News Column

EMC Insurance Group Inc. Reports 2014 Second Quarter and Six Month Results

August 7, 2014

DES MOINES, Iowa--(BUSINESS WIRE)-- EMC Insurance Group Inc. (NASDAQ:EMCI):

Second Quarter Ended June 30, 2014

Operating Loss Per Share – $0.04

Net Income Per Share – $0.08

Net Realized Investment Gains Per Share – $0.11

Catastrophe and Storm Losses Per Share – $1.35

Large Losses Per Share – $0.48

GAAP Combined Ratio – 109.6 percent

Six Month Ended June 30, 2014

Operating Income Per Share – $0.69

Net Income Per Share – $0.87

Net Realized Investment Gains Per Share – $0.17

Catastrophe and Storm Losses Per Share – $1.71

Large Losses Per Share – $0.68

GAAP Combined Ratio – 103.9 percent

2014 Operating Income Guidance – $2.00 to $2.25 per share

EMC Insurance Group Inc. (NASDAQ OMX/GS:EMCI) today reported an operating loss of $509,000 ($0.04 per share) for the second quarter ended June 30, 2014, compared to operating income of $6,098,000 ($0.47 per share) for the second quarter of 20131. For the six months ended June 30, 2014, the Company reported operating income of $9,266,000 ($0.69 per share), compared to $18,637,000 ($1.43 per share) for the same period in 2013.

Net income, including realized investment gains and losses, totaled $1,014,000 ($0.08 per share) for the second quarter of 2014, compared to $6,212,000 ($0.48 per share) for the second quarter of 2013. For the six months ended June 30, 2014, the Company reported net income of $11,609,000 ($0.87 per share), compared to $20,485,000 ($1.58 per share) for the same period in 2013.

The Company’s GAAP combined ratio was 109.6 percent in the second quarter of 2014, compared to 102.2 percent in the second quarter of 2013. For the first six months of 2014, the Company’s GAAP combined ratio was 103.9 percent, compared to 98.1 percent in 2013.

“Second quarter operating results were impacted by higher than anticipated catastrophe and storm losses,” stated President and Chief Executive Officer Bruce G. Kelley. “The frequency of convective storms was down for the first six months of the year compared to recent averages; however, storms during the second quarter happened to strike areas in the Midwest where we have sizable exposures. Improved premium rate adequacy achieved over the past several years reduced the impact that these storms otherwise would have had on our results,” continued Kelley.

Kelley went on to say, “The relatively high loss and settlement expense ratio reported by the reinsurance segment in the second quarter, coupled with the exceptionally low ratio reported in the second quarter of 2013, was responsible for much of the increase in the combined ratio for the quarter.”

Premiums earned increased 5.3 percent to $133,952,000 for the second quarter of 2014, from $127,189,000 in the second quarter of 2013. In the property and casualty insurance segment, premiums earned increased 5.8 percent, with the majority of the increase attributable to rate level increases on renewal business, growth in insured exposures and an increase in retained policies. In the reinsurance segment, premiums earned increased 3.6 percent, reflecting growth in specialty casualty and marine business. Premium growth was limited by an extension of the renewal date of two large facility contracts from May 1 to July 1, and rate level declines on catastrophe excess of loss business. For the first six months of 2014, premiums earned increased 7.8 percent (7.5 percent in the property and casualty insurance segment and 8.9 percent in the reinsurance segment).

Catastrophe and storm losses totaled $27,945,000 ($1.35 per share after tax) in the second quarter of 2014, compared to $21,349,000 ($1.06 per share after tax) in the second quarter of 2013. Second quarter 2014 catastrophe and storm losses accounted for 20.9 percentage points of the combined ratio, which is above the Company’s most recent 10-year average of 18.0 percentage points for this period and the 16.8 percentage points experienced in the second quarter of 2013. For the first six months of 2014, catastrophe and storm losses totaled $35,357,000 ($1.71 per share after tax), compared to $26,746,000 ($1.34 per share after tax) in 2013. On a segment basis, catastrophe and storm losses amounted to $21,465,000 ($1.04 per share after tax) and $28,437,000 ($1.37 per share after tax) in the property and casualty insurance segment, and $6,480,000 ($0.31 per share after tax) and $6,920,000 ($0.34 per share after tax) in the reinsurance segment, for the three months and six months ended June 30, 2014, respectively.

