Fourth Quarter Ended December 31, 2016Net
Income Per Share – $1.01Non-GAAP Operating Income Per Share –
$0.86Net Realized Investment Gains Per Share – $0.15Catastrophe and
Storm Losses Per Share – $0.07GAAP Combined Ratio – 91.7
percent
EMC Insurance Group Inc. (NASDAQ:EMCI) (the “Company”), today
reported net income of $21.3 million ($1.01 per share) for the
fourth quarter ended December 31, 2016, compared to net income of
$9.9 million ($0.48 per share) for the fourth quarter of 2015. For
the year ended December 31, 2016, the Company reported net income
of $46.2 million ($2.20 per share), compared to $50.2 million
($2.43 per share) for the same period in 2015.
Non-GAAP operating income, which excludes realized investment
gains/losses from net income, totaled $18.2 million ($0.86 per
share) for the fourth quarter of 2016, compared to $13.4 million
($0.65 per share) for the fourth quarter of 2015. For the year
ended December 31, 2016, the Company reported non-GAAP operating
income of $43.6 million ($2.07 per share), compared to $46.2
million ($2.24 per share) for the same period in 2015.
The Company’s GAAP combined ratio was 91.7 percent in the fourth
quarter of 2016, compared to 94.1 percent in the fourth quarter of
2015. For the year ended December 31, 2016, the Company’s GAAP
combined ratio was 97.7 percent, compared to 96.3 percent in
2015.
“We are pleased to report our lowest fourth quarter GAAP
combined ratio since 2005,” stated President and Chief Executive
Officer Bruce G. Kelley. “The property and casualty insurance
segment performed better than expected, which allowed us to exceed
expectations.”
“Our new intercompany reinsurance program for the property and
casualty insurance segment performed as expected given the
quarterly amount of catastrophe and storm losses that were
reported. For 2017, we anticipate more consistency in our quarterly
results as the intercompany reinsurance programs for both the
property and casualty insurance segment and the reinsurance segment
were renewed.”
Management is projecting 2017 non-GAAP operating income will be
within a range of $1.35 to $1.55 per share. This guidance is based
on a projected GAAP combined ratio of 100.3 percent for the year
and investment income flat to down slightly. The projected GAAP
combined ratio has a load of 9.4 points for catastrophe and storm
losses, up from the relatively low 8.1 points experienced in 2016.
Net realized investment gains/losses resulting from the sale of
assets are not predictable due to changing market conditions and
the discretionary nature of such events. As a result, management is
unable to accurately project the Company’s annual net income, and
therefore utilizes non-GAAP operating income in the Company’s
projected annual guidance.
Kelley continued, “The 2017 guidance reflects management’s
expectation for further rate softening and increased competition,
which will continue to pressure margins in both segments. As we
continue to gain traction from the commercial auto and personal
lines initiatives we have underway, we remain optimistic that we
will begin to see gradual improvement in the performance of these
lines of business during 2017.”
Premiums earned increased 7.0 percent and 3.9 percent for the
fourth quarter and year ended December 31, 2016. In the property
and casualty insurance segment, premiums earned increased 3.4
percent and 2.1 percent for the fourth quarter and year ended
December 31, 2016. The new intercompany reinsurance program between
the Company’s three property and casualty insurance subsidiaries
and Employers Mutual Casualty Company (Employers Mutual), the
Company’s parent organization, reduced premiums earned by $765,000
and $7.8 million for the fourth quarter and year ended December 31,
2016. Excluding the cost of this program, premiums earned increased
4.1 percent and 3.8 percent, respectively. The majority of these
increases are attributed to growth in insured exposures, an
increase in new business, an increase in retained policies in the
commercial lines of business, and small rate level increases on
renewal business.
In the reinsurance segment, premiums earned increased 22.1
percent and 10.5 percent for the fourth quarter and year ended
December 31, 2016. These increases reflect changes in the total
cost of the revised intercompany reinsurance program with Employers
Mutual, as well as a $7.2 million negative premium adjustment
recorded in the fourth quarter of 2015. Excluding these
factors, premiums earned decreased approximately 3.0 percent for
the fourth quarter, but increased approximately 2.6 percent for the
year ended December 31, 2016. The decrease for the fourth quarter
was driven by a decline in pro rata business, which was partially
offset by an increase in excess of loss business.
