit losses	—
Recoveries of amounts previously written off, if any	(92)
Ending balance of the allowance for reinsurance receivable, September 30, 2021	$	98

With respect to premiums receivable, the Company utilizes an aging method to estimate credit losses. An allowance for doubtful accounts is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders. "Premiums receivable" are presented in the Consolidated Balance Sheets net of an estimated allowance for doubtful accounts and recorded through "Other underwriting expenses" in the Consolidated Statements of Income and Comprehensive Income.

COVID-19 Pandemic

The COVID-19 pandemic caused significant financial market volatility, economic uncertainty and interruptions to normal business activities. As of the date of this report, we expect the effect of the COVID-19 pandemic on claims currently under our coverages to be manageable, based on the information presently available. However, the effects of the COVID-19 pandemic, including the emergence of variant strains, continue to evolve and we cannot predict the extent to which our business, results of operations, financial condition, liquidity, capital position, the value of investments we hold in our investment portfolio, premiums and the demand for our products and our ability to collect premiums or requirement to return premiums to our policyholders, will ultimately be impacted. Additionally, if established written contract policy exclusions of business interruption coverage for losses attributable to the COVID-19 pandemic are voided or changed through legislation, regulations or interpretations by the courts, such changes have the potential to materially increase claims, losses and legal expenses which may impact our business, financial condition, results of operations or liquidity. See further discussion in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2021

Defined Benefit Plans - Disclosures

In August 2018, the FASB issued new guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension and postretirement plans. The new guidance removes the requirement for disclosing

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the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs in the next year and the sensitivity of postretirement health plans to one-percentage-point changes in medical trend rates. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance modifies disclosures, but will not have an impact on the Company's financial position and results of operations.

Income Taxes

In December 2019, the FASB issued new guidance which simplifies the accounting for income taxes by removing certain exceptions to income tax accounting. The amendments also improve consistent application of and simplify GAAP for other areas of income tax accounting. The new guidance clarifies and amends existing guidance, including removing certain requirements that an entity evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, and requiring an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance did not have an impact on the Company’s financial position and results of operations.

NOTE 2. SUMMARY OF INVESTMENTS

Fair Value of Investments

A reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity and short-term investments, presented on a consolidated basis, as of September 30, 2021 and December 31, 2020, is provided below:

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September 30, 2021
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,543	$	283	$	448	$	53,378	$	—	$	53,378
U.S. government agency	55,142		2,646		644		57,144		—		57,144
States, municipalities and political subdivisions
General obligations:
Midwest	68,996		2,714		—		71,710		—		71,710
Northeast	26,562		811		—		27,373		—		27,373
South	92,091		4,196		—		96,287		—		96,287
West	95,022		5,549		—		100,571		—		100,571
Special revenue:
Midwest	118,800		7,473		—		126,273		—		126,273
Northeast	55,940		4,072		—		60,012		—		60,012
South	201,920		14,723		87		216,556		—		216,556
West	127,709		8,119		—		135,828		—		135,828
Foreign bonds	30,331		1,008		175		31,164		—		31,164
Public utilities	95,948		5,138		281		100,805		—		100,805
Corporate bonds
Energy	28,060		2,263		65		30,258		—		30,258
Industrials	52,097		2,783		137		54,743		—		54,743
Consumer goods and services	60,554		2,477		757		62,274		—		62,274
Health care	27,385		639		531		27,493		—		27,493
Technology, media and telecommunications	53,421		3,707		740		56,388		—		56,388
Financial services	90,400		5,336		308		95,428		—		95,428
Mortgage-backed securities	22,251		249		127		22,373		—		22,373
Collateralized mortgage obligations
Government national mortgage association	115,576		3,038		1,358		117,256		—		117,256
Federal home loan mortgage corporation	127,461		1,089		1,588		126,962		—		126,962
Federal national mortgage association	55,697		1,252		532		56,417		—		56,417
Asset-backed securities	322		586		—		908		—		908
Total Available-for-Sale Fixed Maturities	$	1,655,228	$	80,151	$	7,778	$	1,727,601	$	—	$	1,727,601
Short-Term Investments	$	175	$	—	—		$	175	$	—	$	175
Total Available-for-Sale Investments	$	1,655,403	$	80,151	$	7,778	$	1,727,776	$	—	$	1,727,776

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December 31, 2020
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,481	$	482	$	25	$	149,938	$	—	$	149,938
U.S. government agency	60,502		4,016		—		64,518		—		64,518
States, municipalities and political subdivisions
General obligations:
Midwest	77,933		4,047		—		81,980		—		81,980
Northeast	29,071		1,379		—		30,450		—		30,450
South	104,522		5,448		—		109,970		—		109,970
West	102,590		7,431		—		110,021		—		110,021
Special revenue:
Midwest	115,956		9,142		—		125,098		—		125,098
Northeast	56,317		4,759		—		61,076		—		61,076
South	208,739		17,967		—		226,706		—		226,706
West	129,417		9,982		—		139,399		—		139,399
Foreign bonds	27,799		1,805		2		29,602		—		29,602
Public utilities	76,114		7,388		—		83,502		—		83,502
Corporate bonds
Energy	22,441		2,895		—		25,336		—		25,336
Industrials	39,513		3,744		—		43,257		—		43,257
Consumer goods and services	46,521		4,046		—		50,567		—		50,567
Health care	6,678		898		—		7,576		—		7,576
Technology, media and telecommunications	37,270		4,381		15		41,636		—		41,636
Financial services	93,736		7,564		269		101,031		5		101,026
Mortgage-backed securities	20,305		326		54		20,577		—		20,577
Collateralized mortgage obligations
Government national mortgage association	81,758		4,439		45		86,152		—		86,152
Federal home loan mortgage corporation	151,362		2,239		758		152,843		—		152,843
Federal national mortgage association	81,952		2,013		683		83,282		—		83,282
Asset-backed securities	314		612		—		926		—		926
Total Available-for-Sale Fixed Maturities	$	1,720,291	$	107,003	$	1,851	$	1,825,443	$	5	$	1,825,438

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Maturities

The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2021, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities
	Available-For-Sale
September 30, 2021	Amortized Cost		Fair Value
Due in one year or less	$	55,041	$	55,699
Due after one year through five years	469,238		492,892
Due after five years through 10 years	353,810		373,415
Due after 10 years	455,832		481,679
Asset-backed securities	322		908
Mortgage-backed securities	22,251		22,373
Collateralized mortgage obligations	298,734		300,635
	$	1,655,228	$	1,727,601

Net Realized Investment Gains and Losses

Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains (losses) is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net realized investment gains (losses):
Fixed maturities:
Available-for-sale	$	294	$	52	$	(207)	$	52
Allowance for credit losses	170		2		5		(8)
Trading Securities	—		382		—		(780)
Equity securities
Change in the fair value	(1,314)		21,962		20,513		(38,876)
Sales	(1,168)		(7,186)		8,183		(22,772)
Mortgage loans allowance for credit losses	5		—		5		(4)
Real estate	(256)		—		(256)		(28)
Total net realized investment gains (losses)	$	(2,269)	$	15,212	$	28,243	$	(62,416)

The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Proceeds from sales	$	53,973	$	—	$	170,637	$	16,907
Gross realized gains	690		—		843		198
Gross realized losses	396		—		1,051		495

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Funding Commitment

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through July 10, 2030 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $2,636 at September 30, 2021.

In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a three-year lockup with a 60 day minimum notice, with four possible repurchase dates per year, after the three-year lockup period is met. The fair value of the investment at September 30, 2021 was $24,786 and there are no remaining capital contributions with this investment.

Unrealized Appreciation

A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:

	Nine Months Ended September 30,
	2021		2020
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	(32,779)	$	44,574
Income tax effect	6,886		(9,361)
Total change in net unrealized investment appreciation, net of tax	$	(25,893)	$	35,213

Credit Risk

An allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2021:

Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	5
Additions to the allowance for credit losses for which credit losses were not previously recorded	—
Recoveries of amounts previously written off	(5)
Ending balance, September 30, 2021	$	—

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The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2021 and December 31, 2020. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

September 30, 2021	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	7	$	42,264	$	437	1	$	3,695	$	11	$	45,959	$	448
U.S. government agency	3	14,998		644		—	—		—		14,998		644
States, municipalities and political subdivisions
Special revenue
Special revenue - south	1	1,186		87		—	—		—		1,186		87
Foreign bonds	4	9,719		175		—	—		—		9,719		175
Public utilities	7	19,341		281		—	—		—		19,341		281
Corporate bonds
Energy	1	2,942		65		—	—		—		2,942		65
Industrials	2	5,915		137		—	—		—		5,915		137
Consumer goods and services	7	16,348		757		—	—		—		16,348		757
Health care	3	20,517		531		—	—		—		20,517		531
Technology, media and telecommunications	5	11,264		740		—	—		—		11,264		740
Financial services	3	6,457		52		1	4,744		256		11,201		308
Mortgage-backed securities	7	15,181		127		—	—		—		15,181		127
Collateralized mortgage obligations
Federal home loan mortgage corporation	21	71,358		1,191		4	18,604		397		89,962		1,588
Federal national mortgage association	8	27,410		438		4	4,559		94		31,969		532
Government national mortgage association	9	48,566		1,358		—	—		—		48,566		1,358
Total Available-for-Sale Fixed Maturities	88	$	313,466	$	7,020	10	$	31,602	$	758	$	345,068	$	7,778

The unrealized losses on our investments in available-for-sale fixed maturities were the result of interest rate movements. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

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December 31, 2020	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	5	$	86,371	$	25	—	$	—	$	—	$	86,371	$	25
Foreign bonds	1	2,000		2		—	—		—		2,000		2
Technology, media and telecommunications	1	2,020		15		—	—		—		2,020		15
Financial services	1	2,995		5		1	3,000		7		5,995		12
Mortgage-backed securities	2	8,099		53		5	118		1		8,217		54
Collateralized mortgage obligations
Federal home loan mortgage corporation	24	97,691		758		1	26		—		97,717		758
Federal national mortgage association	10	44,677		683		—	—		—		44,677		683
Government national mortgage association	2	12,394		45		1	24		—		12,418		45
Total Available-for-Sale Fixed Maturities	46	$	256,247	$	1,586	8	$	3,168	$	8	$	259,415	$	1,594

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NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

•Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

•Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

•Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years' experience and who have demonstrated knowledge of the subject security.

In order to determine the proper classification in the fair value hierarchy, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The mortgage loan portfolio consists entirely of commercial mortgage loans. The fair value of our mortgage loans is determined by modeling performed by our third party fund manager based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the security's fair value.

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Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (the "Executive Retirement Plan"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plan. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of September 30, 2021, the cash surrender value of the COLI policies was $10,067, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Our long-term debt is not carried in the Consolidated Balance Sheet at fair value. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for similar financial instruments. The fair value is estimated using a discounted cash flows analysis.

A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2021 and December 31, 2020 is as follows:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Available-for-sale securities	$	1,727,601	$	1,727,601	$	1,825,443	$	1,825,438
Equity securities	200,876		200,876		206,685		206,685
Mortgage loans	49,385		47,254		48,932		47,614
Other long-term investments	80,162		80,162		69,305		69,305
Short-term investments	175		175		175		175
Cash and cash equivalents	132,772		132,772		87,948		87,948
Corporate-owned life insurance	10,067		10,067		8,557		8,557
Liabilities
Long Term Debt	47,724		50,000		50,000		50,000

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The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table includes financial instruments at September 30, 2021 and December 31, 2020:

September 30, 2021			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,378	$	—	$	53,378	$	—
U.S. government agency	57,144		—		57,144		—
States, municipalities and political subdivisions
General obligations
Midwest	71,710		—		71,710		—
Northeast	27,373		—		27,373		—
South	96,287		—		96,287		—
West	100,571		—		100,571		—
Special revenue
Midwest	126,273		—		126,273		—
Northeast	60,012		—		60,012		—
South	216,556		—		216,556		—
West	135,828		—		135,828		—
Foreign bonds	31,164		—		31,164		—
Public utilities	100,805		—		100,805		—
Corporate bonds
Energy	30,258		—		30,258		—
Industrials	54,743		—		54,743		—
Consumer goods and services	62,274		—		62,274		—
Health care	27,493		—		27,493		—
Technology, media and telecommunications	56,388		—		56,388		—
Financial services	95,428		—		95,278		150
Mortgage-backed securities	22,373		—		22,373		—
Collateralized mortgage obligations
Government national mortgage association	117,256		—		117,256		—
Federal home loan mortgage corporation	126,962		—		126,962		—
Federal national mortgage association	56,417		—		56,417		—
Asset-backed securities	908		—		—		908
Total Available-for-Sale Fixed Maturities	$	1,727,601	$	—	$	1,726,543	$	1,058
EQUITY SECURITIES
Common stocks
Public utilities	$	16,550	$	16,550	$	—	$	—
Energy	14,296		14,296		—		—
Industrials	36,464		36,464		—		—
Consumer goods and services	48,311		48,311		—		—
Health care	12,584		12,584		—		—
Technology, media and telecommunications	28,651		28,651		—		—

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Financial services	43,425		43,425		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	200,876	$	200,281	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	20,555	$	20,555	$	—	$	—
Corporate-Owned Life Insurance	$	10,067	$	—	$	10,067	$	—
Total Assets Measured at Fair Value	$	1,959,274	$	221,011	$	1,736,610	$	1,653

December 31, 2020			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,938	$	—	$	149,938	$	—
U.S. government agency	64,518		—		64,518		—
States, municipalities and political subdivisions
General obligations
Midwest	81,980		—		81,980		—
Northeast	30,450		—		30,450		—
South	109,970		—		109,970		—
West	110,021		—		110,021		—
Special revenue
Midwest	125,098		—		125,098		—
Northeast	61,076		—		61,076		—
South	226,706		—		226,706		—
West	139,399		—		139,399		—
Foreign bonds	29,602		—		29,602		—
Public utilities	83,502		—		83,502		—
Corporate bonds
Energy	25,336		—		25,336		—
Industrials	43,257		—		43,257		—
Consumer goods and services	50,567		—		50,567		—
Health care	7,576		—		7,576		—
Technology, media and telecommunications	41,636		—		41,636		—
Financial services	101,031		—		100,781		250
Mortgage-backed securities	20,577		—		20,577		—
Collateralized mortgage obligations
Government national mortgage association	86,152		—		86,152		—
Federal home loan mortgage corporation	152,843		—		152,843		—
Federal national mortgage association	83,282		—		83,282		—
Asset-backed securities	926		—		—		926
Total Available-for-Sale Fixed Maturities	$	1,825,443	$	—	$	1,824,267	$	1,176
EQUITY SECURITIES

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Common stocks
Public utilities	$	16,320	$	16,320	$	—	$	—
Energy	9,918		9,918		—		—
Industrials	36,556		36,556		—		—
Consumer goods and services	32,061		32,061		—		—
Health care	24,549		24,549		—		—
Technology, media and telecommunications	17,109		17,109		—		—
Financial services	69,577		69,577		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	206,685	$	206,090	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	24,790	$	24,790	$	—	$	—
Corporate-Owned Life Insurance	$	8,557	$	—	$	8,557	$	—
Total Assets Measured at Fair Value	$	2,065,650	$	231,055	$	1,832,824	$	1,771

The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available.

We use a market-based approach for valuing all of our Level 2 securities and submit them primarily to a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day.

At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. In addition, on a quarterly basis, we also test all securities in the portfolio and independently corroborate the valuations obtained from our third-party valuation service providers. Quarterly, we also perform deep dive analysis of the pricing method used by our third-party valuation service provider by selecting a random sample of securities by asset class and reviewing methodologies. In our opinion, the pricing obtained at September 30, 2021 and December 31, 2020 was reasonable.

For the three- and nine-month periods ended September 30, 2021, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities.

Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers’ valuation processes.

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The following table provides a quantitative information about our Level 3 securities at September 30, 2021:

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at		Valuation Technique(s)	Unobservable inputs	Range of weighted average significant unobservable inputs
	September 30, 2021
Corporate bonds - financial services	$	150	Fair value equals cost	NA	NA
Fixed Maturities asset-backed securities	908		Discounted cash flow	Probability of default	4% - 6%
Nonredeemable preferred stocks	595		Discounted cash flow	Multiplier	3x - 4x

The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at July 1, 2021	$	150	$	891	$	595	$	1,636
Net unrealized gains (losses)(1)	—		17		—		17
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities for the nine-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at January 1, 2021	$	250	$	926	$	595	$	1,771
Net unrealized gains (losses)(1)	—		(18)		—		(18)
Transfers out	(100)		—		—		(100)
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

Commercial Mortgage Loans

The following tables present the carrying value of our commercial mortgage loans and additional information at September 30, 2021 and December 31, 2020:

Commercial Mortgage Loans
	September 30, 2021		December 31, 2020
Loan-to-value	Carrying Value		Carrying Value
Less than 65%	$	30,035	$	30,361
65%-75%	17,290		17,329
Total amortized cost	$	47,325	$	47,690
Allowance for mortgage loan losses	(71)		(76)
Mortgage loans, net	$	47,254	$	47,614

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Mortgage Loans by Region
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
East North Central	$	3,245	6.9	%	$	3,245	6.8	%
Southern Atlantic	9,622		20.3		9,752		20.5
East South Central	8,071		17.1		8,197		17.2
New England	6,588		13.9		6,588		13.8
Middle Atlantic	14,826		31.3		14,936		31.2
Mountain	2,227		4.7		2,227		4.7
West North Central	2,746		5.8		2,745		5.8
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Mortgage Loans by Property Type
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Commercial
Multifamily	$	16,999	35.9	%	$	17,038	35.7	%
Office	11,645		24.6		11,861		24.9
Industrial	10,124		21.4		10,124		21.2
Retail	2,227		4.7		2,227		4.7
Mixed use/Other	6,330		13.4		6,440		13.5
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Amortized Cost Basis by Year of Origination and Credit Quality Indicator
	2021		2020		2019		2018		Total
Commercial mortgage loans:
Risk Rating:
1-2 internal grade	$	—	$	5,495	$	8,356	$	18,390	$	32,241
3-4 internal grade	—		—		8,496		6,588		15,084
5 internal grade	—		—		—		—		—
6 internal grade	—		—		—		—		—
7 internal grade	—		—		—		—		—
Total commercial mortgage loans	$	—	$	5,495	$	16,852	$	24,978	$	47,325
Current-period write-offs	—		—		—		—		—
Current-period recoveries	—		—		—		—		—
Current-period net write-offs	$	—	$	—	$	—	$	—	$	—

Commercial mortgage loans carrying value excludes accrued interest of $166. As of September 30, 2021, all loan receivables were current, with no delinquencies. The commercial mortgage loans originate with an initial loan-to-value ratio to provide sufficient collateral to absorb losses should a loan be required to foreclose. Mortgage loans are evaluated on a quarterly basis for impairment on an individual basis through a monitoring process and review of key credit indicators, such as economic trends, delinquency rates, property valuations, occupancy and rental rates and loan-to-value ratios. A loan is considered impaired when the Company believes it will not collect the contractual principal and interest set forth in the contractual terms of the loan. An internal grade is assigned to each mortgage loan, with a grade of 1 being the highest and least likely for an impairment and the lowest rating of 7 being the most

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likely for an impairment. An allowance for mortgage loan losses is established on each loan recognizing a loss for amounts which we believe will not be collected according to the contractual terms of the respective loan agreement. As of September 30, 2021, the Company had an allowance for mortgage loan losses of $71, summarized in the following rollforward:

Rollforward of allowance for mortgage loan losses:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	76
Current-period provision for expected credit losses	(5)
Ending balance of the allowance for mortgage loan losses, September 30, 2021	$	71

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NOTE 4. RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will take action that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc., to render an opinion as to the reasonableness of our statutory reserves annually.

On a quarterly basis, UFG's internal actuary performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our internal actuary to review, on a regular and quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

We do not discount loss reserves based on the time value of money. 

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The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves at September 30, 2021 and December 31, 2020 (net of reinsurance amounts):

	September 30, 2021		December 31, 2020
Gross liability for losses and loss settlement expenses at beginning of year	$	1,578,131	$	1,421,754
Ceded losses and loss settlement expenses	(131,843)		(68,536)
Net liability for losses and loss settlement expenses at beginning of year	$	1,446,288	$	1,353,218
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	560,080	$	887,119
Prior years	(26,099)		(17,652)
Total incurred	$	533,981	$	869,467
Losses and loss settlement expense payments for claims occurring during
Current year	$	204,056	$	354,635
Prior years	318,573		421,762
Total paid	$	522,629	$	776,397
Net liability for losses and loss settlement expenses at end of year	$	1,457,641	$	1,446,288
Ceded loss and loss settlement expenses	110,009		131,843
Gross liability for losses and loss settlement expenses at end of period	$	1,567,650	$	1,578,131

There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific monetary impact of any individual factor on the development of reserves.

Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. Our reserving philosophy may result in favorable reserve development in future years that will decrease losses and loss settlement expenses for prior year claims in the year of adjustment. We realize that this philosophy, coupled with what we believe to be aggressive and successful claims management and loss settlement practices, has resulted in year-to-year redundancies in reserves. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Therefore, such development cannot be used to project future reserve redundancies or deficiencies.

We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure.

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Reserve Development

The significant drivers of the favorable reserve development in the nine-month period ended September 30, 2021 were the commercial automobile, workers' compensation, commercial fire and allied and personal fire and allied lines of business, partially offset by unfavorable development in commercial liability. The favorable development for commercial automobile was from loss adjustment expense ("LAE") where reductions in reserves were more than sufficient to offset paid LAE. Workers' compensation favorable development came from both loss and LAE. Reserve reductions for both items were more than sufficient to offset payments. The favorable development for commercial fire and allied lines was from LAE where reductions in reserves were more than sufficient to offset paid LAE. The favorable development for personal fire and allied lines came from both loss and LAE. Reserve reductions for both items were more than sufficient to offset payments. The unfavorable development for commercial liability is attributed to paid loss which was greater than the reductions of unpaid claim reserves; paid LAE was more than offset by reductions of reserves for unpaid LAE.

The significant drivers of the favorable reserve development for the full year of 2020 were the workers' compensation, commercial fire and allied lines, fidelity and surety and personal automobile lines of business The favorable development for workers' compensation was primarily from reductions in reserves for reported claims which were more than sufficient to offset paid loss. Reductions in reserves for IBNR claims also contributed favorable development in addition to LAE where reductions in reserves were more than sufficient to offset payments. Commercial fire and allied lines developed favorably because reductions in reserves for reported claims combined with reductions in reserves for IBNR claims were more than sufficient to offset paid loss. LAE also contributed favorable development with reductions in reserves more than sufficient to offset payments. Fidelity and surety loss developed favorably because a reduction in reserves for IBNR claims was more than sufficient to offset both paid loss and increases in reserves for reported claims. The personal automobile line of business developed favorably because reductions of reserves for reported claims combined with reductions of reserves for IBNR claims were more than sufficient to offset paid loss. LAE also contributed favorable development with reductions in reserves more than sufficient to offset payments. Much of the favorable development was offset by unfavorable development from three lines of business, with the largest contributions coming from commercial liability, reinsurance assumed and commercial automobile. The commercial liability line of business experienced unfavorable development due to paid loss which was greater than reductions in reserves for unpaid loss. LAE developed favorably and partially offset the unfavorable loss development. The unfavorable development for reinsurance assumed was due to paid loss which was greater than reductions in reserves for unpaid loss. The commercial automobile line of business experienced unfavorable development because paid loss was greater than reductions in reserves for unpaid loss, but a portion of the unfavorable loss development was offset by favorable development from LAE where payments were more than offset by reductions of reserves for unpaid loss adjustment expense. On an all lines combined basis, favorable development is attributable to LAE, which continues to benefit from additional litigation management efforts.

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NOTE 5. EMPLOYEE BENEFITS

Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and postretirement benefit plans are as follows:

	Pension Plan				Postretirement Benefit Plan
Three Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	3,020	$	2,707	$	—	$	432
Interest cost	1,728		2,066		1		253
Expected return on plan assets	(4,202)		(3,385)		—		—
Amortization of prior service credit	(809)		—		(3,765)		(2,021)
Amortization of net loss	999		979		705		94
Special event plan closure	—		—		—		—
Net periodic benefit cost	$	736	$	2,367	$	(3,059)	$	(1,242)

	Pension Plan				Postretirement Benefit Plan
Nine Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	9,060	$	8,122	$	148	$	1,296
Interest cost	5,184		6,199		71		760
Expected return on plan assets	(12,606)		(10,154)		—		—
Amortization of prior service credit	(2,427)		—		(10,725)		(6,063)
Amortization of net loss	2,997		2,936		1,902		282
Special event plan closure	—		—		(20,177)		—
Net periodic benefit cost	$	2,208	$	7,103	$	(28,781)	$	(3,725)

A portion of the service cost component of net periodic pension and postretirement benefit costs is capitalized and amortized as part of deferred acquisition costs and is included in the line "Amortization of deferred policy acquisition costs" in the Consolidated Statements of Income and Comprehensive Income. The portion not related to the compensation and the other components of net periodic pension and postretirement benefit costs is included in the income statement line titled "other underwriting expenses."

In January 2021, the Company decided to change the post-retirement benefit plan to a voluntary plan funded exclusively by participants, commencing at the start of 2023. The impact of this decision is reflected in the table above, with a one-time adjustment presented in the line "Special event plan closure" and an additional adjustment in the line "Amortization of prior service credit" recorded in first quarter of 2021. There will be continuing amortization of prior service credits through the end of 2022 related to these plan changes.

Employer Contributions

We previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020 that we originally planned to contribute $10,000 to the pension plan in 2021. The Company has revised the expected contributions to $5,000 in 2021 because of the funded status of the plan. For the nine-month period ended September 30, 2021, we contributed $5,000 to the pension plan, completing our expected contributions for the year.

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NOTE 6. STOCK-BASED COMPENSATION

Non-Qualified Employee Stock Award Plan

The United Fire Group, Inc. 2008 Stock Plan (the "2008 Stock Plan") authorized the issuance of restricted and unrestricted stock awards, restricted stock units, stock appreciation rights, incentive stock options, and non-qualified stock options for up to 1,900,000 shares of UFG common stock to employees. In May 2014, the Registrant's shareholders approved an additional 1,500,000 shares of UFG common stock issuable at any time and from time to time pursuant to the 2008 Stock Plan, among other amendments, and renamed such plan as the United Fire Group, Inc. Stock Plan. In May 2021, the Registrant's shareholders approved an additional 650,000 shares of UFG common stock issuable at any time and from time to time pursuant to the Stock Plan, and among other amendments, renamed such plan as the United Fire Group, Inc. 2021 Stock and Incentive Plan (as amended, the "Stock Plan"). At September 30, 2021, there were 1,245,573 authorized shares remaining available for future issuance. The Stock Plan is administered by the Board of Directors, which determines those employees who will receive awards, when awards will be granted, and the terms and conditions of the awards. The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Stock Plan. Pursuant to the Stock Plan, the Board of Directors may, at its sole discretion, grant awards to our employees, who are in positions of substantial responsibility with United Fire.

Options granted pursuant to the Stock Plan are granted to buy shares of UFG's common stock at the market value of the stock on the date of grant. Options granted prior to March 2017 vest and are exercisable in installments of 20.0 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. Options granted after March 2017 vest and are exercisable in installments of 33.3 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. To the extent not exercised, vested option awards accumulate and are exercisable by the awardee, in whole or in part, in any subsequent year included in the option period, but not later than 10 years from the grant date. Restricted and unrestricted stock awards granted pursuant to the Stock Plan are granted at the market value of UFG's common stock on the date of the grant. Restricted stock units fully vest after three years or five years from the date of grant, unless accelerated upon the approval of the Board of Directors, at which time UFG common stock will be issued to the awardee.

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	700,680	1,900,000
Additional shares authorized	650,000	2,150,000
Number of awards granted	(161,857)	(3,450,756)
Number of awards forfeited or expired	56,750	646,329
Ending balance	1,245,573	1,245,573
Number of option awards exercised	7,884	1,481,973
Number of unrestricted stock awards granted	—	10,090
Number of restricted stock awards vested	52,302	216,680

Non-Qualified Non-Employee Director Stock Plan

The United Fire Group, Inc. Non-Employee Director Stock Plan (formerly known as the 2005 Non-Qualified Non- Employee Director Stock Option and Restricted Stock Plan) (the "Director Stock Plan") authorizes the issuance of restricted stock awards and non-qualified stock options to purchase shares of UFG's common stock to non-employee directors. On May 20, 2020, the Company’s shareholders approved amendments to the Director Stock Plan, previously approved by the Company’s Board of Directors, to (i) increase the number of shares available for future awards under the Director Stock Plan from 300,000 to 450,000, (ii) extend the expiration date of the Director Stock Plan from December 31, 2020 to December 31, 2029, (iii) allow for the grant of awards of restricted stock units, and

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(iv) rename the Director Stock Plan as the "United Fire Group, Inc. Non-Employee Director Stock Plan." At September 30, 2021, the Company had 144,352 authorized shares available for future issuance.

The Board of Directors has the authority to determine which non-employee directors receive awards, when restricted stock, restricted stock units and options shall be granted, the option price, the option expiration date, the date of grant, the vesting schedule of options or whether the options shall be immediately vested, the terms and conditions of options, restricted stock and restricted stock units (other than those terms and conditions set forth in the plan) and the number of shares of common stock to be issued pursuant to an option, restricted stock or restricted stock unit agreements (subject to limits set forth in the Director Stock Plan). The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Director Stock Plan.

The activity in the Director Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	160,135	300,000
Additional authorization	—	150,000
Number of awards granted	(18,510)	(332,378)
Number of awards forfeited or expired	2,727	26,730
Ending balance	144,352	144,352
Number of option awards exercised	8,181	142,001
Number of restricted stock awards vested	—	98,491

Stock-Based Compensation Expense

For the three-month periods ended September 30, 2021 and 2020, we recognized stock-based compensation expense of $959 and $1,052, respectively. For the nine-month periods ended September 30, 2021 and 2020, we recognized stock-based compensation expense of $3,074 and $3,979, respectively.

