Exhibit 10.2


             


            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
                	
                            
                            1.0

                        	
                            
                            PLAN OBJECTIVES

                        


            


             


            
                	
                            
                             

                        	
                            
                            1.1

                        	
                            
                            Focus attention on the achievement of Corporate, Branch
                            and Department performance measures.

                        


            


             


            
                	
                            
                             

                        	
                            
                            1.2

                        	
                            
                            Provide a strong financial incentive to employees based
                            on the achievement of critical Corporate, Branch and Department
                            goals.

                        


            


             


            
                	
                            
                             

                        	
                            
                            1.3

                        	
                            
                            Provide a systematic incentive plan consistent with
                            specific performance objectives.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            1.4

                        	
                            
                            Alignment of all levels of employee commitment with the
                            interests of shareholders.

                        


            


             


            
                	
                            
                            2.0

                        	
                            
                            DEFINITIONS

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.1

                        	
                            
                            Top
                            Management:
                            The Chairman of the Board and the Chief Executive
                            Officer.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.2

                        	
                            
                            Calculated
                            Award: The
                            AIP Award a participant would receive based on the level of performance
                            achieved against each Component: Corporate, Branch and
                            Department.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.3

                        	
                            
                            Company:
                            United Fire Group, its subordinate divisions or
                            successor organization.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.4

                        	
                            
                            Corporate Performance
                            Component:
                            The United Fire Group annual financial measures and
                            specific objectives as established by Top Management. The attainment of
                            goals will be the basis for granting the Corporate Award Component.
                            Corporate performance measures will be established each year, and may
                            consist of financial indicators such as ROE and Combined
                            Ratio.

                        


            


             


            
                	
                            
                             

                        	
                            
                            2.5

                        	
                            
                            Earned
                            Award: A
                            participant’s Calculated Award including any discretionary
                            adjustment, resulting in his/her overall Award for the Plan
                            Year.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.6

                        	
                            
                            Branch and Department Performance
                            Component:
                            Specific performance objectives established for each
                            unit, the attainment of which will be the basis for granting the Branch
                            and Department Award Component.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.1

                        	
                            
                             


                            
                             

                        


            


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 1

                        


            


             

            
            


            

            

            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
                	
                            
                             

                        	
                            
                            2.7

                        	
                            
                            Maximum Performance
                            Level: The
                            maximum level of performance used for determining the Calculated Award.
                            The maximum has been set at 120% for the target awards; however,
                            maximum assignments may be modified for each Plan Year.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.8

                        	
                            
                            Plan
                            Year: The
                            twelve-month performance period corresponding to the calendar fiscal
                            year.

                        


            


             


            
                	
                            
                             

                        	
                            
                            2.9

                        	
                            
                            Target
                            Award: The
                            percentage of a participant's eligible salary that he/she would receive
                            assuming that 100% performance level on each of the assigned
                            performance measures is achieved. This will range from 10% - 40% of
                            eligible salary.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.10

                        	
                            
                            Threshold Performance
                            Level: The
                            minimum level of performance that must be achieved before any Earned
                            Awards will be paid. Threshold assignments may be modified for each
                            Plan Year.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            2.11

                        	
                            
                            Direct Written Premium
                            (DWP):
                            Includes all direct written premiums, excluding DWP from
                            Western RE Agreement.

                        


            


            
             


            
                	
                            
                            3.0

                        	
                            
                            PARTICIPATION/PROCEEDURES

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            3.1

                        	
                            
                            To be eligible to participate in this plan an employee
                            must have a minimum of one calendar year of service prior to December
                            31st of the year for which the Award is to be paid. This
                            requirement may be met through employment with any of the subsidiary
                            companies.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            3.2

                        	
                            
                            Eligible participants must have a minimum of 1,000 hours
                            of service in the calendar year the Award is paid and be employed by
                            the Company on the date the Award is paid. Any Award that would have
                            been payable shall be paid in the event of death to the spouse based on
                            the employee’s earnings for the year the Award is
                            based.

                        


            


             


            
                	
                            
                             

                        	
                            
                            3.3

                        	
                            
                            The employee will receive the percentage of bonus
                            attributable to the Company, Branch or Department the employee is
                            assigned to on December 31st of the year the Award is
                            earned.

                        


            


            
             


            
                	
                            
                            4.0

                        	
                            
                            PERFORMANCE MEASURES

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            4.1

                        	
                            
                            Top Management will establish the Corporate financial
                            performance measures, as well as appropriate performance targets and
                            performance thresholds.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            4.2

                        	
                            
                            Individual objectives will be established for each
                            eligible participant that focus attention on key desired results within
                            his/her respective area of responsibility.