The total cost of the reinsurance segment’s revised intercompany
reinsurance program increased $134,000 for the fourth quarter, but
declined $2.3 million for the year ended December 31, 2016. In
2016, the total cost of the intercompany reinsurance program
includes the premiums paid to Employers Mutual, as well as the cost
of Industry Loss Warranties (ILWs) that were purchased from
external parties to provide increased protection in peak exposure
territories. During 2015, the premium paid to Employers Mutual (8
percent of total assumed reinsurance premiums written) included the
cost of ILWs purchased by Employers Mutual for its benefit.
Catastrophe and storm losses totaled $2.4 million ($0.07 per
share after tax) in the fourth quarter of 2016, compared to $3.6
million ($0.11 per share after tax) in the fourth quarter of 2015.
Catastrophe and storm losses were capped at $512,000 in the
property and casualty insurance segment because the retention
amount under the July 1 to December 31 treaty was reached. Fourth
quarter 2016 catastrophe and storm losses accounted for 1.6
percentage points of the combined ratio, which was below the
Company’s most recent 10-year average of 3.1 percentage points for
this period and the 2.6 percentage points experienced in the fourth
quarter of 2015.
For the year ended December 31, 2016, catastrophe and storm
losses totaled $47.9 million ($1.48 per share after tax), compared
to $44.4 million ($1.40 per share after tax) in 2015. The property
and casualty insurance segment recovered $7.5 million of
catastrophe and storm losses from Employers Mutual under the
intercompany reinsurance program during 2016. No recoveries were
made under the reinsurance segment’s intercompany reinsurance
program during 2016.
The Company reported $11.8 million ($0.36 per share after tax)
of favorable development on prior years’ reserves during the fourth
quarter of 2016, compared to $15.2 million ($0.47 per share after
tax) in the fourth quarter of 2015. Included in the reported amount
for the fourth quarter of 2015 is $1.9 million of favorable
“mechanical” development resulting from a change in the allocation
of bulk reserves between the current and prior accident years. For
the year ended December 31, 2016, the Company reported favorable
development of $40.9 million ($1.27 per share after tax), compared
to $35.1 million ($1.11 per share after tax) in 2015. Included in
the reported amount for 2016 is $5.6 million of favorable
“mechanical” development resulting from the change in the property
and casualty insurance segment’s reserving methodology, and
included in the 2015 amount is $0.6 million of adverse “mechanical”
development resulting from a change in the allocation of bulk
reserves between the current and prior accident years. Excluding
the “mechanical” development amounts, which do not have any impact
on earnings, the implied amounts of favorable development that had
an impact on earnings would be approximately $11.8 million and
$35.3 million for the fourth quarter and year ended December 31,
2016, compared to $13.3 million and $35.7 million for the same
periods in 2015.
On a segment basis, fourth quarter 2016 favorable development
totaled $7.8 million in the property and casualty insurance segment
and $4.0 million in the reinsurance segment. The favorable
development in the property and casualty insurance segment was
primarily driven by moderate reductions in the ultimate loss ratios
for several accident years in the workers’ compensation line of
business and a reduction in settlement expense reserves. The
favorable development in the reinsurance segment was primarily
driven by a reduction in carried reserves primarily associated with
the 2015 accident year.
Large losses are defined as reported current accident year
losses greater than $500,000 for the EMC Insurance Companies' pool,
excluding catastrophe and storm losses. Under the property and
casualty insurance segment's prior reserving methodology, large
losses had a direct impact on earnings. Under the new reserving
methodology, large losses are taken into consideration when
establishing the current accident quarter/year ultimate estimates
of losses, but there is no longer a direct relationship between
large losses and earnings. As a result, beginning in the third
quarter of 2016, large losses are no longer being reported
separately.
Net investment income totaled $11.6 million for the fourth
quarter ended December 31, 2016, which is consistent with the
fourth quarter of 2015. Net investment income increased 4.2 percent
to $47.5 million for the year ended December 31, 2016, from $45.6
million for the same period in 2015. This increase primarily
reflects growth in dividend income and income from other invested
assets portfolio.
