United Fire Group announces 54.5 percent dividend cut in 2020

United Fire Group (UFCS) will lower its quarterly dividend by 54.5% to 15 cents per share in 2020. Last year the insurer had announced the 7th consecutive year of dividend increases.

The lower dividend will be payable December 18, 2020 to shareholders of record as of December 4, 2020. A new annual dividend rate of $0.60 per share yields 2.6% at a stock price of $23.33.

UFG states that the company has a long history of paying quarterly dividends, with the quarterly cash dividend declared today marking the 211th consecutive quarterly dividend paid, dating back to March 1968. UFG’s corporate strategy is focused on growth that diversifies the effects of individual underwriting perils, and the new dividend level supports these strategic capital requirements.

Year-to-date the company's stock price is down 46.6 percent resulting in a current market cap of $583 million. Not all insurers have to cut their dividend, with Dividend Aristocrat AFLAC announcing a second dividend increase this year last week, with dividend growth accelerating.

Founded in 1946 as United Fire & Casualty Company, UFG, through its insurance company subsidiaries, is engaged in the business of writing property and casualty insurance. Through its subsidiaries, the company is licensed as a property and casualty insurer in 49 states, plus the District of Columbia. Its segment property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed reinsurance.