8-8-13 6:30 AM EDT | Email Article

EMC Insurance Group Inc. (Nasdaq: EMCI):

Second Quarter Ended June 30, 2013
Operating Income Per Share – $0.47
Net Income Per Share – $0.48
Net Realized Investment Gains Per Share – $0.01
Catastrophe and Storm Losses Per Share – $1.06
Large Losses Per Share – $0.33
GAAP Combined Ratio – 102.2 percent

Six Months Ended June 30, 2013
Operating Income Per Share – $1.43
Net Income Per Share – $1.58
Net Realized Investment Gains Per Share – $0.14
Catastrophe and Storm Losses Per Share – $1.34
Large Losses Per Share – $0.47
GAAP Combined Ratio – 98.1 percent

EMC Insurance Group Inc. (Nasdaq OMX/GS:EMCI) today reported operating income of $6,098,000 ($0.47 per share) for the second quarter ended June 30, 2013, compared to an operating loss of $1,837,000 ($0.14 per share) for the second quarter of 20121. For the six months ended June 30, 2013, the Company reported operating income of $18,637,000 ($1.43 per share), compared to $11,590,000 ($0.90 per share) for the same period in 2012.

Net income, including realized investment gains and losses, totaled $6,212,000 ($0.48 per share) for the second quarter of 2013, compared to a net loss of $2,576,000 ($0.20 per share) for the second quarter of 2012. For the six months ended June 30, 2013, the Company reported net income of $20,485,000 ($1.58 per share), compared to $16,647,000 ($1.29 per share) for the same period in 2012.

“The Company experienced another strong quarter of high-single-digit rate level increases and a more normal level of catastrophe and storm losses consistent with our long-term average. On a consolidated basis, the year is progressing as expected; however, there have been some variations by segment,” stated President and Chief Executive Officer, Bruce G. Kelley.

Kelley went on to say, “Interest rates rose during the quarter, but still remain historically low. We continue to stress improvement in our underwriting margins in this low interest rate environment. We remain optimistic that the pace of rate level increases achieved in the first half of the year will continue for the remainder of the year.”

Premiums earned increased 15.3 percent to $127,188,000 for the second quarter of 2013, from $110,270,000 for the second quarter of 2012. In the property and casualty insurance segment, premiums earned increased 11.4 percent for the quarter, with the majority of the increase attributable to rate level increases, growth in insured exposures on existing accounts and an increase in retained policies. In the reinsurance segment, premiums earned increased 30.9 percent in the second quarter, reflecting a significant increase in premiums earned on policies written in the prior contract year, moderate rate level increases and the addition of some new business. For the first six months of 2013, premiums earned increased 12.6 percent (10.2 percent in the property and casualty insurance segment and 21.2 percent in the reinsurance segment).

It is important to note that the large increase reported in the reinsurance segment’s premiums earned for the second quarter of 2013 reflects a negative $2,686,000 earned but not reported (EBNR) premium adjustment that was recorded in the second quarter of 2012 in connection with a new offshore energy and liability proportional account that Employers Mutual began participating in effective January 1, 2012. This negative EBNR premium adjustment was recorded after the completion of a more refined actuarial analysis of this new account during the second quarter of 2012. Corresponding decreases in incurred but not reported (IBNR) loss reserves and commission expense reserves were also recorded, resulting in an after-tax impact of less than $100,000. If the EBNR premium estimate resulting from the more refined actuarial analysis had been utilized at March 31, 2012, premiums earned during the second quarter of 2012 would have been approximately $3,131,000 higher, and the percentage increase reported for the second quarter of 2013 would have been approximately 16.1 percentage points lower. The increase in premiums earned reported for the six months ended June 30, 2013 is not impacted by the negative EBNR premium adjustment recorded during the second quarter of 2012.

The Company’s GAAP combined ratio was 102.2 percent in the second quarter of 2013, compared to 113.9 percent in the second quarter of 2012. For the first six months of 2013, the Company’s GAAP combined ratio was 98.1 percent, compared to 103.2 percent in 2012.