Net realized investment gains totaled $4.7 million ($0.15 per
share after tax) and $4.1 million ($0.13 per share after tax) for
the fourth quarter and year ended December 31, 2016, compared to
net realized investment losses of $5.4 million ($0.17 per share
after tax) and net realized investment gains of $6.2 million ($0.19
per share after tax) for the same periods in 2015. Included in net
realized investment gains reported for the fourth quarter and year
ended December 31, 2016 are $1.2 million and $6.5 million,
respectively, of net realized investment losses attributed to
declines in the carrying value of a limited partnership that helps
protect the Company from a sudden and significant decline in the
value of its equity portfolio. Included in the net realized
investment gains/losses reported for the fourth quarter and year
ended December 31, 2015 are net realized investment losses of $5.3
million and $1.5 million, respectively, attributed to declines in
the carrying value of this limited partnership.
Income tax expense totaled $7.9 million and $17.0 million for
the fourth quarter and year ended December 31, 2016, compared to
$4.0 million and $21.5 million for the same periods. The effective
tax rate was 27.1 percent and 26.9 percent for the fourth quarter
and year ended December 31, 2016, compared to 28.9 percent and 30.0
percent for the same periods in 2015. In the fourth quarter of
2016, the Company benefited from an investment in a limited
liability company that is designed to provide a return on
investment through the receipt of renewable energy tax credits. The
tax credits reduced the income tax expense, resulting in an
increase in net income of approximately $1.3 million. Without these
credits, the effective tax rate would have been 31.9 percent and
29.1 percent for the fourth quarter and year ended December 31,
2016.
At December 31, 2016, consolidated assets totaled $1.6 billion,
including $1.5 billion in the investment portfolio, and
stockholders’ equity totaled $553.3 million, an increase of 5.4
percent from December 31, 2015. Book value of the Company’s stock
increased 3.2 percent to $26.07 per share from $25.26 per share at
December 31, 2015, but declined 2.2 percent from September 30,
2016, due to a decline in the market value of the investment
portfolio caused by an increase in interest rates. Book value
excluding accumulated other comprehensive income increased 6.5
percent to $23.90 per share from $22.45 per share at December 31,
2015, and increased 3.5% from $23.09 on September 30, 2016. These
increases were primarily driven by net income for the periods
represented.
The Company will hold an earnings teleconference call at noon
Eastern time on Friday, February 10, 2017, to allow securities
analysts, stockholders and other interested parties the opportunity
to hear management discuss the Company’s results for the fourth
quarter and year ended December 31, 2016, as well as its
expectations for 2017. Dial-in information for the call is
toll-free 1-866-652-5200 (International: 1-412-317-6060).
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 for approximately 90 days
following the earnings call. A transcript of the teleconference
will be available on the Company’s website shortly after the
completion of the teleconference.
Participation by Management at Industry
ConferencesOn March 8, 2017, Mark E. Reese, Senior Vice
President and Chief Financial Officer will participate in meetings
with institutional investors at the RBC Capital Markets Financial
Institutions Conference in New York. The conference will take place
at the Lotte New York Palace Hotel, located at 455 Madison Avenue,
New York, NY. Additionally, on Tuesday, March 21, 2017, Bruce G.
Kelley and Kevin J. Hovick, Executive Vice President & COO,
will present at the 21st Annual New York Society of Security
Analysts (NYSSA) Insurance Conference in New York. The presentation
will occur at 11:20 a.m. Eastern time at the offices of the NYSSA,
located at 1540 Broadway, New York, NY. Interested persons may
access the presentation slides on the Company’s investor relations
website at http://www.emcins.com/ir/Presentations.aspx on the day
of the presentation. A live webcast of the event will not be
available to the general public.
About EMCIEMC 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 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. EMCI and Employers Mutual, together with their
subsidiary and affiliated companies, conduct operations under the
trade name EMC Insurance Companies.
Cautionary Note Regarding Forward-Looking
StatementsThe 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.