                        


            


             


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 2

                        


            


             

            
            


            

            

            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
             


            
                	
                            
                             

                        	
                            
                            4.3

                        	
                            
                            The Performance Components (Corporate, Branch or
                            Department), and their relative weighting, will be established for each
                            Plan Year, based on the desired focus. The weighting of performance
                            measurements vary by level and/or function as follows, and may be
                            modified from year to year:

                        


            


            
             


            
                	
                            
                             

                        	
                            
                             

                        	
                            
                            Performance Targets

                        
	
                            
                            Tier

                        	
                            
                            Position

                        	
                            
                            Corporate ROE

                        	
                            
                            Corp/Branch LR

                        	
                            
                            Dept. Expense

                        
	
                            
                            AAAA

                        	
                            
                            CEO

                        	
                            
                            75.0%

                        	
                            
                            25.0%*

                        	
                            
                            -

                        
	
                            
                            AAA

                        	
                            
                            VP/Reg Pres

                        	
                            
                            60.0%

                        	
                            
                            20.0%

                        	
                            
                            20.0%

                        
	
                            
                            AA

                        	
                            
                            AVP/Mgr/Supv

                        	
                            
                            40.0%

                        	
                            
                            30.0%

                        	
                            
                            30.0%

                        
	
                            
                            A

                        	
                            
                            All Others

                        	
                            
                            30.0%

                        	
                            
                            35.0%

                        	
                            
                            35.0%

                        
	
                        	
                        	
                        	
                        	
                        	
                        


            


             


            
            * Revenue Growth


             


            
                	
                            
                             

                        	
                            
                            4.4

                        	
                            
                            When multiple performance measures are assigned, each
                            will be weighted based on the desired focus for each goal.

                        


            


            
             


            
                	
                            
                            5.0

                        	
                            
                            TARGET AWARDS

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            5.1

                        	
                            
                            Target Awards are established based on the
                            participant’s level, and a participant’s Target Award is
                            calculated as a percentage of his/her base salary. Earned Awards may
                            range from 0% to 120% of the Target Award. Target Awards are as
                            follows:

                        


            


            
             


            
                	
                            
                             


                            
                            Tier

                        	
                            
                             


                            
                            Position

                        	
                            
                            At


                            
                            Target %

                        
	
                            
                            AAAA

                        	
                            
                            CEO

                        	
                            
                            40.0%

                        
	
                            
                            AAA

                        	
                            
                            VP/Reg Pres

                        	
                            
                            30.0%

                        
	
                            
                            AA

                        	
                            
                            AVP/Mgr/Supv

                        	
                            
                            17.5%

                        
	
                            
                            A

                        	
                            
                            All Others

                        	
                            
                            10.0%

                        


            


            
             


            
                	
                            
                            6.0

                        	
                            
                            DETERMINATION OF CALCULATED AND EARNED
                            AWARDS

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.1

                        	
                            
                            Calculated Awards reflect a combination of Corporate,
                            Branch and Department performance that are indicative of each
                            participant's performance and contribution.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.2

                        	
                            
                            Each performance Component (Corporate, Branch and
                            Department) will stand alone when evaluating performance. Therefore,
                            each Component must meet or exceed the established Threshold (minimum)
                            performance level in order for Awards to be paid for that Component of
                            the Plan.

                        


            


            
             


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 3

                        


            


             

            
            


            

            

            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
                	
                            
                             

                        	
                            
                            6.3

                        	
                            
                            For determining the level of financial performance when
                            two or more performance indices are used, a formula will be utilized to
                            determine the overall performance.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.4

                        	
                            
                            Each participant's Calculated Award will be based on the
                            level of performance achieved against assigned performance
                            measures.

                        


            


             


            
                	
                            
                             

                        	
                            
                            6.5

                        	
                            
                            Department and Branch Objectives can be weighted based
                            on importance, if necessary.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.6

                        	
                            
                            The Calculated Award may be subject to an adjustment of
                            up to ±10% based on the evaluation of overall performance and
                            contribution of the participant. Ultimately, the Board is responsible
                            for reviewing the overall Award budget for all participants.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.7

                        	
                            
                            At the discretion of the Top Management, performance
                            outside of expectations or outside control may be recognized in the
                            determination of awards.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            6.8

                        	
                            
                            Before any Award is payable to a participant, the
                            participant’s performance level must at least meet solid
                            performance standards in order for him/her to be eligible to receive an
                            Earned Award.

