Good morning. My name is Denise, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Fire Group First Quarter 2016 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. Thank you. And I’ll now turn the call over to Randy Patten, Director of SEC Reporting and Investor Relations. Please go ahead, sir.

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 unitedfiregroup.com. Press releases and slides are located under the Investor Relations tab. Our speakers today are Chief Executive Officer, Randy Ramlo; Michael Wilkins, our Chief Operating Officer; and Dawn Jaffray, Chief Financial Officer. 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 to 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 Mr. Randy Ramlo, Chief Executive Officer of United Fire Group.

Thanks, Randy. Good morning, everyone, and welcome to UFG Insurance first quarter 2016 conference call. This morning we reported another quarter with solid performance. First quarter 2016 is off to a good start with operating income of $0.83 per share and a GAAP combined ratio of 92.3%. This compares with operating income of $0.92 per share and a GAAP combined ratio of 89.7% in the first quarter of 2015. Also in the first quarter of 2016, our book value per share increased to $36.69 from $34.94 at December 31, 2015 and our return on equity was 9.9%. In the property and casualty segment net premiums earned increased 10%, and is the result of organic-growth [ph] and geographic expansion. Rate increases on commercial lines were flat to slightly higher on renewal business, and rate increases on personal lines were in the mid-single-digits, primarily in our homeowners and personal auto lines business. I’ll let Mike address more specifics with respect to P&C market conditions and performance in a few moments. Catastrophe losses in the first quarter of 2016 at 2 percentage points of the combined ratio were slightly better than we would normally expect in the first quarter of any given year. Our historical average in the first quarter is 2.4 percentage points of the combined ratio. Our expectations for catastrophe losses in any given year is 6 percentage points of the combined ratio with second and third quarters being the most significant quarters with storms and catastrophe events in geographic areas where we conduct much of our business, due to spring and summer convective storms and hurricanes. The first quarter of 2016 expense ratio was higher by 1.7 percentage points compared to the first quarter of 2015. The increase in the expense ratio was due to several non-reoccurring employee related expenses…

Thanks, Randy, and good morning, everyone. During the first quarter competitive market conditions continued for both renewals and new business. Commercial lines renewal pricing varied by region, with average percentage increases nearly flat to slightly positive on most small and midmarket accounts. Elevated competition in most lines has made it more challenging to obtain increases. In general, larger accounts are more competitive than smaller accounts. Poor industry results in the commercial auto line have allowed us to obtain rate increases in this line. This is the 18th consecutive quarter of commercial lines pricing increases on our overall book of business, but we have seen the size of the increases decline for the past five consecutive quarters. Personal lines renewal price average percentage increases were in the mid-single-digits, primarily in homeowners and personal auto line of business. Premiums written from new business increased from the first quarter and the fourth quarter of 2015. Our success ratio unquoted accounts remains unchanged from prior two quarters and remains at an acceptable level, with most success in accounts with premiums less than 25,000. Premium and policy retention have remained strong at 84% and 83% respectively with changes from prior quarter of less than 1% respectively. Premiums from audits continue to have positive trends increasing compared to both first and fourth quarter 2015. Premiums from endorsements increased from the first quarter of 2015, the decrease from the fourth quarter of 2015. During the first quarter property and casualty premiums written increased 10% as compared to first quarter 2015. 2% is attributed to new business, 3% is attributed to endorsements and 5% is attributed to rate change and exposure increases. As we discussed in the fourth quarter 2015, this year we’re working on executing several growth strategies, including proactively targeting growth and small business owners product…