Definition of Non-GAAP Information and Reconciliation to
Comparable GAAP MeasuresThe Company prepares its public
financial statements in conformity with accounting principles
generally accepted in the United States of America (GAAP).
Management uses certain non-GAAP financial measures for evaluating
the Company’s performance. One of the primary non-GAAP financial
measures utilized by management for evaluating the Company’s
performance is operating income. Management’s operating income
guidance is also considered a non-GAAP financial measure.
[1] Non-GAAP Operating income: Non-GAAP operating income is
calculated by excluding net realized investment gains/losses
(defined as realized investment gains and losses after applicable
federal and state income taxes) from net income. While realized
investment gains/losses are integral to the Company’s insurance
operations over the long term, the decision to realize investment
gains or losses in any particular period is subject to changing
market conditions and management’s discretion, and is independent
of the Company’s insurance operations. The Company’s calculation of
non-GAAP operating income may differ from similar measures used by
other companies, so investors should exercise caution when
comparing the Company’s measure of non-GAAP operating income to the
measure used by other companies.
Management believes non-GAAP operating income is useful to
investors because it illustrates the performance of the Company’s
normal, ongoing operations, which is important in understanding and
evaluating the Company’s financial condition and results of
operations. While this measure is consistent with measures utilized
by investors and analysts to evaluate performance, it is not
intended as a substitute for the GAAP financial measure of net
income. Therefore, the Company has provided the following
reconciliations of the GAAP financial measures of net income and
net income per share, to the non-GAAP financial measures of
non-GAAP operating income and non-GAAP operating income per
share.
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME TO NON-GAAP OPERATING
INCOME |
($ in thousands) |
|
|
|
|
|
|
|
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
Net income |
$ |
21,292 |
|
$ |
9,895 |
|
|
$ |
46,203 |
|
$ |
50,162 |
Realized investment
gains (losses) |
|
4,717 |
|
|
(5,402 |
) |
|
|
4,074 |
|
|
6,153 |
Income tax expense
(benefit) |
|
1,651 |
|
|
(1,890 |
) |
|
|
1,426 |
|
|
2,154 |
Net realized investment
gains (losses) |
|
3,066 |
|
|
(3,512 |
) |
|
|
2,648 |
|
|
3,999 |
Non-GAAP
operating income |
$ |
18,226 |
|
$ |
13,407 |
|
|
$ |
43,555 |
|
$ |
46,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME PER SHARE TO NON-GAAP
OPERATING INCOME PER SHARE |
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
Net income per
share |
$ |
1.01 |
|
$ |
0.48 |
|
|
$ |
2.20 |
|
$ |
2.43 |
Realized investment
gains (losses) per share |
|
0.22 |
|
|
(0.26 |
) |
|
|
0.19 |
|
|
0.29 |
Income tax expense
(benefit) per share |
|
0.07 |
|
|
(0.09 |
) |
|
|
0.06 |
|
|
0.10 |
Net realized investment
gains (losses) per share |
|
0.15 |
|
|
(0.17 |
) |
|
|
0.13 |
|
|
0.19 |
Non-GAAP
operating income per share |
$ |
0.86 |
|
$ |
0.65 |
|
|
$ |
2.07 |
|
$ |
2.24 |
|
Industry Metric – Premiums Written
[2] Premiums written: Premiums written is an industry metric
used in statutory accounting to quantify the amount of insurance
sold during a specified reporting period. Management analyzes
trends in premiums written to assess business efforts, and uses it
as a financial measure for goal setting and determining a portion
of employee and senior management awards and compensation. Premiums
earned, used in both statutory and GAAP accounting, is the
recognition of the portion of premiums written directly related to
the expired portion of an insurance policy for a given reporting
period. The unexpired portion of premiums written is referred to as
unearned premiums, and represents the portion of premiums written
that would be returned to a policyholder upon cancellation of a
policy.