Catastrophe and storm losses totaled $21,350,000 ($1.06 per share after tax) in the second quarter of 2013, down from $24,847,000 ($1.25 per share after tax) experienced in the second quarter of 2012. Second quarter 2013 catastrophe and storm losses accounted for 16.8 percentage points of the combined ratio, which is in line with the Company’s most recent 10-year average of 16.9 percentage points and well below 22.5 percentage points experienced in the second quarter of 2012. For the first six months of 2013, catastrophe and storm losses totaled $26,746,000 ($1.34 per share after tax), compared to $34,550,000 ($1.74 per share after tax) in 2012. On a segment basis, catastrophe and storm losses amounted to $18,489,000 ($0.92 per share after tax) and $23,354,000 ($1.17 per share after tax) in the property and casualty insurance segment, and $2,861,000 ($0.14 per share after tax) and $3,392,000 ($0.17 per share after tax) in the reinsurance segment, for the three months and six months ended June 30, 2013, respectively.

The Company experienced $2,063,000 ($0.10 per share after tax) of favorable development on prior years’ reserves during the second quarter of 2013, compared to $1,399,000 ($0.07 per share after tax) in the second quarter of 2012. For the first six months of 2013, favorable development totaled $6,319,000 ($0.32 per share after tax), compared to $17,662,000 ($0.89 per share after tax) in 2012. 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 a level of adequacy that is consistent with other recent evaluations.

Large losses (which the Company defines as losses greater than $500,000 for the EMC Insurance Companies’ pool, excluding catastrophe and storm losses) increased slightly to $6,548,000 ($0.33 per share after tax) in the second quarter of 2013 from $6,114,000 ($0.31 per share after tax) in the second quarter of 2012. For the first six months of 2013, large losses decreased to $9,483,000 ($0.47 per share after tax) from $12,439,000 ($0.63 per share after tax) in 2012.

Investment income decreased 1.0 percent and 3.7 percent to $11,040,000 and $21,483,000 for the second quarter and first six months of 2013 from $11,149,000 and $22,305,000 for the same periods in 2012. These declines in investment income are primarily attributable to the prolonged low interest rate environment, but do reflect an increase in dividend income in the equity portfolio. It should be noted that the declines in investment income reported for the second quarter and first six months of 2013 reflect a $170,000 increase in the amount of funds received from the settlement of securities litigation. Excluding this amount from the calculations, the declines in investment income would have been 2.5 percent and 4.4 percent, respectively.

Net realized investment gains totaled $114,000 ($0.01 per share) in the second quarter of 2013, compared to net realized investment losses of $740,000 ($0.06 per share) in 2012. For the first six months of 2013, net realized investment gains totaled $1,848,000 ($0.14 per share), compared to $5,057,000 ($0.39 per share) in 2012.

At June 30, 2013, consolidated assets totaled $1.3 billion, including $1.2 billion in the investment portfolio, and stockholders’ equity totaled $403.3 million, an increase of 0.5 percent from December 31, 2012. Net book value of the Company’s stock decreased 1.1 percent to $30.75 per share from $31.08 per share at December 31, 2012, reflecting a decline in the fair value of the bond portfolio due to the recent increase in interest rates. Book value excluding accumulated other comprehensive income increased to $28.50 per share from $27.38 per share at December 31, 2012.

Based on results for the first six months of 2013 and management’s expectations for the remainder of the year, management is reaffirming its 2013 operating income guidance in the range of $2.40 to $2.65 per share. This guidance is based on a projected GAAP combined ratio of 99.2 percent and a projected mid-single-digit decline in investment income for the year.

The Company will hold an earnings teleconference call at 11:00 a.m. Eastern time on August 8, 2013 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, 2013, as well as its expectations for the rest of 2013. Dial-in information for the call is toll-free 1-877-407-9205 (International: 1-201-689-8054). The event will be archived and available for digital replay through November 8, 2013. The replay access information is toll-free 1-877-660-6853 (International: 1-201-612-7415); conference ID number 417386.

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 8, 2013. 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. 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. Additional information regarding EMC Insurance Companies may be found at www.emcins.com.

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.

