United Fire Reports Fourth-Quarter 2010 Results

-- Net income of $0.35 per diluted share for the fourth quarter of 2010,
compared with $0.07 for the fourth quarter of 2009.
-- Book value per share at $27.35, up $2.00 per share or 7.9 percent from
year end 2009.

CEDAR RAPIDS, Iowa, Feb. 14, 2011 (GLOBE NEWSWIRE) -- United Fire & Casualty
Company (Nasdaq:UFCS) today reports our financial results for the quarter and
year ended December 31, 2010.

--------------------------------------------------------------------------------
--------------
Three Months Ended

Financial Highlights December 31, Year Ended
December 31,

(In Thousands Except Shares Change
Change
and Per Share Data) 2010 2009 % 2010
2009 %
----------------------------- ----------- ---------- ------ -----------
---------- ------
Revenue Highlights

Net premiums earned $ 118,925 $ 119,747 (0.7)% $ 469,473
$ 478,498 (1.9)%
Net investment income 28,342 27,659 2.5 111,685
106,075 5.3
Total revenues 150,029 149,183 0.6 591,072
572,193 3.3
Income Statement Data

Net income (loss) $ 9,087 $ 1,779 NM $ 47,513 $
(10,441) NM
Net realized investment gains

(losses) 1,362 999 36.3 5,518
(8,566) 164.4
----------- ---------- ------ -----------
---------- ------

Operating income (loss) (1) 7,725 780 NM 41,995
(1,875) NM
----------- ---------- ------ -----------
---------- ------
Per Share Data

Diluted earnings (loss) per

share $ 0.35 $ 0.07 NM $ 1.80
$ (0.39) NM
Net realized investment gains

(losses) 0.06 0.04 50.0 0.20
(0.32) 162.5
----------- ---------- ------ -----------
---------- ------
Diluted operating income

(loss) per share (1) 0.29 0.03 NM 1.60
(0.07) NM
----------- ---------- ------ -----------
---------- ------
Catastrophe Data

Pre-tax catastrophe losses

(1) $ 4,339 $ 2,801 54.9 $ 19,770
$ 22,397 (11.7)
Effect on after-tax earnings 0.11 0.07 57.1 0.49
0.55 (10.9)
Effect on combined ratio 4.1% 2.6% 57.7 4.7%
5.1% (7.8)

Combined ratio 104.1% 114.1% (8.8) 99.9%
115.2% (13.3)
Book value per share 27.35
25.35 7.9
Return on equity 6.84%
(1.59)% NM
Cash dividends declared per

share 0.15 0.15 -- 0.60
0.60 --

Diluted weighted average

shares outstanding 26,255,419 26,588,809 (1.3) 26,337,678
26,609,922 (1.0)
----------------------------- ----------- ---------- ------ -----------
---------- ------
NM = not meaningful

(1) The Non-GAAP Financial Measures section of this release defines and
reconciles data not
prepared in accordance with U.S. GAAP.

United Fire is committed to quality over quantity in accounts, investments and
future growth

"Results this quarter and this year are a tremendous improvement over where
things stood a year ago," said President and CEO Randy Ramlo. "We're pleased to
see net income up, investment income up and our loss and loss expenses down,
even though we experienced a slight decrease in net premiums written for the
year.

"We attribute the decrease in premiums written to continuing weakness of the
economy and competitiveness of the insurance market. Despite some encouraging
signs, we're still seeing a slow recovery throughout our regions that is
affecting our current and potential commercial policyholders. Cancellations due
to non-payments and/or companies going out of business also contributed to the
decline in our premium writings. While our prices remain competitive in order to
retain and attract business, we're maintaining our focus on writing quality
accounts and following our underwriting standards.

"However, we're making headway on reducing loss expenses and we've been taking
advantage of opportunities to grow our personal lines to offset the weaker
commercial market. We've also seen a reduction in our Hurricane Katrina
development, reflecting the decline in our exposure related to Katrina as we've
continued to resolve outstanding litigation.