|
EMC INSURANCE GROUP INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED |
|
|
|
|
|
|
|
|
($ in thousands, except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
Property and |
|
|
|
|
|
|
|
|
Casualty |
|
|
|
Parent |
|
|
Quarter
ended December 31, 2016 |
|
Insurance |
|
Reinsurance |
|
Company |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
|
Premiums
earned |
|
$ |
117,878 |
|
|
$ |
33,166 |
|
|
$ |
- |
|
|
$ |
151,044 |
|
Investment income, net |
|
|
8,362 |
|
|
|
3,241 |
|
|
|
4 |
|
|
|
11,607 |
|
Other
income |
|
|
128 |
|
|
|
902 |
|
|
|
- |
|
|
|
1,030 |
|
|
|
|
126,368 |
|
|
|
37,309 |
|
|
|
4 |
|
|
|
163,681 |
|
Losses and
expenses: |
|
|
|
|
|
|
|
Losses
and settlement expenses |
|
|
69,162 |
|
|
|
21,633 |
|
|
|
- |
|
|
|
90,795 |
|
Dividends
to policyholders |
|
|
2,508 |
|
|
|
- |
|
|
|
- |
|
|
|
2,508 |
|
Amortization of deferred policy acquisition costs |
|
|
20,364 |
|
|
|
7,299 |
|
|
|
- |
|
|
|
27,663 |
|
Other
underwriting expenses |
|
|
16,624 |
|
|
|
854 |
|
|
|
- |
|
|
|
17,478 |
|
Interest
expense |
|
|
84 |
|
|
|
- |
|
|
|
- |
|
|
|
84 |
|
Other
expenses |
|
|
163 |
|
|
|
- |
|
|
|
511 |
|
|
|
674 |
|
|
|
|
108,905 |
|
|
|
29,786 |
|
|
|
511 |
|
|
|
139,202 |
|
Operating
income (loss) before income taxes |
|
|
17,463 |
|
|
|
7,523 |
|
|
|
(507 |
) |
|
|
24,479 |
|
Realized investment
gains |
|
|
4,709 |
|
|
|
8 |
|
|
|
- |
|
|
|
4,717 |
|
Income
(loss) before income taxes |
|
|
22,172 |
|
|
|
7,531 |
|
|
|
(507 |
) |
|
|
29,196 |
|
Income tax expense
(benefit): |
|
|
|
|
|
|
|
Current |
|
|
5,646 |
|
|
|
1,122 |
|
|
|
(147 |
) |
|
|
6,621 |
|
Deferred |
|
|
1,309 |
|
|
|
(129 |
) |
|
|
103 |
|
|
|
1,283 |
|
|
|
|
6,955 |
|
|
|
993 |
|
|
|
(44 |
) |
|
|
7,904 |
|
Net
income (loss) |
|
$ |
15,217 |
|
|
$ |
6,538 |
|
|
$ |
(463 |
) |
|
$ |
21,292 |
|
Average shares
outstanding |
|
|
|
|
|
|
|
21,132,500 |
|
Per Share Data: |
|
|
|
|
|
|
|
Net
income (loss) per share - basic and diluted |
|
$ |
0.72 |
|
|
$ |
0.31 |
|
|
$ |
(0.02 |
) |
|
$ |
1.01 |
|
Catastrophe and storm losses (after tax) |
|
$ |
0.01 |
|
|
$ |
0.06 |
|
|
$ |
- |
|
|
$ |
0.07 |
|
Large
losses* (after tax) |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Reported
favorable development |
|
|
|
|
|
|
|
experienced on prior years' reserves (after tax) |
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
- |
|
|
$ |
0.36 |
|
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings (after tax) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Implied
favorable development that had |
|
|
|
|
|
|
|
|
an impact
on earnings (after tax) |
|
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
- |
|
|
$ |
0.36 |
|
Dividends
per share |
|
|
|
|
|
|
$ |
0.210 |
|
Other Information of
Interest: |
|
|
|
|
|
|
|
Premiums
written[2] |
|
$ |
92,969 |
|
|
$ |
32,276 |
|
|
$ |
- |
|
|
$ |
125,245 |
|
Catastrophe and storm losses |
|
$ |
512 |
|
|
$ |
1,861 |
|
|
$ |
- |
|
|
$ |
2,373 |
|
Large