¹The Company uses a non-GAAP financial measure called “operating income (loss)” that management believes 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 (loss). 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 (loss) is as follows:

       
Three Months Ended June 30, Six Months Ended June 30,
2013     2012 2013     2012
 
Operating income (loss) $ 6,098,000 $ (1,837,000 ) $ 18,637,000 $ 11,590,000
Net realized investment gains (losses)   114,000   (739,000 )   1,848,000   5,057,000
Net income (loss) $ 6,212,000 $ (2,576,000 ) $ 20,485,000 $ 16,647,000
 
 
 
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
               
Property and
Casualty Parent
Quarter ended June 30, 2013     Insurance     Reinsurance     Company     Consolidated

Revenues:

Premiums earned $ 97,816,887 $ 29,371,393 $ - $ 127,188,280
Investment income, net 8,095,885 2,946,180 (2,071 ) 11,039,994
Other income   163,417     -     -     163,417  
  106,076,189     32,317,573     (2,071 )   138,391,691  

Losses and expenses:

Losses and settlement expenses 74,080,943 14,887,737 - 88,968,680
Dividends to policyholders 2,333,300 - - 2,333,300
Amortization of deferred policy acquisition costs 16,923,126 6,641,288 - 23,564,414
Other underwriting expenses 14,904,432 151,235 - 15,055,667
Interest expense 84,375 - - 84,375
Other expenses   185,593     101,062     325,198     611,853  
  108,511,769     21,781,322     325,198     130,618,289  
Operating income (loss) before income taxes   (2,435,580 )   10,536,251     (327,269 )   7,773,402  
Realized investment gains (losses)   392,319     (217,066 )   -     175,253  
Income (loss) before income taxes   (2,043,261 )   10,319,185     (327,269 )   7,948,655  

Income tax expense (benefit):

Current (644,011 ) 3,360,861 (114,559 ) 2,602,291
Deferred   (835,766 )   (30,106 )   -     (865,872 )
  (1,479,777 )   3,330,755     (114,559 )   1,736,419  
Net income (loss) $ (563,484 ) $ 6,988,430   $ (212,710 ) $ 6,212,236  
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

Decrease (increase) in provision for insured events of prior years (after tax)

$ (0.04 ) $ 0.14 $ - $ 0.10
Catastrophe and storm losses (after tax) $ (0.92 ) $ (0.14 ) $ - $ (1.06 )
Dividends per share $ 0.21

Other Information of Interest:

Net written premiums $ 105,258,975 $ 30,855,024 $ - $ 136,113,999

Increase (decrease) in provision for insured events of prior years

$ 754,590 $ (2,817,530 ) $ - $ (2,062,940 )
Catastrophe and storm losses $ 18,489,059 $ 2,860,540 $ - $ 21,349,599

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
               
Property and
Casualty Parent
Quarter ended June 30, 2012     Insurance     Reinsurance     Company     Consolidated

Revenues:

Premiums earned (1) $ 87,825,285 $ 22,445,175 $ - $ 110,270,460
Investment income, net 8,139,202 3,011,279 (1,786 ) 11,148,695
Other income   222,751     -     -     222,751  
  96,187,238     25,456,454     (1,786 )   121,641,906  

Losses and expenses:

Losses and settlement expenses (1) 70,620,384 17,779,567 - 88,399,951
Dividends to policyholders 2,260,231 - - 2,260,231
Amortization of deferred policy acquisition costs (1) 16,186,570 4,444,441 - 20,631,011
Other underwriting expenses 14,149,581 180,858 - 14,330,439
Interest expense 225,000 - - 225,000
Other expenses   178,276     (392,315 )   382,781     168,742  
  103,620,042     22,012,551     382,781     126,015,374  
Operating income (loss) before income taxes   (7,432,804 )   3,443,903     (384,567 )   (4,373,468 )
Realized investment losses   (752,888 )   (385,448 )   -     (1,138,336 )
Income (loss) before income taxes   (8,185,692 )   3,058,455     (384,567 )   (5,511,804 )

Income tax expense (benefit):

Current (2,454,703 ) 671,985 (134,598 ) (1,917,316 )
Deferred   (1,086,160 )   68,143     -     (1,018,017 )
  (3,540,863 )   740,128     (134,598 )   (2,935,333 )
Net income (loss) $ (4,644,829 ) $ 2,318,327   $ (249,969 ) $ (2,576,471 )
Average shares outstanding 12,883,333

