Good morning. My name is Diego, and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the United Fire Group’s Third 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. It is now pleasure to introduce your host and turn the call over to Anita Novak, Director of Investor Relations. Thank you. You may begin.

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 website 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 by 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 obligation 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 Randy Ramlo, President and Chief Executive Officer of United Fire Group.

Thank you, Anita. Good morning everyone and welcome to UFG’s third quarter conference call. Earlier this morning, we reported a third quarter operating loss of $0.01 per share, net earnings of $0.01 and a GAAP combined ratio of 107.4%. Year-to-date, we reported operating earnings per share of $0.81, net income per diluted share of $0.95 and a combined ratio of 103%. Our current book value is $32.26 per share, and our annualized return on equity is 4.1%. All of these details can be seen on Slide number three of our webcast. Clearly these are not the results we expected to report three quarters through the year. Third quarter was significantly impacted by large losses, especially fire losses and carryover claims associated with late second quarter catastrophe losses from convective storms. Both of these issues will be addressed on this morning’s call. Overall, our P&C premium increases from organic growth totaled 10.5 %. We attribute 6.7% to rate increases, 3.2% to new business and 0.6% to exposure increases. We believe loss cost trends remain at approximately 3.5%. We base our loss cost trend on an inflation index from Towers Watson and other actuarial resources. We are hearing competitive sentiments from our underwriting and marketing departments. But, so far it is more of an internal opinion, since retention is still good and we are still getting rate increases. Our hit ratios are still good as well. Commercial lines of renewal pricing increased with average percentage increases in the low to mid-single digits on more small and mid-market accounts. But larger accounts have become more competitive. Personal auto lines renewal pricing increases during the quarter, decelerated to low-single-digits, while homeowners pricing experienced average percentage increases in the mid to high-single-digits especially in areas affected by large convective storms. Competitive market conditions persisted on…

Thanks Randy. As Randy indicated and as we pre-released twice this quarter, we experienced both significant catastrophe losses and large losses during the third quarter. We are a custom to accounting for catastrophe losses especially in the second and third quarter due to severe late spring and early summer convective storms. But this year has been especially significant. We experienced six catastrophic events during the latter weeks of June this year, one of them occurred on June 30th and continued into July 1st. None of the storms appeared to be unreasonably material and none exceeded 5 million. Early reported claims are primarily personal lines claims as June passed into July we experienced a significant increase in the number of reported commercial lines claims, mostly hail damage to large commercial roofs, which are more difficult and time assuming to assess. Though not material on an individual storm basis and aggregate, these carryover claims were significant. As for large losses, we experienced an uptick again during the third quarter. Recurring quarters of large losses is highly unusual for us and a phenomenon we are taking very seriously. So far we have not seen any specific trends regard to these large losses, similar to the catastrophe losses, there are multi-stay events with no apparent trend due to branch or class of business. We have analyzed the data and we are not seeing disproportionate losses coming from new accounts. Claims are generally property-related due to fire losses, but also affect our commercial auto and commercial liability lines of business to a much lesser extent. We have taken steps to more closely identify any underlying or less obvious issues, by putting our internal [indiscernible] team on test to review specific claims, policy changes and any other issues that might be a contributing factor. This team…