The Company reported $6,643,000 ($0.32 per share after tax) of favorable development on prior years’ reserves during the second quarter of 2014, compared to $2,063,000 ($0.10 per share after tax) in the second quarter of 2013. For the first six months of 2014, favorable development totaled $9,231,000 ($0.45 per share after tax), compared to $6,319,000 ($0.32 per share after tax) in 2013. Development amounts can vary significantly from quarter to quarter and year to year depending on a number of factors, including the number of claims settled and the settlement terms, and should therefore not be considered a reliable factor in assessing the adequacy of the Company’s carried reserves. The most recent actuarial analysis of the Company’s carried reserves indicates that carried reserves remain within the top quartile of the range of reasonable reserves.

Large losses (which the Company defines as losses greater than $500,000 for the EMC Insurance Companies pool, excluding catastrophe and storm losses) increased to $9,913,000 ($0.48 per share after tax) in the second quarter of 2014 from $6,548,000 ($0.33 per share after tax) in the second quarter of 2013. For the first six months of 2014, large losses increased to $14,109,000 ($0.68 per share after tax) from $9,483,000 ($0.47 per share after tax) in 2013.

Results for the second quarter and first six months of 2014 reflect a significant reduction in the amount of net periodic pension and postretirement benefit costs allocated to the Company. Net periodic pension benefit cost declined to $196,000 and $340,000 for the three and six months ended June 30, 2014, compared to $725,000 and $1,507,000 for the same periods in 2013. This decline reflects an increase in the expected return on plan assets due to growth of the plan assets and a decline in the amount of net actuarial loss amortized into expense. Net periodic postretirement benefit cost changed significantly as a result of the plan amendment that was announced in the fourth quarter of 2013. The Company recognized net periodic postretirement benefit income of $771,000 and $1,542,000 for the three and six months ended June 30, 2014, compared to net periodic postretirement benefit expense of $728,000 and $1,456,000 in the same periods in 2013. The plan amendment created a large prior service credit that is being amortized into expense over 10 years. In addition, the service cost and interest cost components of the revised plan’s net periodic benefit cost are significantly lower than those of the prior plan.

Net investment income increased 0.3 percent and 6.7 percent to $11,076,000 and $22,931,000 for the second quarter and first six months of 2014, from $11,040,000 and $21,483,000 for the same periods in 2013. These increases reflect a higher average invested balance in fixed maturity securities and an increase in dividend income; however, approximately $442,000 (2.1 percentage points) of the increase for the first six months of 2014 resulted from the early payoff of a commercial mortgage-backed security during the first quarter of 2014 that was purchased at a significant discount to par value, which accelerated the accretion of the discount to par value and therefore increased investment income. The investment income amounts reported for the second quarter and first six months of 2013 included $201,000 of funds received from a litigation settlement on one security. Excluding this amount from the calculations, the increases in investment income would have been 2.2 percent and 7.7 percent, respectively.

Net realized investment gains totaled $1,523,000 ($0.11 per share) and $2,343,000 ($0.17 per share) for the second quarter and first six months of 2014, compared to $114,000 ($0.01 per share) and $1,848,000 ($0.14 per share) for the same periods in 2013. During the first quarter of 2014, the Company invested in a limited partnership that is designed to help protect the Company from a sudden and significant decline in the value of its equity portfolio. Included in the net realized investment gains reported for the second quarter and first six months of 2014, are $533,000 and $772,000 of net realized investment losses attributed to the decline in the carrying value of this limited partnership.