Per Share Data:

Net income (loss) per share - basic and diluted $ (0.36 ) $ 0.18 $ (0.02 ) $ (0.20 )

Decrease (increase) in provision for insured events of prior years (after tax)

$ 0.22 $ (0.15 ) $ - $ 0.07
Catastrophe and storm losses (after tax) $ (0.99 ) $ (0.26 ) $ - $ (1.25 )
Dividends per share $ 0.20

Other Information of Interest:

Net written premiums $ 96,510,899 $ 21,806,787 $ - $ 118,317,686

Increase (decrease) in provision for insured events of prior years

$ (4,459,576 ) $ 3,060,700 $ - $ (1,398,876 )
Catastrophe and storm losses $ 19,772,735 $ 5,074,309 $ - $ 24,847,044

GAAP Combined Ratio:

Loss and settlement expense ratio

80.4 % 79.2 % - 80.2 %

Acquisition expense ratio

  37.1 %   20.6 %   -     33.7 %
  117.5 %   99.8 %   -     113.9 %
 
(1) Effective January 1, 2012, Employers Mutual began participating in a new offshore energy and liability proportional account. During the first quarter of 2012, the reinsurance segment recognized $3,577,500 of earned but not reported (EBNR) premiums on this account, net of the ten percent charge for the cost of the excess of loss reinsurance protection provided by Employers Mutual. However, based on more refined actuarial projections, and the fact that the 2012 earnings stream on this account was somewhat back-loaded because it was a new account and the majority of the underlying policies were expected to have effective dates in the months of June and July, a total of $891,000 of EBNR premiums was recognized on this account for the six months ended June 30, 2012. Accordingly, net premiums earned for the three months ended June 30, 2012 reflected $2,686,500 of negative EBNR premiums associated with this account. Corresponding decreases in losses and settlement expenses ($2,239,000) and amortization of deferred policy acquisition costs ($597,000) were also recorded.
 
 
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
               
Property and
Casualty Parent
Six Months Ended June 30, 2013     Insurance     Reinsurance     Company     Consolidated

Revenues:

Premiums earned $ 190,521,905 $ 57,163,627 $ - $ 247,685,532
Investment income, net 15,745,815 5,742,704 (5,442 ) 21,483,077
Other income   397,922     -     -     397,922  
  206,665,642     62,906,331     (5,442 )   269,566,531  

Losses and expenses:

Losses and settlement expenses 130,048,317 31,494,021 - 161,542,338
Dividends to policyholders 4,527,032 - - 4,527,032
Amortization of deferred policy acquisition costs 33,640,610 12,191,242 - 45,831,852
Other underwriting expenses 30,114,055 962,518 - 31,076,573
Interest expense 215,625 - - 215,625
Other expenses   391,199     (340,287 )   707,706     758,618  
  198,936,838     44,307,494     707,706     243,952,038  
Operating income (loss) before income taxes   7,728,804     18,598,837     (713,148 )   25,614,493  
Realized investment gains   2,349,103     494,023     -     2,843,126  
Income (loss) before income taxes   10,077,907     19,092,860     (713,148 )   28,457,619  

Income tax expense (benefit):

Current 2,315,475 6,032,341 (249,602 ) 8,098,214
Deferred   (217,323 )   91,975     -     (125,348 )
  2,098,152     6,124,316     (249,602 )   7,972,866  
Net income (loss) $ 7,979,755   $ 12,968,544   $ (463,546 ) $ 20,484,753  
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

Decrease in provision for insured events of prior years (after tax)

$ 0.09 $ 0.23 $ - $ 0.32
Catastrophe and storm losses (after tax) $ (1.17 ) $ (0.17 ) $ - $ (1.34 )
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 $ 200,040,162 $ 58,204,184 $ - $ 258,244,346

Decrease in provision for insured events of prior years

$ (1,783,227 ) $ (4,536,151 ) $ - $ (6,319,378 )
Catastrophe and storm losses $ 23,354,299 $ 3,391,855 $ - $ 26,746,154

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 STATEMENTS OF INCOME - UNAUDITED
               