Thanks Mike. And good morning. For the first quarter of 2016, we reported consolidated net income of $22.4 million or $0.88 per diluted share compared to $23.7 million or $0.94 per diluted share in the first quarter of 2015, representing a decrease of $1.3 million and $0.006 per diluted share. Our shareholder’s equity increased 6% to $929 million at March 31, 2016 from $879 million at December 31, 2015. Book value increased to $36.69 an increase of the $1.75 from $34.94 at December 31, 2015. The increases in shareholders’ equity and book value are primarily due to net income of $22.4 million and an increase on unrealized investment gain which increased $27.4 million to $155.8 million at March 31, 2016. Return on equity was 9.9% in the first quarter of 2016, as compared to a 11.4% in the first quarter of 2015. Further adjusting ROE to exclude the impact of unrealized gains. Adjusted ROE was 11.8% in the first quarter 2016 as compared to 14% in the first quarter of 2015. The decrease in ROE as compared to the same quarter last year was primarily due to combination of decreases in net income and increases in shareholder equity. As Randy mentioned, the combined ratio in the first quarter of 2016 was 92.3% as compared to 89.7% in the same period of 2015. We’re moving the impact of catastrophes at 2 percentage points for 2016 and 0.1 percentage points for 2015 along with removing the impact of favorable reserve development of 10.9 percentage points for 2016 and 8.4 percentage points for 2015. The quarterly loss ratio would be 69.4% versus 67.9%, resulting in a quarter-over-quarter increase of 1.5 percentage points. We attribute this increase in the loss ratio to an increasing claim frequency in our commercial auto and commercial property lines…

We will now begin the question-and-answer session. [Operator Instructions] We have a question from Paul Newsome from Sandler O’Neill. Please go ahead.

Good morning. Could you give us a little - give me a little bit more detail about the - I’m looking at the accident year combined ratio for the year. And wondering how that’s sort of a good run rate or not, you had a couple of really low numbers in the back half of last year, but this actually is a little bit closer what you [segue from] [ph]. What’s the right way to think about that?

Well, this is Randy, Paul. I think we’ve shown a pretty good track record of reserving, so I always caution people about our accident year loss ratio, should be a little bit redundant from the reserving that we’ve done. So is it a good run rate, we expect that usually to come down a little bit as those claims and that being settled. So that’s - if you look at our historic kind of reserve redundancy maybe if you are kind of looking for a run rate, you might - take that off of that accident year loss ratio, that’d be one way to look at it.

I think, you historically done an accident year loss ratio above 100. You didn’t do that in a back half of 2015, so I don’t know if something changed, so just good results to the back half of last year from an accident year perspective or…

We don’t think, we changes anything in our reserving practices and it’s a couple of quarters, but I would personally look at is - we just had some good results.

Okay.

Paul, this is Mike. I think, if you look at our trend over last four or five years, we’ve made consistent improvement in that an accident year loss ratio over that time. So I think, just as those improvements continue to accumulate. We eventually end up at an accident year combined under 100. And rates are holding up, okay, at this point. And we don’t see loss cost inflation changing, so I feel like our run rate can continue forward has it been recently.

You couple of times sort of warned about Texas storms. Is it just too early to give us a general sense of how serious that could be? And, I mean, I usually have the second quarters, the largest cat loads for your company by - I usually have about 10 to 11 percent points of cat load there. Is it looking like kind of a typical second quarter, which always has a few storms in it or is it some we should be more serious about it? And I guess relatedly is this - this is related to the storms that hit Dallas in the first quarter. It sounds like - I mean, at least your results suggest you knock on the wood, miss those losses.

Yes. This is Randy, again. I think, it’s pretty early to tell, but second quarter is probably starting off for the most part of way we expected, we don’t more of our losses are going to come from the San Antonio area. Do I anticipate? Obviously, if the April storms were a big deal, we would do a press release. I don’t anticipate doing that. So it is too early to tell, but I don’t think it’s going to be anything material. In the Dallas area, we do write more commercial lines than personal lines. That is a known hail area. It’s an area that we are very careful from personal line standpoint. We do write more personal lines in the San Antonio area. So our - I guess, it’s probably going to come more from the San Antonio area; but our strategy in Texas is to - like many states the key is to really use a lot of spread of risk and we try to manage our - where we write and - from San Antonio to Houston to Dallas and into West Texas. So it’s too early to tell, but we’re not anticipating anything alarming.

Great. Thanks for the call.

Thank you, Paul.

[Operator Instructions] And this time, this will conclude our question-and-answer session. I would like to turn the conference back over to Randy Patten for any closing remarks.

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

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.