As of September 30, 2021, we had $4,977 in stock-based compensation expense that has yet to be recognized through our results of operations. We expect this compensation to be recognized over the remainder of 2021 and subsequent years according to the table below, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2021	$	973
2022	2,402
2023	1,339
2024	251
2025	12
Total	$	4,977

NOTE 7. EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards and restricted stock unit awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the

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proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

The components of basic and diluted earnings per share were as follows for the three-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	(9,593)	$	(9,593)	$	(37,241)	$	(37,241)
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Add dilutive effect of restricted stock unit awards	—		—		—		—
Add dilutive effect of stock options	—		—		—		—
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Earnings (loss) per common share	$	(0.38)	$	(0.38)	$	(1.49)	$	(1.49)
Awards excluded from diluted earnings per share calculation(1)	—		865,966		—		820,124

(1)Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

	Nine Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	22,859	$	22,859	$	(103,815)	$	(103,815)
Weighted-average common shares outstanding	25,095,733		25,095,733		25,023,401		25,023,401
Add dilutive effect of restricted stock unit awards	—		216,527		—		—
Add dilutive effect of stock options	—		115,058		—		—
Weighted-average common shares outstanding	25,095,733		25,427,318		25,023,401		25,023,401
Earnings (loss) per common share	$	0.91	$	0.90	$	(4.15)	$	(4.15)
Awards excluded from diluted earnings per share calculation(1)	—		674,921		—		515,984

NOTE 8. DEBT

Long Term Debt

The Company executed a private placement debt transaction on December 15, 2020 between UF&C, and Federated Mutual and Federated Life.

UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes.

Interest payments under the surplus notes will be paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor’s) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date, as set forth in the table below. For the three- and nine-month

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periods ended September 30, 2021, interest expense totaled $797 and $2,391 , respectively. Payment of interest is subject to approval by the Iowa Insurance Division.

A.M. Best Co. Financial Strength Rating	Applicable Interest Rate
A+	5.875%
A	6.375%
A-	6.875%
B++ (or lower)	7.375%

Credit Facilities

On March 31, 2020, UF&C, a wholly owned subsidiary of the Company, entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent (the "Administrative Agent"), issuing lender, swing-line lender and lender, and the other lenders from time to time party thereto (collectively with Wells Fargo, the "Lenders"), providing for a $50,000 revolving credit facility, which includes a $20,000 letter of credit sub-facility and a $5,000 swing-line loan for working capital and other general corporate purposes. The Credit Agreement is provided by the Lenders on an unsecured basis, and UF&C has the option to increase the Credit Agreement by $100,000 if agreed to by the Lenders providing such incremental facility.

The Credit Agreement includes customary events of default, including default in payments of principals, default in payment of other indebtedness, change of control and voluntary and involuntary insolvency proceedings, the occurrence of which would allow the Lenders to accelerate payment of all amounts outstanding thereunder and terminate any further commitments to lend.

The entry into the Credit Agreement was completed as part of the Company’s regular course of financial planning and was not initiated as a result of market conditions resulting from the COVID-19 pandemic.

There was no outstanding balance on the Credit Agreement at September 30, 2021 and 2020, respectively. For the nine-month periods ended September 30, 2021 and 2020, we did not incur any interest expense related to the credit facility. We were in compliance with all covenants under the Credit Agreement at September 30, 2021.

NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the three-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of June 30, 2021	67,005		(11,377)		$	55,628
Change in accumulated other comprehensive income before reclassifications	(9,661)		(2,975)		(12,636)
Reclassification adjustments from accumulated other comprehensive income (loss)	(167)		1,254		1,087
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

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The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the nine-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of January 1, 2021	83,070		(16,159)		$	66,911
Change in accumulated other comprehensive income before reclassifications	(26,252)		(810)		(27,062)
Reclassification adjustments from accumulated other comprehensive income (loss)	359		3,871		4,230
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

NOTE 10. LEASES

The Company has operating leases consisting of office space, vehicle leases, computer equipment, and office equipment. Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of September 30, 2021, we have leases with remaining terms of one year to seven years, some of which may include no options for renewal and others with options to extend the lease terms from six months to five years.

The components of our operating leases were as follows for the three- and nine-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Components of lease expense:
Operating lease expense	$	1,748	$	1,832	$	5,297	$	5,788
Less sublease income	53		53		160		239
Net lease expense	1,695		1,779		5,137		5,549
Cash flows information related to leases:
Operating cash outflow from operating leases	1,714		1,796		5,192		5,265

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with Part I, Item 1 "Financial Statements."

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that are representative of significant judgments and uncertainties and that potentially may result in materially different results under different assumptions and conditions. We base our discussion and analysis of our consolidated financial condition and results of operations on the amounts reported in our Consolidated Financial Statements, which we have prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). As we prepare these Consolidated Financial Statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Our critical accounting policies are more fully described in our Management's Discussion and Analysis of Financial Condition and Results of Operations presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020. There have been no changes in our critical accounting policies from December 31, 2020.

INTRODUCTION

The purpose of this Management's Discussion and Analysis is to provide an understanding of our results of operations and consolidated financial condition. Our Management's Discussion and Analysis should be read in conjunction with our Consolidated Financial Statements and related notes, including those in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020. Our Consolidated Financial Statements are prepared on the basis of GAAP. We also prepare financial statements for each of our insurance company subsidiaries based on statutory accounting principles and file them with insurance regulatory authorities in the states where they do business.

When we provide information on a statutory or other basis, we label it as such, otherwise all other data is presented in accordance with GAAP.

BUSINESS OVERVIEW

Founded in 1946 as United Fire & Casualty Company, United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our") and its consolidated insurance subsidiaries provide insurance protection for individuals and businesses through several regional offices. Our property and casualty insurance company subsidiaries are licensed in 50 states plus the District of Columbia and are represented by approximately 1,000 independent agencies.

Our primary sources of revenue are premiums and investment income. Major categories of expenses from our operations include losses and loss settlement expenses, underwriting and other operating expenses.

Reportable Segments

Our property and casualty insurance business operates and reports as one business segment. For more information, refer to Part I, Item 1, Note 1. "Nature of Operations and Basis of Presentation."

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Lloyd's Syndicates

As of January 1, 2021, the Company became a member of Lloyd's of London ("Lloyd's"). As a member of Lloyd's, the Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support underwriting of property and casualty and reinsurance business by Syndicate 1492, Syndicate 1729, Syndicate 1969, Syndicate 1971 and Syndicate 4747. At September 30, 2021, the Company's FAL investments were comprised of cash of $21.3 million on deposit with Lloyd's in order to satisfy these FAL requirements.

Personal Lines Business

In May 2020, the Company entered into a renewal rights agreement for our personal lines business, providing our independent insurance agents with the opportunity to transfer their personal lines policies to Nationwide Mutual Insurance Company beginning in the third quarter of 2020, subject to the receipt of applicable regulatory approvals. As part of this agreement, Nationwide has offered contracts to many of our personal lines agents across the country, with the exception of agents in Louisiana. In Louisiana, we began non-renewing all personal lines policies in January 2021. Nationwide has been offering replacement policies to most of our personal lines policyholders at the time of renewal. There are three categories of policies where they are refusing to offer replacement coverage directly.

UFG’s entry into a renewal rights agreement with Nationwide was completed as part of our long-term strategic planning, allowing us to focus on the success of our core commercial lines business, which represented 94 percent of our business mix at the time of the agreement. It was not initiated as a result of market conditions from the COVID-19 pandemic.

Pooling Arrangement

All of our property and casualty insurance subsidiaries are members of an intercompany reinsurance pooling arrangement. The Company's pooling arrangement permits the participating companies to rely on the capacity of the entire pool's capital and surplus, rather than being limited to policy exposures of a size commensurate with each participant’s own surplus level.

Geographic Concentration

For the nine-month period ended September 30, 2021, approximately 50.8 percent of our property and casualty premiums were written in Texas, California, Iowa, Missouri, and New Jersey.

Profit Factors

Our profitability is influenced by many factors, including price, competition, economic conditions, investment returns, interest rates, catastrophic events and other natural disasters, man-made disasters, state regulations, court decisions, and changes in the law. To manage these risks and uncertainties, we seek to achieve consistent profitability through strong agency relationships, exceptional customer service, fair and prompt claims handling, disciplined underwriting, superior loss control services, prudent management of our investments, appropriate matching of assets and liabilities, effective use of ceded reinsurance and effective and efficient use of technology.

COVID-19

The spread of the COVID-19 virus, beginning in mid-March 2020, caused significant financial market volatility, economic uncertainty and interruptions to normal business activities. The COVID-19 pandemic has had a profound impact on day-to-day life, financial markets and the economy in the United States. The Company, in response to the challenges presented by the COVID-19 pandemic, activated its pre-existing business continuity plans to respond to a pandemic in mid-March 2020. With the exception of our essential services employees, UFG dispatched its staff to work remotely for the safety, health and well-being of our employees. We are fully operational, but have limited some non-essential travel. Our essential services employees are following recommended health and safety policies. We are and will continue to monitor the state and federal responses to the pandemic and, when appropriate, will

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adjust our operations in response. We have finalized our return to workplace plan for our employees, which gives employees the option to work fully remote, a hybrid schedule or return to the workplace 100 percent of the time depending on the position and with manager approval. On July 19, 2021, we implemented our plan with a certain portion of our employees returning to the workplace and then subsequently paused our plan due to the spread of the delta variant strain of COVID-19 in August 2021. At this time, our plan is to continue to pause our return to the workplace plan through December 31, 2021.

The implementation of our business continuity plans did not have a material effect on our internal control environment. We believe our operational processes, internal controls over financial reporting and disclosures, and financial reporting systems are operating effectively in the present environment.

Nearly all of the policies we have issued contain contract language that specifically excludes business interruption coverage for losses due to viruses such as the COVID-19 pandemic, but we continue to carefully scrutinize each claim and will afford coverage when appropriate. At this time, we expect the effect of the COVID-19 pandemic on claims currently under our coverages to be manageable, based on the information presently available. However, the effects of the COVID-19 pandemic, including the emergence of variant strains, continue to evolve and we cannot predict the extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. Additionally, if established written contract policy exclusions of business interruption coverage for losses attributable to the COVID-19 pandemic are voided or changed through legislation, regulations or interpretations by the courts, such changes have the potential to materially increase claims, losses and legal expenses which could impact our business, financial condition, results of operations and liquidity.

We anticipate that the larger impact on our financial condition and results of operations will likely result from developments in the economy as a whole and the effect on financial markets and the investments we hold in our investment portfolio, premiums and demand for our products, and our ability to collect premiums or any requirement to return premiums to policyholders. We believe our current liquidity position is sufficient to maintain our current operations and we have the ability to draw on our credit facility if needed. See Part 1, Item 1, Note 8 "Debt" for more information. Our share repurchase program was suspended in mid-March 2020 and restarted in the first quarter of 2021. Also, the Company maintained the payment of quarterly cash dividends during 2020 and 2021, with the dividends paid in September 2021 marking the 214th consecutive quarter of paying dividends since March 1968.

Stockholders' equity decreased to $814.5 million at September 30, 2021, from $825.1 million at December 31, 2020. This decrease is primarily attributable to shareholder dividends of $11.3 million and a decrease in net unrealized investment gains on fixed maturity securities of $25.9 million, net of tax, partially offset by net income of $22.9 million, during the first nine months of 2021.

As of September 30, 2021, we intend to keep all assets currently leased and honor the terms of the contracts. Also, we have four lease contracts where we are the lessor which we evaluated for impairment. As of September 30, 2021, all payments on these contracts had been received and we fully expect to receive all future payments on time. In the event that we receive any lease-related relief provided to mitigate the economic effects of the COVID-19 pandemic, we elect not to evaluate whether or not the relief represents a lease modification.

The decline in certain sectors of the equity markets in 2020 due to the COVID-19 pandemic did have a material impact on the fair value of our investments in equity securities and limited liability partnerships, however those sectors have now recovered as of September 30, 2021. The Company's investment philosophy, objectives, approach and program have not changed as a result of the COVID-19 pandemic. During the nine-month period ended September 30, 2021 we had a recovery in the fair value of equity securities of $20.5 million and an increase in value of our investments in limited liability partnerships of $10.8 million from the values reported at December 31, 2020.

The Company has a highly rated fixed maturity portfolio, with low credit risk. The Company recognized a decrease in unrealized gains of $25.9 million, net of tax, at September 30, 2021 on its available-for-sale fixed maturity portfolio. In addition, we adopted new accounting guidance on January 1, 2020, which changes the measurement of credit losses for our investment in available-for-sale fixed maturities and our mortgage loans and also impacts our reinsurance receivables. The adoption of this new guidance resulted in an immaterial allowance for credit losses to

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be recorded for each of these assets on our balance sheet as of September 30, 2021. For more information on credit losses recognized in the three- and nine-month periods ended September 30, 2021, please refer to the Note 1 and Note 2 to Unaudited Consolidated Financial Statements of this Form 10-Q.

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FINANCIAL HIGHLIGHTS

	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		(7.8)	%	$	722,837		$	791,519		(8.7)	%
Investment income, net of investment expenses	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	332			604			(45.0)		163			6,323			(97.4)
Total revenues	$	248,543		$	282,121		(11.9)	%	$	793,690		$	757,729		4.7	%
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	175,444		$	234,693		(25.2)	%	$	533,981		$	626,169		(14.7)	%
Amortization of deferred policy acquisition costs	51,261			52,095			(1.6)		150,533			158,440			(5.0)
Other underwriting expenses	35,468			35,470			—		82,236			114,020			(27.9)
Interest expense	797			—			NM		2,391			—			NM
Goodwill impairment	—			15,091			NM		—			15,091			NM
Total benefits, losses and expenses	$	262,970		$	337,349		(22.0)	%	$	769,141		$	913,720		(15.8)	%
Income (loss) before income taxes	$	(14,427)		$	(55,228)		(73.9)	%	$	24,549		$	(155,991)		(115.7)
Federal income tax expense (benefit)	(4,834)			(17,987)			(73.1)		1,690			(52,176)			(103.2)
Net income (loss)	$	(9,593)		$	(37,241)		(74.2)		$	22,859		$	(103,815)		(122.0)	%
GAAP Ratios:
Net loss ratio (without catastrophes)	56.9		%	69.2		%	(17.8)	%	61.4		%	63.8		%	(3.8)	%
Catastrophes - effect on net loss ratio	16.5			21.4			(22.9)		12.5			15.3			(18.3)
Net loss ratio(1)	73.4		%	90.6		%	(19.0)	%	73.9		%	79.1		%	(6.6)	%
Expense ratio(2)	36.3			33.8			7.4		32.2			34.4			(6.4)
Combined ratio(3)	109.7		%	124.4		%	(11.8)	%	106.1		%	113.5		%	(6.5)	%

(1) The net loss ratio is calculated by dividing the sum of losses and loss settlement expenses by net premiums earned. We use the net loss ratio as a measure of the overall underwriting profitability of the insurance business we write and to assess the adequacy of our pricing. Our net loss ratio is meaningful in evaluating our financial results as reported in our unaudited Consolidated Financial Statements.

(2) The expense ratio is calculated by dividing other underwriting expenses and amortization of deferred policy acquisition costs by net premiums earned. The expense ratio measures a company's operational efficiency in producing, underwriting and administering its insurance business.

(3) The combined ratio is a commonly used financial measure of property and casualty underwriting performance. A combined ratio below 100.0 percent generally indicates a profitable book of business. The combined ratio is the sum of the net loss ratio and the underwriting expense ratio.

NM = Not meaningful

The following is a summary of our financial performance for the three- and nine-month periods ended September 30, 2021:

RESULTS OF OPERATIONS

For the three-month period ended September 30, 2021, net loss was $9.6 million compared to a net loss of $37.2 million for the same period of 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 third quarter of 2021 compared to net realized investment gains in third quarter of 2020.

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For the nine-month period ended September 30, 2021, net income was $22.9 million compared to a net loss of $103.8 million for the same period of 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 of 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 and 8.7 percent during the three- and nine-month periods ended September 30, 2021 compared to the same periods of 2020, respectively. The decrease in the three- and nine-month periods ended September 30, 2021 was primarily due to our focus on improving profitability through non-renewal of under-performing accounts in our commercial auto line of business and our exit of the personal lines business which began in September 2020.

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 due to an increase in the fair value of our investments in limited liability partnerships in the first nine months of 2021 as compared to the same periods in 2020. 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, 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 during the third quarter of 2021, compared to net realized investment 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 14.7 percent percentage points during the three- and nine-month periods ended September 30, 2021, respectively, compared to the same periods in 2020. For the three- and nine-month periods ended September 30, 2021, the decrease in losses and loss settlement expenses was primarily due to a decrease in catastrophe losses and frequency and severity of commercial auto liability losses.

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, combined ratio decreased by 7.4 percentage points to 106.1 percent compared to 113.5 percentage points in the same period in 2020. For the nine-month period ended September 30, 2021, the decrease in the combined ratio was primarily driven by a decrease in the net loss ratio.

The GAAP net loss ratio decreased 17.2 percentage points and 5.2 percentage points during three- and nine-month periods ended September 30, 2021 as compared to the same periods in 2020. The decrease in the net loss ratio during the three- and nine-month periods ended September 30, 2021 as compared to the same periods 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 lower when compared to third quarter of 2020, with catastrophe losses adding 16.5 percentage points to the combined ratio in 2021 as compared to 21.4 percentage points in 2020. Year-to-date, pre-tax catastrophe losses were 12.5 percentage points as compared to 15.3 percentage points during the same period in 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

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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.

The 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 expense ratio was 32.2 percent compared to 34.4 percent as compared to the same period in 2020. The increase in the third quarter of 2021 was 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.

For a detailed discussion of our investment results, refer to the "Investment Portfolio" section below.

Reserve Development

For many liability claims, significant periods of time, ranging up to several years, and for certain construction defect claims, more than a decade, may elapse between the occurrence of the loss, the reporting of the loss to us and the settlement or other disposition of the claim. As a result, loss experience in the more recent accident years for the long-tail liability coverages has limited statistical credibility in our reserving process because a relatively small proportion of losses in these accident years are reported claims and an even smaller proportion are paid losses. In addition, long-tail liability claims are more susceptible to litigation and can be significantly affected by changing contract interpretations and the legal environment. Consequently, the estimation of loss reserves for long-tail coverages is more complex and subject to a higher degree of variability. Reserves for these long-tail coverages represent a significant portion of our overall carried reserves.

When establishing reserves and monitoring reserve adequacy, we analyze historical data and consider the potential impact of various loss development factors and trends, including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation, and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and, for long-tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific dollar impact of any individual factor on the development of reserves.

Our reserving philosophy is to reserve claims to their ultimate expected loss amount as soon as practicable after information about a claim becomes available. This approach tends to produce, on average, prudently conservative case reserves, which we expect to result in some level of favorable development over the course of settlement.

2021 Development

The property and casualty insurance business experienced $11.1 million and $26.0 million of favorable development in our net reserves for prior accident years for the three- and nine-month periods ended September 30, 2021, respectively. For the three-month period ended September 30, 2021 the majority of favorable development was from commercial auto with $11.0 favorable development followed by commercial fire and allied lines with $4.1 million favorable development. The favorable development was partially offset by $7.1 million of unfavorable development in commercial liability. All other lines of insurance, in total, contributed $3.1 million of favorable development during the quarter. The favorable development for commercial fire and allied lines was from both loss and loss adjustment expense ("LAE") where reductions in reserves were more than sufficient to offset payments. The favorable development for commercial automobile was from LAE where reductions in reserves were more than sufficient to offset paid LAE. The unfavorable development for commercial liability was from loss where reductions in loss reserves were not sufficient to offset paid loss.

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For the nine-month period ended September 30, 2021 the majority of favorable development was from commercial automobile with $21.5 million favorable development, followed by workers' compensation with $7.7 million favorable development, commercial fire and allied lines with $5.6 million favorable development, and personal fire and allied lines with $4.0 million favorable development. Partially offsetting this was unfavorable development was contributed primarily by commercial liability with $17.1 million of unfavorable development. All other lines of insurance, in total, contributed $4.3 million of favorable development. The favorable development for commercial automobile was from LAE where reductions in reserves were more than sufficient to offset paid LAE. Workers' compensation favorable development came from both loss and LAE; reserve reductions for both items were more than sufficient to offset payments. The favorable development for commercial fire and allied lines was from LAE where reductions in reserves were more than sufficient to offset paid LAE. The favorable development for personal fire and allied lines came from both loss and LAE; reserve reductions for both items were more than sufficient to offset payments. The unfavorable development for commercial liability is attributed to paid loss which was greater than the reductions of unpaid claim reserves; paid loss adjustment expense was more than offset by reductions of reserves for unpaid LAE.

2020 Development

The property and casualty insurance business experienced $6.3 million and $30.0 million of favorable development in our net reserves for prior accident years for the three- and nine-month periods ended September 30, 2020, respectively. For the three-month period ended September 30, 2020, the majority of favorable development was from the combination of workers' compensation with $5.6 million favorable development and commercial liability with $5.5 million favorable development. Partially offsetting favorable development was commercial automobile with $2.2 million of unfavorable development and reinsurance assumed with $1.6 million of unfavorable development. The favorable development for workers' compensation was primarily from reductions in claim reserves which were more than sufficient to offset paid loss. The favorable development for commercial liability was due to the combination of both loss and loss adjustment expense where reserve reductions were more than sufficient to offset payments. The adverse development for commercial automobile was attributed to an increase in severity of losses with paid losses greater than the reductions of unpaid claim reserves, paid LAE was more than offset by reductions of reserves for unpaid LAE. All other lines of insurance, in total, contributed $1.0 million of unfavorable development during the third quarter of 2020.

For the nine-month period ended September 30, 2020 the majority of favorable development was from workers' compensation with $21.6 million favorable development, followed by commercial fire and allied lines which contributed $12.6 million of favorable development. Partially offsetting favorable development was reinsurance assumed with $4.4 million of unfavorable development and commercial automobile with $2.1 million of unfavorable development. The favorable development for workers' compensation was primarily from reductions in claim reserves which were more than sufficient to offset paid loss. The adverse development for reinsurance assumed was attributed to paid loss which was greater than the reductions of unpaid claim reserves. All other lines of insurance, in total, contributed $2.3 million of favorable development during the third quarter of 2020.

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, and are subject to reallocation between accident years and lines of business. At September 30, 2021, our total reserves were within our actuarial estimates.

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The following tables display our 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

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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

Below are explanations regarding significant changes in the net loss ratios by line of business:

•Commercial fire and allied lines - The net loss ratio improved 14.3 and 8.7 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The improvement is primarily due to lower comparable catastrophe losses in the three and nine-month periods ended September 30, 2021 as compared to the same periods of 2020 along with a decrease in LAE expenses.

•Commercial automobile - The net loss ratio improved 43.7 and 11.8 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The improvement in the three and nine-month periods ended September 30, 2021 is a direct result of our strategic plan to improve the profitability of this line of business through non-renew underperforming commercial auto accounts and seeking rate increase, which has led to a reduction in claims frequency and severity and a decrease in the number of commercial auto exposure units.

•Workers' compensation - The net loss ratio deteriorated 20.9 and 29.3 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The deterioration is primarily attributable to paid loss for large claims, which have been more severe in the three and nine-month periods ended September 30, 2021 as compared to the same periods in 2020.

•Fidelity and surety - The net loss ratio deteriorated 13.1 and 13.3 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The deterioration is primarily attributable to paid loss for large claims and large claims that were reported during the first and second quarters of 2021 as compared to the absence of large claims during 2020.

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•Personal fire and allied lines - The net loss ratio improved 127.7 and 51.4 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The improvement is primarily due to lower comparable catastrophe losses in the three and nine-month periods ended September 30, 2021 as compared to the same periods of 2020.

•Reinsurance assumed - The net loss ratio deteriorated 36.5 and 17.8 percentage points in the three and nine-month periods ended September 30, 2021, respectively, compared to the same periods of 2020. The deterioration is primarily due to higher catastrophe losses in the three and nine-month periods ended September 30, 2021 as compared to the same periods of 2020.

Financial Condition

Stockholders' equity decreased to $814.5 million at September 30, 2021, from $825.1 million at December 31, 2020. 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. The 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, partially offset by net income of $22.9 million during the first nine months of 2021.

Investment Portfolio

Our invested assets totaled $2.1 billion at September 30, 2021, compared to $2.1 billion at December 31, 2020, a decrease of $93.1 million. At September 30, 2021, fixed maturity securities and equity securities made up 84.0 percent and 9.8 percent of the value of our investment portfolio, respectively. Because the primary purpose of our investment portfolio is to fund future claims payments, we use a conservative investment philosophy, investing in a diversified portfolio of high-quality, intermediate-term taxable corporate bonds, taxable U.S. government bonds and tax-exempt U.S. municipal bonds.

Composition

We develop our investment strategies based on a number of factors, including estimated duration of reserve liabilities, short- and long-term liquidity needs, projected tax status, general economic conditions, expected rates of inflation, regulatory requirements, interest rates and credit quality of assets. We administer our investment portfolio based on investment guidelines approved by management and the investment committee of our Board of Directors that comply with applicable statutory regulations.

The composition of our investment portfolio at September 30, 2021 is presented at carrying value in the following table:

	Property & Casualty Insurance
			Percent
(In Thousands, Except Ratios)			of Total
Fixed maturities (1)
Available-for-sale	$	1,727,601	84.0	%
Equity securities	200,876		9.8
Mortgage loans	47,254		2.2
Other long-term investments	80,162		4.0
Short-term investments	175		—
Total	$	2,056,068	100.0	%

(1) Available-for-sale securities and trading fixed maturities are carried at fair value.

As of September 30, 2021 and December 31, 2020, we did not have direct exposure to investments in subprime mortgages or other credit enhancement vehicles.

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Credit Quality

The table below shows the composition of fixed maturity securities held in our available-for-sale and trading security portfolios, by credit rating at September 30, 2021 and December 31, 2020. Information contained in the table is generally based upon the issued credit ratings provided by Moody's, unless the rating is unavailable, in which case we obtain credit ratings from Standard & Poor's.

(In Thousands, Except Ratios)	September 30, 2021				December 31, 2020
Rating	Carrying Value		% of Total		Carrying Value		% of Total
AAA	$	696,706	40.3	%	$	817,142	44.8	%
AA	602,097		34.9		639,011		35.0
A	198,812		11.5		182,011		10.0
Baa/BBB	217,423		12.6		172,078		9.4
Other/Not Rated	12,563		0.7		15,196		0.8
	$	1,727,601	100.0	%	$	1,825,438	100.0	%

Duration

Our investment portfolio is invested primarily in fixed maturity securities whose fair value is susceptible to market risk, specifically interest rate changes. Duration is a measurement we use to quantify our inherent interest rate risk and analyze our ability to match our invested assets to our reserve liabilities. If our invested assets and reserve liabilities have similar durations, then any change in interest rates will have an equal effect on these accounts. The primary purpose for matching invested assets and reserve liabilities is liquidity. With appropriate matching, our investments will mature when cash is needed, preventing the need to liquidate other assets prematurely. Mismatches in the duration of assets and liabilities can cause significant fluctuations in our results of operations.

Investment Results

We invest the premiums received from our policyholders in order to generate investment income, which is an important component of our revenues and profitability. The amount of investment income that we are able to generate is affected by many factors, some of which are beyond our control. Some of these factors are volatility in the financial markets, economic growth, inflation, interest rates, world political conditions, terrorist attacks or threats of terrorism, adverse events affecting other companies in our industry or the industries in which we invest and other unpredictable national or world events. Our net investment income increased in the three- and nine-month periods ended September 30, 2021, compared with the same period of 2020 primarily due to the change in value of our investments in limited liability partnerships.

We hold certain investments in limited liability partnerships that are recorded on the equity method of accounting, with changes in value of these investments recorded in investment income. In the three- and nine-month periods ended September 30, 2021, the change in value of our investments in limited liability partnerships resulted in investment income of $1.3 million and $10.8 million as compared to an investment income of $4.7 million and $13.8 million in the same periods of 2020.

We had net realized investment losses of $2.3 million and net realized investment gains of $28.2 million, respectively, during the three- and nine-month periods ended September 30, 2021, as compared to net realized investment gains of $15.2 million and net realized investment losses of $62.4 million in the same periods of 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.

We regularly monitor the difference between our cost basis and the estimated fair value of our investments. For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's

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expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history.

Non-credit related changes in unrealized gains and losses on available-for-sale fixed maturity securities are recognized as a component of other comprehensive income, impact stockholders' equity and book value per share, but do not affect net income. We believe that any unrealized losses on our available-for-sale securities at September 30, 2021 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

For mortgage loans, an allowance for losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments that have similar risk characteristics. This allowance is presented as a separate line in the Consolidated Balance Sheets with an offset to "Net realized investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income.

To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. An example of a market linked adjustment is the change in commercial market price appreciation or change in gross domestic product, with every point of fall leading to an increase in loss reserve. Local market economics are also considered. On a quarterly basis, quantitative credit risk metrics, including for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity measures our ability to generate sufficient cash flows to meet our short- and long-term cash obligations. Our cash inflows are primarily a result of the receipt of premiums, reinsurance recoveries, sales or maturities of investments, and investment income. Cash provided from these sources is used to fund the payment of losses and loss settlement expenses, the purchase of investments, operating expenses, dividends, pension plan contributions, and in recent years, common stock repurchases.

We monitor our capital adequacy to support our business on a regular basis. The future capital requirements of our business will depend on many factors, including our ability to write new business successfully and to establish premium rates and reserves at levels sufficient to cover losses. Our ability to underwrite is largely dependent upon the quality of our claims paying and financial strength ratings as evaluated by independent rating agencies. In particular, we require (1) sufficient capital to maintain our financial strength ratings, as issued by various rating agencies, at a level considered necessary by management to enable our insurance company subsidiaries to compete and (2) sufficient capital to enable our insurance company subsidiaries to meet the capital adequacy tests performed by regulatory agencies in the United States.

Cash outflows may be variable because of the uncertainty regarding settlement dates for losses. In addition, the timing and amount of individual catastrophe losses are inherently unpredictable and could increase our liquidity requirements. The timing and amount of reinsurance recoveries may be affected by reinsurer solvency and reinsurance coverage disputes.

Historically, we have generated substantial cash inflows from operations. It is our policy to invest the cash generated from operations in securities with maturities that, in the aggregate, correlate to the anticipated timing of payments for losses and loss settlement expenses. The majority of our assets are invested in available-for-sale fixed maturity securities.

