EMC Insurance Group Inc. Announces Year-End 2015 Operating Income and Combined Ratio Estimates
February 01 2016 - 7:30AM
EMC Insurance Group Inc. (NASDAQ:EMCI) (the “Company”), today
announced that it expects to report operating income1 in the range
of $2.21 to $2.26 per share for the year ended December 31, 2015,
and that the GAAP combined ratio for the year will be approximately
96.3 percent. These results are significantly better than the
Company’s most recent guidance, which anticipated operating income
in the range of $1.80 to $2.00 per share and a GAAP combined ratio
of 97.6 percent.
“Improved premium rate adequacy and below average catastrophe
and storm losses produced an excellent combined ratio--our lowest
since 2006,” stated President and Chief Executive Officer Bruce G.
Kelley. “Operating income per share should exceed the high end of
our previous guidance range by more than ten percent.”
The increase in guidance is primarily attributed to the
reinsurance segment, which is expected to report a 71.0 percent
fourth quarter GAAP combined ratio that is much lower than
previously anticipated. This better than expected result is
primarily driven by an increase in the amount of favorable
development experienced on prior accident year reserves and a low
level of large losses. The property and casualty insurance segment
is expected to report a GAAP combined ratio of 99.6 percent for the
fourth quarter.
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 is a non-GAAP
financial measure, calculated by excluding net realized investment
gains/losses from net income. The Company’s calculation of
operating income may differ from similar measures used by other
companies, so investors should exercise caution when comparing the
Company’s measure of operating income to the measure of other
companies. Management’s projected operating income guidance is also
considered a non-GAAP financial measure.
Management believes operating income 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. Management also uses non-GAAP financial measures for
goal setting, determining employee and senior management awards and
compensation, and evaluating performance.
Contact: Steve Walsh (Investors) 515-345-2515
Lisa Hamilton (Media) 515-345-7589
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