losses* |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Reported
favorable development |
|
|
|
|
|
|
|
|
experienced on prior years' reserves |
|
$ |
(7,784 |
) |
|
$ |
(4,048 |
) |
|
$ |
- |
|
|
$ |
(11,832 |
) |
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Implied
favorable development that had |
|
|
|
|
|
|
|
|
an impact
on earnings |
|
$ |
(7,784 |
) |
|
$ |
(4,048 |
) |
|
$ |
- |
|
|
$ |
(11,832 |
) |
GAAP Ratios: |
|
|
|
|
|
|
|
Loss and
settlement expense ratio |
|
|
58.7 |
% |
|
|
65.2 |
% |
|
|
- |
|
|
|
60.1 |
% |
Acquisition expense ratio |
|
|
33.5 |
% |
|
|
24.6 |
% |
|
|
- |
|
|
|
31.6 |
% |
Combined
ratio |
|
|
92.2 |
% |
|
|
89.8 |
% |
|
|
- |
|
|
|
91.7 |
% |
|
|
|
|
|
|
|
|
|
*Large losses are defined as reported current accident year
losses greater than $500 for the EMC Insurance Companies' pool,
excluding catastrophe and storm losses. Under the property and
casualty insurance segment's prior reserving methodology, large
losses had a direct impact on earnings. Under the new reserving
methodology implemented during the third quarter of 2016, large
losses are taken into consideration when establishing the current
accident quarter/year ultimate estimates of losses, but there is no
longer a direct relationship between large losses and earnings. As
a result, it is no longer meaningful to report large losses
separately. |
EMC INSURANCE GROUP INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
($ in thousands, except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
Property and |
|
|
|
|
|
|
|
|
Casualty |
|
|
|
Parent |
|
|
Quarter
ended December 31, 2015 |
|
Insurance |
|
Reinsurance |
|
Company |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
|
Premiums
earned |
|
$ |
113,985 |
|
|
$ |
27,157 |
|
|
$ |
- |
|
|
$ |
141,142 |
|
Investment income, net |
|
|
8,367 |
|
|
|
3,269 |
|
|
|
- |
|
|
|
11,636 |
|
Other
income (loss) |
|
|
189 |
|
|
|
(86 |
) |
|
|
- |
|
|
|
103 |
|
|
|
|
122,541 |
|
|
|
30,340 |
|
|
|
- |
|
|
|
152,881 |
|
Losses and
expenses: |
|
|
|
|
|
|
|
Losses
and settlement expenses |
|
|
76,415 |
|
|
|
13,718 |
|
|
|
- |
|
|
|
90,133 |
|
Dividends
to policyholders |
|
|
1,213 |
|
|
|
- |
|
|
|
- |
|
|
|
1,213 |
|
Amortization of deferred policy acquisition costs |
|
|
19,698 |
|
|
|
3,663 |
|
|
|
- |
|
|
|
23,361 |
|
Other
underwriting expenses |
|
|
16,170 |
|
|
|
1,897 |
|
|
|
- |
|
|
|
18,067 |
|
Interest
expense |
|
|
84 |
|
|
|
- |
|
|
|
- |
|
|
|
84 |
|
Other
expenses |
|
|
180 |
|
|
|
- |
|
|
|
518 |
|
|
|
698 |
|
|
|
|
113,760 |
|
|
|
19,278 |
|
|
|
518 |
|
|
|
133,556 |
|
Operating
income (loss) before income taxes |
|
|
8,781 |
|
|
|
11,062 |
|
|
|
(518 |
) |
|
|
19,325 |
|
Realized investment
losses |
|
|
(3,703 |
) |
|
|
(1,699 |
) |
|
|
- |
|
|
|
(5,402 |
) |
Income
(loss) before income taxes |
|
|
5,078 |
|
|
|
9,363 |
|
|
|
(518 |
) |
|
|
13,923 |
|
Income tax expense
(benefit): |
|
|
|
|
|
|
|
Current |
|
|
317 |
|
|
|
2,880 |
|
|
|
(180 |
) |
|
|
3,017 |
|
Deferred |
|
|
862 |
|
|
|
149 |