Property and
Casualty Parent
Six Months Ended June 30, 2012     Insurance     Reinsurance     Company     Consolidated

Revenues:

Premiums earned $ 172,856,675 $ 47,173,541 $ - $ 220,030,216
Investment income, net 16,314,329 5,995,204 (4,056 ) 22,305,477
Other income   461,749     -     -     461,749  
  189,632,753     53,168,745     (4,056 )   242,797,442  

Losses and expenses:

Losses and settlement expenses 122,638,637 31,001,603 - 153,640,240
Dividends to policyholders 3,911,756 - - 3,911,756
Amortization of deferred policy acquisition costs 30,806,505 9,038,884 - 39,845,389
Other underwriting expenses 28,991,236 597,072 - 29,588,308
Interest expense 450,000 - - 450,000
Other expenses   397,440     (372,550 )   730,369     755,259  
  187,195,574     40,265,009     730,369     228,190,952  
Operating income (loss) before income taxes   2,437,179     12,903,736     (734,425 )   14,606,490  
Realized investment gains   7,151,901     628,092     -     7,779,993  
Income (loss) before income taxes   9,589,080     13,531,828     (734,425 )   22,386,483  

Income tax expense (benefit):

Current 2,858,800 3,095,734 (257,048 ) 5,697,486
Deferred   (948,143 )   989,876     -     41,733  
  1,910,657     4,085,610     (257,048 )   5,739,219  
Net Income (loss) $ 7,678,423   $ 9,446,218   $ (477,377 ) $ 16,647,264  
Average shares outstanding 12,881,177

Per Share Data:

Net income (loss) per share - basic and diluted $ 0.60 $ 0.73 $ (0.04 ) $ 1.29

Decrease in provision for insured events of prior years (after tax)

$ 0.75 $ 0.14 $ - $ 0.89
Catastrophe and storm losses (after tax) $ (1.27 ) $ (0.47 ) $ - $ (1.74 )
Dividends per share $ 0.40
Book value per share $ 29.08
Effective tax rate 25.6 %
Annualized net income as a percent of beg. SH equity 9.5 %

Other Information of Interest:

Net written premiums $ 182,405,995 $ 43,883,450 $ - $ 226,289,445

Decrease in provision for insured events of prior years

$ (14,964,153 ) $ (2,697,496 ) $ - $ (17,661,649 )
Catastrophe and storm losses $ 25,327,020 $ 9,223,213 $ - $ 34,550,233

GAAP Combined Ratio:

Loss and settlement expense ratio

70.9 % 65.7 % - 69.8 %

Acquisition expense ratio

  36.9 %   20.4 %   -     33.4 %
  107.8 %   86.1 %   -     103.2 %
 
 
CONSOLIDATED BALANCE SHEETS - UNAUDITED
 
    June 30,     December 31,
2013 2012
ASSETS
Investments:

Fixed maturity securities available-for-sale, at fair value (amortized cost $961,013,661 and $920,843,939)

$ 997,064,563 $ 999,794,857

Equity securities available-for-sale, at fair value (cost $115,397,494 and $111,851,963)

157,577,216 140,293,825
Other long-term investments 865,384 863,257
Short-term investments   33,921,749   53,418,914
Total investments 1,189,428,912 1,194,370,853
 
Cash 505,623 330,392
Reinsurance receivables due from affiliate 32,764,299 34,277,728
Prepaid reinsurance premiums due from affiliate 7,405,927 5,195,892

Deferred policy acquisition costs (affiliated $36,603,042 and $34,425,593)

36,629,835 34,425,593
Prepaid pension benefits due from affiliate 921,515 1,413,104
Accrued investment income 10,033,315 9,938,714
Accounts receivable 2,251,127 2,390,955
Income taxes recoverable 3,170,763 1,588,089
Deferred income taxes 3,596,776 -
Goodwill 941,586 941,586
Other assets (affiliated $7,064,353 and $5,760,369)   12,225,536   5,836,200
Total assets $ 1,299,875,214 $ 1,290,709,106
 
LIABILITIES

Losses and settlement expenses (affiliated $589,088,254 and $577,476,988)