At June 30, 2014, consolidated assets totaled $1.4 billion, including $1.3 billion in the investment portfolio, and stockholders’ equity totaled $486.6 million, an increase of 6.9 percent from December 31, 2013. Book value of the Company’s stock increased 5.4 percent to $36.05 per share, from $34.21 per share at December 31, 2013. Book value excluding accumulated other comprehensive income increased to $30.18 per share from $29.78 per share at December 31, 2013.

On July 21, 2014, management announced that, based on actual results for the first six months of the year and projections for the remainder of the year, it was revising its 2014 operating income guidance to a range of $2.00 to $2.25 per share. This guidance is based on a projected GAAP combined ratio of 101.0 percent and a mid-single digit increase in investment income. The projected GAAP combined ratio has a load of 11.2 percentage points for catastrophe and storm losses.

The Company will hold an earnings teleconference call at 11:00 a.m. Eastern Time on August 7, 2014 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company’s results for the quarter ended June 30, 2014, as well as its expectations for the remainder of 2014. Dial-in information for the call is toll-free 1-877-407-9205 (International: 1-201-689-8054).

Members of the news media, investors and the general public are invited to access a live webcast of the conference call via the Company’s investor relations page at www.emcins.com/ir. The webcast will be archived and available for replay until November 7, 2014. A transcript of the teleconference will also be available on the Company’s website shortly after the completion of the teleconference.

About EMCI:

EMC Insurance Group Inc. is a publicly held insurance holding company with operations in property and casualty insurance and reinsurance, which was formed in 1974 and became publicly held in 1982. The Company’s common stock trades on the Global Select Market tier of the NASDAQ OMX Stock Market under the symbol EMCI. Additional information regarding EMC Insurance Group Inc. may be found at www.emcins.com/ir. EMCI’s parent company is Employers Mutual Casualty Company (EMCC). EMCI and EMCC, together with their subsidiary and affiliated companies, conduct operations under the trade name EMC Insurance Companies.

Cautionary Note Regarding Forward-Looking Statements:

The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans and objectives may vary materially from those expressed in the forward-looking statements.

The risks and uncertainties that may affect the actual results of the Company include, but are not limited to, the following:

  • catastrophic events and the occurrence of significant severe weather conditions;
  • the adequacy of loss and settlement expense reserves;
  • state and federal legislation and regulations;
  • changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general economy;
  • rating agency actions;
  • “other-than-temporary” investment impairment losses; and
  • other risks and uncertainties inherent to the Company’s business, including those discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.

    Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,” “project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements. The Company disclaims any obligation to update such statements or to announce publicly the results of any revisions that it may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

    ¹The Company prepares its public financial statements in conformity with accounting principles generally accepted in the Unites States of America (GAAP). Operating income/loss is a non-GAAP financial measure, calculated by excluding net realized investment gains/losses from net income/loss. The Company’s calculation of operating income/loss may differ from similar measures used by other companies, so investors should exercise caution when comparing the Company’s measure of operating income/loss to the measure of other companies. Management’s projected operating income guidance is also considered a non-GAAP financial measure.

    Management believes operating income/loss is useful to investors because it illustrates the performance of our normal, ongoing operations, which is important in understanding and evaluating our financial condition and results of operations. While this measure is consistent with measures utilized by investors to evaluate performance, it is not a substitute for the GAAP financial measure of net income/loss. Therefore, the Company has provided the following reconciliation of the non-GAAP financial measure of operating income/loss to the GAAP financial measure of net income. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

    The reconciliation of operating income/loss to net income is as follows:

                   
    Three Months Ended June 30, Six Months Ended June 30,
    2014 2013 2014 2013
    ($ in thousands)
    Operating income (loss) $ (509 ) $ 6,098 $ 9,266 $ 18,637
    Net realized investment gains   1,523     114   2,343   1,848
    Net income $ 1,014   $ 6,212 $ 11,609 $ 20,485
     