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The following table displays a consolidated summary of cash sources and uses for the nine-month periods ended September 30, 2021 and 2020:

Cash Flow Summary	Nine Months Ended September 30,
(In Thousands)	2021		2020
Cash provided by (used in)
Operating activities	$	18,188	$	(12,868)
Investing activities	40,358		19,836
Financing activities	(13,722)		(28,086)
Net increase in cash and cash equivalents	$	44,824	$	(21,118)

Our cash flows were sufficient to meet our liquidity needs for the nine-month periods ended September 30, 2021 and 2020 and we anticipate they will be sufficient to meet our future liquidity needs for at least the next twelve months. We also have the ability to draw on our credit facility if needed.

Operating Activities

Net cash flows from operating activities had inflows of $18.2 million and outflows of $12.9 million for the nine-month periods ended September 30, 2021 and 2020, respectively.

Investing Activities

Cash in excess of operating requirements is generally invested in fixed maturity securities and equity securities. Fixed maturities provide regular interest payments and allow us to match the duration of our liabilities. Equity securities provide dividend income, potential dividend income growth and potential appreciation. For further discussion of our investments, including our philosophy and our strategy for our portfolio, see the "Investment Portfolio" section of this Item 2.

In addition to investment income, possible sales of investments and proceeds from calls or maturities of fixed maturity securities also can provide liquidity. During the next five years, $526.8 million, or 30.5 percent, of our fixed maturity portfolio will mature.

We invest funds required for short-term cash needs primarily in money market accounts, which are classified as cash equivalents. At September 30, 2021, our cash and cash equivalents included $20.6 million related to these money market accounts, compared to $24.8 million at December 31, 2020.

Net cash flows provided by investing activities were $40.4 million for the nine-month period ended September 30, 2021, compared to net cash flows provided by investing activities of $19.8 million for the nine-month period ending September 30, 2020. For the nine-month periods ended September 30, 2021 and 2020, we had cash inflows from scheduled and unscheduled investment maturities, redemptions, prepayments, and sales of investments of $389.0 million and $261.7 million, respectively.

Our cash outflows for investment purchases were $337.7 million for the nine-month period ended September 30, 2021, compared to $226.4 million for the same period of 2020.

Financing Activities

Net cash flows used in financing activities was $13.7 million for the nine-month period ended September 30, 2021 which decreased $14.4 million compared to $28.1 million used in the nine-month period ended September 30, 2020.

Credit Facilities

On March 31, 2020, United Fire & Casualty Company, as borrower ("Borrower"), wholly owned subsidiary of United Fire Group, Inc. entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National

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Association ("Wells Fargo"), as administrative agent, issuing lender, swing line lender and lender, and the other lenders from time to time party thereto (collectively with Wells Fargo, the "Lenders"), providing for a $50,000 revolving credit facility, which includes a $20,000 letter of credit sub-facility and a $5,000 swing line loan for working capital and other general corporate purposes. The Credit Agreement is provided on an unsecured basis, and the Borrower has the option to increase the Credit Agreement by $100,000 if agreed to by the Lenders providing such incremental facility. As of September 30, 2021 and 2020, there were no balances outstanding under the Credit Agreement. For the nine-month period ended September 30, 2021 and 2020, we did not incur any interest expense related to the credit facility. For further discussion of the Credit Agreement, refer to Part I, Item 1, Note 8 "Debt."

Dividends

Dividends paid to shareholders totaled $11.3 million and $24.8 million in the nine-month periods ended September 30, 2021 and 2020, respectively. Our practice has been to pay quarterly cash dividends, which we have paid every quarter since March 1968.

Payments of any future dividends and the amounts of such dividends will depend upon factors such as net income, financial condition, capital requirements, and general business conditions. We will only pay dividends if declared by our Board of Directors out of legally available funds.

As a holding company with no independent operations of its own, we rely on dividends received from our insurance company subsidiaries in order to pay dividends to our common shareholders. Dividends payable by our insurance subsidiaries are governed by the laws in the states in which they are domiciled, and if applicable, commercially domiciled. In all cases, these state laws permit the payment of dividends only from earned surplus arising from business operations. For example, under Iowa law, the maximum dividend or distribution that may be paid within a 12-month period without prior approval of the Iowa Insurance Commissioner is generally restricted to the greater of 10 percent of statutory surplus as of the preceding December 31, or net income of the preceding calendar year on a statutory basis, not greater than earned statutory surplus. Other states in which our insurance company subsidiaries are domiciled may impose similar restrictions on dividends and distributions. Based on these restrictions, at September 30, 2021, UFG's sole direct insurance company subsidiary, United Fire & Casualty Company, is able to make a maximum of $53.2 million in dividend payments without prior regulatory approval. We do not believe that these restrictions have a material impact in meeting the cash obligations of UFG.

Stockholders' Equity

Stockholders' equity decreased to $814.5 million at September 30, 2021, from $825.1 million at December 31, 2020. 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. The 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, partially offset by net income of $22.9 million during the first nine months of 2021.

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OFF BALANCE SHEET ARRANGEMENTS

Funding Commitments

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through July 10, 2030, to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $2.6 million at September 30, 2021.

In addition, the Company invested $25.0 million in December 2019 in a limited liability partnership investment fund which is subject to a three year lockup with a 60 day minimum notice, with 4 possible repurchase dates per year after the three year lockup period is met. The fair value of the investment at September 30, 2021 was $24.8 million and there are no remaining capital contribution obligations with this investment.

MEASUREMENT OF RESULTS

Management evaluates our operations by monitoring key measures of growth and profitability. The following section provides further explanation of the key measures management uses to evaluate our results.

Catastrophe losses is a commonly used financial measure that uses the designations of the Insurance Services Office ("ISO") and are reported with losses and loss settlement expense amounts net of reinsurance recoverables, unless specified otherwise. According to the ISO, a catastrophe loss is defined as a single unpredictable incident or series of closely related incidents that result in $25.0 million or more in U.S. industry-wide direct insured losses to property and that affect a significant number of insureds and insurers ("ISO catastrophe"). In addition to ISO catastrophes, we also include as catastrophes those events ("non-ISO catastrophes"), which may include U.S. or international losses that we believe are, or will be, material to our operations, either in amount or in number of claims made. Management, at times, may determine for comparison purposes that it is more meaningful to exclude extraordinary catastrophe losses and resulting litigation. The frequency and severity of catastrophe losses we experience in any year affect our results of operations and financial position. In analyzing the underwriting performance of our property and casualty insurance business, we evaluate performance both including and excluding catastrophe losses. Portions of our catastrophe losses may be recoverable under our catastrophe reinsurance agreements. We include a discussion of the impact of catastrophes because we believe it is meaningful for investors to understand the variability in our periodic earnings.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2021		2020		2021		2020
ISO catastrophes	$	33,105	$	54,878	$	81,277	$	121,089
Non-ISO catastrophes (1)	6,361		483		9,049		172
Total catastrophes	$	39,466	$	55,361	$	90,326	$	121,261

(1) This number includes international assumed losses.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to market risk arising from potential losses in our investment portfolio due to adverse changes in interest rates and market prices. However, we have the ability to hold fixed maturity investments to maturity. Our investment guidelines define the overall framework for managing our market and other investment risks, including accountability and controls. In addition, each of our subsidiaries has specific investment policies that delineate the investment limits and strategies that are appropriate given each entity's liquidity, surplus, product, and regulatory requirements. We respond to market risk by managing the character of investment purchases.

It is our philosophy that we do not utilize financial hedges or derivative financial instruments to manage risks, nor do we enter into any swap, forward or option contracts, but attempt to mitigate our exposure through active portfolio management. In addition, we place the majority of our investments in high-quality, liquid securities and limit the amount of credit exposure to any one issuer. At September 30, 2021, we did not have direct exposure to investments in sub-prime mortgages or other credit-enhancement exposures.

Our primary market risks are exposure to changes in interest rates and equity prices, and we have limited exposure to foreign currency exchange rates.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Interim Co-Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Interim Co-Chief Financial Officer concluded that our disclosure controls and procedures, as of the end of the period covered by this report, were designed and functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control Over Financial Reporting

Our management, including our Chief Executive Officer and Interim Co-Chief Financial Officer, has evaluated our internal control over financial reporting to determine whether any changes occurred during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on this evaluation, no such change in our internal control over financial reporting occurred during the fiscal quarter to which this report relates. We believe our operational processes, internal controls over financial reporting and disclosures, and financial reporting systems are operating effectively in the present environment.

53

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the normal course of its business, the Company is a party to a variety of legal proceedings. While the final outcome of these legal proceedings cannot be predicted with certainty, management believes all of the proceedings pending as of September 30, 2021 to be ordinary and routine and does not expect these legal proceedings to have a material adverse effect on the Company's financial condition or results of operations.

ITEM 1A. RISK FACTORS

Our business is subject to a number of risks, including those identified in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 26, 2021. These risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material effect on our business, results of operations, financial condition and/or liquidity.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Under our share repurchase program, first announced in August 2007, we may purchase UFG 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 our discretion and will depend upon a number of factors, including the share price, general economic and market conditions, and corporate and regulatory requirements.

The following table provides information with respect to purchases of shares of common stock made by or on our behalf or by any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three-month period ended September 30, 2021:

				Total Number of Shares	Maximum Number of
	Total			Purchased as a Part of	Shares that may yet be
	Number of	Average Price		Publicly Announced	Purchased Under the
Period	Shares Purchased	Paid per Share		Plans or Programs	Plans or Programs(1)
7/1/2021 - 7/31/2021	—	$	—	—	1,755,743
8/1/2021 - 8/31/2021	36,417	27.46		36,417	1,719,326
9/1/2021 - 9/30/2021	—	—		—	1,719,326
Total	36,417	$	27.46	36,417	1,719,326

(1) Our share repurchase program was originally announced in August 2007. In August 2016, our Board of Directors authorized the repurchase of up to an additional 1,500,000 shares of common stock through the end of August 2018. This is in addition to the 1,528,886 shares of common stock remaining under its previous authorizations. In August 2018, our Board of Directors extended our share repurchase program through the end of August 2020. In August 2020, our Board of Directors extended our share repurchase program through the end of August 2022. As of September 30, 2021, we remained authorized to repurchase 1,719,326 shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

54

None.

55

ITEM 6. EXHIBIT INDEX

Exhibit number	Exhibit description	Furnished herewith	Filed herewith
10.1	United Fire Group, Inc. 2021 Stock and Incentive Plan Performance-Based Restricted Stock Unit Award Notice		X
10.2	United Fire Group, Inc. 2021 Stock and Incentive Plan Option Award Notice		X
10.3	United Fire Group, Inc. 2021 Stock and Incentive Plan Restricted Stock Unit Award Notice		X
31.1	Certification of Randy A. Ramlo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		X
31.2	Certification of Randy L. Patten pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		X
32.1	Certification of Randy A. Ramlo pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
32.2	Certification of Randy L. Patten pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
101.1	The following financial information from United Fire Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020; (ii) Consolidated Statements of Income and Comprehensive Income (unaudited) for the three- and nine-months ended September 30, 2021 and 2020 (iii) Consolidated Statement of Stockholders’ Equity (unaudited) for the three- and nine-months ended September 30, 2021 and 2020; (iv) Consolidated Statements of Cash Flows (unaudited) for the three- and nine-months ended September 30, 2021 and 2020; and (v) Notes to Unaudited Consolidated Financial Statements, tagged as a block of text.		X
104.1	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)		X

56

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNITED FIRE GROUP, INC.
(Registrant)
/s/ Randy A. Ramlo	/s/ Randy L. Patten
Randy A. Ramlo	Randy L. Patten
President, Chief Executive Officer, Director and Principal Executive Officer	Assistant Vice President, Interim Co-Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer
November 4, 2021	November 4, 2021
(Date)	(Date)

57

EX-10.1

Exhibit 10.1

United Fire Group, Inc.

2021 Stock and Incentive Plan 

Performance-Based Restricted Stock Unit Award Notice

[Participant Name]

You have been awarded a performance-based restricted stock unit award (the “Award”) with respect to shares of common stock of United Fire Group, Inc., an Iowa corporation (the “Company”), pursuant to the terms and conditions of the United Fire Group, Inc. 2021 Stock and Incentive Plan (the “Plan”) and the Performance-Based Restricted Stock Unit Award Agreement (together with this Award Notice, the “Agreement”). Copies of the Plan and the Performance-Based Restricted Stock Unit Award Agreement are attached hereto. Capitalized terms not defined herein shall have the meanings specified in the Plan or the Agreement.

Target Award: You have been awarded a performance-based restricted stock unit award with respect to [___________] shares (at target) of Common Stock, par value $0.001 per share (the “Common Stock”), subject to adjustment as provided in the Plan.

Grant Date: [___________]

Vesting Schedule: Except as otherwise provided in the Plan, the Agreement or any other agreement between the Company or any of its Subsidiaries and you in effect on the Grant Date, the Award shall vest based on the achievement of the Performance Measures set forth in this Award Notice over the applicable performance period set forth in the table below (the “Performance Period”), provided Holder remains continuously (except for any absence for vacation, leave, etc. in accordance with the Company’s or its Subsidiaries’ policies) employed by the Company or any of its Subsidiaries from the Grant Date through and including the last day of the Performance Period. The actual number of shares of Common Stock subject to the Award that vest shall be determined by multiplying the target number of shares subject to each Performance Measure by the applicable Level of Attainment, as determined by the Committee, and rounded up to the nearest whole share. No shares of Common Stock subject to a Performance Measure shall vest, and all such shares shall be forfeited, if the Threshold Level of performance with respect to such Performance Measure is not attained during the Performance Period. Vesting between Levels of Attainment shall be determined based on straight line interpolation.

[Vesting Schedule Table]

UNITED FIRE GROUP, INC.

Acknowledgment, Acceptance and Agreement:

By electronically accepting this Agreement within my stock plan account with the Company’s stock plan administrator according to the procedures then in effect, I hereby acknowledge receipt of the Agreement and the Plan, accept the Award granted to me and agree to be bound by the terms and conditions of this Award Notice, the Agreement and the Plan.

United Fire Group, Inc.

2021 Stock and Incentive Plan 

Exhibit 10.1

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT

United Fire Group, Inc., an Iowa corporation (the “Company”), hereby grants to the individual (the “Holder”) named in the award notice attached hereto (the “Award Notice”) as of the date set forth in the Award Notice (the “Grant Date”), pursuant to the provisions of the United Fire Group, Inc. 2021 Stock and Incentive Plan (the “Plan”), a performance-based restricted stock unit award (the “Award”) with respect to the number of shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), set forth in the Award Notice, upon and subject to the restrictions, terms and conditions set forth in the Plan and this agreement (the “Agreement”). Capitalized terms not defined herein shall have the meanings specified in the Plan.

1. Award Subject to Acceptance of Agreement. The Award shall be null and void unless the Holder accepts this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Holder’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect).

2. Rights as a Stockholder. The Holder shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until, and only to the extent, such shares become vested pursuant to Section 3 hereof and the Holder becomes a stockholder of record with respect to such shares.

3. Restriction Period and Vesting.

3.1     Performance-Based Vesting Conditions. Subject to the remainder of this Section 3, the Common Stock shall vest pursuant to the terms of this Agreement and the Plan based on the achievement of the performance measures set forth in the Award Notice over the performance period set forth in the Award Notice (the “Performance Period”), provided that that Holder remains employed by the Company or any of its Subsidiaries from the Grant Date through and including the last day of the Performance Period specified in the Award Notice.  Attainment of the performance goals shall be determined and certified by the Committee in writing prior to the settlement of the Award.

3.2    Termination of Employment.

(a) Termination other than due to Death or Disability. Except as otherwise provided for in Section 3.2(b) or the Plan or any other agreement between the Company or any of its Subsidiaries and Holder in effect on the Grant Date and which provides for more favorable treatment than as set forth herein, if the Holder’s employment with the Company terminates prior to the end of the Performance Period for any reason, the Award shall be immediately forfeited by the Holder and cancelled by the Company.

(b) Termination due to Death or Disability. If Holder’s employment with the Company terminates prior to the end of the Performance Period by reason of Holder’s death or a termination by the Company due to Disability (as defined below), then in either such case, the Award shall vest at the conclusion of the Performance Period with respect to the number of shares of Common Stock that would have vested based on actual performance had Holder remained continuously employed by the Company through the end of the Performance Period, multiplied by a fraction, the numerator of which is the number of days elapsed in the Performance Period through the date of termination and the denominator of which is the total number of days in the Performance Period; provided, however, that, in the case of a termination of Holder’s employment due to Disability, if Holder’s Disability originally required Holder to take a short-term disability leave that was later converted into long-term disability, then for the purposes of determining vesting under this Section 3.2(b), the date of termination shall be deemed to be the date of commencement of the short-term disability leave. For purposes of this Award, “Disability” shall mean

Exhibit 10.1

Holder’s absence from Holder’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of Holder’s incapacity due to physical or mental illness.

4. Issuance or Delivery of Shares.  Subject to Section 6, as soon as practicable (but no later than thirty (30) days) after the end of the Performance Period, the Company shall issue or deliver, subject to the conditions of this Agreement, the vested shares of Common Stock to the Holder. Such issuance or delivery shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance or delivery, except as otherwise provided in Section 6.  Prior to the issuance to the Holder of the shares of Common Stock subject to the Award, the Holder shall have no direct or secured claim in any specific assets of the Company or in such shares of Common Stock, and will have the status of a general unsecured creditor of the Company.

5. Transfer Restrictions and Investment Representation.

5.1.    Nontransferability of Award. The Award may not be transferred by the Holder other than by will or the laws of descent and distribution.  Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights hereunder shall immediately become null and void.

5.2.    Investment Representation. The Holder hereby covenants that (a) any sale of any share of Common Stock acquired upon the vesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable.

6. Additional Terms and Conditions of Award.

6.1.    Withholding Taxes.

(a) General. As a condition precedent to the issuance of Common Stock following the vesting of the Award, the Holder shall, upon request by the Company, pay to the Company such amount as the Company determines is required, under all applicable federal, state, local or other laws or regulations, to be withheld and paid over as income or other withholding taxes (the “Required Tax Payments”) with respect to such vesting of the Award. If the Holder shall fail to advance the Required Tax Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company to the Holder.    

(b) Holder Election. The Holder may elect to satisfy his or her obligation to advance the Required Tax Payments by any of the following means: (i) a cash payment to the Company; (ii) authorizing the Company to withhold whole shares of Stock which would otherwise be delivered to the Holder having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises, equal to the Required Tax Payments; or (iii) any combination of (i) and (ii). Shares to be withheld may not have a Fair Market Value in excess of the minimum amount of the Required Tax Payments (or such higher withholding rate permitted by the Committee). Any fraction of a share which would be required to satisfy any such obligation shall be disregarded and the remaining amount due shall be paid in cash by the Holder. No shares or certificate representing shares shall be issued or delivered until the Required Tax Payments have been satisfied in full.

Exhibit 10.1

6.2.    Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the shares of Common Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

6.3.    Award Confers No Rights to Continued Employment. In no event shall the granting of the Award or its acceptance by the Holder, or any provision of the Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time.

6.4.    Decisions of Board or Committee. The Board or the Committee shall have the right to resolve all questions which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.

6.5.    Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreement or the Plan.

6.6.    Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to United Fire Group, Inc., Attn: Corporate Counsel, 118 Second Avenue SE, Cedar Rapid, Iowa 52401, and if to the Holder, to the last known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

6.7.    Governing Law. This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Iowa and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.8.    Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan, including Section 5.8 with respect to a Change in Control, and shall be interpreted in accordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Holder hereby acknowledges receipt of a copy of the Plan.

6.9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder.

6.10.    Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

6.11.    Amendment and Waiver. The Company may amend the provisions of this Agreement at any time; provided that an amendment that would materially impair the Holder’s rights under this Agreement shall be subject to the written consent of the Holder. No course of conduct or failure or delay in enforcing

Exhibit 10.1

the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

6.12.    Compliance With Section 409A of the Code. This Award is intended to be exempt from Section 409A of the Code, and shall be interpreted and construed accordingly, and each payment hereunder shall be considered a separate payment. To the extent this Agreement provides for the Award to become vested and be settled upon the Holder’s termination of employment, the applicable shares of Stock shall be transferred to the Holder or his or her beneficiary upon the Holder’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Holder is a “specified employee,” within the meaning of Section 409A of the Code, then to the extent the Award constitutes nonqualified deferred compensation, within the meaning of Section 409A of the Code, such shares of Stock shall be transferred to the Holder or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Holder’s death.

EX-10.2

Exhibit 10.2

United Fire Group, Inc.

2021 Stock and Incentive Plan

Option Award Notice

[Participant Name]

You have been awarded an option to purchase shares of Common Stock of United Fire Group, Inc. (the “Company”). The option is granted pursuant to the terms and conditions of the United Fire Group, Inc. 2021 Stock and Incentive Plan (the “Plan”) and the Stock Option Agreement (together with this Award Notice, the “Agreement”). Copies of the Plan and the Stock Option Agreement are attached hereto. Capitalized terms not defined herein shall have the meanings specified in the Plan or the Agreement.

Option: You have been awarded a Nonqualified Stock Option to purchase from the Company [___________] shares of its Common Stock, par value $0.001 per share (the “Common Stock”), subject to adjustment as provided in Section 4.2 of the Agreement.

Option Date: [___________]

Exercise Price: [___________] per share, subject to adjustment as provided in Section 4.2 of the Agreement.

Vesting Schedule: Except as otherwise provided in the Plan, the Agreement or any other agreement between the Company or any of its Subsidiaries and Optionee in effect on the Option Date, the Option shall be vested as follows:

[Vesting Schedule Table]

(each such date, a “Vesting Date”) if, and only if, you are, and have been, continuously (except for any absence for vacation, leave, etc. in accordance with the Company’s or its Subsidiaries’ policies): (i) employed by the Company or any of its Subsidiaries; (ii) serving as a Non-Employee Director; or (iii) providing services to the Company or any of its Subsidiaries as an advisor or consultant, in each case, from the Option Date through and including the applicable Vesting Date.

Expiration Date: Except to the extent earlier terminated pursuant to Section 2.2 of the Agreement or earlier exercised pursuant to Section 2.3 of the Agreement, the Option shall terminate at 5:00 p.m., U.S. Central time, on the ten-year anniversary of the Option Date; provided, however, if such date occurs during any period when the Optionee is prohibited from trading in securities of the Company pursuant to the Company’s insider trading policy or other policy of the Company or during a period when the exercise of the Option would violate applicable securities laws (each, a “Blackout Period”), then the period during which the Option is exercisable shall be extended, to the extent permitted by Section 409A of the Code, to the date that is 30 days after the expiration of such Blackout Period.

UNITED FIRE GROUP, INC.

Acknowledgment, Acceptance and Agreement:

By electronically accepting this Agreement within my stock plan account with the Company’s stock plan administrator according to the procedures then in effect, I hereby acknowledge receipt of the Agreement and the Plan, accept the Option granted to me and agree to be bound by the terms and conditions of this Award Notice, the Agreement and the Plan.

Exhibit 10.2

United Fire Group, Inc.

2021 Stock and Incentive Plan

Stock Option Agreement

United Fire Group, Inc., an Iowa corporation (the “Company”), hereby grants to the individual (“Optionee”) named in the award notice attached hereto (the “Award Notice”) as of the date set forth in the Award Notice (the “Option Date”), pursuant to the provisions of the United Fire Group, Inc. 2021 Stock and Incentive Plan (the “Plan”), an option to purchase from the Company the number of shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), set forth in the Award Notice at the price per share set forth in the Award Notice (the “Exercise Price”) (the “Option”), upon and subject to the terms and conditions set forth below, in the Award Notice and in the Plan. Capitalized terms not defined herein shall have the meanings specified in the Plan.

1. Option Subject to Acceptance of Agreement. The Option shall be null and void unless Optionee shall accept this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Optionee’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect).

2. Time and Manner of Exercise of Option.

2.1.    Maximum Term of Option. In no event may the Option be exercised, in whole or in part, after the expiration date set forth in the Award Notice (the “Expiration Date”).

2.2.    Vesting and Exercise of Option. The Option shall become vested and exercisable in accordance with the vesting schedule set forth in the Award Notice (the “Vesting Schedule”). The period of time prior to the full vesting of the Option shall be referred to herein as the “Vesting Period.” Except as otherwise provided in the Plan or any other agreement between the Company or any of its Subsidiaries and Optionee in effect on the Option Date and which provides for more favorable treatment than as set forth herein, the Option shall be vested and exercisable following a termination of Optionee’s employment according to the following terms and conditions:

(a) Termination due to Death or Disability. If Optionee’s employment with the Company terminates prior to the end of the Vesting Period by reason of Optionee’s death or a termination by the Company due to Disability (as defined below), then in either such case, the portion of the Option scheduled to vest during the twelve (12) months following the date of termination shall be vested as of the date of termination, and the Option may thereafter be exercised by Optionee or Optionee’s executor, administrator, legal representative, guardian or similar person until and including the earlier to occur of (i) the date which is one year after the date of termination of employment and (ii) the Expiration Date. The portion of the Option that does not vest pursuant to the preceding sentence shall terminate immediately upon such death or termination of employment.

(b) Termination other than for Cause or due to death or Disability. If Optionee’s employment with the Company terminates prior to the end of the Vesting Period by reason of a termination of Optionee’s employment (i) by the Company for any reason other than for Cause (as defined below), death or Disability or (ii) by the Optionee for any reason, the Option, only to the extent vested on the effective date of such termination of employment, may thereafter be exercised by Optionee until and including the earlier to occur of (i) the date which is thirty (30) days after the date of such termination of employment and (ii) the Expiration Date; provided, however, that in the event of the Optionee’s death after a termination of employment other than for Cause but during the time when Optionee could have exercised the Option pursuant to the terms of this Agreement, the Option, to the extent exercisable by the Optionee

Exhibit 10.2

on the date of death, shall be exercisable in accordance with its terms by Optionee’s executor, administrator, legal representative, guardian or similar person until and including the earlier to occur of (i) the date which is one year after the date of death and (ii) the Expiration Date. The unvested portion of the Option shall terminate immediately upon such termination of employment.

(c) Termination for Cause. If Optionee’s employment with the Company terminates by reason of the Company’s termination of Optionee’s employment for Cause, then the Option, whether or not vested, shall terminate immediately upon such termination of employment.

(d) Termination of Option During Blackout Period. If the Option shall expire under Section 2.2 during any period when the Optionee is prohibited from trading in securities of the Company pursuant to the Company’s insider trading policy or other policy of the Company or during a period when the exercise of the Option would violate applicable securities laws (each, a “Blackout Period”), then the period during which the Option is exercisable shall be extended, to the extent permitted by Section 409A of the Code, to the date that is 30 days after the expiration of such Blackout Period.

(e) Definitions.

(i) Cause. For purposes of this Option, “Cause” (i) shall have the meaning assigned to such term in any written employment or similar agreement between the Company or any of its Subsidiaries and the Optionee in effect on the Option Date or (ii) if Optionee is not party to an employment or similar agreement in effect on the Option Date which defines “Cause,” then “Cause” shall mean: (A) a material breach by Optionee of those duties and responsibilities of Optionee (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on Optionee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach or (B) the commission by Optionee of a felony involving moral turpitude. 

(ii) Disability. For purpose of this Option, “Disability” shall mean Optionee’s absence from the Optionee’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Optionee’s incapacity due to physical or mental illness.

2.3.    Method of Exercise. Subject to the limitations set forth in this Agreement, the Option, to the extent vested, may be exercised by Optionee (a) by delivering to the Company an exercise notice in the form prescribed by the Company specifying the number of whole shares of Common Stock to be purchased and by accompanying such notice with payment therefor in full (or by arranging for such payment to the Company’s satisfaction) (i) in cash or (ii) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocable notice of exercise, and (b) by executing such documents as the Company may reasonably request. No share of Common Stock or certificate representing a share of Common Stock shall be issued or delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 4.1, have been paid.

2.4.    Termination of Option. In no event may the Option be exercised after it terminates as set forth in this Section 2.4. The Option shall terminate, to the extent not earlier terminated pursuant to Section 2.2 or exercised pursuant to Section 2.3, on the Expiration Date. Upon the termination of the Option, the Option and all rights hereunder shall immediately become null and void.

3. Transfer Restrictions and Investment Representations.

3.1.    Nontransferability of Option. The Option may not be transferred by Optionee other than by will or the laws of descent and distribution or pursuant to the designation of one or more beneficiaries on the form prescribed by the Company. Except to the extent permitted by the foregoing sentence, (i) during Optionee’s lifetime the Option is exercisable only by Optionee or Optionee’s legal representative, guardian or similar person and (ii) the Option may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be

Exhibit 10.2

subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and all rights hereunder shall immediately become null and void.

3.2.    Investment Representation. Optionee hereby represents and covenants that (a) any shares of Common Stock purchased upon exercise of the Option will be purchased for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), unless such purchase has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, Optionee shall submit a written statement, in a form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of any purchase of any shares hereunder or (y) is true and correct as of the date of any sale of any such shares, as applicable. As a further condition precedent to any exercise of the Option, Optionee shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Board or the Committee shall in its sole discretion deem necessary or advisable.

4. Additional Terms and Conditions.

4.1.    Withholding Taxes.

(a) General. As a condition precedent to the issuance of Common Stock following the exercise of the Option, Optionee shall, upon request by the Company, pay to the Company in addition to the purchase price of the shares, such amount as the Company determines is required, under all applicable federal, state, local or other laws or regulations, to be withheld and paid over as income or other withholding taxes (the “Required Tax Payments”) with respect to such exercise of the Option. If Optionee shall fail to advance the Required Tax Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company to Optionee.

(b) Optionee Election. Optionee may elect to satisfy his or her obligation to advance the Required Tax Payments by any of the following means: (i) a cash payment to the Company; or (ii) except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocable notice of exercise. No shares or certificate representing shares shall be issued or delivered until the Required Tax Payments have been satisfied in full.

4.2.    Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the number and class of securities subject to the Option and the Exercise Price shall be equitably adjusted by the Committee, such adjustment to be made in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. The decision of the Committee regarding any such adjustment shall be final, binding and conclusive.

4.3.    Compliance with Applicable Law. The Option is subject to the condition that if the listing, registration or qualification of the shares subject to the Option upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the purchase or issuance of shares hereunder, the

Exhibit 10.2

Option may not be exercised, in whole or in part, and such shares may not be issued, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

4.4.    Issuance or Delivery of Shares. Upon the exercise of the Option, in whole or in part, the Company shall issue or deliver, subject to the conditions of this Agreement, the number of shares of Common Stock purchased against full payment therefor. Such issuance shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance, except as otherwise provided in Section 4.1.