"Our life insurance business achieved their profitability goals for the year, as
sales of more traditional life products have increased, partially offsetting the
decrease in annuity sales. As interest rates remain low, so does consumer
interest in annuities.

"United Fire's focus on quality extends to our investment philosophy, as well.
While there are industry-wide concerns about the municipal bond market, we are
confident in the strength of our own bond portfolio. We select high quality
bonds based solely on their underlying credit (92 percent are rated "A" or
better). We also diversify our risk by purchasing bonds issued across a large
number of states. In 2010, we added a small number of bonds to our municipal
bond portfolio and we've been extending durations in order to capture higher
interest rates on our other bonds.

"We're also proud that United Fire has also been named one of the most
trustworthy publicly traded companies in America by Forbes and Audit Integrity.
According to the stringent Audit Integrity standards for transparency and fair
governance, less than five percent of the entire U.S. stock market qualifies for
inclusion on the list.

United Fire to Acquire Mercer Insurance Group

"On November 30, we announced our agreement to acquire Mercer Insurance Group,"
said Ramlo. "United Fire decided to enter the Mid-Atlantic and West Coast
markets because of the potential to diversify our risk profile and increase the
scale of our operations. Mercer Insurance has a long track record of operating
profitably in these markets, and there is no overlap between our two agency
networks."

Under the terms of the agreement, United Fire will acquire all of the
outstanding shares of Mercer Insurance common stock in a transaction expected to
close at the end of the first quarter of 2011. Mercer Insurance shareholders
will receive $28.25 per share in cash, representing an aggregate transaction
value of approximately $191 million.

The transaction is subject to customary conditions, including approval by the
shareholders of Mercer Insurance and regulatory authorities. Approval of the
transaction by United Fire shareholders is not required and there is no
financing condition to consummate the transaction. United Fire expects to
finance the transaction with a combination of available cash and bank financing.

"We are very pleased that the company and its employees, agents and
policyholders will be joining the United Fire family," Ramlo concluded. "The
transaction is a very attractive financial opportunity for us, and we anticipate
it will contribute to our net income and return on equity no later than 2012."

Consolidated Investment Results

-- Invested assets were $2.5 billion at year-end 2010, compared with $2.4
billion at year-end 2009. Fixed-maturity securities made up 92.5 percent
of the portfolio at year-end 2010, with equity securities accounting for
6.0 percent and the remaining 1.5 percent consisting of other
investments.

-- Net investment income increased 2.5 percent in the fourth quarter of
2010 and 5.3 percent in the year ended December 31, 2010, as compared
with the same periods of 2009. The growth in annuity sales in 2009
contributed to the increase in our invested assets and our 2010 net
investment income, in spite of historically low interest rates.

-- Realized investment gains were $2.1 million in the fourth quarter of
2010 and $8.5 million in the year ended December 31, 2010, compared with
realized investment gains of $1.5 million in the fourth quarter of 2009
and realized investment losses of $13.2 million in the year ended
December 31, 2009. The increase in our realized gains is attributable to
a significant reduction in other-than-temporary impairment charges,
which totaled $0.5 million in the year ended December 31, 2010 compared
to $18.3 million in the same period of 2009. We incurred substantial
other-than-temporary impairment charges in 2009 as a result of the
credit crisis that impacted the financial markets in 2008 and into 2009.

-- Unrealized investment gains totaled $102.6 million as of December 31,
2010, an increase of $20.2 million or 24.4 percent since December 31,
2009. While the total gain for the year was due to increases in our bond
and equity holdings, we saw a deterioration in the unrealized gains on
our bond portfolio develop during the fourth quarter due to rising
interest rates.

Property and Casualty Insurance Segment

For the year-ended December 31, 2010, premium revenues for our property and
casualty insurance segment were generated from 91 percent commercial lines
business and 9 percent personal lines business. Our top five states for direct
premiums written were Texas, Iowa, Missouri, Louisiana and Illinois.