                        


            


             


            
                	
                            
                            7.0

                        	
                            
                            AWARD CALCULATION

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            7.1

                        	
                            
                            Awards will be based on the Department and
                            Branch’s actual performance at year-end.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            7.2

                        	
                            
                            Department and Branch goals will be measured against the
                            established standards.

                        


            


             


            
                	
                            
                             

                        	
                            
                            7.3

                        	
                            
                            Award will be capped at two (2) times the Target Award
                            for each participant.

                        


            


             


            
                	
                            
                            8.0

                        	
                            
                            AWARD DISTRIBUTION

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            8.1

                        	
                            
                            Earned Awards will be calculated and paid in April,
                            following the end of the Plan Year for which the Awards have been
                            earned.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            8.2

                        	
                            
                            A participant must
                            be actively employed on the last day of the Plan
                            Year and actively
                            employed on the date of distribution in order to be eligible to receive
                            his/her Earned Award.

                        


            


             


            
                	
                            
                             

                        	
                            
                            8.3

                        	
                            
                            Up to one hundred (100%) percent of the Earned Award may
                            deferred into appropriate Corporate plans.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            8.4

                        	
                            
                            If a participant is promoted into a position where the
                            eligibility and/or Target Award changes, he/she may receive, at the
                            discretion of Top Management, the higher Award.

                        


            


             


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 4

                        


            


             

            
            


            

            

            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
             


            
                	
                            
                             

                        	
                            
                            8.5

                        	
                            
                            In the event that a participant does not meet
                            eligibility criteria during the Plan Year, he/she would not be eligible
                            to receive any Award.

                        


            


             


            
                	
                            
                             

                        	
                            
                            8.6

                        	
                            
                            In the event that a participant leaves the Company
                            during the Plan Year or before the date of award distribution due to
                            retirement or death, he/she (or surviving spouse), would be eligible to
                            receive a pro-rated Earned Award to the date of the qualifying event at
                            the sole and final discretion of Top Management. Earned Awards will be
                            payable based on overall results and distributed in April.

                        


            


            
             


            
                	
                            
                            9.0

                        	
                            
                            FUNDING

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            9.1

                        	
                            
                            The threshold Corporate performance
                            must be met for any
                            payout.

                        


            


             


            
                	
                            
                             

                        	
                            
                            9.2

                        	
                            
                            The plan will be funded with Company profits.

                        


            


            
             


            
                	
                            
                            10.0

                        	
                            
                            GENERAL

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            10.1

                        	
                            
                            The Chief Executive Officer, or his/her designee, shall
                            be responsible for the implementation and on-going administration of
                            the Plan.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            10.2

                        	
                            
                            Targets and weightings may be changed annually based on
                            the shift in focus.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            10.3

                        	
                            
                            Interpretation of all matters related to this Plan,
                            including but not limited to eligibility, calculation and determination
                            of Earned Awards, as well as the resolution of any questions relating
                            to accounting procedures of the Plan, shall be at the sole and final
                            determination of Top Management.

                        


            


            
             


            
                	
                            
                             

                        	
                            
                            10.4

                        	
                            
                            United Fire Group may amend or discontinue this Plan at
                            any time with respect to future Awards; however, any Awards earned up
                            to the date of modification or termination will be distributed in
                            accordance with Plan provisions at the time they were
                            earned.

                        


            


            
                	
                            
                             

                        	
                            
                            10.5

                        	
                            
                             


                            
                             

                        


            


            


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 5

                        


            


             

            
            


            

            

            
            United Fire Group


            
            ANNUAL INCENTIVE PLAN
            (AIP)


            
            PLAN DOCUMENT


             


            
            Nothing in this Plan shall be interpreted as giving any participant the
            right to be retained as an employee of United Fire Group or of limiting the
            Company’s rights to control or terminate the service of any employee at any time
            in the course of its business.


            
             


            
                	
                            
                             

                        	
                            
                            10.6

                        	
                            
                            This Plan shall be construed in accordance with all
                            applicable Federal and State securities and regulatory laws. In the
                            event that any section, or portion of a section, of the Plan shall be
                            held invalid, illegal, or unenforceable, that section, or portion of
                            that section, shall not affect any other section hereof. This Plan
                            shall be construed and enforced as if the invalid, illegal, or
                            unenforceable section, or portion of the section, had never been
                            contained herein.

                        


            


            
             


            
             


            
             


             


            
                	
                            
                            Compensation Resources, Inc.

                        	
                            
                            Page 6