4.5.    Option Confers No Rights as Stockholder. Optionee shall not be entitled to any privileges of ownership with respect to shares of Common Stock subject to the Option unless and until such shares are purchased and issued upon the exercise of the Option, in whole or in part, and Optionee becomes a stockholder of record with respect to such issued shares. Optionee shall not be considered a stockholder of the Company with respect to any such shares not so purchased and issued.

4.6.    Option Confers No Rights to Continued Employment. In no event shall the granting of the Option or its acceptance by Optionee, or any provision of this Agreement or the Plan, give or be deemed to give Optionee any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time.

4.7.    Decisions of Board or Committee. The Board or the Committee shall have the right to resolve all questions which may arise in connection with the Option or its exercise. Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.

4.8.    Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of Optionee, acquire any rights hereunder in accordance with this Agreement or the Plan.

4.9.    Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to United Fire Group, Inc., Attn: Corporate Counsel, 118 Second Avenue SE, Cedar Rapid, Iowa 52401, and if to Optionee, to the last known mailing address of Optionee contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

4.10.    Governing Law. This Agreement, the Option and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the Code or the laws of the United States, shall be governed by the laws of the State of Iowa and construed in accordance therewith without giving effect to principles of conflicts of laws.

4.11.    Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Optionee hereby acknowledges receipt of a copy of the Plan.

4.12.    Entire Agreement. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be

Exhibit 10.2

modified adversely to the Optionee’s interest except by means of a writing signed by the Company and the Optionee.

4.13.    Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

4.14.    Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Optionee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

4.15.    Counterparts. The Award Notice may be executed in two counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

EX-10.3

Exhibit 10.3

United Fire Group, Inc.

2021 Stock and Incentive Plan 

Restricted Stock Unit Award Notice

[Participant Name]

You have been awarded a restricted stock unit award (the “Award”) with respect to shares of common stock of United Fire Group, Inc., an Iowa corporation (the “Company”), pursuant to the terms and conditions of the United Fire Group, Inc. 2021 Stock and Incentive Plan (the “Plan”) and the Restricted Stock Unit Award Agreement (together with this Award Notice, the “Agreement”). Copies of the Plan and the Restricted Stock Unit Award Agreement are attached hereto. Capitalized terms not defined herein shall have the meanings specified in the Plan or the Agreement.

Restricted Stock Units: You have been awarded a restricted stock unit award with respect to [___________] shares of Common Stock, par value $0.001 per share (the “Common Stock”), subject to adjustment as provided in the Plan.

Grant Date: [___________]

Vesting Schedule: Except as otherwise provided in the Plan, the Agreement or any other agreement between the Company or any of its Subsidiaries and you in effect on the Grant Date, the Award shall vest as follows:

[Vesting Schedule Table]

(each such date, a “Vesting Date”) if, and only if, you are, and have been, continuously (except for any absence for vacation, leave, etc. in accordance with the Company’s or its Subsidiaries’ policies): (i) employed by the Company or any of its Subsidiaries; (ii) serving as a Non-Employee Director; or (iii) providing services to the Company or any of its Subsidiaries as an advisor or consultant, in each case, from the Grant Date through and including the applicable Vesting Date.

UNITED FIRE GROUP, INC.

Acknowledgment, Acceptance and Agreement:

By electronically accepting this Agreement within my stock plan account with the Company’s stock plan administrator according to the procedures then in effect, I hereby acknowledge receipt of the Agreement and the Plan, accept the Award granted to me and agree to be bound by the terms and conditions of this Award Notice, the Agreement and the Plan.

United Fire Group, Inc.

2021 Stock and Incentive Plan 

RESTRICTED STOCK UNIT AWARD AGREEMENT

United Fire Group, Inc., an Iowa corporation (the “Company”), hereby grants to the individual (the “Holder”) named in the award notice attached hereto (the “Award Notice”) as of the date set forth in the Award Notice (the “Grant Date”), pursuant to the provisions of the United Fire Group, Inc. 2021 Stock

Exhibit 10.3

and Incentive Plan (the “Plan”), a restricted stock unit award (the “Award”) with respect to the number of shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), set forth in the Award Notice, upon and subject to the restrictions, terms and conditions set forth in the Plan and this agreement (the “Agreement”). Capitalized terms not defined herein shall have the meanings specified in the Plan.

1. Award Subject to Acceptance of Agreement. The Award shall be null and void unless the Holder accepts this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Holder’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect).

2. Rights as a Stockholder. The Holder shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until, and only to the extent, such shares become vested pursuant to Section 3 hereof and the Holder becomes a stockholder of record with respect to such shares.

3. Restriction Period and Vesting.

3.1     Service-Based Vesting Conditions. Except as otherwise provided for in this Agreement, the Award shall vest in accordance with the vesting schedule set forth in the Award Notice if, and only if, the Holder is, and has been, continuously (except for any absence for vacation, leave, etc. in accordance with the Company's or its Subsidiaries' policies): (a) employed by the Company or any of its Subsidiaries; (b) serving as a Non-Employee Director; or (c) providing services to the Company or any of its Subsidiaries as an advisor or consultant, in each case, from the Grant Date through and including the applicable Vesting Date specified in the Award Notice. The period of time prior to the vesting shall be referred to herein as the “Restriction Period.”

3.2    Termination of Employment.

(a) Termination other than due to Death or Disability. Except as otherwise provided for in Section 3.2(b) or the Plan or any other agreement between the Company or any of its Subsidiaries and Holder in effect on the Grant Date and which provides for more favorable treatment than as set forth herein, if the Holder’s employment with the Company terminates prior to the end of the Restriction Period for any reason, the Award shall be immediately forfeited by the Holder and cancelled by the Company.

(b) Termination due to Death or Disability. If Holder’s employment with the Company terminates prior to the end of the Restriction Period by reason of Holder’s death or a termination by the Company due to Disability (as defined below), then in either such case, the portion of the Award scheduled to vest during the twelve (12) months following the date of termination shall accelerate and be vested as of the date of death or such termination of employment and the remaining unvested portion of the Award shall be immediately forfeited by the Holder and cancelled by the Company. For purposes of this Award, “Disability” shall mean Holder’s absence from Holder’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of Holder’s incapacity due to physical or mental illness.

4. Issuance or Delivery of Shares.  Subject to Section 6, as soon as practicable (but no later than thirty (30) days) after each vesting of the Award, the Company shall issue or deliver, subject to the conditions of this Agreement, the vested shares of Common Stock to the Holder. Such issuance or delivery shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance or delivery, except as otherwise provided in Section 6.  Prior to the issuance to the Holder of the shares of Common Stock subject to the Award, the Holder shall have no direct or

Exhibit 10.3

secured claim in any specific assets of the Company or in such shares of Common Stock, and will have the status of a general unsecured creditor of the Company.

5. Transfer Restrictions and Investment Representation.

5.1.    Nontransferability of Award. The Award may not be transferred by the Holder other than by will or the laws of descent and distribution.  Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights hereunder shall immediately become null and void.

5.2.    Investment Representation. The Holder hereby covenants that (a) any sale of any share of Common Stock acquired upon the vesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable.

6. Additional Terms and Conditions of Award.

6.1.    Withholding Taxes.

(a) General. As a condition precedent to the issuance of Common Stock following the vesting of the Award, the Holder shall, upon request by the Company, pay to the Company such amount as the Company determines is required, under all applicable federal, state, local or other laws or regulations, to be withheld and paid over as income or other withholding taxes (the “Required Tax Payments”) with respect to such vesting of the Award. If the Holder shall fail to advance the Required Tax Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company to the Holder.    

(b) Holder Election. The Holder may elect to satisfy his or her obligation to advance the Required Tax Payments by any of the following means: (i) a cash payment to the Company; (ii) authorizing the Company to withhold whole shares of Stock which would otherwise be delivered to the Holder having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises, equal to the Required Tax Payments; or (iii) any combination of (i) and (ii). Shares to be withheld may not have a Fair Market Value in excess of the minimum amount of the Required Tax Payments (or such higher withholding rate permitted by the Committee). Any fraction of a share which would be required to satisfy any such obligation shall be disregarded and the remaining amount due shall be paid in cash by the Holder. No shares or certificate representing shares shall be issued or delivered until the Required Tax Payments have been satisfied in full.

6.2.    Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the shares of Common Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

6.3.    Award Confers No Rights to Continued Employment. In no event shall the granting of the Award or its acceptance by the Holder, or any provision of the Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by the Company, any Subsidiary or any affiliate of the

Exhibit 10.3

Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time.

6.4.    Decisions of Board or Committee. The Board or the Committee shall have the right to resolve all questions which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.

6.5.    Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreement or the Plan.

6.6.    Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to United Fire Group, Inc., Attn: Corporate Counsel, 118 Second Avenue SE, Cedar Rapid, Iowa 52401, and if to the Holder, to the last known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service. The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

6.7.    Governing Law. This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Iowa and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.8.    Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan, including Section 5.8 with respect to a Change in Control, and shall be interpreted in accordance therewith. In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control. The Holder hereby acknowledges receipt of a copy of the Plan.

6.9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder.

6.10.    Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

6.11.    Amendment and Waiver. The Company may amend the provisions of this Agreement at any time; provided that an amendment that would materially impair the Holder’s rights under this Agreement shall be subject to the written consent of the Holder. No course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

6.12.    Compliance With Section 409A of the Code. This Award is intended to be exempt from Section 409A of the Code, and shall be interpreted and construed accordingly, and each payment hereunder shall be considered a separate payment. To the extent this Agreement provides for the Award to become vested and be settled upon the Holder’s termination of employment, the applicable shares of Stock shall be transferred to the Holder or his or her beneficiary upon the Holder’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Holder is a “specified employee,” within the meaning of Section 409A of the Code, then to the extent the Award constitutes nonqualified deferred compensation, within the meaning of Section 409A of the Code, such shares of Stock shall be transferred

Exhibit 10.3

to the Holder or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Holder’s death.

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Randy A. Ramlo, certify that:

1.I have reviewed this quarterly report on Form 10-Q of United Fire Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the Consolidated Financial Statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 4, 2021
		/s/ Randy A. Ramlo
		Randy A. Ramlo
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Randy L. Patten, certify that:

1.I have reviewed this quarterly report on Form 10-Q of United Fire Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the Consolidated Financial Statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 4, 2021
		/s/ Randy L. Patten
		Randy L. Patten
		Interim Co-Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of United Fire Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randy A. Ramlo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 4, 2021
		/s/ Randy A. Ramlo
		Randy A. Ramlo
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to United Fire Group, Inc. and will be retained by United Fire Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of United Fire Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Randy L. Patten, Interim Co-Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 4, 2021
		/s/ Randy L. Patten
		Randy L. Patten
		Interim Co-Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to United Fire Group, Inc. and will be retained by United Fire Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2021	Nov. 01, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-34257
Entity Registrant Name	UNITED FIRE GROUP INC
Entity Incorporation, State or Country Code	IA
Entity Tax Identification Number	45-2302834
Entity Address, Address Line One	118 Second Avenue SE
Entity Address, City or Town	Cedar Rapids
Entity Address, State or Province	IA
Entity Address, Postal Zip Code	52401
City Area Code	319
Local Phone Number	399-5700
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	UFCS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,080,923
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000101199
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fixed maturities
Available-for-sale, at fair value (amortized cost $1,655,228 in 2021 and $1,720,291 in 2020; allowance for credit losses $— in 2021 and $5 in 2020)	$ 1,727,601	$ 1,825,438
Equity securities at fair value (cost $81,797 in 2021 and $49,085 in 2020)	200,876	206,685
Mortgage loans	47,325	47,690
Less: allowance for mortgage loan losses	71	76
Mortgage loans, net	47,254	47,614
Other long-term investments	80,162	69,305
Short-term investments available-for-sale, at fair value (amortized cost $175 in 2021 and $175 in 2020)	175	175
Total investments	2,056,068	2,149,217
Cash and cash equivalents	132,772	87,948
Accrued investment income	13,947	14,615
Premiums receivable (net of allowance for doubtful accounts of $894 in 2021 and $687 in 2020)	325,072	317,292
Deferred policy acquisition costs	95,060	87,094
Property and equipment (primarily land and buildings, at cost, less accumulated depreciation of $58,709 in 2021 and $55,141 in 2020)	136,196	129,874
Reinsurance receivables and recoverables (net of allowance for credit losses of $98 in 2021 and $190 in 2020)	121,290	160,540
Prepaid reinsurance premiums	9,312	12,965
Intangible assets	6,211	6,743
Income taxes receivable	69,074	66,194
Other assets	45,652	37,196
TOTAL ASSETS	3,010,654	3,069,678
Liabilities
Losses and loss settlement expenses	1,567,650	1,578,131
Unearned premiums	458,931	464,845
Accrued expenses and other liabilities	101,447	126,624
Long term debt	50,000	50,000
Deferred tax liability	18,097	24,929
TOTAL LIABILITIES	2,196,125	2,244,529
Stockholders’ Equity
Common stock, $0.001 par value; authorized 75,000,000 shares; 25,080,923 and 25,055,479 shares issued and outstanding in 2021 and 2020, respectively	25	25
Additional paid-in capital	203,014	202,359
Retained earnings	567,411	555,854
Accumulated other comprehensive income, net of tax	44,079	66,911
TOTAL STOCKHOLDERS’ EQUITY	814,529	825,149
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 3,010,654	$ 3,069,678

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Equity securities, cost	$ 81,797	$ 49,085
Allowance for doubtful accounts	894	687
Property and equipment accumulated depreciation	58,709	55,141
Reinsurance receivables and recoverables, allowance for credit losses	$ 98	$ 190
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	25,080,923	25,055,479
Common stock, shares outstanding (in shares)	25,080,923	25,055,479
Fixed maturities
Cost or Amortized Cost	$ 1,655,228	$ 1,720,291
Allowance for Credit Losses	0	5
Short-Term Investments
Cost or Amortized Cost	175	$ 175
Allowance for Credit Losses	$ 0

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Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 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) (includes reclassifications for net unrealized investment gains/(losses) on available-for-sale securities of $214 and $(453) in 2021 and $54 and $13 in 2020; previously included in accumulated other comprehensive income)	(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 (includes reclassifications for employee benefit costs of $1,586 and $4,899 in 2021 and $1,072 and $3,217 in 2020; previously included in accumulated other comprehensive income)	35,468	35,470	82,236	114,020
Goodwill impairment	0	15,091	0	15,091
Interest Expense	797	0	2,391	0
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) (includes reclassifications of $285 and $1,122 in 2021 and $213 and $672 in 2020; previously included in accumulated other comprehensive income)	(4,834)	(17,987)	1,690	(52,176)
Net Income (loss)	(9,593)	(37,241)	22,859	(103,815)
Other comprehensive income (loss)
Change in net unrealized appreciation on investments	(12,230)	4,116	(33,231)	44,586
Change in liability for underfunded employee benefit plans	(3,765)	0	(1,025)	0
Other comprehensive income (loss), before tax and reclassification adjustments	(15,995)	4,116	(34,256)	44,586
Income tax effect	3,359	(864)	7,194	(9,363)
Other comprehensive income (loss), after tax, before reclassification adjustments	(12,636)	3,252	(27,062)	35,223
Reclassification adjustment for net realized investment losses included in income	(214)	(54)	453	(13)
Reclassification adjustment for employee benefit costs included in expense	1,586	1,072	4,899	3,217
Total reclassification adjustments, before tax	1,372	1,018	5,352	3,204
Income tax effect	(285)	(213)	(1,122)	(672)
Total reclassification adjustments, after tax	1,087	805	4,230	2,532
Comprehensive income (loss)	$ (21,142)	$ (33,184)	$ 27	$ (66,060)
Diluted weighted average common shares outstanding (in shares)	25,092,167	25,031,234	25,427,318	25,023,401
Earnings (loss) per common share:
Basic (in dollars per share)	$ (0.38)	$ (1.49)	$ 0.91	$ (4.15)
Diluted (in dollars per share)	$ (0.38)	$ (1.49)	$ 0.90	$ (4.15)

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Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Reclassification adjustment for net realized (gains) losses included in income	$ 214	$ 54	$ (453)	$ 13
Reclassification adjustment for employee benefit costs included in expense	1,586	1,072	4,899	3,217
Reclassifications for federal income tax expense (benefit)	$ (285)	$ (213)	$ (1,122)	$ (672)

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Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands		Total	Cumulative effect of change in accounting principle	Common Stock	Additional paid-in capital	Retaining Earnings	Retaining Earnings Cumulative effect of change in accounting principle	Accumulated other comprehensive income
Balance, beginning (in shares) at Dec. 31, 2019				25,015,963
Balance, beginning at Dec. 31, 2019		$ 910,472	$ (30)	$ 25	$ 200,179	$ 697,116	$ (30)	$ 13,152
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(72,534)				(72,534)
Shares repurchased (in shares)				(70,467)
Shares repurchased		(2,741)			(2,741)
Stock based compensation (in shares)				70,597
Stock based compensation		879			879
Dividends on common stock		(8,249)				(8,249)
Change in net unrealized investment appreciation	[1]	4,500						4,500
Change in liability for underfunded employee benefit plans	[2]	847						847
Balance, ending (in shares) at Mar. 31, 2020				25,016,093
Balance, ending at Mar. 31, 2020		833,144		$ 25	198,317	616,303		18,499
Balance, beginning (in shares) at Dec. 31, 2019				25,015,963
Balance, beginning at Dec. 31, 2019		910,472	$ (30)	$ 25	200,179	697,116	$ (30)	13,152
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(103,815)
Balance, ending (in shares) at Sep. 30, 2020				25,031,234
Balance, ending at Sep. 30, 2020		820,282		$ 25	200,849	568,501		50,907
Balance, beginning (in shares) at Mar. 31, 2020				25,016,093
Balance, beginning at Mar. 31, 2020		833,144		$ 25	198,317	616,303		18,499
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		5,960				5,960
Stock based compensation (in shares)				15,141
Stock based compensation		1,479			1,479
Dividends on common stock		(8,267)				(8,267)
Change in net unrealized investment appreciation	[1]	27,504						27,504
Change in liability for underfunded employee benefit plans	[2]	847						847
Balance, ending (in shares) at Jun. 30, 2020				25,031,234
Balance, ending at Jun. 30, 2020		860,667		$ 25	199,796	613,996		46,850
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(37,241)				(37,241)
Stock based compensation		1,053			1,053
Dividends on common stock		(8,254)				(8,254)
Change in net unrealized investment appreciation	[1]	3,209						3,209
Change in liability for underfunded employee benefit plans	[2]	848						848
Balance, ending (in shares) at Sep. 30, 2020				25,031,234
Balance, ending at Sep. 30, 2020		$ 820,282		$ 25	200,849	568,501		50,907
Balance, beginning (in shares) at Dec. 31, 2020		25,055,479		25,055,479
Balance, beginning at Dec. 31, 2020		$ 825,149		$ 25	202,359	555,854		66,911
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		18,702				18,702
Shares repurchased (in shares)				(207)
Shares repurchased		(7)			(7)
Stock based compensation (in shares)				64,583
Stock based compensation		522			522
Dividends on common stock		(3,767)				(3,767)
Change in net unrealized investment appreciation	[1]	(23,456)						(23,456)
Change in liability for underfunded employee benefit plans	[2]	6,456						6,456
Balance, ending (in shares) at Mar. 31, 2021				25,119,855
Balance, ending at Mar. 31, 2021		$ 823,599		$ 25	202,874	570,789		49,911
Balance, beginning (in shares) at Dec. 31, 2020		25,055,479		25,055,479
Balance, beginning at Dec. 31, 2020		$ 825,149		$ 25	202,359	555,854		66,911
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		$ 22,859
Balance, ending (in shares) at Sep. 30, 2021		25,080,923		25,080,923
Balance, ending at Sep. 30, 2021		$ 814,529		$ 25	203,014	567,411		44,079
Balance, beginning (in shares) at Mar. 31, 2021				25,119,855
Balance, beginning at Mar. 31, 2021		823,599		$ 25	202,874	570,789		49,911
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		13,750				13,750
Shares repurchased (in shares)				(31,027)
Shares repurchased		(1,000)			(1,000)
Stock based compensation (in shares)				28,512
Stock based compensation		1,180			1,180
Dividends on common stock		(3,772)				(3,772)
Change in net unrealized investment appreciation	[1]	7,391						7,391
Change in liability for underfunded employee benefit plans	[2]	(1,674)						(1,674)
Balance, ending (in shares) at Jun. 30, 2021				25,117,340
Balance, ending at Jun. 30, 2021		839,474		$ 25	203,054	580,767		55,628
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(9,593)				(9,593)
Shares repurchased (in shares)				(36,417)
Shares repurchased		(1,001)			(1,001)
Stock based compensation		960			960
Dividends on common stock		(3,763)				(3,763)
Change in net unrealized investment appreciation	[1]	(9,828)						(9,828)
Change in liability for underfunded employee benefit plans	[2]	$ (1,721)						(1,721)
Balance, ending (in shares) at Sep. 30, 2021		25,080,923		25,080,923
Balance, ending at Sep. 30, 2021		$ 814,529		$ 25	$ 203,014	$ 567,411		$ 44,079

[1] The change in net unrealized appreciation is net of reclassification adjustments and income taxes.

[2] The change in liability for underfunded employee benefit plans is net of reclassification adjustments and income taxes.

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Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividends on common stock, per share (in dollars per share)	$ 0.15	$ 0.15	$ 0.15	$ 0.33	$ 0.33	$ 0.33

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash Flows From Operating Activities
Net income (loss)	$ 22,859	$ (103,815)
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Net accretion of bond premium	10,546	7,719
Depreciation and amortization	4,887	5,009
Goodwill impairment	0	15,091
Stock-based compensation expense	3,074	3,979
Net realized investment (gains) losses	(28,243)	62,416
Net cash flows from equity and trading investments	34,504	37,552
Deferred income tax benefit	248	(21,824)
Changes in:
Accrued investment income	668	154
Premiums receivable	(7,780)	5,482
Deferred policy acquisition costs	(7,966)	69
Reinsurance receivables	39,250	(127,551)
Prepaid reinsurance premiums	3,653	(2,734)
Income taxes receivable	(2,880)	(38,198)
Other assets	(8,456)	(11,616)
Losses and loss settlement expenses	(10,481)	133,329
Unearned premiums	(5,914)	(5,432)
Accrued expenses and other liabilities	(21,348)	4,593
Deferred income taxes	(1,009)	7,713
Other, net	(7,424)	15,196
Cash from operating activities	(4,671)	90,947
Net cash provided by (used in) operating activities	18,188	(12,868)
Cash Flows From Investing Activities
Proceeds from sale of available-for-sale investments	170,637	16,907
Proceeds from call and maturity of available-for-sale investments	214,702	239,438
Proceeds from sale of other investments	3,616	5,391
Purchase of investments in mortgage loans	0	(5,564)
Purchase of investments available-for-sale	(331,644)	(216,001)
Purchase of other investments	(6,021)	(4,829)
Net purchases and sales of property and equipment	(10,932)	(15,506)
Net cash provided by investing activities	40,358	19,836
Cash Flows From Financing Activities
Issuance of common stock	(412)	(568)
Repurchase of common stock	(2,008)	(2,741)
Payment of cash dividends	(11,302)	(24,777)
Net cash used in financing activities	(13,722)	(28,086)
Net Change in Cash and Cash Equivalents	44,824	(21,118)
Cash and Cash Equivalents at Beginning of Period	87,948	120,722
Cash and Cash Equivalents at End of Period	$ 132,772	$ 99,604

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Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Business

United Fire Group, Inc. ("UFG," the "Registrant," the "Company," "we," "us," or "our") and its consolidated subsidiaries and affiliates are engaged in the business of writing property and casualty insurance through a network of independent agencies. Our insurance company subsidiaries are licensed as property and casualty insurers in 50 states and the District of Columbia.

Basis of Presentation

The unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X promulgated by the SEC. Certain financial information that is included in our Annual Report on Form 10-K for the year ended December 31, 2020, including certain financial statement footnote disclosures, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; loss settlement expenses; and pension and post-retirement benefit obligations.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Management of UFG believes the accompanying unaudited Consolidated Financial Statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. All significant intercompany transactions have been eliminated in consolidation. The results reported for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020.

Segment Information

Our property and casualty insurance business is reported as one business segment. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. We will continue to evaluate our operations on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP.

Lloyd's Syndicates

On January 1, 2021, the Company became a member of Lloyd's of London ("Lloyd's"). As a member of Lloyd's, the Company is required to maintain capital at Lloyd's, referred to as Funds at Lloyd's ("FAL"), to support underwriting of property and casualty and reinsurance business by Syndicate 1492, Syndicate 1729, Syndicate 1969, Syndicate 1971 and Syndicate 4747. At September 30, 2021, the Company's FAL investments were comprised of cash of $21,331 on deposit with Lloyd's in order to satisfy these FAL requirements.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, cash on deposit and held at Lloyd's and non-negotiable certificates of deposit with original maturities of three months or less.

Deferred Policy Acquisition Costs ("DAC")

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred. The following table is a summary of the components of DAC, including the related amortization recognized for the nine-month period ended September 30, 2021.

	Total
Recorded asset at beginning of period	$	87,094
Underwriting costs deferred	158,499
Amortization of deferred policy acquisition costs	(150,533)
Recorded asset at September 30, 2021	$	95,060

Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned.

Goodwill

Goodwill assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill assets relate to the acquisition of Mercer Insurance Group, Inc. on March 28, 2011. We evaluate goodwill assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill assets may exceed their implied fair value. Any impairment is recognized in the period that the impairment is identified. During the third quarter of 2020, we completed a quantitative analysis of our goodwill as a result of the following factors: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, as a result of the COVID-19 pandemic and due to the current year weather related catastrophes; and (ii) the fair value of our stock trading significantly below book value. As a result of the quantitative analysis, we recorded an impairment charge of $15,091 as of September 30, 2020. The impairment charge was determined based on completion of both a discounted cash flow and market value analysis.

Other Intangible Assets

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized using the straight-line method over periods ranging from two years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized.

Long Term Debt

The Company executed a private placement debt transaction on December 15, 2020 between United Fire & Casualty Company ("UF&C"), and Federated Mutual Insurance Company, a mutual insurance company domiciled in Minnesota ("Federated Mutual"), and Federated Life Insurance Company, an insurance company domiciled in Minnesota ("Federated Life” and, together with Federated Mutual, the "Note Purchasers").

UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes. The notes are presented as a long term debt liability in the Consolidated Balance Sheets and as a financing activity in the Consolidated Statement of Cash Flows.

Interest payments under the surplus notes are paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor’s) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date. For the nine-month period ended September 30, 2021, interest totaled $2,391 and is included in accrued expenses and other liabilities in the Consolidated Balance Sheets and as Interest expense in the Consolidated Statements of Income and Comprehensive Income. Payment of interest is subject to approval by the Iowa Insurance Division.

Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss ("NOL") carryovers and carrybacks to offset 100 percent of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has considered the implications of the CARES Act on its tax provision. As of September 30, 2021, there was no income tax benefit as a result of the CARES Act. As of September 30, 2020, there was an income tax benefit of $17,768 as a result of the CARES Act.

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

We reported consolidated federal income tax expense of $1,690 for the nine-month period ended September 30, 2021 compared to an income tax benefit of $52,176 during the same period of 2020. Our effective tax rate for 2021 and 2020 is different than the federal statutory rate of 21 percent, due principally to the net effect of tax-exempt municipal bond interest income. Our effective tax rate for 2020 is also different than the federal statutory rate of 21 percent, due principally to the impact of the provisions of the CARES Act.

The Company performs a quarterly review of its tax positions and makes a determination of whether it is more likely than not that the tax position will be sustained upon examination. If, based on this review, it appears not more likely than not that the positions will be sustained, the Company will calculate any unrecognized tax benefits and, if necessary, calculate and accrue any related interest and penalties. We did not recognize any liability for unrecognized tax benefits at September 30, 2021 or December 31, 2020. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

For the nine-month periods ended September 30, 2021 and 2020, we made payments for income taxes totaling $5,345 and $125, respectively. We did not receive a tax refund during the nine-month periods ended September 30, 2021 and 2020.

We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2017.

Leases

The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases consists of operating leases which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The Company's operating leases consist of office space, vehicles, computer equipment and office equipment. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. Short-term leases of 12 months or less are recorded on the Consolidated Balance Sheets and lease payments are recognized on the Consolidated Statements of Income and Comprehensive Income. For more information on leases refer to Note 10 "Leases."

Variable Interest Entities

The Company and certain related parties are equity investors in one investment which the Company determined is a variable interest entity ("VIE") as a result of participation in the risks and rewards of the VIE based on the objectives and strategies of the VIE. The VIE is a limited liability company that primarily invests in commercial real estate. The Company and certain related parties are not the primary beneficiary largely due to their inability to influence management or direct the activities that most significantly impact the VIE's economic performance. Based on these facts and circumstances, the Company has a variable interest in the VIE, but has not consolidated the VIE's financial results as it is not the primary beneficiary. The Company's investment is reported in other long-term investments in the Consolidated Balance Sheets and accounted for under the equity method of accounting. The fair value of the VIE at September 30, 2021 was $3,030 and there are no future funding commitments.

Credit Losses

The Company recognizes credit losses for our available-for-sale fixed-maturity portfolio, reinsurance receivables, mortgage loans and premium receivables by setting up allowances which are remeasured each reporting period and recorded in the Consolidated Statements of Income and Comprehensive Income.

For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. For more information on credit losses and the allowance for credit losses for available-for-sale fixed-maturity portfolio, see Note 2 "Summary of Investments."

An allowance for mortgage loan losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments which have similar risk characteristics. To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. On a quarterly basis, quantitative credit risk metrics, including for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations. This allowance is presented as a separate line in the Consolidated Balance Sheets beneath the asset value as well as presented net and recorded through "Net realized investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income. For more information on credit losses and the allowance for credit losses for our investment in mortgage loans see Note 3 "Fair Value of Financial Instruments."

For reinsurance receivables, the Company's model estimates expected credit loss by multiplying the exposure at default by both the probability of default and loss given default ("LGD"). The LGD is estimated by the rating of the reinsurer, historical relationship with UFG, existence of letters of credit and known regulation the Company may be held accountable for. The ultimate LGD percentage is estimated after considering Moody’s experience with unsecured year 1 bond recovery rates from 1983-2017. The allowance calculated as of September 30, 2021 is recorded through the line "Reinsurance receivables and recoverables" in the Consolidated Balance Sheets and through the line "Other underwriting expenses" in the Consolidated Statements of Income and Other Comprehensive Income. As of September 30, 2021, the Company had a credit loss allowance for reinsurance receivables of $98.