--------------------------------------------------------------------------------
--------
Property & Casualty Insurance Financial Three Months Ended

Results: December 31, Year Ended
December 31,

(In Thousands) 2010 2009 2010
2009
--------------------------------------- ----------- ---------- -----------
----------
Revenues

Net premiums written (1) $ 90,723 $ 87,652 $ 414,908
$ 424,827
--------------------------------------- ----------- ---------- -----------
----------
Net premiums earned $ 106,824 $ 107,256 $ 420,373
$ 435,677
Investment income, net of investment

expenses 9,293 7,960 34,787
31,542
Realized investment gains (losses)

Other-than-temporary impairment

charges -- (167) (153)
(9,824)

All other realized gains 918 660 3,746
3,009
----------- ---------- -----------
----------
Total realized investment gains

(losses) 918 493 3,593
(6,815)

Other income 31 75 147
194
--------------------------------------- ----------- ---------- -----------
----------
Total Revenues $ 117,066 $ 115,784 $ 458,900
$ 460,598

Benefits, Losses and Expenses

Losses and loss settlement expenses $ 73,946 $ 86,310 $ 289,437
$ 365,721
Amortization of deferred policy

acquisition costs 26,255 26,172 102,636
105,606
Other underwriting expenses 10,952 9,886 28,003
30,553

Disaster charges and other related

expenses, net of recoveries -- 4 (16)
(1,335)
--------------------------------------- ----------- ---------- -----------
----------
Total Benefits, Losses and Expenses $ 111,153 $ 122,372 $ 420,060
$ 500,545

--------------------------------------- ----------- ---------- -----------
----------

Income (loss) before income taxes 5,913 (6,588) 38,840
(39,947)
--------------------------------------- ----------- ---------- -----------
----------

Federal income tax expense (benefit) 294 (4,265) 4,114
(22,270)
--------------------------------------- ----------- ---------- -----------
----------

Net income (loss) $ 5,619 $ (2,323) $ 34,726
$ (17,677)
--------------------------------------- ----------- ---------- -----------
----------

GAAP combined ratio:

--------------------------------------- ----------- ---------- -----------
----------
Net loss ratio (without catastrophes) 64.3% 78.2% 62.2%
70.1%
Hurricane Katrina litigation - effect

on net loss ratio 0.9 (0.3) 2.0
8.7

Other catastrophes - effect on net loss

ratio 4.1 2.6 4.7
5.1
--------------------------------------- ----------- ---------- -----------
----------

Net loss ratio 69.3% 80.5% 68.9%
83.9%
--------------------------------------- ----------- ---------- -----------
----------

Expense ratio (2) 34.8 33.6 31.0
31.3
--------------------------------------- ----------- ---------- -----------
----------

Combined ratio 104.1% 114.1% 99.9%
115.2%
--------------------------------------- ----------- ---------- -----------
----------

Statutory combined ratio: (1)

--------------------------------------- ----------- ---------- -----------
----------
Net loss ratio (without catastrophes) 64.3% 78.1% 62.2%
70.1%
Hurricane Katrina litigation - effect

on net loss ratio 0.9 (0.3) 2.0
8.7

Other catastrophes - effect on net loss

ratio 4.1 2.6 4.7
5.1
--------------------------------------- ----------- ---------- -----------
----------

Net loss ratio 69.3% 80.4% 68.9%
83.9%
--------------------------------------- ----------- ---------- -----------
----------

Expense ratio 30.8 32.4 31.0
30.3
--------------------------------------- ----------- ---------- -----------
----------

Combined ratio 100.1% 112.8% 99.9%
114.2%
--------------------------------------- ----------- ---------- -----------
----------
(1) The Statutory Financial Measures section of this release defines data
prepared in
accordance with statutory accounting practices, which is a comprehensive
basis of
accounting other than U.S. GAAP.

(2) We have excluded disaster charges and other related expenses, net of
recoveries, from
the GAAP expense ratio. These charges resulted from flood damage at our home
office and
hurricane damage at our Gulf Coast regional office in 2008.

