Good morning. My name is Jessie, and I’ll be your conference operator today. At this time, I'd like to welcome everyone to the United Fire Group Second Quarter 2014 Financial Results Conference Call. At this time, all the participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) And as a reminder, this conference is being recorded. I'll now turn the call over to Anita Novak, Director of Investor Relations. Please go ahead.

Good morning everyone, and thank you for joining this call. Earlier today, we issued a news release on our results. To find a copy of this document, please visit our Web site at www.unitedfiregroup.com. Press releases in slides are located under the Investor Relations tab. Our speakers today are Randy Ramlo, President and Chief Executive Officer; Mike Wilkins, Executive Vice President and Chief Operating Officer; and Dianne Lyons, Senior Vice President and Chief Financial Officer. Other members of our executive team are also available for the question-and-answer session that will follow our prepared remarks. Please note that our presentation today may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The company cautions investors that any forward-looking statements include risks and uncertainties and are not a guarantee of future performance. These forward-looking statements are based on management’s current expectations, and we assume no responsibility to update them. The actual results may differ materially due to a variety of factors, which are described in our press release and SEC filings. Please also note that in our discussion today, we may use some non-GAAP financial measures. Reconciliations of these measures to the most comparable GAAP measures are also available in our press release and SEC filings. At this time, I'm pleased to present Mr. Randy Ramlo, President and Chief Executive Officer of United Fire Group.

Thank you, Anita. Good morning, everyone, and welcome to United Fire’s second quarter conference call. Earlier this morning, we reported second quarter operating earnings per share of $0.35, net income per diluted share of $0.42 and a GAAP combined ratio of 101.7%. Year-to-date, we reported operating earnings per share of $0.82 per share, net income per diluted share of $0.94 and a combined ratio of 100.7%. Our current book value is $32.74 per share, and our annualized return on equity is 6%. All of these details can be seen on Slide number three of our webcast. Despite the impact of 11 catastrophe events as well as an increase in additional non-catastrophe storm losses during the quarter, our results are still consistent with our expectation. Our underlying book of business is solid and market conditions continue to be favorable. The overall economy is slowly improving, although that has had an extremely minimal effect on our growth. Even so we're not yet seeing the margin expansion we expected to see by midyear in order to produce our expected return on equity. Mike Wilkins will expand upon this discussion as part of his prepared remarks. Competitive market conditions were unchanged on most renewals, but slightly more competitive on some. We continue to experience some increased competitiveness on more profitable large commercial accounts, and competitive market conditions persisted on new business during the quarter. Commercial lines renewal pricing increased at a slightly slower pace in most regions with average percentage increases in the low to mid single-digit on most small and mid market accounts. Personal auto renewal pricing increases decelerated slightly with average percentage increases in the mid single-digit. The homeowners' line is experiencing average percentage increases in the high single-digit. Policy retention was down slightly at the end of the second quarter to…

Thanks, Randy. I'd like to expand just a little bit on Randy's discussion of the current rating environment. It's important to convey that even though we're seeing pockets of increased competitiveness, we're still seeing numerous opportunities for rate increases, especially in geographic locations experiencing significant weather-related events throughout the U.S. and within our workers' compensation line of business. Randy mentioned in his comments that we're not seeing the margin expansion we expected midway through the year. I'd like to stress the improvement over the last several years of our core book of business. As you can see from Slide number six, our quarter loss ratio has improved each year since 2009. We attribute this trend to solid and disciplined underwriting in an improved pricing environment. As investment opportunities begin to deteriorate during the recent financial crisis, we refocused our underwriting efforts and established revised underwriting targets that would allow us to achieve our target ROE. We think this slide successfully demonstrates that our underwriting initiatives have been effective. However, our current quarter loss ratio is running approximately six percentage points higher than one year ago, which is disappointing for us. The drivers of this increase include the explosion in the urban townhome community that we discussed during our first quarter call increased non-cat weather-related losses and an increase in the frequency of large fires in our property lines of business. We are confident that our underwriting remain solid and that our pricing increases continue to exceed loss cost inflation and our expectation is for a return to the favorable trends we have seen since 2009 in the quarter loss ratio. The specialty operation is performing very well and as expected. Future expansion into additional states is being explored. This operation currently operates in the states of California, Oregon, Nevada and Arizona. As a reminder we do not have a standalone worker’s compensation line of business. However, workers’ compensation policies are part of our commercial packages. Nevertheless, we strive for profitability and all of our offered products although workers’ compensation is more challenging to write profitably. Year-to-date we’ve seen some deterioration due to increased severity. Our current analysis suggests that the issue is an overall increase in the average incurred per claim. Currently we continue to enter right policies as they renew, increase rates when possible and expand our loss control efforts in this line. We’ve identified specific types of situations that we write profitably and we continue to pursue those opportunities as well. With regard to our voluntary assumed book of business, rates continue to deteriorate by approximately 10%. Historically the book of business has been very lucrative and remains so, despite diminished rates. We are, however, evaluating future performance and risk factors associated with the premium rate deterioration. With that, I’ll turn the financial discussion over to Dianne Lyons.