Rollforward of credit loss allowance for reinsurance receivable:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	190
Current-period provision for expected credit losses	—
Recoveries of amounts previously written off, if any	(92)
Ending balance of the allowance for reinsurance receivable, September 30, 2021	$	98

With respect to premiums receivable, the Company utilizes an aging method to estimate credit losses. An allowance for doubtful accounts is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders. "Premiums receivable" are presented in the Consolidated Balance Sheets net of an estimated allowance for doubtful accounts and recorded through "Other underwriting expenses" in the Consolidated Statements of Income and Comprehensive Income.

COVID-19 Pandemic

The COVID-19 pandemic caused significant financial market volatility, economic uncertainty and interruptions to normal business activities. As of the date of this report, we expect the effect of the COVID-19 pandemic on claims currently under our coverages to be manageable, based on the information presently available. However, the effects of the COVID-19 pandemic, including the emergence of variant strains, continue to evolve and we cannot predict the extent to which our business, results of operations, financial condition, liquidity, capital position, the value of investments we hold in our investment portfolio, premiums and the demand for our products and our ability to collect premiums or requirement to return premiums to our policyholders, will ultimately be impacted. Additionally, if established written contract policy exclusions of business interruption coverage for losses attributable to the COVID-19 pandemic are voided or changed through legislation, regulations or interpretations by the courts, such changes have the potential to materially increase claims, losses and legal expenses which may impact our business, financial condition, results of operations or liquidity. See further discussion in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2021

Defined Benefit Plans - Disclosures

In August 2018, the FASB issued new guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension and postretirement plans. The new guidance removes the requirement for disclosing

the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs in the next year and the sensitivity of postretirement health plans to one-percentage-point changes in medical trend rates. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance modifies disclosures, but will not have an impact on the Company's financial position and results of operations.

Income Taxes

In December 2019, the FASB issued new guidance which simplifies the accounting for income taxes by removing certain exceptions to income tax accounting. The amendments also improve consistent application of and simplify GAAP for other areas of income tax accounting. The new guidance clarifies and amends existing guidance, including removing certain requirements that an entity evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, and requiring an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance did not have an impact on the Company’s financial position and results of operations.

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Summary of Investments

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Investments

SUMMARY OF INVESTMENTS

Fair Value of Investments

A reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity and short-term investments, presented on a consolidated basis, as of September 30, 2021 and December 31, 2020, is provided below:

September 30, 2021
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,543	$	283	$	448	$	53,378	$	—	$	53,378
U.S. government agency	55,142		2,646		644		57,144		—		57,144
States, municipalities and political subdivisions
General obligations:
Midwest	68,996		2,714		—		71,710		—		71,710
Northeast	26,562		811		—		27,373		—		27,373
South	92,091		4,196		—		96,287		—		96,287
West	95,022		5,549		—		100,571		—		100,571
Special revenue:
Midwest	118,800		7,473		—		126,273		—		126,273
Northeast	55,940		4,072		—		60,012		—		60,012
South	201,920		14,723		87		216,556		—		216,556
West	127,709		8,119		—		135,828		—		135,828
Foreign bonds	30,331		1,008		175		31,164		—		31,164
Public utilities	95,948		5,138		281		100,805		—		100,805
Corporate bonds
Energy	28,060		2,263		65		30,258		—		30,258
Industrials	52,097		2,783		137		54,743		—		54,743
Consumer goods and services	60,554		2,477		757		62,274		—		62,274
Health care	27,385		639		531		27,493		—		27,493
Technology, media and telecommunications	53,421		3,707		740		56,388		—		56,388
Financial services	90,400		5,336		308		95,428		—		95,428
Mortgage-backed securities	22,251		249		127		22,373		—		22,373
Collateralized mortgage obligations
Government national mortgage association	115,576		3,038		1,358		117,256		—		117,256
Federal home loan mortgage corporation	127,461		1,089		1,588		126,962		—		126,962
Federal national mortgage association	55,697		1,252		532		56,417		—		56,417
Asset-backed securities	322		586		—		908		—		908
Total Available-for-Sale Fixed Maturities	$	1,655,228	$	80,151	$	7,778	$	1,727,601	$	—	$	1,727,601
Short-Term Investments	$	175	$	—	—		$	175	$	—	$	175
Total Available-for-Sale Investments	$	1,655,403	$	80,151	$	7,778	$	1,727,776	$	—	$	1,727,776

December 31, 2020
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,481	$	482	$	25	$	149,938	$	—	$	149,938
U.S. government agency	60,502		4,016		—		64,518		—		64,518
States, municipalities and political subdivisions
General obligations:
Midwest	77,933		4,047		—		81,980		—		81,980
Northeast	29,071		1,379		—		30,450		—		30,450
South	104,522		5,448		—		109,970		—		109,970
West	102,590		7,431		—		110,021		—		110,021
Special revenue:
Midwest	115,956		9,142		—		125,098		—		125,098
Northeast	56,317		4,759		—		61,076		—		61,076
South	208,739		17,967		—		226,706		—		226,706
West	129,417		9,982		—		139,399		—		139,399
Foreign bonds	27,799		1,805		2		29,602		—		29,602
Public utilities	76,114		7,388		—		83,502		—		83,502
Corporate bonds
Energy	22,441		2,895		—		25,336		—		25,336
Industrials	39,513		3,744		—		43,257		—		43,257
Consumer goods and services	46,521		4,046		—		50,567		—		50,567
Health care	6,678		898		—		7,576		—		7,576
Technology, media and telecommunications	37,270		4,381		15		41,636		—		41,636
Financial services	93,736		7,564		269		101,031		5		101,026
Mortgage-backed securities	20,305		326		54		20,577		—		20,577
Collateralized mortgage obligations
Government national mortgage association	81,758		4,439		45		86,152		—		86,152
Federal home loan mortgage corporation	151,362		2,239		758		152,843		—		152,843
Federal national mortgage association	81,952		2,013		683		83,282		—		83,282
Asset-backed securities	314		612		—		926		—		926
Total Available-for-Sale Fixed Maturities	$	1,720,291	$	107,003	$	1,851	$	1,825,443	$	5	$	1,825,438

Maturities

The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2021, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities
	Available-For-Sale
September 30, 2021	Amortized Cost		Fair Value
Due in one year or less	$	55,041	$	55,699
Due after one year through five years	469,238		492,892
Due after five years through 10 years	353,810		373,415
Due after 10 years	455,832		481,679
Asset-backed securities	322		908
Mortgage-backed securities	22,251		22,373
Collateralized mortgage obligations	298,734		300,635
	$	1,655,228	$	1,727,601

Net Realized Investment Gains and Losses

Net realized gains on disposition of investments are computed using the specific identification method and are included in the computation of net income. A summary of the components of net realized investment gains (losses) is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net realized investment gains (losses):
Fixed maturities:
Available-for-sale	$	294	$	52	$	(207)	$	52
Allowance for credit losses	170		2		5		(8)
Trading Securities	—		382		—		(780)
Equity securities
Change in the fair value	(1,314)		21,962		20,513		(38,876)
Sales	(1,168)		(7,186)		8,183		(22,772)
Mortgage loans allowance for credit losses	5		—		5		(4)
Real estate	(256)		—		(256)		(28)
Total net realized investment gains (losses)	$	(2,269)	$	15,212	$	28,243	$	(62,416)

The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Proceeds from sales	$	53,973	$	—	$	170,637	$	16,907
Gross realized gains	690		—		843		198
Gross realized losses	396		—		1,051		495

Funding Commitment

Pursuant to an agreement with one of our limited liability partnership investments, we are contractually committed through July 10, 2030 to make capital contributions upon request of the partnership. Our remaining potential contractual obligation was $2,636 at September 30, 2021.

In addition, the Company invested $25,000 in December 2019 in a limited liability partnership investment fund which is subject to a three-year lockup with a 60 day minimum notice, with four possible repurchase dates per year, after the three-year lockup period is met. The fair value of the investment at September 30, 2021 was $24,786 and there are no remaining capital contributions with this investment.

Unrealized Appreciation

A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:

	Nine Months Ended September 30,
	2021		2020
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	(32,779)	$	44,574
Income tax effect	6,886		(9,361)
Total change in net unrealized investment appreciation, net of tax	$	(25,893)	$	35,213

Credit Risk

An allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2021:

Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	5
Additions to the allowance for credit losses for which credit losses were not previously recorded	—
Recoveries of amounts previously written off	(5)
Ending balance, September 30, 2021	$	—

The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2021 and December 31, 2020. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

September 30, 2021	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	7	$	42,264	$	437	1	$	3,695	$	11	$	45,959	$	448
U.S. government agency	3	14,998		644		—	—		—		14,998		644
States, municipalities and political subdivisions
Special revenue
Special revenue - south	1	1,186		87		—	—		—		1,186		87
Foreign bonds	4	9,719		175		—	—		—		9,719		175
Public utilities	7	19,341		281		—	—		—		19,341		281
Corporate bonds
Energy	1	2,942		65		—	—		—		2,942		65
Industrials	2	5,915		137		—	—		—		5,915		137
Consumer goods and services	7	16,348		757		—	—		—		16,348		757
Health care	3	20,517		531		—	—		—		20,517		531
Technology, media and telecommunications	5	11,264		740		—	—		—		11,264		740
Financial services	3	6,457		52		1	4,744		256		11,201		308
Mortgage-backed securities	7	15,181		127		—	—		—		15,181		127
Collateralized mortgage obligations
Federal home loan mortgage corporation	21	71,358		1,191		4	18,604		397		89,962		1,588
Federal national mortgage association	8	27,410		438		4	4,559		94		31,969		532
Government national mortgage association	9	48,566		1,358		—	—		—		48,566		1,358
Total Available-for-Sale Fixed Maturities	88	$	313,466	$	7,020	10	$	31,602	$	758	$	345,068	$	7,778

The unrealized losses on our investments in available-for-sale fixed maturities were the result of interest rate movements. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

December 31, 2020	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	5	$	86,371	$	25	—	$	—	$	—	$	86,371	$	25
Foreign bonds	1	2,000		2		—	—		—		2,000		2
Technology, media and telecommunications	1	2,020		15		—	—		—		2,020		15
Financial services	1	2,995		5		1	3,000		7		5,995		12
Mortgage-backed securities	2	8,099		53		5	118		1		8,217		54
Collateralized mortgage obligations
Federal home loan mortgage corporation	24	97,691		758		1	26		—		97,717		758
Federal national mortgage association	10	44,677		683		—	—		—		44,677		683
Government national mortgage association	2	12,394		45		1	24		—		12,418		45
Total Available-for-Sale Fixed Maturities	46	$	256,247	$	1,586	8	$	3,168	$	8	$	259,415	$	1,594

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

•Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

•Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

•Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years' experience and who have demonstrated knowledge of the subject security.

In order to determine the proper classification in the fair value hierarchy, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The mortgage loan portfolio consists entirely of commercial mortgage loans. The fair value of our mortgage loans is determined by modeling performed by our third party fund manager based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the security's fair value.

Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (the "Executive Retirement Plan"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plan. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of September 30, 2021, the cash surrender value of the COLI policies was $10,067, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Our long-term debt is not carried in the Consolidated Balance Sheet at fair value. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for similar financial instruments. The fair value is estimated using a discounted cash flows analysis.

A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2021 and December 31, 2020 is as follows:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Available-for-sale securities	$	1,727,601	$	1,727,601	$	1,825,443	$	1,825,438
Equity securities	200,876		200,876		206,685		206,685
Mortgage loans	49,385		47,254		48,932		47,614
Other long-term investments	80,162		80,162		69,305		69,305
Short-term investments	175		175		175		175
Cash and cash equivalents	132,772		132,772		87,948		87,948
Corporate-owned life insurance	10,067		10,067		8,557		8,557
Liabilities
Long Term Debt	47,724		50,000		50,000		50,000

The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table includes financial instruments at September 30, 2021 and December 31, 2020:

September 30, 2021			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,378	$	—	$	53,378	$	—
U.S. government agency	57,144		—		57,144		—
States, municipalities and political subdivisions
General obligations
Midwest	71,710		—		71,710		—
Northeast	27,373		—		27,373		—
South	96,287		—		96,287		—
West	100,571		—		100,571		—
Special revenue
Midwest	126,273		—		126,273		—
Northeast	60,012		—		60,012		—
South	216,556		—		216,556		—
West	135,828		—		135,828		—
Foreign bonds	31,164		—		31,164		—
Public utilities	100,805		—		100,805		—
Corporate bonds
Energy	30,258		—		30,258		—
Industrials	54,743		—		54,743		—
Consumer goods and services	62,274		—		62,274		—
Health care	27,493		—		27,493		—
Technology, media and telecommunications	56,388		—		56,388		—
Financial services	95,428		—		95,278		150
Mortgage-backed securities	22,373		—		22,373		—
Collateralized mortgage obligations
Government national mortgage association	117,256		—		117,256		—
Federal home loan mortgage corporation	126,962		—		126,962		—
Federal national mortgage association	56,417		—		56,417		—
Asset-backed securities	908		—		—		908
Total Available-for-Sale Fixed Maturities	$	1,727,601	$	—	$	1,726,543	$	1,058
EQUITY SECURITIES
Common stocks
Public utilities	$	16,550	$	16,550	$	—	$	—
Energy	14,296		14,296		—		—
Industrials	36,464		36,464		—		—
Consumer goods and services	48,311		48,311		—		—
Health care	12,584		12,584		—		—
Technology, media and telecommunications	28,651		28,651		—		—

Financial services	43,425		43,425		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	200,876	$	200,281	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	20,555	$	20,555	$	—	$	—
Corporate-Owned Life Insurance	$	10,067	$	—	$	10,067	$	—
Total Assets Measured at Fair Value	$	1,959,274	$	221,011	$	1,736,610	$	1,653

December 31, 2020			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,938	$	—	$	149,938	$	—
U.S. government agency	64,518		—		64,518		—
States, municipalities and political subdivisions
General obligations
Midwest	81,980		—		81,980		—
Northeast	30,450		—		30,450		—
South	109,970		—		109,970		—
West	110,021		—		110,021		—
Special revenue
Midwest	125,098		—		125,098		—
Northeast	61,076		—		61,076		—
South	226,706		—		226,706		—
West	139,399		—		139,399		—
Foreign bonds	29,602		—		29,602		—
Public utilities	83,502		—		83,502		—
Corporate bonds
Energy	25,336		—		25,336		—
Industrials	43,257		—		43,257		—
Consumer goods and services	50,567		—		50,567		—
Health care	7,576		—		7,576		—
Technology, media and telecommunications	41,636		—		41,636		—
Financial services	101,031		—		100,781		250
Mortgage-backed securities	20,577		—		20,577		—
Collateralized mortgage obligations
Government national mortgage association	86,152		—		86,152		—
Federal home loan mortgage corporation	152,843		—		152,843		—
Federal national mortgage association	83,282		—		83,282		—
Asset-backed securities	926		—		—		926
Total Available-for-Sale Fixed Maturities	$	1,825,443	$	—	$	1,824,267	$	1,176
EQUITY SECURITIES

Common stocks
Public utilities	$	16,320	$	16,320	$	—	$	—
Energy	9,918		9,918		—		—
Industrials	36,556		36,556		—		—
Consumer goods and services	32,061		32,061		—		—
Health care	24,549		24,549		—		—
Technology, media and telecommunications	17,109		17,109		—		—
Financial services	69,577		69,577		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	206,685	$	206,090	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	24,790	$	24,790	$	—	$	—
Corporate-Owned Life Insurance	$	8,557	$	—	$	8,557	$	—
Total Assets Measured at Fair Value	$	2,065,650	$	231,055	$	1,832,824	$	1,771

The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available.

We use a market-based approach for valuing all of our Level 2 securities and submit them primarily to a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day.

At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. In addition, on a quarterly basis, we also test all securities in the portfolio and independently corroborate the valuations obtained from our third-party valuation service providers. Quarterly, we also perform deep dive analysis of the pricing method used by our third-party valuation service provider by selecting a random sample of securities by asset class and reviewing methodologies. In our opinion, the pricing obtained at September 30, 2021 and December 31, 2020 was reasonable.

For the three- and nine-month periods ended September 30, 2021, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities.

Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers’ valuation processes.

The following table provides a quantitative information about our Level 3 securities at September 30, 2021:

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at		Valuation Technique(s)	Unobservable inputs	Range of weighted average significant unobservable inputs
	September 30, 2021
Corporate bonds - financial services	$	150	Fair value equals cost	NA	NA
Fixed Maturities asset-backed securities	908		Discounted cash flow	Probability of default	4% - 6%
Nonredeemable preferred stocks	595		Discounted cash flow	Multiplier	3x - 4x

The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at July 1, 2021	$	150	$	891	$	595	$	1,636
Net unrealized gains (losses)(1)	—		17		—		17
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities for the nine-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at January 1, 2021	$	250	$	926	$	595	$	1,771
Net unrealized gains (losses)(1)	—		(18)		—		(18)
Transfers out	(100)		—		—		(100)
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

Commercial Mortgage Loans

The following tables present the carrying value of our commercial mortgage loans and additional information at September 30, 2021 and December 31, 2020:

Commercial Mortgage Loans
	September 30, 2021		December 31, 2020
Loan-to-value	Carrying Value		Carrying Value
Less than 65%	$	30,035	$	30,361
65%-75%	17,290		17,329
Total amortized cost	$	47,325	$	47,690
Allowance for mortgage loan losses	(71)		(76)
Mortgage loans, net	$	47,254	$	47,614

Mortgage Loans by Region
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
East North Central	$	3,245	6.9	%	$	3,245	6.8	%
Southern Atlantic	9,622		20.3		9,752		20.5
East South Central	8,071		17.1		8,197		17.2
New England	6,588		13.9		6,588		13.8
Middle Atlantic	14,826		31.3		14,936		31.2
Mountain	2,227		4.7		2,227		4.7
West North Central	2,746		5.8		2,745		5.8
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Mortgage Loans by Property Type
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Commercial
Multifamily	$	16,999	35.9	%	$	17,038	35.7	%
Office	11,645		24.6		11,861		24.9
Industrial	10,124		21.4		10,124		21.2
Retail	2,227		4.7		2,227		4.7
Mixed use/Other	6,330		13.4		6,440		13.5
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Amortized Cost Basis by Year of Origination and Credit Quality Indicator
	2021		2020		2019		2018		Total
Commercial mortgage loans:
Risk Rating:
1-2 internal grade	$	—	$	5,495	$	8,356	$	18,390	$	32,241
3-4 internal grade	—		—		8,496		6,588		15,084
5 internal grade	—		—		—		—		—
6 internal grade	—		—		—		—		—
7 internal grade	—		—		—		—		—
Total commercial mortgage loans	$	—	$	5,495	$	16,852	$	24,978	$	47,325
Current-period write-offs	—		—		—		—		—
Current-period recoveries	—		—		—		—		—
Current-period net write-offs	$	—	$	—	$	—	$	—	$	—

Commercial mortgage loans carrying value excludes accrued interest of $166. As of September 30, 2021, all loan receivables were current, with no delinquencies. The commercial mortgage loans originate with an initial loan-to-value ratio to provide sufficient collateral to absorb losses should a loan be required to foreclose. Mortgage loans are evaluated on a quarterly basis for impairment on an individual basis through a monitoring process and review of key credit indicators, such as economic trends, delinquency rates, property valuations, occupancy and rental rates and loan-to-value ratios. A loan is considered impaired when the Company believes it will not collect the contractual principal and interest set forth in the contractual terms of the loan. An internal grade is assigned to each mortgage loan, with a grade of 1 being the highest and least likely for an impairment and the lowest rating of 7 being the most

likely for an impairment. An allowance for mortgage loan losses is established on each loan recognizing a loss for amounts which we believe will not be collected according to the contractual terms of the respective loan agreement. As of September 30, 2021, the Company had an allowance for mortgage loan losses of $71, summarized in the following rollforward:

Rollforward of allowance for mortgage loan losses:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	76
Current-period provision for expected credit losses	(5)
Ending balance of the allowance for mortgage loan losses, September 30, 2021	$	71

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Reserves for Losses and Loss Settlement Expenses

9 Months Ended

Sep. 30, 2021

Insurance Loss Reserves [Abstract]

Reserves for Losses and Loss Settlement Expenses

RESERVES FOR LOSSES AND LOSS SETTLEMENT EXPENSES

Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property or the loss of its income-producing abilities. Casualty insurance primarily covers liability for damage to property of, or injury to, a person or entity other than the insured. In most cases, casualty insurance also obligates the insurance company to provide a defense for the insured in litigation, arising out of events covered by the policy.

Liabilities for losses and loss settlement expenses reflect management's best estimates at a given point in time of what we expect to pay for claims that have been reported and those that have been incurred but not reported ("IBNR"), based on known facts, circumstances, and historical trends. Because property and casualty insurance reserves are estimates of the unpaid portions of incurred losses that have been reported to us, as well as losses that have been incurred but not reported, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process. The ultimate cost of losses and related loss settlement expenses may vary materially from recorded amounts. We regularly update our reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported as a component of losses and loss settlement expenses incurred in the period such changes are determined.

The determination of reserves (particularly those relating to liability lines of insurance that have relatively longer lag in claim reporting) requires significant work to reasonably project expected future claim reporting and payment patterns. If, during the course of our regular monitoring of reserves, we determine that coverages previously written are incurring higher than expected losses, we will take action that may include, among other things, increasing the related reserves. Any adjustments we make to reserves are reflected in operating results in the year in which we make those adjustments. We engage an independent actuary, Regnier Consulting Group, Inc., to render an opinion as to the reasonableness of our statutory reserves annually.

On a quarterly basis, UFG's internal actuary performs a detailed actuarial review of IBNR reserves. This review includes a comparison of results from the most recent analysis of reserves completed by both our internal and external actuaries. Senior management meets with our internal actuary to review, on a regular and quarterly basis, the adequacy of carried reserves based on results from this actuarial analysis. There are two fundamental types or sources of IBNR reserves. We record IBNR reserves for "normal" types of claims and also specific IBNR reserves related to unique circumstances or events. A major hurricane is an example of an event that might necessitate establishing specific IBNR reserves because an analysis of existing historical data would not provide an appropriate estimate.

We do not discount loss reserves based on the time value of money. 

The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves at September 30, 2021 and December 31, 2020 (net of reinsurance amounts):

	September 30, 2021		December 31, 2020
Gross liability for losses and loss settlement expenses at beginning of year	$	1,578,131	$	1,421,754
Ceded losses and loss settlement expenses	(131,843)		(68,536)
Net liability for losses and loss settlement expenses at beginning of year	$	1,446,288	$	1,353,218
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	560,080	$	887,119
Prior years	(26,099)		(17,652)
Total incurred	$	533,981	$	869,467
Losses and loss settlement expense payments for claims occurring during
Current year	$	204,056	$	354,635
Prior years	318,573		421,762
Total paid	$	522,629	$	776,397
Net liability for losses and loss settlement expenses at end of year	$	1,457,641	$	1,446,288
Ceded loss and loss settlement expenses	110,009		131,843
Gross liability for losses and loss settlement expenses at end of period	$	1,567,650	$	1,578,131

There are a multitude of factors that can impact loss reserve development. Those factors include, but are not limited to: historical data, the potential impact of various loss reserve development factors and trends including historical loss experience, legislative enactments, judicial decisions, legal developments in imposition of damages, experience with alternative dispute resolution, results of our medical bill review process, the potential impact of salvage and subrogation and changes and trends in general economic conditions, including the effects of inflation. All of these factors influence our estimates of required reserves and for long tail lines these factors can change over the course of the settlement of the claim. However, there is no precise method for evaluating the specific monetary impact of any individual factor on the development of reserves.

Generally, we base reserves for each claim on the estimated ultimate exposure for that claim. We believe that it is appropriate and reasonable to establish a best estimate for reserves within a range of reasonable estimates, especially when we are reserving for claims for bodily injury, disabilities and similar claims, for which settlements and verdicts can vary widely. Our reserving philosophy may result in favorable reserve development in future years that will decrease losses and loss settlement expenses for prior year claims in the year of adjustment. We realize that this philosophy, coupled with what we believe to be aggressive and successful claims management and loss settlement practices, has resulted in year-to-year redundancies in reserves. We believe our approach produces recorded reserves that are reasonably consistent as to their relative position within a range of reasonable reserves from year-to-year. However, conditions and trends that have affected the reserve development for a given year do change. Therefore, such development cannot be used to project future reserve redundancies or deficiencies.

We are not aware of any significant contingent liabilities related to environmental issues. Because of the type of property coverage we write, we have potential exposure to environmental pollution, mold and asbestos claims. Our underwriters are aware of these exposures and use riders or endorsements to limit exposure.

Reserve Development

The significant drivers of the favorable reserve development in the nine-month period ended September 30, 2021 were the commercial automobile, workers' compensation, commercial fire and allied and personal fire and allied lines of business, partially offset by unfavorable development in commercial liability. The favorable development for commercial automobile was from loss adjustment expense ("LAE") where reductions in reserves were more than sufficient to offset paid LAE. Workers' compensation favorable development came from both loss and LAE. Reserve reductions for both items were more than sufficient to offset payments. The favorable development for commercial fire and allied lines was from LAE where reductions in reserves were more than sufficient to offset paid LAE. The favorable development for personal fire and allied lines came from both loss and LAE. Reserve reductions for both items were more than sufficient to offset payments. The unfavorable development for commercial liability is attributed to paid loss which was greater than the reductions of unpaid claim reserves; paid LAE was more than offset by reductions of reserves for unpaid LAE.

The significant drivers of the favorable reserve development for the full year of 2020 were the workers' compensation, commercial fire and allied lines, fidelity and surety and personal automobile lines of business The favorable development for workers' compensation was primarily from reductions in reserves for reported claims which were more than sufficient to offset paid loss. Reductions in reserves for IBNR claims also contributed favorable development in addition to LAE where reductions in reserves were more than sufficient to offset payments. Commercial fire and allied lines developed favorably because reductions in reserves for reported claims combined with reductions in reserves for IBNR claims were more than sufficient to offset paid loss. LAE also contributed favorable development with reductions in reserves more than sufficient to offset payments. Fidelity and surety loss developed favorably because a reduction in reserves for IBNR claims was more than sufficient to offset both paid loss and increases in reserves for reported claims. The personal automobile line of business developed favorably because reductions of reserves for reported claims combined with reductions of reserves for IBNR claims were more than sufficient to offset paid loss. LAE also contributed favorable development with reductions in reserves more than sufficient to offset payments. Much of the favorable development was offset by unfavorable development from three lines of business, with the largest contributions coming from commercial liability, reinsurance assumed and commercial automobile. The commercial liability line of business experienced unfavorable development due to paid loss which was greater than reductions in reserves for unpaid loss. LAE developed favorably and partially offset the unfavorable loss development. The unfavorable development for reinsurance assumed was due to paid loss which was greater than reductions in reserves for unpaid loss. The commercial automobile line of business experienced unfavorable development because paid loss was greater than reductions in reserves for unpaid loss, but a portion of the unfavorable loss development was offset by favorable development from LAE where payments were more than offset by reductions of reserves for unpaid loss adjustment expense. On an all lines combined basis, favorable development is attributable to LAE, which continues to benefit from additional litigation management efforts.

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Employee Benefits

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Employee Benefits

EMPLOYEE BENEFITS

Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and postretirement benefit plans are as follows:

	Pension Plan				Postretirement Benefit Plan
Three Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	3,020	$	2,707	$	—	$	432
Interest cost	1,728		2,066		1		253
Expected return on plan assets	(4,202)		(3,385)		—		—
Amortization of prior service credit	(809)		—		(3,765)		(2,021)
Amortization of net loss	999		979		705		94
Special event plan closure	—		—		—		—
Net periodic benefit cost	$	736	$	2,367	$	(3,059)	$	(1,242)

	Pension Plan				Postretirement Benefit Plan
Nine Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	9,060	$	8,122	$	148	$	1,296
Interest cost	5,184		6,199		71		760
Expected return on plan assets	(12,606)		(10,154)		—		—
Amortization of prior service credit	(2,427)		—		(10,725)		(6,063)
Amortization of net loss	2,997		2,936		1,902		282
Special event plan closure	—		—		(20,177)		—
Net periodic benefit cost	$	2,208	$	7,103	$	(28,781)	$	(3,725)

A portion of the service cost component of net periodic pension and postretirement benefit costs is capitalized and amortized as part of deferred acquisition costs and is included in the line "Amortization of deferred policy acquisition costs" in the Consolidated Statements of Income and Comprehensive Income. The portion not related to the compensation and the other components of net periodic pension and postretirement benefit costs is included in the income statement line titled "other underwriting expenses."

In January 2021, the Company decided to change the post-retirement benefit plan to a voluntary plan funded exclusively by participants, commencing at the start of 2023. The impact of this decision is reflected in the table above, with a one-time adjustment presented in the line "Special event plan closure" and an additional adjustment in the line "Amortization of prior service credit" recorded in first quarter of 2021. There will be continuing amortization of prior service credits through the end of 2022 related to these plan changes.

Employer Contributions

We previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020 that we originally planned to contribute $10,000 to the pension plan in 2021. The Company has revised the expected contributions to $5,000 in 2021 because of the funded status of the plan. For the nine-month period ended September 30, 2021, we contributed $5,000 to the pension plan, completing our expected contributions for the year.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Non-Qualified Employee Stock Award Plan

The United Fire Group, Inc. 2008 Stock Plan (the "2008 Stock Plan") authorized the issuance of restricted and unrestricted stock awards, restricted stock units, stock appreciation rights, incentive stock options, and non-qualified stock options for up to 1,900,000 shares of UFG common stock to employees. In May 2014, the Registrant's shareholders approved an additional 1,500,000 shares of UFG common stock issuable at any time and from time to time pursuant to the 2008 Stock Plan, among other amendments, and renamed such plan as the United Fire Group, Inc. Stock Plan. In May 2021, the Registrant's shareholders approved an additional 650,000 shares of UFG common stock issuable at any time and from time to time pursuant to the Stock Plan, and among other amendments, renamed such plan as the United Fire Group, Inc. 2021 Stock and Incentive Plan (as amended, the "Stock Plan"). At September 30, 2021, there were 1,245,573 authorized shares remaining available for future issuance. The Stock Plan is administered by the Board of Directors, which determines those employees who will receive awards, when awards will be granted, and the terms and conditions of the awards. The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Stock Plan. Pursuant to the Stock Plan, the Board of Directors may, at its sole discretion, grant awards to our employees, who are in positions of substantial responsibility with United Fire.