Thank you, Mike. Consolidated net income including net realized invested gains and losses was $0.3 million or $0.01 per share for the quarter, compared to $11.7 million or $0.45 per share last year. Year-to-date consolidated net income included net realized investment gains and losses was $24.3 million or $0.95 per share compared to $49.6 million or $1.94 per share in 2013. Losses and loss settlement expenses increased by $23.2 million or 17.7% during the third quarter compared to the third quarter of 2013 and $73.2 million or 21% year-to-date. For the quarter, losses and loss settlement expenses were impacted by a significant increase in both catastrophe losses and a significant number of large losses especially in our commercial property line of business. The year-to-date losses and loss settlement expenses also included large losses due to a townhome complex fire reported in the first quarter, a city block commercial fire reported in the second quarter and a third quarter commercial fire in which we represented both the property owner and the business tenant. Consistent with our pre-announcement on October 23, 2014 pre-tax catastrophe losses for the quarter totaled $23.3 million or $0.60 per share after tax compared to $8.5 million or $0.21 per share after tax. These losses added 11.9 percentage points to our combined ratio. Year-to-date catastrophe losses totaled $47.2 million or $1.20 per share after tax and added 8.4 percentage points to the combined ratio. Typically our fourth quarter catastrophe losses are wide which leads us to believe that our 2014 catastrophe losses will likely be more closely aligned with our annual catastrophe load expectations of 6 percentage points. Favorable reserve development for the third quarter was $6.8 million compared to $8.6 million in the third quarter of 2013. The positive impact on net income for the quarter was…

Thank you. [Operator Instructions] Our first question comes from Paul Newsome with Sandler O’Neill. Please go ahead. Paul Newsome – Sandler O’Neill: Good morning everyone.

Hi Paul. Paul Newsome – Sandler O’Neill: But, fully its worth, I appreciate the fact that you stepped up the buybacks particularly with the stock is low. I was hoping you could kind of step back and look at your loss ratio ex-cats over the last say, look at the chart maybe some 2009. And I guess outside of 2009, if you kind of look at from 2010 to present it looks awfully flat in an environment where we should have been getting some fairly decent price increases (technical difficulty). You kind of talk about what you think of the other factors involved here that big picture obviously and maybe even outside of the quarters fire issues.

No I would say Paul, this is Randy. If we’re kind of getting all during that period kind of a consistent mid-single digit rate increase minus inflation, which maybe say 3, 3.5 I’m not sure what it was going back to 2010. I think you would expect maybe 3 points of margin expansion and that’s kind of what we – what we had every year going back maybe less so between 2012 and 2013, but going back to 2009, 2010 and 2011 it would seem to be 3 points would seem to make pretty good sense. This market is been kind of uniquely characterized with not having giant double-digit rate increases, but maybe we’ve shown a little bit more consistency. Mike do you have anything to add to that.

No, I would agree with Randy’s comments and I think, why didn’t we have the level of market expansion in 2013 and 2014. I think you can look at, some of the severity that we’ve had and that’s where we’re spending our time right now trying to address that issue. Paul Newsome – Sandler O’Neill: Again obviously the question of the day, what you can add on to the severity issues that you are trying to address in terms of details, it sounds like the basic ideas of looking for particular business lines is not the where you’re – you’ve gone out of these evidence of problems, what are the next steps?

One thing we’ve really got to, if you look at all of our lines of business, there are all doing okay except property and part of that’s catastrophic losses, part of that’s smaller storm losses in the Midwest and we’ve trying to diversify and write more nationwide business, especially in the east and west coast. But we’re not able to write new property business and non-cat exposed areas fast enough to offset our exposure, kind of in the Midwest and Gulf. So, one of the things we got to do is, step up pricing and selectivity and maybe some loss control and underwriting measures on our property book, soon or rather than later, we probably have to adjust some goals in the property area. You’ve heard us comment in the past, so we want to emphasize our bob writings in small and commercial and obviously those have property lines go with them. But, our experience has not been real bad in those areas, but it’s really been, our commercial property areas specifically some of the larger commercial roofs that have experienced hail damage. So, we may have to look at more cosmetic damage endorsements larger deductibles obviously existing from some accounts reducing our concentration. Workers’ compensation has improved nicely, auto has maybe ticked up a little bit. We have to pay a little bit of attention to that. Our casualty experience has been good, personal lines has ticked up a little bit, the homeowners again based mostly on storms, but then our personal auto has ticked up a little bit to and we’ve got some initiatives going for the future that I think is going to help that line. Paul Newsome – Sandler O’Neill: Terrific, thank you. I’ll let somebody else ask some questions.

Thanks Paul.

[Operator Instructions] Our next question comes from Vincent DeAugustino with KBW. Please go ahead.