     
    CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
    ($ in thousands, except share and per share amounts)
        Property and            
    Casualty Parent
    Quarter ended June 30, 2014     Insurance     Reinsurance     Company     Consolidated

    Revenues:

    Premiums earned $ 103,517 $ 30,435 $ - $ 133,952
    Investment income, net 7,972 3,106 (2 ) 11,076
    Other income   181     -     -     181  
      111,670     33,541     (2 )   145,209  

    Losses and expenses:

    Losses and settlement expenses 80,787 25,059 - 105,846
    Dividends to policyholders 2,213 - - 2,213
    Amortization of deferred policy acquisition costs 18,011 7,107 - 25,118
    Other underwriting expenses 13,485 119 - 13,604
    Interest expense 85 - - 85
    Other expenses   234     (181 )   363     416  
      114,815     32,104     363     147,282  
    Operating income (loss) before income taxes   (3,145 )   1,437     (365 )   (2,073 )
    Realized investment gains   1,568     775     -     2,343  
    Income (loss) before income taxes   (1,577 )   2,212     (365 )   270  

    Income tax expense (benefit):

    Current (367 ) 694 (129 ) 198
    Deferred   (770 )   (172 )   -     (942 )
      (1,137 )   522     (129 )   (744 )
    Net income (loss) $ (440 ) $ 1,690   $ (236 ) $ 1,014  
    Average shares outstanding 13,470,972

    Per Share Data:

    Net income (loss) per share - basic and diluted $ (0.03 ) $ 0.13 $ (0.02 ) $ 0.08
    Catastrophe and storm losses (after tax) $ (1.04 ) $ (0.31 ) $ - $ (1.35 )

    Reported favorable development experienced on prior years' reserves (after tax)

    $ 0.23 $ 0.09 $ - $ 0.32
    Dividends per share $ 0.23

    Other Information of Interest:

    Net written premiums $ 112,464 $ 26,560 $ - $ 139,024
    Catastrophe and storm losses $ 21,465 $ 6,480 $ - $ 27,945

    Reported favorable development experienced on prior years' reserves

    $ (4,740 ) $ (1,903 ) $ - $ (6,643 )

    GAAP Combined Ratio:

    Loss and settlement expense ratio 78.0 % 82.3 % - 79.0 %
    Acquisition expense ratio   32.6 %   23.8 %   -     30.6 %
      110.6 %   106.1 %   -     109.6 %
     
     
    CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
    ($ in thousands, except share and per share amounts)
        Property and            
    Casualty Parent
    Quarter ended June 30, 2013     Insurance     Reinsurance     Company     Consolidated

    Revenues:

    Premiums earned $ 97,817 $ 29,372 $ - $ 127,189
    Investment income, net 8,096 2,946 (2 ) 11,040
    Other income   163     -     -     163  
      106,076     32,318     (2 )   138,392  

    Losses and expenses:

    Losses and settlement expenses 74,080 14,888 - 88,968
    Dividends to policyholders 2,333 - - 2,333
    Amortization of deferred policy acquisition costs 16,923 6,642 - 23,565
    Other underwriting expenses 14,904 151 - 15,055
    Interest expense 85 - - 85
    Other expenses   186     101     325     612  
      108,511     21,782     325     130,618  
    Operating income (loss) before income taxes   (2,435 )   10,536     (327 )   7,774  
    Realized investment gains (losses)   392     (217 )   -     175  
    Income (loss) before income taxes   (2,043 )   10,319     (327 )   7,949  

    Income tax expense (benefit):

    Current (645 ) 3,360 (113 ) 2,602
    Deferred   (835 )   (30 )   -     (865 )
      (1,480 )   3,330     (113 )   1,737  
    Net income (loss) $ (563 ) $ 6,989   $ (214 ) $ 6,212  
    Average shares outstanding 13,055,443

    Per Share Data:

    Net income (loss) per share - basic and diluted $ (0.05 ) $ 0.54 $ (0.01 ) $ 0.48
    Catastrophe and storm losses (after tax) $ (0.92 ) $ (0.14 ) $ - $ (1.06 )