Options granted pursuant to the Stock Plan are granted to buy shares of UFG's common stock at the market value of the stock on the date of grant. Options granted prior to March 2017 vest and are exercisable in installments of 20.0 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. Options granted after March 2017 vest and are exercisable in installments of 33.3 percent of the number of shares covered by the option award each year from the grant date, unless the Board of Directors authorizes the acceleration of vesting. To the extent not exercised, vested option awards accumulate and are exercisable by the awardee, in whole or in part, in any subsequent year included in the option period, but not later than 10 years from the grant date. Restricted and unrestricted stock awards granted pursuant to the Stock Plan are granted at the market value of UFG's common stock on the date of the grant. Restricted stock units fully vest after three years or five years from the date of grant, unless accelerated upon the approval of the Board of Directors, at which time UFG common stock will be issued to the awardee.

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	700,680	1,900,000
Additional shares authorized	650,000	2,150,000
Number of awards granted	(161,857)	(3,450,756)
Number of awards forfeited or expired	56,750	646,329
Ending balance	1,245,573	1,245,573
Number of option awards exercised	7,884	1,481,973
Number of unrestricted stock awards granted	—	10,090
Number of restricted stock awards vested	52,302	216,680

Non-Qualified Non-Employee Director Stock Plan

The United Fire Group, Inc. Non-Employee Director Stock Plan (formerly known as the 2005 Non-Qualified Non- Employee Director Stock Option and Restricted Stock Plan) (the "Director Stock Plan") authorizes the issuance of restricted stock awards and non-qualified stock options to purchase shares of UFG's common stock to non-employee directors. On May 20, 2020, the Company’s shareholders approved amendments to the Director Stock Plan, previously approved by the Company’s Board of Directors, to (i) increase the number of shares available for future awards under the Director Stock Plan from 300,000 to 450,000, (ii) extend the expiration date of the Director Stock Plan from December 31, 2020 to December 31, 2029, (iii) allow for the grant of awards of restricted stock units, and

(iv) rename the Director Stock Plan as the "United Fire Group, Inc. Non-Employee Director Stock Plan." At September 30, 2021, the Company had 144,352 authorized shares available for future issuance.

The Board of Directors has the authority to determine which non-employee directors receive awards, when restricted stock, restricted stock units and options shall be granted, the option price, the option expiration date, the date of grant, the vesting schedule of options or whether the options shall be immediately vested, the terms and conditions of options, restricted stock and restricted stock units (other than those terms and conditions set forth in the plan) and the number of shares of common stock to be issued pursuant to an option, restricted stock or restricted stock unit agreements (subject to limits set forth in the Director Stock Plan). The Board of Directors may also take any action it deems necessary and appropriate for the administration of the Director Stock Plan.

The activity in the Director Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	160,135	300,000
Additional authorization	—	150,000
Number of awards granted	(18,510)	(332,378)
Number of awards forfeited or expired	2,727	26,730
Ending balance	144,352	144,352
Number of option awards exercised	8,181	142,001
Number of restricted stock awards vested	—	98,491

Stock-Based Compensation Expense

For the three-month periods ended September 30, 2021 and 2020, we recognized stock-based compensation expense of $959 and $1,052, respectively. For the nine-month periods ended September 30, 2021 and 2020, we recognized stock-based compensation expense of $3,074 and $3,979, respectively.

As of September 30, 2021, we had $4,977 in stock-based compensation expense that has yet to be recognized through our results of operations. We expect this compensation to be recognized over the remainder of 2021 and subsequent years according to the table below, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2021	$	973
2022	2,402
2023	1,339
2024	251
2025	12
Total	$	4,977

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Common Share

EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards and restricted stock unit awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the

proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

The components of basic and diluted earnings per share were as follows for the three-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	(9,593)	$	(9,593)	$	(37,241)	$	(37,241)
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Add dilutive effect of restricted stock unit awards	—		—		—		—
Add dilutive effect of stock options	—		—		—		—
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Earnings (loss) per common share	$	(0.38)	$	(0.38)	$	(1.49)	$	(1.49)
Awards excluded from diluted earnings per share calculation(1)	—		865,966		—		820,124

(1)Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

	Nine Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	22,859	$	22,859	$	(103,815)	$	(103,815)
Weighted-average common shares outstanding	25,095,733		25,095,733		25,023,401		25,023,401
Add dilutive effect of restricted stock unit awards	—		216,527		—		—
Add dilutive effect of stock options	—		115,058		—		—
Weighted-average common shares outstanding	25,095,733		25,427,318		25,023,401		25,023,401
Earnings (loss) per common share	$	0.91	$	0.90	$	(4.15)	$	(4.15)
Awards excluded from diluted earnings per share calculation(1)	—		674,921		—		515,984

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Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

DEBT

Long Term Debt

The Company executed a private placement debt transaction on December 15, 2020 between UF&C, and Federated Mutual and Federated Life.

UF&C sold an aggregate principal amount of $50,000 of notes due 2040 to the Note Purchasers. One note with a principal amount of $35,000 was issued to Federated Mutual and one note with a principal amount of $15,000 was issued to Federated Life subject to the terms of their respective notes.

Interest payments under the surplus notes will be paid quarterly on March 15, June 15, September 15 and December 15 of each year (each such date, an "Interest Payment Date"). The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor’s) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date, as set forth in the table below. For the three- and nine-month

periods ended September 30, 2021, interest expense totaled $797 and $2,391 , respectively. Payment of interest is subject to approval by the Iowa Insurance Division.

A.M. Best Co. Financial Strength Rating	Applicable Interest Rate
A+	5.875%
A	6.375%
A-	6.875%
B++ (or lower)	7.375%

Credit Facilities

On March 31, 2020, UF&C, a wholly owned subsidiary of the Company, entered into a credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent (the "Administrative Agent"), issuing lender, swing-line lender and lender, and the other lenders from time to time party thereto (collectively with Wells Fargo, the "Lenders"), providing for a $50,000 revolving credit facility, which includes a $20,000 letter of credit sub-facility and a $5,000 swing-line loan for working capital and other general corporate purposes. The Credit Agreement is provided by the Lenders on an unsecured basis, and UF&C has the option to increase the Credit Agreement by $100,000 if agreed to by the Lenders providing such incremental facility.

The Credit Agreement includes customary events of default, including default in payments of principals, default in payment of other indebtedness, change of control and voluntary and involuntary insolvency proceedings, the occurrence of which would allow the Lenders to accelerate payment of all amounts outstanding thereunder and terminate any further commitments to lend.

The entry into the Credit Agreement was completed as part of the Company’s regular course of financial planning and was not initiated as a result of market conditions resulting from the COVID-19 pandemic.

There was no outstanding balance on the Credit Agreement at September 30, 2021 and 2020, respectively. For the nine-month periods ended September 30, 2021 and 2020, we did not incur any interest expense related to the credit facility. We were in compliance with all covenants under the Credit Agreement at September 30, 2021.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the three-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of June 30, 2021	67,005		(11,377)		$	55,628
Change in accumulated other comprehensive income before reclassifications	(9,661)		(2,975)		(12,636)
Reclassification adjustments from accumulated other comprehensive income (loss)	(167)		1,254		1,087
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the nine-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of January 1, 2021	83,070		(16,159)		$	66,911
Change in accumulated other comprehensive income before reclassifications	(26,252)		(810)		(27,062)
Reclassification adjustments from accumulated other comprehensive income (loss)	359		3,871		4,230
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

LEASES

The Company has operating leases consisting of office space, vehicle leases, computer equipment, and office equipment. Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of September 30, 2021, we have leases with remaining terms of one year to seven years, some of which may include no options for renewal and others with options to extend the lease terms from six months to five years.

The components of our operating leases were as follows for the three- and nine-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Components of lease expense:
Operating lease expense	$	1,748	$	1,832	$	5,297	$	5,788
Less sublease income	53		53		160		239
Net lease expense	1,695		1,779		5,137		5,549
Cash flows information related to leases:
Operating cash outflow from operating leases	1,714		1,796		5,192		5,265

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Nature of Operations and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The unaudited consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Regulation S-X promulgated by the SEC. Certain financial information that is included in our Annual Report on Form 10-K for the year ended December 31, 2020, including certain financial statement footnote disclosures, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statement categories that are most dependent on management estimates and assumptions include: investments; deferred policy acquisition costs; reinsurance receivables and recoverables; loss settlement expenses; and pension and post-retirement benefit obligations.

Reclassification

Certain prior year amounts have been reclassified to conform to the current year presentation.

Segment Information

Our property and casualty insurance business is reported as one business segment. The property and casualty insurance business profit or loss is consistent with consolidated reporting as disclosed on the Consolidated Statements of Income and Comprehensive Income. We analyze the property and casualty insurance business results based on profitability (i.e., loss ratios), expenses and return on equity. The Company's property and casualty insurance business was determined using a management approach to make decisions on operating matters, including allocating resources, assessing performance, determining which products to market and sell, determining distribution networks with insurance agents and monitoring the regulatory environment. The property and casualty insurance business products have similar economic characteristics and use a similar marketing and distribution strategy with our independent agents. We will continue to evaluate our operations on the basis of both statutory accounting principles prescribed or permitted by our states of domicile and GAAP.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash, money market accounts, cash on deposit and held at Lloyd's and non-negotiable certificates of deposit with original maturities of three months or less.

Deferred Policy Acquisition Costs (DAC)

Certain costs associated with underwriting new business (primarily commissions, premium taxes and variable underwriting and policy issue expenses associated with successful acquisition efforts) are deferred.Property and casualty insurance policy acquisition costs deferred are amortized as premium revenue is recognized. The method followed in computing DAC limits the amount of such deferred costs to their estimated realizable value. This takes into account the premium to be earned, losses and loss settlement expenses expected to be incurred and certain other costs expected to be incurred as the premium is earned.

Goodwill

Goodwill assets arise as a result of business combinations and consist of the excess of the fair value of consideration paid over the tangible assets acquired and liabilities assumed. All of our goodwill assets relate to the acquisition of Mercer Insurance Group, Inc. on March 28, 2011. We evaluate goodwill assets for impairment at least on an annual basis or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount of goodwill assets may exceed their implied fair value. Any impairment is recognized in the period that the impairment is identified. During the third quarter of 2020, we completed a quantitative analysis of our goodwill as a result of the following factors: (i) disruptions in the equity markets, specifically for property and casualty insurance companies, as a result of the COVID-19 pandemic and due to the current year weather related catastrophes; and (ii) the fair value of our stock trading significantly below book value. As a result of the quantitative analysis, we recorded an impairment charge of $15,091 as of September 30, 2020. The impairment charge was determined based on completion of both a discounted cash flow and market value analysis.

Other Intangible Assets

Our other intangible assets, which consist primarily of agency relationships, trade names, state insurance licenses, and software, are being amortized using the straight-line method over periods ranging from two years to 15 years, with the exception of state insurance licenses, which are indefinite-lived and not amortized.

Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss ("NOL") carryovers and carrybacks to offset 100 percent of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has considered the implications of the CARES Act on its tax provision. As of September 30, 2021, there was no income tax benefit as a result of the CARES Act. As of September 30, 2020, there was an income tax benefit of $17,768 as a result of the CARES Act.

Deferred tax assets and liabilities are established based on differences between the financial statement bases of assets and liabilities and the tax bases of those same assets and liabilities, using the currently enacted statutory tax rates. Deferred income tax expense is measured by the year-to-year change in the net deferred tax asset or liability, except for certain changes in deferred tax amounts that affect stockholders' equity and do not impact federal income tax expense.

We reported consolidated federal income tax expense of $1,690 for the nine-month period ended September 30, 2021 compared to an income tax benefit of $52,176 during the same period of 2020. Our effective tax rate for 2021 and 2020 is different than the federal statutory rate of 21 percent, due principally to the net effect of tax-exempt municipal bond interest income. Our effective tax rate for 2020 is also different than the federal statutory rate of 21 percent, due principally to the impact of the provisions of the CARES Act.

The Company performs a quarterly review of its tax positions and makes a determination of whether it is more likely than not that the tax position will be sustained upon examination. If, based on this review, it appears not more likely than not that the positions will be sustained, the Company will calculate any unrecognized tax benefits and, if necessary, calculate and accrue any related interest and penalties. We did not recognize any liability for unrecognized tax benefits at September 30, 2021 or December 31, 2020. In addition, we have not accrued for interest and penalties related to unrecognized tax benefits. However, if interest and penalties would need to be accrued related to unrecognized tax benefits, such amounts would be recognized as a component of federal income tax expense.

For the nine-month periods ended September 30, 2021 and 2020, we made payments for income taxes totaling $5,345 and $125, respectively. We did not receive a tax refund during the nine-month periods ended September 30, 2021 and 2020.

We file a consolidated federal income tax return. We also file income tax returns in various state jurisdictions. We are no longer subject to federal or state income tax examination for years before 2017.

Leases

The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases consists of operating leases which are recorded as a lease obligation liability disclosed in the "Accrued expenses and other liabilities" line on the Consolidated Balance Sheets and as a lease right-of-use asset disclosed in the "Other assets" line on the Consolidated Balance Sheets. The Company's operating leases consist of office space, vehicles, computer equipment and office equipment. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the applied lease. Short-term leases of 12 months or less are recorded on the Consolidated Balance Sheets and lease payments are recognized on the Consolidated Statements of Income and Comprehensive Income.

Variable Interest Entities

The Company and certain related parties are equity investors in one investment which the Company determined is a variable interest entity ("VIE") as a result of participation in the risks and rewards of the VIE based on the objectives and strategies of the VIE. The VIE is a limited liability company that primarily invests in commercial real estate. The Company and certain related parties are not the primary beneficiary largely due to their inability to influence management or direct the activities that most significantly impact the VIE's economic performance. Based on these facts and circumstances, the Company has a variable interest in the VIE, but has not consolidated the VIE's financial results as it is not the primary beneficiary. The Company's investment is reported in other long-term investments in the Consolidated Balance Sheets and accounted for under the equity method of accounting.

Credit Losses

The Company recognizes credit losses for our available-for-sale fixed-maturity portfolio, reinsurance receivables, mortgage loans and premium receivables by setting up allowances which are remeasured each reporting period and recorded in the Consolidated Statements of Income and Comprehensive Income.

For our available-for-sale fixed-maturity portfolio an allowance for credit losses is recorded net of available-for-sale fixed maturities in the Consolidated Balance Sheets and a corresponding credit loss recognized as a realized loss or gain in the Consolidated Statements of Income and Comprehensive Income. The Company determines if an allowance for credit losses is recorded based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as market value vs. amortized cost, investment spreads widening or contracting, rating actions, payment and default history. For more information on credit losses and the allowance for credit losses for available-for-sale fixed-maturity portfolio, see Note 2 "Summary of Investments."

An allowance for mortgage loan losses is established based on historical loss information of the collective pool of the Company's commercial mortgage loan investments which have similar risk characteristics. To calculate the allowance for mortgage loan losses, the Company starts with historical loan experience to predict the future expected losses and then layers on a market-linked adjustment. On a quarterly basis, quantitative credit risk metrics, including for example, cash-flows, rent rolls and financial statements are reviewed for each loan to determine if it is performing in line with its expectations. This allowance is presented as a separate line in the Consolidated Balance Sheets beneath the asset value as well as presented net and recorded through "Net realized investment gains (losses)" in the Consolidated Statements of Income and Comprehensive Income. For more information on credit losses and the allowance for credit losses for our investment in mortgage loans see Note 3 "Fair Value of Financial Instruments."

For reinsurance receivables, the Company's model estimates expected credit loss by multiplying the exposure at default by both the probability of default and loss given default ("LGD"). The LGD is estimated by the rating of the reinsurer, historical relationship with UFG, existence of letters of credit and known regulation the Company may be held accountable for. The ultimate LGD percentage is estimated after considering Moody’s experience with unsecured year 1 bond recovery rates from 1983-2017. The allowance calculated as of September 30, 2021 is recorded through the line "Reinsurance receivables and recoverables" in the Consolidated Balance Sheets and through the line "Other underwriting expenses" in the Consolidated Statements of Income and Other Comprehensive Income. With respect to premiums receivable, the Company utilizes an aging method to estimate credit losses. An allowance for doubtful accounts is based on a periodic evaluation of the aging and collectability of amounts due from agents and policyholders. "Premiums receivable" are presented in the Consolidated Balance Sheets net of an estimated allowance for doubtful accounts and recorded through "Other underwriting expenses" in the Consolidated Statements of Income and Comprehensive Income.

Subsequent Events

In the preparation of the accompanying financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements.

Recently Issued Accounting Standards

Accounting Standards Adopted in 2021

Defined Benefit Plans - Disclosures

In August 2018, the FASB issued new guidance which modifies the disclosure requirements for employers that sponsor defined benefit pension and postretirement plans. The new guidance removes the requirement for disclosing

the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs in the next year and the sensitivity of postretirement health plans to one-percentage-point changes in medical trend rates. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance modifies disclosures, but will not have an impact on the Company's financial position and results of operations.

Income Taxes

In December 2019, the FASB issued new guidance which simplifies the accounting for income taxes by removing certain exceptions to income tax accounting. The amendments also improve consistent application of and simplify GAAP for other areas of income tax accounting. The new guidance clarifies and amends existing guidance, including removing certain requirements that an entity evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, and requiring an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The new guidance is effective for annual periods beginning after December 15, 2020. The Company adopted the new guidance as of January 1, 2021. The new guidance did not have an impact on the Company’s financial position and results of operations.

Fair Value of Financial Instruments

Current accounting guidance on fair value measurements includes the application of a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Our financial instruments that are recorded at fair value are categorized into a three-level hierarchy, which is based upon the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (i.e., Level 1) and the lowest priority to unobservable inputs (i.e., Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the financial instrument.

Financial instruments recorded at fair value are categorized in the fair value hierarchy as follows:

•Level 1: Valuations are based on unadjusted quoted prices in active markets for identical financial instruments that we have the ability to access.

•Level 2: Valuations are based on quoted prices for similar financial instruments, other than quoted prices included in Level 1, in markets that are not active or on inputs that are observable either directly or indirectly for the full term of the financial instrument.

•Level 3: Valuations are based on pricing or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument.

We review our fair value hierarchy categorizations on a quarterly basis at which time the classification of certain financial instruments may change if the input observations have changed. Transfers between levels, if any, are recorded as of the beginning of the reporting period.

To determine the fair value of the majority of our investments, we utilize prices obtained from independent, nationally recognized pricing services. When the pricing services cannot provide a determination of fair value for a specific security, we obtain non-binding price quotes from broker-dealers with whom we have had several years' experience and who have demonstrated knowledge of the subject security.

In order to determine the proper classification in the fair value hierarchy, we obtain and evaluate the vendors' pricing procedures and inputs used to price the security, which include unadjusted quoted market prices for identical securities, such as a New York Stock Exchange closing price, and quoted prices for identical securities in markets that are not active. For fixed maturity securities, an evaluation of interest rates and yield curves observable at commonly quoted intervals, volatility, prepayment speeds, credit risks and default rates may also be performed. We have determined that these processes and inputs result in fair values and classifications consistent with the applicable accounting guidance on fair value measurements.

When possible, we use quoted market prices to determine the fair value of fixed maturities, equity securities, trading securities and short-term investments. When quoted market prices do not exist, we base estimates of fair value on market information obtained from independent pricing services and brokers or on valuation techniques that are both unobservable and significant to the overall fair value measurement of the financial instrument. Such inputs may reflect management's own assumptions about the assumptions a market participant would use in pricing the financial instrument. Our valuation techniques are discussed in more detail throughout this section.

The mortgage loan portfolio consists entirely of commercial mortgage loans. The fair value of our mortgage loans is determined by modeling performed by our third party fund manager based on the stated principal and coupon payments provided for in the loan agreements. These cash flows are then discounted using an appropriate risk-adjusted discount rate to determine the security's fair value.

Our other long-term investments consist primarily of our interests in limited liability partnerships that are recorded on the equity method of accounting. The fair value of the partnerships is obtained from the fund managers, which is based on the fair value of the underlying investments held in the partnerships. In management's opinion, these values represent a reasonable estimate of fair value. We have not adjusted the net asset value provided by the fund managers.

For cash and cash equivalents and accrued investment income, carrying value is a reasonable estimate of fair value due to the short-term nature of these financial instruments.

The Company formed a rabbi trust in 2014 to fund obligations under the United Fire & Casualty Company Supplemental Executive Retirement and Deferral Plan (the "Executive Retirement Plan"). Within the rabbi trust, corporate-owned life insurance ("COLI") policies are utilized as an investment vehicle and source of funding for the Company's Executive Retirement Plan. The COLI policies invest in mutual funds, which are priced daily by independent sources. As of September 30, 2021, the cash surrender value of the COLI policies was $10,067, which is equal to the fair value measured using Level 2 inputs, based on the underlying assets of the COLI policies, and is included in other assets in the Consolidated Balance Sheets.

Our long-term debt is not carried in the Consolidated Balance Sheet at fair value. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for similar financial instruments. The fair value is estimated using a discounted cash flows analysis.

The fair value of securities that are categorized as Level 1 is based on quoted market prices that are readily and regularly available.

We use a market-based approach for valuing all of our Level 2 securities and submit them primarily to a third-party valuation service provider. Any of these securities not valued by this service provider are submitted to another third-party valuation service provider. Both service providers use a market approach to find pricing of similar financial instruments. The market inputs our service providers normally seek to value our securities include the following, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The method and inputs for these securities classified as Level 2 are the same regardless of industry category, credit quality, duration, geographical concentration or economic characteristics. For our mortgage-backed securities, collateralized mortgage obligations and asset-backed securities, our service providers use additional market inputs to value these securities, including the following: new issue data, periodic payment information, monthly payment information, collateral performance and real estate analysis from third parties. Our service providers prioritize inputs based on market conditions, and not all inputs listed are available for use in the valuation process for each security on any given day.

At least annually, we review the methodologies and assumptions used by our valuation service providers and verify that they are reasonable and representative of the fair value of the underlying securities held in the investment portfolio. We validate the prices obtained from independent pricing services and brokers prior to their use for reporting purposes by evaluating their reasonableness on a monthly basis. In addition, on a quarterly basis, we also test all securities in the portfolio and independently corroborate the valuations obtained from our third-party valuation service providers. Quarterly, we also perform deep dive analysis of the pricing method used by our third-party valuation service provider by selecting a random sample of securities by asset class and reviewing methodologies. In our opinion, the pricing obtained at September 30, 2021 and December 31, 2020 was reasonable.

For the three- and nine-month periods ended September 30, 2021, the change in our available-for-sale securities categorized as Level 1 and Level 2 is the result of investment purchases that were made using funds held in our money market accounts, disposals and the change in unrealized gains on both fixed maturities and equity securities.

Securities categorized as Level 3 include holdings in certain private placement fixed maturity and equity securities for which an active market does not currently exist. The fair value of our Level 3 private placement securities is determined by management relying on pricing received from our independent pricing services and brokers consistent with the process to estimate fair value for Level 2 securities. However, securities are categorized as Level 3 if these quotes cannot be corroborated by other market observable data due to the unobservable nature of the brokers’ valuation processes.

Earnings Per Common Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share gives effect to all dilutive common shares outstanding during the reporting period. The dilutive shares we consider in our diluted earnings per share calculation relate to our outstanding stock options, restricted stock awards and restricted stock unit awards.

We determine the dilutive effect of our outstanding stock options using the "treasury stock" method. Under this method, we assume the exercise of all of the outstanding stock options whose exercise price is less than the weighted-average market value of our common stock during the reporting period. This method also assumes that the

proceeds from the hypothetical stock option exercises are used to repurchase shares of our common stock at the weighted-average market value of the stock during the reporting period. The net of the assumed stock options exercised and assumed common shares repurchased represents the number of dilutive common shares, which we add to the denominator of the earnings per share calculation.

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Nature of Operations and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of Deferred Acquisition Costs

The following table is a summary of the components of DAC, including the related amortization recognized for the nine-month period ended September 30, 2021.

	Total
Recorded asset at beginning of period	$	87,094
Underwriting costs deferred	158,499
Amortization of deferred policy acquisition costs	(150,533)
Recorded asset at September 30, 2021	$	95,060

Schedule of Rollforward of Credit Loss Allowance for Reinsurance Receivable

Rollforward of credit loss allowance for reinsurance receivable:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	190
Current-period provision for expected credit losses	—
Recoveries of amounts previously written off, if any	(92)
Ending balance of the allowance for reinsurance receivable, September 30, 2021	$	98

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Summary of Investments (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Schedule of Fair Value of Investments

A reconciliation of the amortized cost to fair value of investments in available-for-sale fixed maturity and short-term investments, presented on a consolidated basis, as of September 30, 2021 and December 31, 2020, is provided below:

September 30, 2021
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,543	$	283	$	448	$	53,378	$	—	$	53,378
U.S. government agency	55,142		2,646		644		57,144		—		57,144
States, municipalities and political subdivisions
General obligations:
Midwest	68,996		2,714		—		71,710		—		71,710
Northeast	26,562		811		—		27,373		—		27,373
South	92,091		4,196		—		96,287		—		96,287
West	95,022		5,549		—		100,571		—		100,571
Special revenue:
Midwest	118,800		7,473		—		126,273		—		126,273
Northeast	55,940		4,072		—		60,012		—		60,012
South	201,920		14,723		87		216,556		—		216,556
West	127,709		8,119		—		135,828		—		135,828
Foreign bonds	30,331		1,008		175		31,164		—		31,164
Public utilities	95,948		5,138		281		100,805		—		100,805
Corporate bonds
Energy	28,060		2,263		65		30,258		—		30,258
Industrials	52,097		2,783		137		54,743		—		54,743
Consumer goods and services	60,554		2,477		757		62,274		—		62,274
Health care	27,385		639		531		27,493		—		27,493
Technology, media and telecommunications	53,421		3,707		740		56,388		—		56,388
Financial services	90,400		5,336		308		95,428		—		95,428
Mortgage-backed securities	22,251		249		127		22,373		—		22,373
Collateralized mortgage obligations
Government national mortgage association	115,576		3,038		1,358		117,256		—		117,256
Federal home loan mortgage corporation	127,461		1,089		1,588		126,962		—		126,962
Federal national mortgage association	55,697		1,252		532		56,417		—		56,417
Asset-backed securities	322		586		—		908		—		908
Total Available-for-Sale Fixed Maturities	$	1,655,228	$	80,151	$	7,778	$	1,727,601	$	—	$	1,727,601
Short-Term Investments	$	175	$	—	—		$	175	$	—	$	175
Total Available-for-Sale Investments	$	1,655,403	$	80,151	$	7,778	$	1,727,776	$	—	$	1,727,776

December 31, 2020
Type of Investment	Cost or Amortized Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Fair Value		Allowance for Credit Losses		Carrying Value
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,481	$	482	$	25	$	149,938	$	—	$	149,938
U.S. government agency	60,502		4,016		—		64,518		—		64,518
States, municipalities and political subdivisions
General obligations:
Midwest	77,933		4,047		—		81,980		—		81,980
Northeast	29,071		1,379		—		30,450		—		30,450
South	104,522		5,448		—		109,970		—		109,970
West	102,590		7,431		—		110,021		—		110,021
Special revenue:
Midwest	115,956		9,142		—		125,098		—		125,098
Northeast	56,317		4,759		—		61,076		—		61,076
South	208,739		17,967		—		226,706		—		226,706
West	129,417		9,982		—		139,399		—		139,399
Foreign bonds	27,799		1,805		2		29,602		—		29,602
Public utilities	76,114		7,388		—		83,502		—		83,502
Corporate bonds
Energy	22,441		2,895		—		25,336		—		25,336
Industrials	39,513		3,744		—		43,257		—		43,257
Consumer goods and services	46,521		4,046		—		50,567		—		50,567
Health care	6,678		898		—		7,576		—		7,576
Technology, media and telecommunications	37,270		4,381		15		41,636		—		41,636
Financial services	93,736		7,564		269		101,031		5		101,026
Mortgage-backed securities	20,305		326		54		20,577		—		20,577
Collateralized mortgage obligations
Government national mortgage association	81,758		4,439		45		86,152		—		86,152
Federal home loan mortgage corporation	151,362		2,239		758		152,843		—		152,843
Federal national mortgage association	81,952		2,013		683		83,282		—		83,282
Asset-backed securities	314		612		—		926		—		926
Total Available-for-Sale Fixed Maturities	$	1,720,291	$	107,003	$	1,851	$	1,825,443	$	5	$	1,825,438

Schedule of Maturities

The amortized cost and fair value of available-for-sale fixed maturity securities at September 30, 2021, by contractual maturity, are shown in the following tables. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Asset-backed securities, mortgage-backed securities and collateralized mortgage obligations may be subject to prepayment risk and are therefore not categorized by contractual maturity.