-- Net premiums written increased in the fourth quarter of 2010 but
decreased for the year ended December 31, 2010, compared to the same
periods in 2009.

-- Commercial lines - A slow recovery continues to affect the economy and
potential commercial policyholders. In 2010, cancellations due to
non-payment and/or companies going out of business contributed to the
decline in our premium writings, while the soft pricing environment in
the insurance industry also continues to have an impact on our business.
During the fourth quarter of 2010, we slightly reduced our commercial
lines renewal pricing levels in order to retain quality accounts,
keeping approximately 80 percent of our accounts, which is in line with
our retention goals. New business pricing remained unchanged.
-- Personal lines - Personal lines retention rates reached approximately 87
percent for the year. We have been successful in achieving slight
increases in our personal lines rates and will continue pursuing
opportunities to grow our personal lines business.

-- Losses and loss settlement expenses decreased 14.3 percent in the fourth
quarter of 2010 and 20.9 percent in the year ended December 31, 2010, as
compared with the same periods in 2009. The improvement is due to our
prior year's claims experience, which resulted in favorable reserve
development of $45.9 million for 2010 and is consistent with our
historical development excluding the impact of Hurricane Katrina. The
2010 development included $8.6 million in adverse Katrina development as
a result of our continuing resolution of outstanding litigation. In
comparison our 2009 prior year's claims experience was significantly
impacted by adverse Katrina development totaling $38.0 million, which
resulted in unfavorable reserve development of $26.2 million.

-- Noncatastrophe claims experience - a decrease in claims severity
accompanied by a slight decrease in claims frequency in the year ended
December 31, 2010, as compared with the same period of 2009, contributed
to the reduction in losses and loss settlement expenses.

-- GAAP combined ratio improved by 10.0 percentage points in the fourth
quarter of 2010 and 15.3 percentage points in the year ended December
31, 2010, as compared with the same prior-year periods. This is due
primarily to the aforementioned decrease in our losses and loss
settlement expenses.

-- Other underwriting expenses increased 10.8 percent in the fourth quarter
of 2010 as compared to the same period of 2009, primarily due to
transaction costs of $1.2 million related to our acquisition of Mercer
Insurance Group that were incurred during the quarter. Year-to-date this
line decreased 8.4 percent, which is primarily the result of a higher
level of deferrable underwriting expenses in 2010 as compared to 2009.

Life Insurance Segment

United Life Insurance Company, our life insurance subsidiary, offers a variety
of products, including single premium annuities, universal life products and
traditional life products. For the year-ended December 31, 2010, according to
statutory financial measures that include annuities as premium income, our top
five states for business were Iowa, Wisconsin, Illinois, Minnesota and Nebraska.

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-----
Three Months Ended

Life Insurance Financial Results: December 31, Year Ended
December 31,

(In Thousands) 2010 2009 2010
2009
-------------------------------------- ---------- --------- -----------
----------
Revenues

Net premiums written (1) $ 12,072 $ 12,450 $ 48,984
$ 42,600
-------------------------------------- ---------- --------- -----------
----------
Net premiums earned $ 12,101 $ 12,491 $ 49,100
$ 42,821
Investment income, net of investment

expenses 19,049 19,699 76,898
74,533
Realized investment gains (losses)

Other-than-temporary impairment

charges -- -- (306)
(8,482)

All other realized gains 1,177 1,044 5,202
2,118
---------- --------- -----------
----------
Total realized investment gains

(losses) 1,177 1,044 4,896
(6,364)

Other income 636 165 1,278
605
-------------------------------------- ---------- --------- -----------
----------
Total Revenues $ 32,963 $ 33,399 $ 132,172 $
111,595

Benefits, Losses and Expenses

Losses and loss settlement expenses $ 5,418 $ 4,381 $ 20,359
$ 16,773
Increase in liability for future

policy benefits 6,246 8,534 27,229
23,897
Amortization of deferred policy

acquisition costs 3,179 1,505 10,735
9,287
Other underwriting expenses 2,490 1,786 11,318
8,745