Thanks, Mike. Consolidated net income including net real life investment gains and losses were $2.7 million or $0.42 per share for the quarter compared to $15.5 million or $0.61 per share last year. Year-to-date consolidated net income including net realized investment gains and losses was 24 million or $0.94 per share compared to $37.9 million or $1.49 per share in 2013. Favorable reserve development for the second quarter was 11.3 million compared to 16.4 million in the second quarter of 2013. The positive impact on net income for the quarter was $0.29 per share compared to $0.42 per share in 2013. The decline for the quarter is due to the timing of paid claims. Year-to-date favorable reserve development was 25.8 million or $0.65 per share compared to 40.5 million or $1.04 per share. Our year-to-date favorable development reflects both the timing of paid claims from the second quarter and adverse development of large claims from prior accident years primarily relevant to 2013 March losses that further developed in the first quarter of this year. As we have stated on many occasions reserve development will vary from quarter-to-quarter and year-to-year due to the timing of payment of claims. And we will remind our audience that we have historically reserved on a conservative basis and continue to do so. At June 30, 2014 our total reserves remained relatively flat and within our actuarial estimates. Losses and loss settlement expenses increased by 20 million or 17.3% during the second quarter compared to the second quarter of 2013 and 46.5 million or 22.4% year-to-date. For the quarter loss and loss settlement expenses were impacted by a significant increase in both catastrophe losses and non-catastrophe weather related events as well as for large commercial fires. The year-to-date losses and loss settlement expenses also included the…

(Operator Instructions) Our first question is from the line of Vincent DeAugustino with KBW. Please proceed with your question. Vincent DeAugustino – KBW: Hi there. Good morning, everyone.

Hi, Vincent. Vincent DeAugustino – KBW: Just to start off on the pricing front, since it's just a pretty important topic this quarter, if I'm interpreting the low to mid-single digit terminology being used as something in the 4% range -- if that's ballpark accurate, then that would imply that there's not a lot of excess rate above loss cost trend. And so, with what appears to be a backdrop of deteriorating rate increases, into your guys' point on you're not seeing as much margin expansion as you would like, I'd like to see if we could discuss and put some numeric parameters around your goals for non-rate-driven margin expansion, particularly some of the initiatives that you're deploying in workers' comp. And then again, within the context of if you're margin neutral from a rate increase standpoint, what we might be able to expect from a margin improvement standpoint in this environment?

Vincent, this is Randy. A couple of the areas that you probably heard us mention workers’ compensation and I think in past discussions we’ve noted that we’ve identified some of our higher severity classes or workers’ compensation and either retire from those or trying to get the pricing up. We’ve also -- we are big users of our loss control services. We are trying to focus more on loss control to try to improve some of the accounts that we do right. With comp, we are still able to get decent rate increases. Across the board, we’ve tried to identify the 5% worst performing accounts that we have in either getting significant rate increases on those accounts or getting off limits if that’s necessary. Property, we are really pushing especially property located in the mid west. It’s subject to the cap storm activity last couple of years. We are continuing to push to make sure we get more rate increases on some of those areas. So those are some of the things. Mike, do you have anything to add there?