    Reported (adverse) favorable development experienced on prior years' reserves (after tax)

    $ (0.04 ) $ 0.14 $ - $ 0.10
    Dividends per share $ 0.21

    Other Information of Interest:

    Net written premiums $ 105,259 $ 30,855 $ - $ 136,114
    Catastrophe and storm losses $ 18,489 $ 2,860 $ - $ 21,349

    Reported adverse (favorable) development experienced on prior years' reserves

    $ 755 $ (2,818 ) $ - $ (2,063 )

    GAAP Combined Ratio:

    Loss and settlement expense ratio 75.7 % 50.7 % - 70.0 %
    Acquisition expense ratio   35.0 %   23.1 %   -     32.2 %
      110.7 %   73.8 %   -     102.2 %
     
     
    CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
    ($ in thousands, except share and per share amounts)
                   
    Property and
    Casualty Parent
    Six Months Ended June 30, 2014     Insurance     Reinsurance     Company     Consolidated

    Revenues:

    Premiums earned $ 204,764 $ 62,268 $ - $ 267,032
    Investment income, net 16,588 6,349 (6 ) 22,931
    Other income   382     -     -     382  
      221,734     68,617     (6 )   290,345  

    Losses and expenses:

    Losses and settlement expenses 148,513 46,302 - 194,815
    Dividends to policyholders 3,929 - - 3,929
    Amortization of deferred policy acquisition costs 35,752 13,981 - 49,733
    Other underwriting expenses 28,024 1,010 - 29,034
    Interest expense 169 - - 169
    Other expenses   408     (14 )   717     1,111  
      216,795     61,279     717     278,791  
    Operating income (loss) before income taxes   4,939     7,338     (723 )   11,554  
    Realized investment gains   2,579     1,026     -     3,605  
    Income (loss) before income taxes   7,518     8,364     (723 )   15,159  

    Income tax expense (benefit):

    Current 1,850 2,704 (254 ) 4,300
    Deferred   (444 )   (306 )   -     (750 )
      1,406     2,398     (254 )   3,550  
    Net income (loss) $ 6,112   $ 5,966   $ (469 ) $ 11,609  
    Average shares outstanding 13,409,851

    Per Share Data:

    Net income (loss) per share - basic and diluted $ 0.46 $ 0.44 $ (0.03 ) $ 0.87
    Catastrophe and storm losses (after tax) $ (1.37 ) $ (0.34 ) $ - $ (1.71 )

    Reported favorable development experienced on prior years' reserves (after tax)

    $ 0.28 $ 0.17 $ - $ 0.45
    Dividends per share $ 0.46
    Book value per share $ 36.05
    Effective tax rate 23.4 %
    Annualized net income as a percent of beg. SH equity 5.1 %

    Other Information of Interest:

    Net written premiums $ 214,977 $ 59,452 $ - $ 274,429
    Catastrophe and storm losses $ 28,437 $ 6,920 $ - $ 35,357

    Reported favorable development experienced on prior years' reserves

    $ (5,679 ) $ (3,552 ) $ - $ (9,231 )

    GAAP Combined Ratio:

    Loss and settlement expense ratio 72.5 % 74.4 % - 73.0 %
    Acquisition expense ratio   33.1 %   24.0 %   -     30.9 %
      105.6 %   98.4 %   -     103.9 %
     
     
    CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
    ($ in thousands, except share and per share amounts)
                   
    Property and
    Casualty Parent
    Six Months Ended June 30, 2013     Insurance     Reinsurance     Company     Consolidated

    Revenues:

    Premiums earned $ 190,522 $ 57,164 $ - $ 247,686
    Investment income, net 15,745 5,743 (5 ) 21,483
    Other income   398     -     -     398  
      206,665     62,907     (5 )   269,567  

    Losses and expenses:

