United Fire & Casualty to Close New Orleans Office

April 1, 2004

United Fire & Casualty Company announced it will close its New Orleans Regional Office and consolidate its business with that of the company’s regional office in Galveston, Texas.

All of the office’s administrative and underwriting operations will be transferred to the regional office in Galveston.

Although the company plans to sell the building that currently serves as the New Orleans regional office, it will acquire rental space to maintain a regional claims office in New Orleans. The consolidation will be complete by June 30, 2004.

The New Orleans regional office is located at 2626 Canal Street in New Orleans. It has served as the New Orleans regional office since Lafayette Insurance Company was purchased by United Fire in 1979. The office currently employs 81 and serves agents in Alabama, Arkansas, Louisiana, Mississippi and Tennessee.

The claims, marketing and loss control personnel will continue in their positions; however, they will now report to the regional office in Galveston. Approximately 23 relocation packages will be offered to New Orleans regional office employees. The consolidation will result in the elimination of approximately 18 positions.

President and CEO John A. Rife stated, “The closing of an office is one of the most difficult tasks I confront in my position. Yet, it is my duty to the company to make decisions that will contribute to the overall strength and vitality of United Fire Group. I am sensitive to the hardship this causes to those losing their jobs, and our company will provide them with assistance during this period. I remain very grateful for the excellent service that the staff in New Orleans has provided us, and I am hopeful that many of them will choose to relocate to our regional office in Galveston.”

The consolidation is expected to have a positive financial impact for the company, most notably by reducing expenses. In addition, the consolidation is expected to result in improved communication, increased efficiency and greater control of operations.

“Today’s technology has enabled us to consolidate our operations while maintaining a strong relationship with our agents, which we consider vital to our success,” Rife commented.

“One of my concerns has been the underwriting expense percentage component of the combined ratio, which actually increased in 2003 for the first time since 1999,” Rife said. “It is critical for us to examine our expense factors, as it is one area we have an opportunity to control. The proximity of our New Orleans office to our Galveston office was also a factor in our decision to consolidate. The company has no plans for any further consolidation of our regional offices.”

United Fire & Casualty Company is a regional insurer, who along with its insurance subsidiaries, offers personal and commercial property and casualty insurance and life insurance. Its products are marketed principally through its regional offices in Cedar Rapids, Iowa (company headquarters); New Orleans, La.; Denver, Colo.; and Galveston.

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