Maturities
	Available-For-Sale
September 30, 2021	Amortized Cost		Fair Value
Due in one year or less	$	55,041	$	55,699
Due after one year through five years	469,238		492,892
Due after five years through 10 years	353,810		373,415
Due after 10 years	455,832		481,679
Asset-backed securities	322		908
Mortgage-backed securities	22,251		22,373
Collateralized mortgage obligations	298,734		300,635
	$	1,655,228	$	1,727,601

Summary of Net Realized Investment Gains and Losses

A summary of the components of net realized investment gains (losses) is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net realized investment gains (losses):
Fixed maturities:
Available-for-sale	$	294	$	52	$	(207)	$	52
Allowance for credit losses	170		2		5		(8)
Trading Securities	—		382		—		(780)
Equity securities
Change in the fair value	(1,314)		21,962		20,513		(38,876)
Sales	(1,168)		(7,186)		8,183		(22,772)
Mortgage loans allowance for credit losses	5		—		5		(4)
Real estate	(256)		—		(256)		(28)
Total net realized investment gains (losses)	$	(2,269)	$	15,212	$	28,243	$	(62,416)

Schedule of Proceeds and Gross Realized Gains and Losses

The proceeds and gross realized gains on the sale of available-for-sale fixed maturity securities are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Proceeds from sales	$	53,973	$	—	$	170,637	$	16,907
Gross realized gains	690		—		843		198
Gross realized losses	396		—		1,051		495

Schedule of Unrealized Investment Appreciation

A summary of the changes in net unrealized investment appreciation during the reporting period is as follows:

	Nine Months Ended September 30,
	2021		2020
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$	(32,779)	$	44,574
Income tax effect	6,886		(9,361)
Total change in net unrealized investment appreciation, net of tax	$	(25,893)	$	35,213

Schedule of Rollforward of Allowance for Credit Losses for Available-for-Sale Fixed Maturity Securities

The following table contains a rollforward of the allowance for credit losses for available-for-sale fixed maturity securities at September 30, 2021:

Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	5
Additions to the allowance for credit losses for which credit losses were not previously recorded	—
Recoveries of amounts previously written off	(5)
Ending balance, September 30, 2021	$	—

Schedule of Investments in Unrealized Loss Position

The following tables summarize our fixed maturity securities that were in an unrealized loss position reported on a consolidated basis at September 30, 2021 and December 31, 2020. The securities are presented by the length of time they have been continuously in an unrealized loss position. Non-credit related unrealized losses are recognized as a component of other comprehensive income and represent other market movements that are not credit related, for example interest rate changes. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature.

September 30, 2021	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	7	$	42,264	$	437	1	$	3,695	$	11	$	45,959	$	448
U.S. government agency	3	14,998		644		—	—		—		14,998		644
States, municipalities and political subdivisions
Special revenue
Special revenue - south	1	1,186		87		—	—		—		1,186		87
Foreign bonds	4	9,719		175		—	—		—		9,719		175
Public utilities	7	19,341		281		—	—		—		19,341		281
Corporate bonds
Energy	1	2,942		65		—	—		—		2,942		65
Industrials	2	5,915		137		—	—		—		5,915		137
Consumer goods and services	7	16,348		757		—	—		—		16,348		757
Health care	3	20,517		531		—	—		—		20,517		531
Technology, media and telecommunications	5	11,264		740		—	—		—		11,264		740
Financial services	3	6,457		52		1	4,744		256		11,201		308
Mortgage-backed securities	7	15,181		127		—	—		—		15,181		127
Collateralized mortgage obligations
Federal home loan mortgage corporation	21	71,358		1,191		4	18,604		397		89,962		1,588
Federal national mortgage association	8	27,410		438		4	4,559		94		31,969		532
Government national mortgage association	9	48,566		1,358		—	—		—		48,566		1,358
Total Available-for-Sale Fixed Maturities	88	$	313,466	$	7,020	10	$	31,602	$	758	$	345,068	$	7,778

December 31, 2020	Less than 12 months					12 months or longer					Total
Type of Investment	Number of Issues	Fair Value		Gross Unrealized Depreciation		Number of Issues	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	5	$	86,371	$	25	—	$	—	$	—	$	86,371	$	25
Foreign bonds	1	2,000		2		—	—		—		2,000		2
Technology, media and telecommunications	1	2,020		15		—	—		—		2,020		15
Financial services	1	2,995		5		1	3,000		7		5,995		12
Mortgage-backed securities	2	8,099		53		5	118		1		8,217		54
Collateralized mortgage obligations
Federal home loan mortgage corporation	24	97,691		758		1	26		—		97,717		758
Federal national mortgage association	10	44,677		683		—	—		—		44,677		683
Government national mortgage association	2	12,394		45		1	24		—		12,418		45
Total Available-for-Sale Fixed Maturities	46	$	256,247	$	1,586	8	$	3,168	$	8	$	259,415	$	1,594

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Summary of Carrying Value and Estimated Fair Value of Financial Instruments

A summary of the carrying value and estimated fair value of our financial instruments at September 30, 2021 and December 31, 2020 is as follows:

	September 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets
Investments
Fixed maturities:
Available-for-sale securities	$	1,727,601	$	1,727,601	$	1,825,443	$	1,825,438
Equity securities	200,876		200,876		206,685		206,685
Mortgage loans	49,385		47,254		48,932		47,614
Other long-term investments	80,162		80,162		69,305		69,305
Short-term investments	175		175		175		175
Cash and cash equivalents	132,772		132,772		87,948		87,948
Corporate-owned life insurance	10,067		10,067		8,557		8,557
Liabilities
Long Term Debt	47,724		50,000		50,000		50,000

Summary of Financial Instruments Measured at Fair Value on Recurring Basis

The following tables present the categorization for our financial instruments measured at fair value on a recurring basis. The table includes financial instruments at September 30, 2021 and December 31, 2020:

September 30, 2021			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	53,378	$	—	$	53,378	$	—
U.S. government agency	57,144		—		57,144		—
States, municipalities and political subdivisions
General obligations
Midwest	71,710		—		71,710		—
Northeast	27,373		—		27,373		—
South	96,287		—		96,287		—
West	100,571		—		100,571		—
Special revenue
Midwest	126,273		—		126,273		—
Northeast	60,012		—		60,012		—
South	216,556		—		216,556		—
West	135,828		—		135,828		—
Foreign bonds	31,164		—		31,164		—
Public utilities	100,805		—		100,805		—
Corporate bonds
Energy	30,258		—		30,258		—
Industrials	54,743		—		54,743		—
Consumer goods and services	62,274		—		62,274		—
Health care	27,493		—		27,493		—
Technology, media and telecommunications	56,388		—		56,388		—
Financial services	95,428		—		95,278		150
Mortgage-backed securities	22,373		—		22,373		—
Collateralized mortgage obligations
Government national mortgage association	117,256		—		117,256		—
Federal home loan mortgage corporation	126,962		—		126,962		—
Federal national mortgage association	56,417		—		56,417		—
Asset-backed securities	908		—		—		908
Total Available-for-Sale Fixed Maturities	$	1,727,601	$	—	$	1,726,543	$	1,058
EQUITY SECURITIES
Common stocks
Public utilities	$	16,550	$	16,550	$	—	$	—
Energy	14,296		14,296		—		—
Industrials	36,464		36,464		—		—
Consumer goods and services	48,311		48,311		—		—
Health care	12,584		12,584		—		—
Technology, media and telecommunications	28,651		28,651		—		—

Financial services	43,425		43,425		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	200,876	$	200,281	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	20,555	$	20,555	$	—	$	—
Corporate-Owned Life Insurance	$	10,067	$	—	$	10,067	$	—
Total Assets Measured at Fair Value	$	1,959,274	$	221,011	$	1,736,610	$	1,653

December 31, 2020			Fair Value Measurements
Description	Total		Level 1		Level 2		Level 3
AVAILABLE-FOR-SALE
Fixed maturities:
Bonds
U.S. Treasury	$	149,938	$	—	$	149,938	$	—
U.S. government agency	64,518		—		64,518		—
States, municipalities and political subdivisions
General obligations
Midwest	81,980		—		81,980		—
Northeast	30,450		—		30,450		—
South	109,970		—		109,970		—
West	110,021		—		110,021		—
Special revenue
Midwest	125,098		—		125,098		—
Northeast	61,076		—		61,076		—
South	226,706		—		226,706		—
West	139,399		—		139,399		—
Foreign bonds	29,602		—		29,602		—
Public utilities	83,502		—		83,502		—
Corporate bonds
Energy	25,336		—		25,336		—
Industrials	43,257		—		43,257		—
Consumer goods and services	50,567		—		50,567		—
Health care	7,576		—		7,576		—
Technology, media and telecommunications	41,636		—		41,636		—
Financial services	101,031		—		100,781		250
Mortgage-backed securities	20,577		—		20,577		—
Collateralized mortgage obligations
Government national mortgage association	86,152		—		86,152		—
Federal home loan mortgage corporation	152,843		—		152,843		—
Federal national mortgage association	83,282		—		83,282		—
Asset-backed securities	926		—		—		926
Total Available-for-Sale Fixed Maturities	$	1,825,443	$	—	$	1,824,267	$	1,176
EQUITY SECURITIES

Common stocks
Public utilities	$	16,320	$	16,320	$	—	$	—
Energy	9,918		9,918		—		—
Industrials	36,556		36,556		—		—
Consumer goods and services	32,061		32,061		—		—
Health care	24,549		24,549		—		—
Technology, media and telecommunications	17,109		17,109		—		—
Financial services	69,577		69,577		—		—
Nonredeemable preferred stocks	595		—		—		595
Total Equity Securities	$	206,685	$	206,090	$	—	$	595
Short-Term Investments	$	175	$	175	$	—	$	—
Money Market Accounts	$	24,790	$	24,790	$	—	$	—
Corporate-Owned Life Insurance	$	8,557	$	—	$	8,557	$	—
Total Assets Measured at Fair Value	$	2,065,650	$	231,055	$	1,832,824	$	1,771

Summary of Quantitative Information About Level 3 Fair Value Measurements

The following table provides a quantitative information about our Level 3 securities at September 30, 2021:

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at		Valuation Technique(s)	Unobservable inputs	Range of weighted average significant unobservable inputs
	September 30, 2021
Corporate bonds - financial services	$	150	Fair value equals cost	NA	NA
Fixed Maturities asset-backed securities	908		Discounted cash flow	Probability of default	4% - 6%
Nonredeemable preferred stocks	595		Discounted cash flow	Multiplier	3x - 4x

Changes in Fair Value of Level 3 Securities

The following table provides a summary of the changes in fair value of our Level 3 securities for the three-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at July 1, 2021	$	150	$	891	$	595	$	1,636
Net unrealized gains (losses)(1)	—		17		—		17
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

The following table provides a summary of the changes in fair value of our Level 3 securities for the nine-month period ended September 30, 2021:

	Corporate bonds		Asset-backed securities		Equities		Total
Balance at January 1, 2021	$	250	$	926	$	595	$	1,771
Net unrealized gains (losses)(1)	—		(18)		—		(18)
Transfers out	(100)		—		—		(100)
Balance at September 30, 2021	$	150	$	908	$	595	$	1,653

(1) Net unrealized gains (losses) are recorded as a component of comprehensive income.

Summary of Carrying Value of Commercial Mortgage Loans by Loan-to-Value Ratio

The following tables present the carrying value of our commercial mortgage loans and additional information at September 30, 2021 and December 31, 2020:

Commercial Mortgage Loans
	September 30, 2021		December 31, 2020
Loan-to-value	Carrying Value		Carrying Value
Less than 65%	$	30,035	$	30,361
65%-75%	17,290		17,329
Total amortized cost	$	47,325	$	47,690
Allowance for mortgage loan losses	(71)		(76)
Mortgage loans, net	$	47,254	$	47,614

Mortgage Loans by Region
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
East North Central	$	3,245	6.9	%	$	3,245	6.8	%
Southern Atlantic	9,622		20.3		9,752		20.5
East South Central	8,071		17.1		8,197		17.2
New England	6,588		13.9		6,588		13.8
Middle Atlantic	14,826		31.3		14,936		31.2
Mountain	2,227		4.7		2,227		4.7
West North Central	2,746		5.8		2,745		5.8
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Mortgage Loans by Property Type
	September 30, 2021				December 31, 2020
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Commercial
Multifamily	$	16,999	35.9	%	$	17,038	35.7	%
Office	11,645		24.6		11,861		24.9
Industrial	10,124		21.4		10,124		21.2
Retail	2,227		4.7		2,227		4.7
Mixed use/Other	6,330		13.4		6,440		13.5
Total mortgage loans at amortized cost	$	47,325	100.0	%	$	47,690	100.0	%

Summary of Amortized Cost Basis by Year of Origination and Credit Quality Indicator

Amortized Cost Basis by Year of Origination and Credit Quality Indicator
	2021		2020		2019		2018		Total
Commercial mortgage loans:
Risk Rating:
1-2 internal grade	$	—	$	5,495	$	8,356	$	18,390	$	32,241
3-4 internal grade	—		—		8,496		6,588		15,084
5 internal grade	—		—		—		—		—
6 internal grade	—		—		—		—		—
7 internal grade	—		—		—		—		—
Total commercial mortgage loans	$	—	$	5,495	$	16,852	$	24,978	$	47,325
Current-period write-offs	—		—		—		—		—
Current-period recoveries	—		—		—		—		—
Current-period net write-offs	$	—	$	—	$	—	$	—	$	—

Summary of Rollforward of Allowance for Mortgage Loan Losses

As of September 30, 2021, the Company had an allowance for mortgage loan losses of $71, summarized in the following rollforward:

Rollforward of allowance for mortgage loan losses:
	As of
	September 30, 2021
Beginning balance, January 1, 2021	$	76
Current-period provision for expected credit losses	(5)
Ending balance of the allowance for mortgage loan losses, September 30, 2021	$	71

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Reserves for Losses and Loss Settlement Expenses (Tables)

9 Months Ended

Sep. 30, 2021

Insurance Loss Reserves [Abstract]

Summary of Changes in Property and Casualty Losses and Loss Settlement Expense Reserves

The following table provides an analysis of changes in our property and casualty losses and loss settlement expense reserves at September 30, 2021 and December 31, 2020 (net of reinsurance amounts):

	September 30, 2021		December 31, 2020
Gross liability for losses and loss settlement expenses at beginning of year	$	1,578,131	$	1,421,754
Ceded losses and loss settlement expenses	(131,843)		(68,536)
Net liability for losses and loss settlement expenses at beginning of year	$	1,446,288	$	1,353,218
Losses and loss settlement expenses incurred for claims occurring during
Current year	$	560,080	$	887,119
Prior years	(26,099)		(17,652)
Total incurred	$	533,981	$	869,467
Losses and loss settlement expense payments for claims occurring during
Current year	$	204,056	$	354,635
Prior years	318,573		421,762
Total paid	$	522,629	$	776,397
Net liability for losses and loss settlement expenses at end of year	$	1,457,641	$	1,446,288
Ceded loss and loss settlement expenses	110,009		131,843
Gross liability for losses and loss settlement expenses at end of period	$	1,567,650	$	1,578,131

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

The components of the net periodic benefit cost for our pension and postretirement benefit plans are as follows:

	Pension Plan				Postretirement Benefit Plan
Three Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	3,020	$	2,707	$	—	$	432
Interest cost	1,728		2,066		1		253
Expected return on plan assets	(4,202)		(3,385)		—		—
Amortization of prior service credit	(809)		—		(3,765)		(2,021)
Amortization of net loss	999		979		705		94
Special event plan closure	—		—		—		—
Net periodic benefit cost	$	736	$	2,367	$	(3,059)	$	(1,242)

	Pension Plan				Postretirement Benefit Plan
Nine Months Ended September 30,	2021		2020		2021		2020
Net periodic benefit cost
Service cost	$	9,060	$	8,122	$	148	$	1,296
Interest cost	5,184		6,199		71		760
Expected return on plan assets	(12,606)		(10,154)		—		—
Amortization of prior service credit	(2,427)		—		(10,725)		(6,063)
Amortization of net loss	2,997		2,936		1,902		282
Special event plan closure	—		—		(20,177)		—
Net periodic benefit cost	$	2,208	$	7,103	$	(28,781)	$	(3,725)

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Activity in Stock Award Plans

The activity in the Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	700,680	1,900,000
Additional shares authorized	650,000	2,150,000
Number of awards granted	(161,857)	(3,450,756)
Number of awards forfeited or expired	56,750	646,329
Ending balance	1,245,573	1,245,573
Number of option awards exercised	7,884	1,481,973
Number of unrestricted stock awards granted	—	10,090
Number of restricted stock awards vested	52,302	216,680

The activity in the Director Stock Plan is displayed in the following table:

Authorized Shares Available for Future Award Grants	Nine Months Ended September 30, 2021	From Inception to September 30, 2021
Beginning balance	160,135	300,000
Additional authorization	—	150,000
Number of awards granted	(18,510)	(332,378)
Number of awards forfeited or expired	2,727	26,730
Ending balance	144,352	144,352
Number of option awards exercised	8,181	142,001
Number of restricted stock awards vested	—	98,491

Remaining Stock-Based Compensation Expense

We expect this compensation to be recognized over the remainder of 2021 and subsequent years according to the table below, except with respect to awards that are accelerated by the Board of Directors, in which case we will recognize any remaining compensation expense in the period in which the awards are accelerated.

2021	$	973
2022	2,402
2023	1,339
2024	251
2025	12
Total	$	4,977

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Components of Basic and Diluted Earnings Per Share

The components of basic and diluted earnings per share were as follows for the three-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	(9,593)	$	(9,593)	$	(37,241)	$	(37,241)
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Add dilutive effect of restricted stock unit awards	—		—		—		—
Add dilutive effect of stock options	—		—		—		—
Weighted-average common shares outstanding	25,092,167		25,092,167		25,031,234		25,031,234
Earnings (loss) per common share	$	(0.38)	$	(0.38)	$	(1.49)	$	(1.49)
Awards excluded from diluted earnings per share calculation(1)	—		865,966		—		820,124

(1)Outstanding awards that are not "in-the-money" are excluded from the diluted earnings per share calculation because the effect of including them would have been anti-dilutive.

	Nine Months Ended September 30,
(In Thousands, Except Share Data)	2021				2020
	Basic		Diluted		Basic		Diluted
Net income (loss)	$	22,859	$	22,859	$	(103,815)	$	(103,815)
Weighted-average common shares outstanding	25,095,733		25,095,733		25,023,401		25,023,401
Add dilutive effect of restricted stock unit awards	—		216,527		—		—
Add dilutive effect of stock options	—		115,058		—		—
Weighted-average common shares outstanding	25,095,733		25,427,318		25,023,401		25,023,401
Earnings (loss) per common share	$	0.91	$	0.90	$	(4.15)	$	(4.15)
Awards excluded from diluted earnings per share calculation(1)	—		674,921		—		515,984

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Debt (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Interest Payments

The interest rate will equal the rate that corresponds to the A.M. Best Co. (or its successor’s) financial strength rating for members of the United Fire & Casualty Pooled Group as of the applicable Interest Payment Date, as set forth in the table below. For the three- and nine-month

periods ended September 30, 2021, interest expense totaled $797 and $2,391 , respectively. Payment of interest is subject to approval by the Iowa Insurance Division.

A.M. Best Co. Financial Strength Rating	Applicable Interest Rate
A+	5.875%
A	6.375%
A-	6.875%
B++ (or lower)	7.375%

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the three-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of June 30, 2021	67,005		(11,377)		$	55,628
Change in accumulated other comprehensive income before reclassifications	(9,661)		(2,975)		(12,636)
Reclassification adjustments from accumulated other comprehensive income (loss)	(167)		1,254		1,087
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

The following table shows the changes in the components of our accumulated other comprehensive income (loss), net of tax, for the nine-month period ended September 30, 2021:

			Liability for
	Net unrealized		underfunded
	appreciation		employee
	on investments		benefit costs(1)		Total
Balance as of January 1, 2021	83,070		(16,159)		$	66,911
Change in accumulated other comprehensive income before reclassifications	(26,252)		(810)		(27,062)
Reclassification adjustments from accumulated other comprehensive income (loss)	359		3,871		4,230
Balance as of September 30, 2021	$	57,177	$	(13,098)	$	44,079

(1) The preparation of financial statements in conformity with GAAP requires us to make various estimates and assumptions that affect the reporting of net periodic benefit cost, plan assets and plan obligations for each plan at the date of the financial statements. Actual results could differ from these estimates. One significant estimate relates to the calculation of the benefit obligation for each plan. We annually establish the discount rate, which is an estimate of the interest rate at which these benefits could be effectively settled, that is used to determine the present value of the respective plan's benefit obligations as of December 31.

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Components of Operating Leases

The components of our operating leases were as follows for the three- and nine-month periods ended September 30, 2021 and 2020:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Components of lease expense:
Operating lease expense	$	1,748	$	1,832	$	5,297	$	5,788
Less sublease income	53		53		160		239
Net lease expense	1,695		1,779		5,137		5,549
Cash flows information related to leases:
Operating cash outflow from operating leases	1,714		1,796		5,192		5,265

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Nature of Operations and Basis of Presentation - Segment Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) segment state
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of states in which we are licensed as insurer | state	50
Number of reportable segments | segment	1
Cash on deposit with Lloyd's of London | $	$ 21,331

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Nature of Operations and Basis of Presentation - Deferred Policy Acquisition Costs (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Recorded asset at beginning of period	$ 87,094
Underwriting costs deferred	158,499
Amortization of deferred policy acquisition costs	(150,533)
Recorded asset at ending of period	$ 95,060

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Nature of Operations and Basis of Presentation - Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Goodwill impairment	$ 0	$ 15,091	$ 0	$ 15,091
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Useful life			2 years
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Useful life			15 years

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Nature of Operations and Basis of Presentation - Long Term Debt (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 15, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Interest Expense	$ 797,000	$ 0	$ 2,391,000	$ 0
Surplus Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal amount					$ 50,000,000
Surplus Notes | Federated Mutual
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal amount					35,000,000
Surplus Notes | Federated Life
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal amount					$ 15,000,000

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Nature of Operations and Basis of Presentation - Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Income tax benefit, CARES Act			$ 0	$ 17,768,000
Federal income tax benefit	$ 4,834,000	$ 17,987,000	(1,690,000)	52,176,000
Liability for unrecognized tax benefits	$ 0		0		$ 0
Payment for income taxes			5,345,000	125,000
Federal tax refund received			$ 0	$ 0

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Nature of Operations and Basis of Presentation - Variable Interest Entities (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) variable_interest_entity	Dec. 31, 2020 USD ($)
Variable Interest Entity [Line Items]
Number of variable interest entities | variable_interest_entity	1
Fair value of VIE	$ 3,010,654	$ 3,069,678
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Fair value of VIE	$ 3,030

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Nature of Operations and Basis of Presentation - Credit Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Credit loss allowance for reinsurance receivables	$ 98	$ 190

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Nature of Operations and Basis of Presentation - Rollforward of Credit Loss Allowance for Reinsurance Receivable (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Reinsurance Recoverable, Allowance for Credit Loss [Roll Forward]
Beginning balance, January 1, 2021	$ 190
Current-period provision for expected credit losses	0
Recoveries of amounts previously written off, if any	(92)
Ending balance of the allowance for reinsurance receivable, September 30, 2021	$ 98

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Summary of Investments - Fair Value of Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fixed maturities:
Carrying Value	$ 1,727,601	$ 1,825,438
Fixed maturities
Fixed maturities:
Cost or Amortized Cost	1,655,228	1,720,291
Gross Unrealized Appreciation	80,151	107,003
Gross Unrealized Depreciation	7,778	1,851
Fair Value	1,727,601	1,825,443
Allowance for Credit Losses	0	5
Carrying Value	1,727,601	1,825,438
Short-Term Investments
Fixed maturities:
Cost or Amortized Cost	175	175
Gross Unrealized Appreciation	0
Gross Unrealized Depreciation	0
Fair Value	175
Allowance for Credit Losses	0
Carrying Value	175
Total Available-for-Sale Investments
Fixed maturities:
Cost or Amortized Cost	1,655,403
Gross Unrealized Appreciation	80,151
Gross Unrealized Depreciation	7,778
Fair Value	1,727,776
Allowance for Credit Losses	0
Carrying Value	1,727,776
U.S. Treasury
Fixed maturities:
Cost or Amortized Cost	53,543	149,481
Gross Unrealized Appreciation	283	482
Gross Unrealized Depreciation	448	25
Fair Value	53,378	149,938
Allowance for Credit Losses	0	0
Carrying Value	53,378	149,938
U.S. government agency
Fixed maturities:
Cost or Amortized Cost	55,142	60,502
Gross Unrealized Appreciation	2,646	4,016
Gross Unrealized Depreciation	644	0
Fair Value	57,144	64,518
Allowance for Credit Losses	0	0
Carrying Value	57,144	64,518
States, municipalities and political subdivisions | General obligations | Midwest
Fixed maturities:
Cost or Amortized Cost	68,996	77,933
Gross Unrealized Appreciation	2,714	4,047
Gross Unrealized Depreciation	0	0
Fair Value	71,710	81,980
Allowance for Credit Losses	0	0
Carrying Value	71,710	81,980
States, municipalities and political subdivisions | General obligations | Northeast
Fixed maturities:
Cost or Amortized Cost	26,562	29,071
Gross Unrealized Appreciation	811	1,379
Gross Unrealized Depreciation	0	0
Fair Value	27,373	30,450
Allowance for Credit Losses	0	0
Carrying Value	27,373	30,450
States, municipalities and political subdivisions | General obligations | South
Fixed maturities:
Cost or Amortized Cost	92,091	104,522
Gross Unrealized Appreciation	4,196	5,448
Gross Unrealized Depreciation	0	0
Fair Value	96,287	109,970
Allowance for Credit Losses	0	0
Carrying Value	96,287	109,970
States, municipalities and political subdivisions | General obligations | West
Fixed maturities:
Cost or Amortized Cost	95,022	102,590
Gross Unrealized Appreciation	5,549	7,431
Gross Unrealized Depreciation	0	0
Fair Value	100,571	110,021
Allowance for Credit Losses	0	0
Carrying Value	100,571	110,021
States, municipalities and political subdivisions | Special revenue | Midwest
Fixed maturities:
Cost or Amortized Cost	118,800	115,956
Gross Unrealized Appreciation	7,473	9,142
Gross Unrealized Depreciation	0	0
Fair Value	126,273	125,098
Allowance for Credit Losses	0	0
Carrying Value	126,273	125,098
States, municipalities and political subdivisions | Special revenue | Northeast
Fixed maturities:
Cost or Amortized Cost	55,940	56,317
Gross Unrealized Appreciation	4,072	4,759
Gross Unrealized Depreciation	0	0
Fair Value	60,012	61,076
Allowance for Credit Losses	0	0
Carrying Value	60,012	61,076
States, municipalities and political subdivisions | Special revenue | South
Fixed maturities:
Cost or Amortized Cost	201,920	208,739
Gross Unrealized Appreciation	14,723	17,967
Gross Unrealized Depreciation	87	0
Fair Value	216,556	226,706
Allowance for Credit Losses	0	0
Carrying Value	216,556	226,706
States, municipalities and political subdivisions | Special revenue | West
Fixed maturities:
Cost or Amortized Cost	127,709	129,417
Gross Unrealized Appreciation	8,119	9,982
Gross Unrealized Depreciation	0	0
Fair Value	135,828	139,399
Allowance for Credit Losses	0	0
Carrying Value	135,828	139,399
Foreign bonds
Fixed maturities:
Cost or Amortized Cost	30,331	27,799
Gross Unrealized Appreciation	1,008	1,805
Gross Unrealized Depreciation	175	2
Fair Value	31,164	29,602
Allowance for Credit Losses	0	0
Carrying Value	31,164	29,602
Public utilities
Fixed maturities:
Cost or Amortized Cost	95,948	76,114
Gross Unrealized Appreciation	5,138	7,388
Gross Unrealized Depreciation	281	0
Fair Value	100,805	83,502
Allowance for Credit Losses	0	0
Carrying Value	100,805	83,502
Corporate bonds | Energy
Fixed maturities:
Cost or Amortized Cost	28,060	22,441
Gross Unrealized Appreciation	2,263	2,895
Gross Unrealized Depreciation	65	0
Fair Value	30,258	25,336
Allowance for Credit Losses	0	0
Carrying Value	30,258	25,336
Corporate bonds | Industrials
Fixed maturities:
Cost or Amortized Cost	52,097	39,513
Gross Unrealized Appreciation	2,783	3,744
Gross Unrealized Depreciation	137	0
Fair Value	54,743	43,257
Allowance for Credit Losses	0	0
Carrying Value	54,743	43,257
Corporate bonds | Consumer goods and services
Fixed maturities:
Cost or Amortized Cost	60,554	46,521
Gross Unrealized Appreciation	2,477	4,046
Gross Unrealized Depreciation	757	0
Fair Value	62,274	50,567
Allowance for Credit Losses	0	0
Carrying Value	62,274	50,567
Corporate bonds | Health care
Fixed maturities:
Cost or Amortized Cost	27,385	6,678
Gross Unrealized Appreciation	639	898
Gross Unrealized Depreciation	531	0
Fair Value	27,493	7,576
Allowance for Credit Losses	0	0
Carrying Value	27,493	7,576
Corporate bonds | Technology, media and telecommunications
Fixed maturities:
Cost or Amortized Cost	53,421	37,270
Gross Unrealized Appreciation	3,707	4,381
Gross Unrealized Depreciation	740	15
Fair Value	56,388	41,636
Allowance for Credit Losses	0	0
Carrying Value	56,388	41,636
Corporate bonds | Financial services
Fixed maturities:
Cost or Amortized Cost	90,400	93,736
Gross Unrealized Appreciation	5,336	7,564
Gross Unrealized Depreciation	308	269
Fair Value	95,428	101,031
Allowance for Credit Losses	0	5
Carrying Value	95,428	101,026
Mortgage-backed securities
Fixed maturities:
Cost or Amortized Cost	22,251	20,305
Gross Unrealized Appreciation	249	326
Gross Unrealized Depreciation	127	54
Fair Value	22,373	20,577
Allowance for Credit Losses	0	0
Carrying Value	22,373	20,577
Collateralized mortgage obligations | Government national mortgage association
Fixed maturities:
Cost or Amortized Cost	115,576	81,758
Gross Unrealized Appreciation	3,038	4,439
Gross Unrealized Depreciation	1,358	45
Fair Value	117,256	86,152
Allowance for Credit Losses	0	0
Carrying Value	117,256	86,152
Collateralized mortgage obligations | Federal home loan mortgage corporation
Fixed maturities:
Cost or Amortized Cost	127,461	151,362
Gross Unrealized Appreciation	1,089	2,239
Gross Unrealized Depreciation	1,588	758
Fair Value	126,962	152,843
Allowance for Credit Losses	0	0
Carrying Value	126,962	152,843
Collateralized mortgage obligations | Federal national mortgage association
Fixed maturities:
Cost or Amortized Cost	55,697	81,952
Gross Unrealized Appreciation	1,252	2,013
Gross Unrealized Depreciation	532	683
Fair Value	56,417	83,282
Allowance for Credit Losses	0	0
Carrying Value	56,417	83,282
Asset-backed securities
Fixed maturities:
Cost or Amortized Cost	322	314
Gross Unrealized Appreciation	586	612
Gross Unrealized Depreciation	0	0
Fair Value	908	926
Allowance for Credit Losses	0	0
Carrying Value	$ 908	$ 926