    Losses and settlement expenses 130,048 31,494 - 161,542
    Dividends to policyholders 4,527 - - 4,527
    Amortization of deferred policy acquisition costs 33,640 12,192 - 45,832
    Other underwriting expenses 30,114 962 - 31,076
    Interest expense 216 - - 216
    Other expenses   391     (340 )   708     759  
      198,936     44,308     708     243,952  
    Operating income (loss) before income taxes   7,729     18,599     (713 )   25,615  
    Realized investment gains   2,349     494     -     2,843  
    Income (loss) before income taxes   10,078     19,093     (713 )   28,458  

    Income tax expense (benefit):

    Current 2,315 6,032 (249 ) 8,098
    Deferred   (217 )   92     -     (125 )
      2,098     6,124     (249 )   7,973  
    Net Income (loss) $ 7,980   $ 12,969   $ (464 ) $ 20,485  
    Average shares outstanding 13,000,865

    Per Share Data:

    Net income (loss) per share - basic and diluted $ 0.61 $ 1.00 $ (0.03 ) $ 1.58
    Catastrophe and storm losses (after tax) $ (1.17 ) $ (0.17 ) $ - $ (1.34 )

    Reported favorable development experienced on prior years' reserves (after tax)

    $ 0.09 $ 0.23 $ - $ 0.32
    Dividends per share $ 0.42
    Book value per share $ 30.75
    Effective tax rate 28.0 %
    Annualized net income as a percent of beg. SH equity 10.2 %

    Other Information of Interest:

    Net written premiums $ 200,040 $ 58,204 $ - $ 258,244
    Catastrophe and storm losses $ 23,354 $ 3,392 $ - $ 26,746

    Reported favorable development experienced on prior years' reserves

    $ (1,783 ) $ (4,536 ) $ - $ (6,319 )

    GAAP Combined Ratio:

    Loss and settlement expense ratio 68.3 % 55.1 % - 65.2 %
    Acquisition expense ratio   35.8 %   23.0 %   -     32.9 %
      104.1 %   78.1 %   -     98.1 %
     
     
    CONSOLIDATED BALANCE SHEETS
    ($ in thousands, except share and per share amounts)
       

      June 30,  

        December 31,
    2014 2013
    (Unaudited)
    ASSETS
    Investments:

    Fixed maturity securities available-for-sale, at fair value (amortized cost $1,028,029 and $1,009,572)

    $ 1,071,203 $ 1,027,984

    Equity securities available-for-sale, at fair value (cost $120,870 and $113,835)

    184,576 169,848
    Other long-term investments 6,159 2,392
    Short-term investments   59,799   56,166
    Total investments 1,321,737 1,256,390
     
    Cash 568 239
    Reinsurance receivables due from affiliate 35,045 34,760
    Prepaid reinsurance premiums due from affiliate 8,796 9,717
    Deferred policy acquisition costs (affiliated $39,064 and $37,414) 39,306 37,792
    Prepaid pension and postretirement benefits due from affiliate 23,082 23,121
    Accrued investment income 10,192 9,984
    Accounts receivable 2,379 1,080
    Income taxes recoverable 3,058 -
    Goodwill 942 942
    Other assets (affiliated $4,097 and $4,780)   4,291   4,908
    Total assets $ 1,449,396 $ 1,378,933
     
    LIABILITIES
    Losses and settlement expenses (affiliated $643,270 and $600,313) $ 651,884 $ 610,181
    Unearned premiums (affiliated $226,518 and $218,788) 227,555 220,627
    Other policyholders' funds (all affiliated) 8,705 8,491
    Surplus notes payable to affiliate 25,000 25,000
    Amounts due affiliate to settle inter-company transaction balances 5,167 13,522
    Pension and postretirement benefits payable to affiliate 3,348 3,401
    Income taxes payable - 1,530
    Deferred income taxes 22,953 12,822
    Other liabilities (affiliated $18,049 and $25,161)   18,159   28,149
    Total liabilities   962,771   923,723
     