Just maybe a couple of comments; on the pricing side, on the rate increase side, maybe a little better than what you had assumed there would be four -- actually our average was a little above 5.5. So still have a little bit of a cushion there for margin expansion, and a couple of other areas that I think will help with non-rate driven improvement or profitability or specialty division which we mentioned a couple of times in the press release is a segment of the business that we think has a little higher margins and maybe our traditional business that we’ve written. And we expect that segment to grow substantially over the next few years. And then also we’ve done quite a bit more with program business over the last couple of years and we continue to focus on that as well as our small commercial segment which we -- or both segments that we think have a little better return than maybe our overall book of business. Vincent DeAugustino – KBW: Okay. And then Mike, you just mentioned it was small commercials to take the other side -- on the large side. One of the initiatives that you guys had talked about in the past -- it was in the context of being balanced, but it was on initiative for the larger accounts. And just to there being a little bit more competition on the large side, does that change your guys' appetite for those larger accounts here more recently?

We continue to be in a market for larger accounts. Those have become a little more competitive. We are definitely seeing more pricing pressure there. So when we compete on accounts we expect them to be adequately priced if we will write them. So we will continue to try to compete on those accounts and if we think we can write them at adequate price, we will. And if we can’t get the price we need, we won’t write those. When you think our agents have value in -- they put value in companies that can write larger accounts, so we want to be in market for our agents for those types of accounts, but only if we can do it adequately priced. Vincent DeAugustino – KBW: Okay, good to hear. And then, sorry, one more rate question; on the premium growth reconciliation slide that you guys have -- I think it's slide four -- this quarter it says a 9.9% contribution from rate increases. And that's up about 260 basis points from last quarter. And I guess I was just a little bit surprised, given that the aggregate deceleration is going the other direction. So, I was just hoping to maybe reconcile the underlying numbers that are moving that up on the premium slide.

Yes. Can we get back to you on that? Our Head of Corporate Underwriting, Allen Sorensen, he does that analysis. And we can get some more detail for you and get back to you. I just don’t have that information available right now.

Okay, sounds good, and then one last quick one. You guys had mentioned that this quarter with the large townhome explosion, I just wanted to see if there was any update on your thoughts on subrogation for that?

Maybe we'll let Dave Conner, our Head of Claims comment on that one.

Hi, Vincent. This is Dave. Not much of an update from what we reported last quarter, we still view this as opportunity for recovery on subrogation, but a long gone out battle because of the dependents that are involved.

Okay. All right, thanks guys. We'll talk to you soon.

Thank you.

Thank you. (Operator Instructions) Thank you. We do have a follow-up question coming from the line of Vincent DeAugustino with KBW. Please proceed with your question.

Didn’t expect to get back in so quick, but just one follow-up; just on commercial auto, I think you guys deserve a lot of credit for the loss ratio there moving in the right direction. And I was just hoping we might comment on -- in your opinion to some of the things that United Fire is doing right, just because that line has been such a trouble spot for a lot of your peers. I just wanted to see how you guys are managing that so well.

Vincent, this is Randy. Well, I don’t want to giveaway any of our secrets, but I think we've -- it's probably just a matter of focus. I think sometimes it's easy to maybe underwrite the liability of the property of an account and just take whatever auto comes along with it. But we've utilized our loss control services and been very diligent on keeping drivers list updated and keeping current motor vehicle reports on commercial auto being careful large limits with large and extra heavy truck vehicles. But basically I think it's just a matter of diligence. We've always been pretty good commercial auto underwriters and you have to not be afraid to walk away from larger account just because it doesn’t have very good auto.

Okay. And just one last one, on the share repurchases front, I guess externally -- from here I just don’t really see the environment is that much different than the first quarter, and your shares have actually held up pretty decent to some of your peers. I just wanted to see if there was anything in particular that drove the greater repurchase appetite this quarter?

This is Randy, not necessarily. I think we've done some -- we talked a little bit about some capital modeling that we've done. I think we're more convinced than ever that we have some excess capital. We're really not looking at any M&A activity right now. And we're having good success with organic growth, but we just feel that we have some additional capital. We feel that our shares are priced for the discount, especially knowing some of the positive things that we have going on. So I think we just decided that additional share repurchases make a lot of sense right now.

Okay. Thanks for all the color, and I certainly hope the weather in Iowa is a bit better.

We agree with you there. Thank you.

Thank you. It appears there are no further questions at this time. I'd now like to turn the floor back over to Ms. Novak for any additional concluding comments.

Thanks, Jessie. This now concludes this conference call. As a reminder, a transcript of this call will be available on the company Web site at www.unitedfiregroup.com. On behalf of the management of United Fire Group, I wish all of you a very pleasant day.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time, and we thank you for your participation.