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Summary of Investments - Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Available-For-Sale, Amortized Cost
Due in one year or less	$ 55,041
Due after one year through five years	469,238
Due after five years through 10 years	353,810
Due after 10 years	455,832
Available-For-Sale, Fair Value
Due in one year or less	55,699
Due after one year through five years	492,892
Due after five years through 10 years	373,415
Due after 10 years	481,679
Fair Value	1,727,601	$ 1,825,438
Asset-backed securities
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	322
Amortized Cost	322	314
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	908
Fair Value	908	926
Mortgage-backed securities
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	22,251
Amortized Cost	22,251	20,305
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	22,373
Fair Value	22,373	$ 20,577
Collateralized mortgage obligations
Available-For-Sale, Amortized Cost
Securities not categorized by contractual maturity	298,734
Available-For-Sale, Fair Value
Securities not categorized by contractual maturity	300,635
Fixed maturities
Available-For-Sale, Amortized Cost
Amortized Cost	1,655,228
Available-For-Sale, Fair Value
Fair Value	$ 1,727,601

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Summary of Investments - Net Realized Investment Gains and Losses and Proceeds (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net realized investment gains (losses):
Available-for-sale	$ 294	$ 52	$ (207)	$ 52
Allowance for credit losses	170	2	5	(8)
Trading Securities	0	382	0	(780)
Mortgage loans allowance for credit losses	5	0	5	(4)
Real estate	(256)	0	(256)	(28)
Total net realized investment gains (losses)	(2,269)	15,212	28,243	(62,416)
Proceeds from sale of available-for-sale investments			170,637	16,907
Fixed maturities
Net realized investment gains (losses):
Proceeds from sale of available-for-sale investments	53,973	0	170,637	16,907
Gross realized gains	690	0	843	198
Gross realized losses	396	0	1,051	495
Change in the fair value
Net realized investment gains (losses):
Equity securities	(1,314)	21,962	20,513	(38,876)
Sales
Net realized investment gains (losses):
Equity securities	$ (1,168)	$ (7,186)	$ 8,183	$ (22,772)

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Summary of Investments - Narrative (Details) $ in Thousands	1 Months Ended
	Dec. 31, 2019 USD ($) date	Sep. 30, 2021 USD ($)
Investments, Debt and Equity Securities [Abstract]
Remaining potential contractual obligation		$ 2,636
Investment in limited liability partnership investment fund	$ 25
Lockup period	3 years
Minimum notice period	60 days
Number of possible repurchase dates | date	4
Investment fair value		$ 24,786

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Summary of Investments - Unrealized Appreciation (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Change in net unrealized investment appreciation
Available-for-sale fixed maturities	$ (32,779)	$ 44,574
Income tax effect	6,886	(9,361)
Total change in net unrealized investment appreciation, net of tax	$ (25,893)	$ 35,213

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Summary of Investments - Rollforward of Allowance for Credit Losses for Available-for-Sale Fixed Maturity Securities (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Rollforward of allowance for credit losses for available-for-sale fixed maturity securities:
Beginning balance, January 1, 2021	$ 5
Additions to the allowance for credit losses for which credit losses were not previously recorded	0
Recoveries of amounts previously written off	(5)
Ending balance, September 30, 2021	$ 0

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Summary of Investments - Investments in Unrealized Loss Position (Details) $ in Thousands	Sep. 30, 2021 USD ($) issue	Dec. 31, 2020 USD ($) issue
Number of Issues
Less than 12 months | issue	88	46
12 months or longer | issue	10	8
Fair Value
Less than 12 months	$ 313,466	$ 256,247
12 months or longer	31,602	3,168
Total	345,068	259,415
Gross Unrealized Depreciation
Less than 12 months	7,020	1,586
12 months or longer	758	8
Total	$ 7,778	$ 1,594
U.S. Treasury
Number of Issues
Less than 12 months | issue	7	5
12 months or longer | issue	1	0
Fair Value
Less than 12 months	$ 42,264	$ 86,371
12 months or longer	3,695	0
Total	45,959	86,371
Gross Unrealized Depreciation
Less than 12 months	437	25
12 months or longer	11	0
Total	$ 448	$ 25
U.S. government agency
Number of Issues
Less than 12 months | issue	3
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 14,998
12 months or longer	0
Total	14,998
Gross Unrealized Depreciation
Less than 12 months	644
12 months or longer	0
Total	$ 644
States, municipalities and political subdivisions | Special revenue | South
Number of Issues
Less than 12 months | issue	1
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 1,186
12 months or longer	0
Total	1,186
Gross Unrealized Depreciation
Less than 12 months	87
12 months or longer	0
Total	$ 87
Foreign bonds
Number of Issues
Less than 12 months | issue	4	1
12 months or longer | issue	0	0
Fair Value
Less than 12 months	$ 9,719	$ 2,000
12 months or longer	0	0
Total	9,719	2,000
Gross Unrealized Depreciation
Less than 12 months	175	2
12 months or longer	0	0
Total	$ 175	$ 2
Public utilities
Number of Issues
Less than 12 months | issue	7
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 19,341
12 months or longer	0
Total	19,341
Gross Unrealized Depreciation
Less than 12 months	281
12 months or longer	0
Total	$ 281
Corporate bonds | Industrials
Number of Issues
Less than 12 months | issue	2
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 5,915
12 months or longer	0
Total	5,915
Gross Unrealized Depreciation
Less than 12 months	137
12 months or longer	0
Total	$ 137
Corporate bonds | Consumer goods and services
Number of Issues
Less than 12 months | issue	7
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 16,348
12 months or longer	0
Total	16,348
Gross Unrealized Depreciation
Less than 12 months	757
12 months or longer	0
Total	$ 757
Corporate bonds | Health care
Number of Issues
Less than 12 months | issue	3
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 20,517
12 months or longer	0
Total	20,517
Gross Unrealized Depreciation
Less than 12 months	531
12 months or longer	0
Total	$ 531
Corporate bonds | Technology, media and telecommunications
Number of Issues
Less than 12 months | issue	5	1
12 months or longer | issue	0	0
Fair Value
Less than 12 months	$ 11,264	$ 2,020
12 months or longer	0	0
Total	11,264	2,020
Gross Unrealized Depreciation
Less than 12 months	740	15
12 months or longer	0	0
Total	$ 740	$ 15
Corporate bonds | Financial services
Number of Issues
Less than 12 months | issue	3	1
12 months or longer | issue	1	1
Fair Value
Less than 12 months	$ 6,457	$ 2,995
12 months or longer	4,744	3,000
Total	11,201	5,995
Gross Unrealized Depreciation
Less than 12 months	52	5
12 months or longer	256	7
Total	$ 308	$ 12
Corporate bonds | Energy
Number of Issues
Less than 12 months | issue	1
12 months or longer | issue	0
Fair Value
Less than 12 months	$ 2,942
12 months or longer	0
Total	2,942
Gross Unrealized Depreciation
Less than 12 months	65
12 months or longer	0
Total	$ 65
Mortgage-backed securities
Number of Issues
Less than 12 months | issue	7	2
12 months or longer | issue	0	5
Fair Value
Less than 12 months	$ 15,181	$ 8,099
12 months or longer	0	118
Total	15,181	8,217
Gross Unrealized Depreciation
Less than 12 months	127	53
12 months or longer	0	1
Total	$ 127	$ 54
Collateralized mortgage obligations | Federal home loan mortgage corporation
Number of Issues
Less than 12 months | issue	21	24
12 months or longer | issue	4	1
Fair Value
Less than 12 months	$ 71,358	$ 97,691
12 months or longer	18,604	26
Total	89,962	97,717
Gross Unrealized Depreciation
Less than 12 months	1,191	758
12 months or longer	397	0
Total	$ 1,588	$ 758
Collateralized mortgage obligations | Federal national mortgage association
Number of Issues
Less than 12 months | issue	8	10
12 months or longer | issue	4	0
Fair Value
Less than 12 months	$ 27,410	$ 44,677
12 months or longer	4,559	0
Total	31,969	44,677
Gross Unrealized Depreciation
Less than 12 months	438	683
12 months or longer	94	0
Total	$ 532	$ 683
Collateralized mortgage obligations | Government national mortgage association
Number of Issues
Less than 12 months | issue	9	2
12 months or longer | issue	0	1
Fair Value
Less than 12 months	$ 48,566	$ 12,394
12 months or longer	0	24
Total	48,566	12,418
Gross Unrealized Depreciation
Less than 12 months	1,358	45
12 months or longer	0	0
Total	$ 1,358	$ 45

XML

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Accrued interest excluded from carrying value	$ 166
Allowance for mortgage loan losses	71	$ 76
Rabbi Trust | Other Assets | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash surrender value	$ 10,067

XML

Fair Value of Financial Instruments - Carrying Value and Estimated Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fixed maturities:
Available-for-sale securities	$ 1,727,601	$ 1,825,438
Equity securities	200,876	206,685
Mortgage loans	47,254	47,614
Fixed maturities
Fixed maturities:
Available-for-sale securities	1,727,601	1,825,438
Fair Value
Fixed maturities:
Equity securities	200,876	206,685
Mortgage loans	49,385	48,932
Other long-term investments	80,162	69,305
Short-term investments	175	175
Cash and cash equivalents	132,772	87,948
Corporate-owned life insurance	10,067	8,557
Liabilities
Long Term Debt	47,724	50,000
Fair Value | Fixed maturities
Fixed maturities:
Available-for-sale securities	1,727,601	1,825,443
Carrying Value
Fixed maturities:
Equity securities	200,876	206,685
Mortgage loans	47,254	47,614
Other long-term investments	80,162	69,305
Short-term investments	175	175
Cash and cash equivalents	132,772	87,948
Corporate-owned life insurance	10,067	8,557
Liabilities
Long Term Debt	50,000	50,000
Carrying Value | Fixed maturities
Fixed maturities:
Available-for-sale securities	$ 1,727,601	$ 1,825,438

XML

Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 1,727,601	$ 1,825,438
Equity securities	200,876	206,685
U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	53,378	149,938
U.S. government agency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	57,144	64,518
Foreign bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,164	29,602
Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,805	83,502
Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	22,373	20,577
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	908	926
Government national mortgage association | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	117,256	86,152
Federal home loan mortgage corporation | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,962	152,843
Federal national mortgage association | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,417	83,282
General obligations | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	71,710	81,980
General obligations | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,373	30,450
General obligations | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	96,287	109,970
General obligations | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,571	110,021
Special revenue | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,273	125,098
Special revenue | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	60,012	61,076
Special revenue | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	216,556	226,706
Special revenue | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	135,828	139,399
Energy | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	30,258	25,336
Industrials | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,743	43,257
Consumer goods and services | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	62,274	50,567
Health care | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,493	7,576
Technology, media and telecommunications | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,388	41,636
Financial services | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	95,428	101,026
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,727,601	1,825,443
Equity securities	200,876	206,685
Short-Term Investments	175	175
Money Market Accounts	20,555	24,790
Corporate-Owned Life Insurance	10,067	8,557
Total Assets Measured at Fair Value	1,959,274	2,065,650
Recurring | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	53,378	149,938
Recurring | U.S. government agency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	57,144	64,518
Recurring | Foreign bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,164	29,602
Recurring | Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,805	83,502
Recurring | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	22,373	20,577
Recurring | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	908	926
Recurring | Nonredeemable preferred stocks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	595	595
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Equity securities	200,281	206,090
Short-Term Investments	175	175
Money Market Accounts	20,555	24,790
Corporate-Owned Life Insurance	0	0
Total Assets Measured at Fair Value	221,011	231,055
Recurring | Level 1 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | U.S. government agency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | Foreign bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 1 | Nonredeemable preferred stocks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,726,543	1,824,267
Equity securities	0	0
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	10,067	8,557
Total Assets Measured at Fair Value	1,736,610	1,832,824
Recurring | Level 2 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	53,378	149,938
Recurring | Level 2 | U.S. government agency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	57,144	64,518
Recurring | Level 2 | Foreign bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	31,164	29,602
Recurring | Level 2 | Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,805	83,502
Recurring | Level 2 | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	22,373	20,577
Recurring | Level 2 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 2 | Nonredeemable preferred stocks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	1,058	1,176
Equity securities	595	595
Short-Term Investments	0	0
Money Market Accounts	0	0
Corporate-Owned Life Insurance	0	0
Total Assets Measured at Fair Value	1,653	1,771
Recurring | Level 3 | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 3 | U.S. government agency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 3 | Foreign bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 3 | Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 3 | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Level 3 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	908	926
Recurring | Level 3 | Nonredeemable preferred stocks
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	595	595
Recurring | Government national mortgage association | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	117,256	86,152
Recurring | Government national mortgage association | Level 1 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Government national mortgage association | Level 2 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	117,256	86,152
Recurring | Government national mortgage association | Level 3 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Federal home loan mortgage corporation | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,962	152,843
Recurring | Federal home loan mortgage corporation | Level 1 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Federal home loan mortgage corporation | Level 2 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,962	152,843
Recurring | Federal home loan mortgage corporation | Level 3 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Federal national mortgage association | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,417	83,282
Recurring | Federal national mortgage association | Level 1 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Federal national mortgage association | Level 2 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,417	83,282
Recurring | Federal national mortgage association | Level 3 | Collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	71,710	81,980
Recurring | General obligations | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,373	30,450
Recurring | General obligations | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	96,287	109,970
Recurring | General obligations | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,571	110,021
Recurring | General obligations | Level 1 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 1 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 1 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 1 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 2 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	71,710	81,980
Recurring | General obligations | Level 2 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,373	30,450
Recurring | General obligations | Level 2 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	96,287	109,970
Recurring | General obligations | Level 2 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	100,571	110,021
Recurring | General obligations | Level 3 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 3 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 3 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | General obligations | Level 3 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,273	125,098
Recurring | Special revenue | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	60,012	61,076
Recurring | Special revenue | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	216,556	226,706
Recurring | Special revenue | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	135,828	139,399
Recurring | Special revenue | Level 1 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 1 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 1 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 1 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 2 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	126,273	125,098
Recurring | Special revenue | Level 2 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	60,012	61,076
Recurring | Special revenue | Level 2 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	216,556	226,706
Recurring | Special revenue | Level 2 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	135,828	139,399
Recurring | Special revenue | Level 3 | States, municipalities and political subdivisions | Midwest
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 3 | States, municipalities and political subdivisions | Northeast
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 3 | States, municipalities and political subdivisions | South
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Special revenue | Level 3 | States, municipalities and political subdivisions | West
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Public utilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	16,550	16,320
Recurring | Public utilities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	16,550	16,320
Recurring | Public utilities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Public utilities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Energy
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	14,296	9,918
Recurring | Energy | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	30,258	25,336
Recurring | Energy | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	14,296	9,918
Recurring | Energy | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Energy | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Energy | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	30,258	25,336
Recurring | Energy | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Energy | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Industrials
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	36,464	36,556
Recurring | Industrials | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,743	43,257
Recurring | Industrials | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	36,464	36,556
Recurring | Industrials | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Industrials | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Industrials | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,743	43,257
Recurring | Industrials | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Industrials | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Consumer goods and services
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	48,311	32,061
Recurring | Consumer goods and services | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	62,274	50,567
Recurring | Consumer goods and services | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	48,311	32,061
Recurring | Consumer goods and services | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Consumer goods and services | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Consumer goods and services | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	62,274	50,567
Recurring | Consumer goods and services | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Consumer goods and services | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Health care
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	12,584	24,549
Recurring | Health care | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,493	7,576
Recurring | Health care | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	12,584	24,549
Recurring | Health care | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Health care | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Health care | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	27,493	7,576
Recurring | Health care | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Health care | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Technology, media and telecommunications
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	28,651	17,109
Recurring | Technology, media and telecommunications | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,388	41,636
Recurring | Technology, media and telecommunications | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	28,651	17,109
Recurring | Technology, media and telecommunications | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Technology, media and telecommunications | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Technology, media and telecommunications | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	56,388	41,636
Recurring | Technology, media and telecommunications | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Technology, media and telecommunications | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Financial services
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	43,425	69,577
Recurring | Financial services | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	95,428	101,031
Recurring | Financial services | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	43,425	69,577
Recurring | Financial services | Level 1 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	0	0
Recurring | Financial services | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Financial services | Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	95,278	100,781
Recurring | Financial services | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring | Financial services | Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 150	$ 250

XML

Fair Value of Financial Instruments - Quantitative Information About Level 3 Fair Value Measurements (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	$ 1,727,601	$ 1,825,438
Nonredeemable preferred stocks	200,876	206,685
Asset-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	908	926
Financial services | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	95,428	101,026
Recurring
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	1,727,601	1,825,443
Nonredeemable preferred stocks	200,876	206,685
Recurring | Asset-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	908	926
Recurring | Nonredeemable preferred stocks
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks	595	595
Recurring | Financial services
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks	43,425	69,577
Recurring | Financial services | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	95,428	101,031
Recurring | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	1,058	1,176
Nonredeemable preferred stocks	595	595
Recurring | Level 3 | Asset-backed securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	$ 908	926
Recurring | Level 3 | Asset-backed securities | Discounted cash flow | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities, range of weighted average significant unobservable inputs	0.04
Recurring | Level 3 | Asset-backed securities | Discounted cash flow | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities, range of weighted average significant unobservable inputs	0.06
Recurring | Level 3 | Nonredeemable preferred stocks
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks	$ 595	595
Recurring | Level 3 | Nonredeemable preferred stocks | Discounted cash flow | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks, range of weighted average significant unobservable inputs	0.03
Recurring | Level 3 | Nonredeemable preferred stocks | Discounted cash flow | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks, range of weighted average significant unobservable inputs	0.04
Recurring | Level 3 | Financial services
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Nonredeemable preferred stocks	$ 0	0
Recurring | Level 3 | Financial services | Corporate bonds
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Available-for-sale securities	$ 150	$ 250

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Fair Value of Financial Instruments - Level 3 Securities (Details) - Recurring - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,636	$ 1,771
Net unrealized gains (losses)	17	(18)
Transfers out		(100)
Ending balance	1,653	1,653
Corporate bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	150	250
Net unrealized gains (losses)	0	0
Transfers out		(100)
Ending balance	150	150
Asset-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	891	926
Net unrealized gains (losses)	17	(18)
Transfers out		0
Ending balance	908	908
Equities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	595	595
Net unrealized gains (losses)	0	0
Transfers out		0
Ending balance	$ 595	$ 595

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Fair Value of Financial Instruments - Carrying Value of Commercial Mortgage Loans and Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Total amortized cost	$ 47,325	$ 47,690
Allowance for mortgage loan losses	(71)	(76)
Mortgage loans, net	47,254	47,614
Total mortgage loans | Mortgage Loans by Region
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 47,325	$ 47,690
Percent of Total	100.00%	100.00%
Total mortgage loans | Mortgage Loans by Region | East North Central
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 3,245	$ 3,245
Percent of Total	6.90%	6.80%
Total mortgage loans | Mortgage Loans by Region | Southern Atlantic
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 9,622	$ 9,752
Percent of Total	20.30%	20.50%
Total mortgage loans | Mortgage Loans by Region | East South Central
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 8,071	$ 8,197
Percent of Total	17.10%	17.20%
Total mortgage loans | Mortgage Loans by Region | New England
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 6,588	$ 6,588
Percent of Total	13.90%	13.80%
Total mortgage loans | Mortgage Loans by Region | Middle Atlantic
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 14,826	$ 14,936
Percent of Total	31.30%	31.20%
Total mortgage loans | Mortgage Loans by Region | Mountain
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 2,227	$ 2,227
Percent of Total	4.70%	4.70%
Total mortgage loans | Mortgage Loans by Region | West North Central
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 2,746	$ 2,745
Percent of Total	5.80%	5.80%
Total mortgage loans | Mortgage Loans by Property Type
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 47,325	$ 47,690
Percent of Total	100.00%	100.00%
Total mortgage loans | Mortgage Loans by Property Type | Multifamily
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 16,999	$ 17,038
Percent of Total	35.90%	35.70%
Total mortgage loans | Mortgage Loans by Property Type | Office
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 11,645	$ 11,861
Percent of Total	24.60%	24.90%
Total mortgage loans | Mortgage Loans by Property Type | Industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 10,124	$ 10,124
Percent of Total	21.40%	21.20%
Total mortgage loans | Mortgage Loans by Property Type | Retail
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 2,227	$ 2,227
Percent of Total	4.70%	4.70%
Total mortgage loans | Mortgage Loans by Property Type | Mixed use/Other
Financing Receivable, Credit Quality Indicator [Line Items]
Mortgage loans, net	$ 6,330	$ 6,440
Percent of Total	13.40%	13.50%
Less than 65%
Financing Receivable, Credit Quality Indicator [Line Items]
Total amortized cost	$ 30,035	$ 30,361
65%-75%
Financing Receivable, Credit Quality Indicator [Line Items]
Total amortized cost	$ 17,290	$ 17,329

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Fair Value of Financial Instruments - Amortized Cost Basis by Year of Origination and Credit Quality Indicator (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
2021	$ 0
2020	5,495
2019	16,852
2018	24,978
Total	47,325	$ 47,690
Current-period write-offs	0
Current-period recoveries	0
Current-period net write-offs	0
1-2 internal grade
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	5,495
2019	8,356
2018	18,390
Total	32,241
3-4 internal grade
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	8,496
2018	6,588
Total	15,084
5 internal grade
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
Total	0
6 internal grade
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
Total	0
7 internal grade
Financing Receivable, Credit Quality Indicator [Line Items]
2021	0
2020	0
2019	0
2018	0
Total	$ 0

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Fair Value of Financial Instruments - Rollforward of Allowance for Mortgage Loan Losses (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Rollforward of allowance for mortgage loan losses:
Beginning balance	$ 76
Current-period provision for expected credit losses	(5)
Ending balance of the allowance for mortgage loan losses	$ 71

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Reserves for Losses and Loss Settlement Expenses (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Gross liability for losses and loss settlement expenses at beginning of year	$ 1,578,131	$ 1,421,754
Ceded losses and loss settlement expenses	(131,843)	(68,536)
Net liability for losses and loss settlement expenses at beginning of year	1,446,288	1,353,218
Losses and loss settlement expenses incurred for claims occurring during
Current year	560,080	887,119
Prior years	(26,099)	(17,652)
Total incurred	533,981	869,467
Losses and loss settlement expense payments for claims occurring during
Current year	204,056	354,635
Prior years	318,573	421,762
Total paid	522,629	776,397
Net liability for losses and loss settlement expenses at end of year	1,457,641	1,446,288
Ceded loss and loss settlement expenses	110,009	131,843
Gross liability for losses and loss settlement expenses at end of period	$ 1,567,650	$ 1,578,131

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Employee Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Pension Plan
Net periodic benefit cost
Service cost	$ 3,020	$ 2,707	$ 9,060	$ 8,122
Interest cost	1,728	2,066	5,184	6,199
Expected return on plan assets	(4,202)	(3,385)	(12,606)	(10,154)
Amortization of prior service credit	(809)	0	(2,427)	0
Amortization of net loss	999	979	2,997	2,936
Special event plan closure	0	0	0	0
Net periodic benefit cost	736	2,367	2,208	7,103
Estimated 2021 pension plan contribution, disclosed in prior year 10K					$ 10,000
Revised expected contribution	5,000		5,000
Contribution by employer			5,000
Postretirement Benefit Plan
Net periodic benefit cost
Service cost	0	432	148	1,296
Interest cost	1	253	71	760
Expected return on plan assets	0	0	0	0
Amortization of prior service credit	(3,765)	(2,021)	(10,725)	(6,063)
Amortization of net loss	705	94	1,902	282
Special event plan closure	0	0	(20,177)	0
Net periodic benefit cost	$ (3,059)	$ (1,242)	$ (28,781)	$ (3,725)

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended		85 Months Ended	201 Months Ended
	May 31, 2021	May 31, 2014	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	May 31, 2021	Sep. 30, 2021	Dec. 31, 2020	May 20, 2020	May 19, 2020	Dec. 31, 2008	Dec. 31, 2004
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			$ 959	$ 1,052	$ 3,074	$ 3,979
Stock-based compensation expense to be recognized through results of operations			$ 4,977		$ 4,977			$ 4,977
Employee Stock Award Plan-2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)			1,245,573		1,245,573			1,245,573	700,680			1,900,000
Additional shares authorized (in shares)	650,000	1,500,000			650,000		2,150,000
Employee Stock Award Plan-2008 | Options Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period					10 years
Employee Stock Award Plan-2008 | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage					20.00%
Employee Stock Award Plan-2008 | Share-based Compensation Award, Tranche One | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period					3 years
Employee Stock Award Plan-2008 | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage					33.30%
Employee Stock Award Plan-2008 | Share-based Compensation Award, Tranche Two | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period					5 years
Director Plan - 2005
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)			144,352		144,352			144,352	160,135	450,000	300,000		300,000
Additional shares authorized (in shares)					0			150,000

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Stock-Based Compensation - Activity in the Stock Plan (Details) - shares	1 Months Ended		9 Months Ended	85 Months Ended	153 Months Ended	201 Months Ended
	May 31, 2021	May 31, 2014	Sep. 30, 2021	May 31, 2021	Sep. 30, 2021	Sep. 30, 2021
Employee Stock Award Plan-2008
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Beginning balance (in shares)			700,680		1,900,000
Additional shares authorized (in shares)	650,000	1,500,000	650,000	2,150,000
Number of awards granted (in shares)			(161,857)		(3,450,756)
Number of awards forfeited or expired (in shares)			56,750		646,329
Ending balance (in shares)			1,245,573		1,245,573	1,245,573
Employee Stock Award Plan-2008 | Options Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of option awards exercised (in shares)			7,884		1,481,973
Employee Stock Award Plan-2008 | Unrestricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of awards granted (in shares)			0		(10,090)
Employee Stock Award Plan-2008 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of restricted stock awards vested (in shares)			52,302		216,680
Director Plan - 2005
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Beginning balance (in shares)			160,135			300,000
Additional shares authorized (in shares)			0			150,000
Number of awards granted (in shares)			(18,510)			(332,378)
Number of awards forfeited or expired (in shares)			2,727			26,730
Ending balance (in shares)			144,352		144,352	144,352
Director Plan - 2005 | Options Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of option awards exercised (in shares)			8,181			142,001
Director Plan - 2005 | Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award Available for Grant [Roll Forward]
Number of restricted stock awards vested (in shares)			0			98,491

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Stock-Based Compensation - Stock-based Compensation Expense (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Share-based Payment Arrangement [Abstract]
2021	$ 973
2022	2,402
2023	1,339
2024	251
2025	12
Total	$ 4,977

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Basic and Diluted Earnings per Share [Line Items]
Net income (loss)	$ (9,593)	$ (37,241)	$ 22,859	$ (103,815)
Weighted-average common shares outstanding, basic (in shares)	25,092,167	25,031,234	25,095,733	25,023,401
Weighted-average common shares outstanding, diluted (in shares)	25,092,167	25,031,234	25,427,318	25,023,401
Earnings (loss) per common share, basic (in dollars per share)	$ (0.38)	$ (1.49)	$ 0.91	$ (4.15)
Earnings (loss) per common share, diluted (in dollars per share)	$ (0.38)	$ (1.49)	$ 0.90	$ (4.15)
Awards excluded from diluted earnings per share calculation (in shares)	865,966	820,124	674,921	515,984
Restricted Stock Unit Awards
Basic and Diluted Earnings per Share [Line Items]
Add dilutive effect of share-based awards outstanding (in shares)	0	0	216,527	0
Stock Options
Basic and Diluted Earnings per Share [Line Items]
Add dilutive effect of share-based awards outstanding (in shares)	0	0	115,058	0

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DEBT - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 15, 2020	Mar. 31, 2020
Line of Credit Facility [Line Items]
Interest expense	$ 797,000	$ 0	$ 2,391,000	$ 0
Outstanding balance on credit facility	$ 0	$ 0	0	0
New Credit Agreement
Line of Credit Facility [Line Items]
Option to increase, maximum amount						$ 100,000,000
New Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Interest expense			$ 0	$ 0
Maximum borrowing capacity						50,000,000
New Credit Agreement | Letter of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity						20,000,000
New Credit Agreement | Swing Line of Credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity						$ 5,000,000
Surplus Notes
Line of Credit Facility [Line Items]
Principal amount					$ 50,000,000
Surplus Notes | Federated Mutual
Line of Credit Facility [Line Items]
Principal amount					35,000,000
Surplus Notes | Federated Life
Line of Credit Facility [Line Items]
Principal amount					$ 15,000,000

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Debt - Interest Payable (Details) - Surplus Notes	Sep. 30, 2021
A+
Financing Receivable, Credit Quality Indicator [Line Items]
Applicable Interest Rate	5.875%
A
Financing Receivable, Credit Quality Indicator [Line Items]
Applicable Interest Rate	6.375%
A-
Financing Receivable, Credit Quality Indicator [Line Items]
Applicable Interest Rate	6.875%
B++ (or lower)
Financing Receivable, Credit Quality Indicator [Line Items]
Applicable Interest Rate	7.375%

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, beginning	$ 839,474	$ 860,667	$ 825,149	$ 910,472
Change in accumulated other comprehensive income before reclassifications	(12,636)	3,252	(27,062)	35,223
Reclassification adjustments from accumulated other comprehensive income (loss)	1,087	805	4,230	2,532
Balance, ending	814,529	820,282	814,529	820,282
Net unrealized appreciation on investments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, beginning	67,005		83,070
Change in accumulated other comprehensive income before reclassifications	(9,661)		(26,252)
Reclassification adjustments from accumulated other comprehensive income (loss)	(167)		359
Balance, ending	57,177		57,177
Liability for underfunded employee benefit costs
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, beginning	(11,377)		(16,159)
Change in accumulated other comprehensive income before reclassifications	(2,975)		(810)
Reclassification adjustments from accumulated other comprehensive income (loss)	1,254		3,871
Balance, ending	(13,098)		(13,098)
Total
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance, beginning	55,628	46,850	66,911	13,152
Balance, ending	$ 44,079	$ 50,907	$ 44,079	$ 50,907

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Leases - Narrative (Details)	Sep. 30, 2021
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Lease extension option terms	6 months
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	7 years
Lease extension option terms	5 years

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Components of Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Components of lease expense:
Operating lease expense	$ 1,748	$ 1,832	$ 5,297	$ 5,788
Less sublease income	53	53	160	239
Net lease expense	1,695	1,779	5,137	5,549
Cash flows information related to leases:
Operating cash outflow from operating leases	$ 1,714	$ 1,796	$ 5,192	$ 5,265