Interest on policyholders' accounts 10,617 10,853 42,988
41,652
-------------------------------------- ---------- --------- -----------
----------
Total Benefits, Losses and Expenses $ 27,950 $ 27,059 $ 112,629 $
100,354

-------------------------------------- ---------- --------- -----------
----------

Income before income taxes 5,013 6,340 19,543
11,241
-------------------------------------- ---------- --------- -----------
----------

Federal income tax expense 1,545 2,238 6,756
4,005
-------------------------------------- ---------- --------- -----------
----------

Net income $ 3,468 $ 4,102 $ 12,787
$ 7,236
-------------------------------------- ---------- --------- -----------
----------
(1) The Statutory Financial Measures section of this release defines data
prepared in
accordance with statutory accounting practices, which is a comprehensive
basis of
accounting other than U.S. GAAP.

-- Net premiums earned increased 14.7 percent in 2010 compared to the year
prior as a result of our strategy to emphasize the marketing of our
traditional life insurance products, primarily single premium whole
life, to our independent life insurance agents to achieve a more
balanced product mix.

-- Increase in liability for future policy benefits decreased 26.8 percent
in the fourth quarter of 2010 and increased 13.9 percent for the year
ended December 31, 2010, compared to the same periods in 2009. The
decrease in the fourth quarter of 2010 as compared to the same period of
2009, is primarily due a decrease in interest rates. The increase for
the year ended December 31, 2010 as compared to the same period of 2009,
is primarily due to an increase in mortality rates. Also contributing to
the increase was an increase in the sales of our single premium whole
life product. These increases were somewhat offset by the decrease in
interest rates and a decrease in the number of beneficiaries choosing a
supplemental contract payout.

Our life insurance segment also experienced the following:

-- Losses and loss settlement expenses increased 23.7 percent in the fourth
quarter of 2010 and 21.4 percent for the year ended December 31, 2010,
compared to the same periods in 2009, reflecting an increase in both
annuity benefits and life insurance death benefits, as the mortality
assumptions we use in estimating reserves is correlated to the
demographics of our insureds.

-- Other underwriting expenses increased 29.4 percent for the year ended
December 31, 2010, compared to the same period in 2009, due primarily to
an increase in agent commissions that corresponds to the increase in
premiums written for our single premium whole life and universal life
products.

-- Interest on policyholders' accounts increased 3.2 percent for the year
ended December 31, 2010 as compared to the same period of 2009, because
of the higher average deferred annuity balance in 2010 versus 2009,
which led to the increased amount of interest credited in 2010.

-- Deferred annuity sales decreased 44.1 percent in the fourth quarter of
2010 and 57.3 percent in the year ended December 31, 2010, as compared
with the same periods of 2009. In the quarter and year ended December
31, 2010, deferred annuity sales have decreased, as interest rates have
continued to remain at historic lows and as some consumers with a
greater tolerance for risk are choosing to surrender their annuities and
place the funds in products with greater risk and potentially greater
return. Deferred annuity deposits are not recorded as a component of net
premiums written or net premiums earned; however, they do generate
investment income.

-- Net cash outflow related to our annuity business was $3.8 million in the
fourth quarter of 2010 versus a net cash inflow of $13.2 million in the
fourth quarter of 2009. For the year ended December 31, 2010, we
experienced a net cash inflow of $.4 million compared to $96.0 million
in the year ended December 31, 2009. The lower level of net cash inflows
is attributable to the decline in annuity sales.

Share Repurchase Program

In the fourth quarter of 2010, United Fire repurchased 38,742 shares of our
common stock for $.8 million, at an average cost of $19.95 per share. For the
year ended December 31, 2010, we repurchased 343,328 shares of our common stock
for $6.3 million, at an average cost of $18.29 per share. As of December 31,
2010, the book value per share of our common stock is $27.35. We are authorized
to purchase an additional 172,826 shares of common stock under our Share
Repurchase Program, which expires in August 2011.

Supplemental Information

For information supplemental to this release, please visit the Investor
Relations section of our website at www.unitedfiregroup.com. Select "Financial
Information" and then "Quarterly Results."