Hi, good morning everyone, it’s actually [Joe Dempsie] on for Vincent today, I work alongside Vincent here at KBW, and I want to be stepping in for him today. So with that being said, which I think couple of quick questions. The first is related to your workers’ comp initiative, looks like some of those initiatives that you have underway on workers’ comp are actually getting traction, and I was hoping that you might be able to provide some details on the workers’ comp loss ratio improvement year-over-year, in terms of how much that is coming from your initiatives versus net expenses in the reserve development or other items?

I think a lot of it, was coming from our initiatives, we’ve done some things with loss control that I won’t get into the detail. We’ve really pushed that line hard on price increases and then we’ve kind of add, I think we’ve mentioned in the past we tried to identify the worst 5% performing accounts in that line and either severely increased the prices or exit from those accounts. So, those are really the biggest areas that we’re focused on.

Okay great.

And I don’t know on the reserving, I think we’ve been pretty consistent there actually, that’s actually one of our more consistent reserving line. So, I don’t think reserve changes contributed very much to the improvement.

Okay.

This is Mike Wilkins. I don’t know the exact figures on the reserve changes either, but I do know our accident years improved as well as the calendar. So, it’s more than just reserving.

Okay great. And we noticed looking at the press releases between this quarter and last quarter. There was a little bit of a different commentary around the expense deferrals. I’m just curious that, the difference here owes to some of the loss activities specifically in the quarter or is there any underlying go forward assumption changes that are driving the change and if you might be able to quantify the impact of the expense ratio this quarter.

This is Dianne Lyons. And it’s more of a quarter phenomenon than by year-to-date or going forward. And I can’t quantify that, I would kind of back of the envelope would say be about a one point difference there. I do see other initiatives that we’re taking here from an expense standpoint. Some of them still related to measure, but to a lesser extent other internal measures that we have that will be driving that down. Again a lot of that have to do with the full experience just instead of lines where we have some severity which cause some premium deficiency, which ultimately leads us to need to write off some of those expenses, some of those deferred expenses.

Great. And on the personal lines front, early in the call you guys met and you’ve been walking away from underpriced business. So, I guess I would have expected that deceleration on the rate increase pace there or is this a situation where losing some of the accounts that we’ve increased the most therefore our skewing rate increases metrics towards your better accounts or should we potentially expect personal increases to accelerate from here. How should we think about this?

Joe this is Mike. I think when we talked about walking away from underpriced accounts, we’re primarily talking coastal business.

Okay.

So it’s really the books that we have in probably specifically New Jersey, but maybe also Louisiana, Florida and Texas. That’s where in some situations we feel, we can’t get adequate rate right that at a level that long-term will provide the level profit that we need to compensate us for the bad storm years that you have in those areas when you have a hurricane. What was the second part of your question, I’ll go forward just on the rate increase. In the storm exposed areas Midwest and south in particular the homeowner rate environment is very good or looking at upper single-digits and there is been no deceleration there at all. I think we’re pricing a little bit more competition in the personal auto this year than we’ve seen in a couple of years. And so those increases are low-single-digit or maybe, year or two ago they were mid-single-digits.

Great. And then just last, my last question here, I just want to check in the subrogation process from the town hall exposure, do you guys have an update on that at all?

This is Dave Conner with Claims. Not much of specific update, I can tell you or reaffirm that our optimism still exist that our recovery will be forthcoming. And the only question still is how long that will take into what degree or how much we will recover on the overall loss. As I mentioned before, they initially will get a credit for argue for and rightfully so replacement cost versus actual cash value that we know, we won’t get the entire amount back. We’re very optimistic about the recovery timing and how much of (technical difficulty) recovery is still a question.

Okay. All right that’s all I had. Thank you so much for taking my questions today.

Thank you.

And there appears to be no further questions at this time. I’ll turn the conference back to management for closing remarks. Thank you.

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

Thank you. This concludes today’s conference. All parties may disconnect. Have a great day. Thank you.