    STOCKHOLDERS' EQUITY

    Common stock, $1 par value, authorized 20,000,000 shares; issued and outstanding, 13,498,385 shares in 2014 and 13,306,027 shares in 2013

    13,498 13,306
    Additional paid-in capital 104,854 99,309
    Accumulated other comprehensive income 79,219 59,010
    Retained earnings   289,054   283,585
    Total stockholders' equity   486,625   455,210
    Total liabilities and stockholders' equity $ 1,449,396 $ 1,378,933
     
     
    INVESTMENTS
    The Company had total cash and invested assets with a carrying value of $1.3 billion as of June 30, 2014, and December 31, 2013, respectively. The following table summarizes the Company's cash and invested assets as of the dates indicated:
                   
    June 30, 2014
    Percent of
    Amortized Fair Total Carrying
    ($ in thousands) Cost Value Fair Value Value
    Fixed maturity securities available-for-sale $ 1,028,029 $ 1,071,203 81.0 % $ 1,071,203
    Equity securities available-for-sale 120,870 184,576 14.0 % 184,576
    Cash 568 568 - 568
    Short-term investments 59,799 59,799 4.5 % 59,799
    Other long-term investments   6,159     6,159   0.5 %   6,159  
    $ 1,215,425   $ 1,322,305   100.0 % $ 1,322,305  
     
    December 31, 2013
    Percent of
    Amortized Fair Total Carrying
    ($ in thousands) Cost Value Fair Value Value
    Fixed maturity securities available-for-sale $ 1,009,572 $ 1,027,984 81.8 % $ 1,027,984
    Equity securities available-for-sale 113,835 169,848 13.5 % 169,848
    Cash 239 239 - 239
    Short-term investments 56,166 56,166 4.5 % 56,166
    Other long-term investments   2,392     2,392   0.2 %   2,392  
    $ 1,182,204   $ 1,256,629   100.0 % $ 1,256,629  
     
    NET WRITTEN PREMIUMS
    Three Months Ended Six Months Ended
    June 30, 2014June 30, 2014
    Percent of Percent of
    Percent of Increase/(Decrease) Percent of Increase/(Decrease)
    Net Written in Net Written Net Written in Net Written
    Premiums Premiums Premiums Premiums
    Property and Casualty Insurance
    Commercial Lines:
    Automobile 19.9 % 13.8 % 19.1 % 13.5 %
    Liability 16.6 % 8.5 % 16.5 % 10.8 %
    Property 18.7 % 8.8 % 18.0 % 10.6 %
    Workers' compensation 15.3 % 5.8 % 15.1 % 5.1 %
    Other   1.6 % 9.6 % 1.3 % (1.7 )%
    Total commercial lines   72.1 % 9.4 % 70.0 % 9.9 %
     
    Personal Lines:
    Automobile 4.7 % (10.3 )% 4.6 % (9.4 )%
    Property 4.0 % (11.1 )% 3.6 % (10.6 )%
    Liability   0.1 % 8.9 % 0.1 % 11.0 %
    Total personal lines   8.8 % (10.4 )% 8.3 % (9.7 )%
    Total property and casualty insurance   80.9 % 6.8 % 78.3 % 7.5 %
     
    Reinsurance:
    Pro rata (1) 6.0 % (30.3 )% 8.2 % 7.1 %
    Excess of loss (1)   13.1 % (3.5 )% 13.5 % (0.7 )%
    Total reinsurance   19.1 % (13.9 )% 21.7 % 2.1 %
    Total   100.0 % 2.1 % 100.0 % 6.3 %
     
    (1) Includes $532,146 negative portfolio adjustment from the January 1, 2013 decreased participation in the MRB pool.
     





    EMC Insurance Group Inc.

    Investors:

    Steve Walsh, 515-345-2515

    or

    Media:

    Lisa Hamilton, 515-345-7589

    Source: EMC Insurance Group Inc.


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    Source: Business Wire


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