About United Fire & Casualty Company

Founded in 1946, United Fire & Casualty Company is engaged in the business of
writing property and casualty insurance and life insurance and selling
annuities. Our company's net premiums written totaled $463.9 million through the
year ended December 31, 2010, and our market capitalization was $584.7 million
at December 31, 2010.

We are licensed as a property and casualty insurer in 43 states, plus the
District of Columbia, and represented by over 800 independent agencies. The
company's line of products consists of commercial insurance (including surety
bonds) and personal insurance. Approximately 91 percent of property and casualty
premiums written are commercial in nature.

United Fire is rated A (Excellent) by A.M. Best Company. For the third
consecutive year, United Fire was named a "Top 10 Ease of Doing Business
Performer" for 2010 in Deep Customer Connections Inc.'s (DCC) eighth annual Ease
of Doing Business (EDB) survey. The performance of more than 200 property and
casualty carriers was assessed by 7,800 independent agents and brokers. They
rated the importance of 11 key factors, ranging from underwriting responsiveness
to handling claims promptly to employing effective, user-friendly technology.
DCC specializes in helping property and casualty carriers achieve profitable
growth by making it easy for their agents to work with them. DCC's EDB Index(R)
is an industry benchmark of carriers' EDB performance. United Fire has also been
named one of the most trustworthy publicly traded companies in America by Forbes
and Audit Integrity. According to the stringent Audit Integrity standards for
transparency and fair governance, less than five percent of the entire U.S.
stock market qualifies for the list.

Our subsidiary, United Life Insurance Company, is licensed in 28 states,
represented by over 900 independent life agencies, and has been named to the
Ward's 50 Life & Health Insurance Companies for five consecutive years
(2006-2010).

For more information about United Fire, visit www.unitedfiregroup.com.

The United Fire & Casualty Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7089

Statutory Financial Measures

United Fire and its subsidiaries are required to file financial statements based
on statutory accounting principles in each of the states where our insurance
companies are domiciled and licensed to conduct business. Management analyzes
financial data and statements that are prepared in accordance with statutory
accounting principles as well as U.S. GAAP.

The following definitions of key statutory financial measures are provided for
our readers' convenience. Regulation G promulgated by the Securities and
Exchange Commission does not require reconciliation to U.S. GAAP of data
prepared under a system of regulation of a government or governmental authority
or self-regulatory organization that is applicable to the registrant.

Premiums written is a measure of our overall business volume. Net premiums
written comprise direct and assumed premiums written, less ceded premiums
written. Direct premiums written is the amount of premiums charged for policies
issued during the period. Assumed premiums written is consideration or payment
we receive in exchange for insurance we provide to other insurance companies. We
report these premiums as revenue as they are earned over the underlying policy
period. Ceded premiums written is the portion of direct premiums written that we
cede to our reinsurers under our reinsurance contracts. Premiums written is an
important measure of business production for the period under review.

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----
Three Months Ended

(In Thousands) December 31, Year Ended
December 31,

2010 2009 2010
2009
----------------------------------- ----------- ---------- -----------
----------
Net premiums written $ 102,795 $ 100,102 $ 463,892 $
467,427
Net change in unearned premium 16,221 19,826 5,669
10,956

Net change in prepaid reinsurance

premium (91) (181) (88)
115
----------------------------------- ----------- ---------- -----------
----------

Net premiums earned $ 118,925 $ 119,747 $ 469,473 $
478,498
----------------------------------- ----------- ---------- -----------
----------

Combined ratio is a commonly used statutory financial measure of underwriting
performance. A combined ratio below 100 percent generally indicates a profitable
book of business. The combined ratio is the sum of two separately calculated
ratios, the loss and loss settlement expense ratio (the "net loss ratio") and
the underwriting expense ratio (the "expense ratio").