$ 596,343,521 $ 583,096,965
Unearned premiums (affiliated $209,739,584 and $196,215,465) 209,859,865 196,215,465
Other policyholders' funds (all affiliated) 6,734,825 6,055,111
Surplus notes payable to affiliate 25,000,000 25,000,000
Amounts due affiliate to settle inter-company transaction balances 2,610,031 19,127,010
Pension and postretirement benefits payable to affiliate 31,860,634 30,714,633
Deferred income taxes - 6,352,690
Other liabilities (affiliated $16,339,440 and $22,794,304)   24,192,190   22,938,068
Total liabilities   896,601,066   889,499,942
 
STOCKHOLDERS' EQUITY

Common stock, $1 par value, authorized 20,000,000 shares; issued and outstanding, 13,116,098 shares in 2013 and 12,909,457 shares in 2012

13,116,098 12,909,457
Additional paid-in capital 94,300,936 89,205,881
Accumulated other comprehensive income 29,507,587 47,752,375
Retained earnings   266,349,527   251,341,451
Total stockholders' equity   403,274,148   401,209,164
Total liabilities and stockholders' equity $ 1,299,875,214 $ 1,290,709,106
 
 
INVESTMENTS
The Company had total cash and invested assets with a carrying value of $1.2 billion as of June 30, 2013 and December 31, 2012. The following table summarizes the Company's cash and invested assets as of the dates indicated:
 
    June 30, 2013
        Percent of    
Amortized Fair Total Carrying
($ in thousands) Cost Value Fair Value Value
Fixed maturity securities available-for-sale $ 961,014 $ 997,065 83.8 % $ 997,065
Equity securities available-for-sale 115,397 157,577 13.2 % 157,577
Cash 506 506 - 506
Short-term investments 33,922 33,922 2.9 % 33,922
Other long-term investments   865     865   0.1 %   865  
$ 1,111,704   $ 1,189,935   100.0 % $ 1,189,935  
 
December 31, 2012
Percent of
Amortized Fair Total Carrying
($ in thousands) Cost Value Fair Value Value
Fixed maturity securities available-for-sale $ 920,844 $ 999,795 83.7 % $ 999,795
Equity securities available-for-sale 111,852 140,294 11.7 % 140,294
Cash 330 330 - 330
Short-term investments 53,419 53,419 4.5 % 53,419
Other long-term investments   863     863   0.1 %   863  
$ 1,087,308   $ 1,194,701   100.0 % $ 1,194,701  
 
 
NET WRITTEN PREMIUMS
Three Months Ended Six Months Ended
June 30, 2013 June 30, 2013
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 17.8 % 11.1 % 17.9 % 12.5 %
Liability 15.7 % 10.5 % 15.8 % 12.1 %
Property 17.5 % 13.7 % 17.3 % 13.2 %
Workers' compensation 14.8 % 11.3 % 15.3 % 10.9 %
Other   1.5 % 0.9 % 1.4 % (1.3 )%
Total commercial lines   67.3 % 11.4 % 67.7 % 11.9 %
 
Personal Lines:
Automobile 5.3 % (6.1 )% 5.4 % (5.2 )%
Property 4.6 % (3.1 )% 4.3 % (1.8 )%
Liability   0.2 % 10.0 % 0.1 % 11.8 %
Total personal lines   10.1 % (4.5 )% 9.8 % (3.5 )%
Total property and casualty insurance   77.4 % 9.1 % 77.5 % 9.7 %
 
Reinsurance:
Pro rata (1) (2) 8.8 % 129.4 % 8.1 % 105.3 %
Excess of loss (1)   13.8 % 13.7 % 14.4 % 10.7 %
Total reinsurance   22.6 % 41.5 % 22.5 % 32.6 %
Total   100.0 % 15.0 % 100.0 % 14.1 %
 
(1) Includes $532,146 negative portfolio adjustment related to the January 1, 2013 decreased participation in the MRB pool.
 
(2) Includes $3,065,279 negative portfolio adjustment related to the January 1, 2012 cancellation of a large pro rata account.
 

EMC Insurance Group Inc.
Investors:
Steve Walsh, 515-345-2515
or
Media:
Lisa Hamilton, 515-345-7589

Copyright Business Wire 2013
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