When prepared in accordance with U.S. GAAP, the net loss ratio is calculated by
dividing the sum of losses and loss settlement expenses by net premiums earned.
The expense ratio is calculated by dividing nondeferred underwriting expenses
and amortization of deferred policy acquisition costs by net premiums earned.

When prepared in accordance with statutory accounting principles, the net loss
ratio is calculated by dividing the sum of losses and loss settlement expenses
by net premium earned; the expense ratio is calculated by dividing underwriting
expenses by net premiums written.

Statutory surplus is the excess of admitted assets, those recognized and
accepted by the state insurance laws to determine solvency, over liabilities.

Non-GAAP Financial Measures

We believe that disclosure of certain Non-GAAP financial measures enhances
investor understanding of our financial performance. The following Non-GAAP
financial measures are utilized in this release:

Operating income (loss) is net income (loss) excluding realized capital gains
and losses and related federal income taxes. Because our calculation may differ
from similar measures used by other companies, investors should be careful when
comparing our measure of operating income to that of other companies. Management
evaluates this measurement and ratios derived from this measurement because we
believe it better represents the normal, ongoing performance of our businesses.

--------------------------------------------------------------------------------
-----
Three Months Ended Year Ended
December
(In Thousands Except Per Share Data) December 31, 31,

2010 2009 2010
2009
----------------------------------------- --------- -------- ----------
----------
Net income (loss) $ 9,087 $ 1,779 $ 47,513 $
(10,441)

After-tax realized investment (gains)

losses (1,362) (999) (5,518)
8,566
----------------------------------------- --------- -------- ----------
----------

Operating income (loss) $ 7,725 $ 780 $ 41,995 $
(1,875)
----------------------------------------- --------- -------- ----------
----------
Diluted earnings (loss) per share 0.35 0.07 1.80
(0.39)

Diluted operating income (loss) per share 0.29 0.03 1.60
(0.07)
----------------------------------------- --------- -------- ----------
----------

Catastrophe losses utilize the designations of the Insurance Services Office
(ISO) and are reported with loss 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 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") 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, such as Hurricane Katrina. The frequency and severity of
catastrophic 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 segment, 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 periodic earnings.

---------------------------------------------------------------------
Three Months Ended Year Ended December
(In Thousands) December 31, 31,

2010 2009 2010 2009
------------------------- --------- -------- ---------- ---------
ISO catastrophes $ 2,642 $ 2,461 $ 24,806 $ 58,757

Less Hurricane Katrina
loss development (1,000) 339 (8,576) (37,976)
------------------------- --------- -------- ---------- ---------
ISO catastrophes without
Hurricane Katrina $ 1,642 $ 2,800 $ 16,230 $ 20,781

Non-ISO catastrophes 2,697 1 3,540 1,616
------------------------- --------- -------- ---------- ---------

Total catastrophes $ 4,339 $ 2,801 $ 19,770 $ 22,397
------------------------- --------- -------- ---------- ---------

Disclosure of forward-looking statements

This release 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 and the Securities Exchange Act of 1934 for forward-looking statements. The
forward-looking statements are not historical facts and involve risks and
uncertainties that could cause actual results to differ materially from those
expected and/or projected. Such forward-looking statements are based on current
expectations, estimates, forecasts and projections about our company, 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)," "target(s),"
"forecast(s)," "project(s)," "predict(s)," "should," "could," "may," "will
continue," "might," "hope," "can" and other words and terms of similar meaning
or expression in connection with a discussion of future operating, financial
performance or financial condition, are intended to identify forward-looking
statements. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed in such forward-looking statements. Information concerning factors
that could cause actual results to differ materially from those in the
forward-looking statements is contained in Part I Item 1A "Risk Factors" of our
annual report on Form 10-K for the year ended December, 31, 2009, filed with the
SEC on March 1, 2010 and in our report on Form 10-Q for the quarter ended
September 30, 2010, filed with the SEC on November 1, 2010. The risks identified
on Form 10-K 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 release or as of the date they are made.

CONTACT: Randy A. Ramlo, President/CEO or
Dianne M. Lyons, Vice President/CFO, 319-399-5700