|
|
|
- |
|
|
|
1,011 |
|
|
|
|
1,179 |
|
|
|
3,029 |
|
|
|
(180 |
) |
|
|
4,028 |
|
Net
income (loss) |
|
$ |
3,899 |
|
|
$ |
6,334 |
|
|
$ |
(338 |
) |
|
$ |
9,895 |
|
Average shares
outstanding |
|
|
|
|
|
|
|
20,755,198 |
|
Per Share Data: |
|
|
|
|
|
|
|
Net
income (loss) per share - basic and diluted |
|
$ |
0.19 |
|
|
$ |
0.31 |
|
|
$ |
(0.02 |
) |
|
$ |
0.48 |
|
Catastrophe and storm losses (after tax) |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
- |
|
|
$ |
0.11 |
|
Large
losses* (after tax) |
|
$ |
0.40 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.40 |
|
Reported
(adverse) favorable development |
|
|
|
|
|
|
|
experienced on prior years' reserves (after tax) |
$ |
(0.01 |
) |
|
$ |
0.48 |
|
|
$ |
- |
|
|
$ |
0.47 |
|
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings (after tax) |
|
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
- |
|
|
|
(0.05 |
) |
Implied
(adverse) favorable development that had |
|
|
|
|
|
|
|
|
an impact
on earnings (after tax) |
|
$ |
(0.02 |
) |
|
$ |
0.44 |
|
|
$ |
- |
|
|
$ |
0.42 |
|
Dividends
per share |
|
|
|
|
|
|
$ |
0.190 |
|
Other Information of
Interest: |
|
|
|
|
|
|
|
Premiums
written[2] |
|
$ |
90,105 |
|
|
$ |
27,590 |
|
|
$ |
- |
|
|
$ |
117,695 |
|
Catastrophe and storm losses |
|
$ |
958 |
|
|
$ |
2,661 |
|
|
$ |
- |
|
|
$ |
3,619 |
|
Large
losses* |
|
$ |
12,786 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
12,786 |
|
Reported
adverse (favorable) development |
|
|
|
|
|
|
|
|
experienced on prior years' reserves |
|
$ |
338 |
|
|
$ |
(15,495 |
) |
|
$ |
- |
|
|
$ |
(15,157 |
) |
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings |
|
|
423 |
|
|
|
1,454 |
|
|
|
- |
|
|
|
1,877 |
|
Implied
adverse (favorable) development that had |
|
|
|
|
|
|
|
|
an impact
on earnings |
|
$ |
761 |
|
|
$ |
(14,041 |
) |
|
$ |
- |
|
|
$ |
(13,280 |
) |
GAAP Ratios: |
|
|
|
|
|
|
|
Loss and
settlement expense ratio |
|
|
67.0 |
% |
|
|
50.5 |
% |
|
|
- |
|
|
|
63.9 |
% |
Acquisition expense ratio |
|
|
32.6 |
% |
|
|
20.5 |
% |
|
|
- |
|
|
|
30.2 |
% |
Combined
ratio |
|
|
99.6 |
% |
|
|
71.0 |
% |
|
|
- |
|
|
|
94.1 |
% |
|
|
|
|
|
|
|
|
|
*Large losses are defined as reported current accident year
losses greater than $500 for the EMC Insurance Companies' pool,
excluding catastrophe and storm losses. |
EMC INSURANCE GROUP INC. |
|
|
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED |
|
|
|
|
|
|
($ in thousands, except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
Property and |
|
|
|
|
|
|
|
|
Casualty |
|
|
|
Parent |
|
|
Year
ended December 31, 2016 |
|
Insurance |
|
Reinsurance |
|
Company |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
|
Premiums
earned |
|
$ |
456,467 |
|
|
$ |
135,941 |
|
|
$ |
- |
|
|
$ |
592,408 |
|
Investment income, net |
|
|
33,886 |
|
|
|
13,591 |
|
|
|
13 |
|
|
|
47,490 |
|
Other
income |
|
|
594 |
|
|
|
417 |
|
|
|
- |
|
|
|
1,011 |
|
|
|
|
490,947 |
|
|
|
149,949 |
|
|
|
13 |
|
|
|
640,909 |
|
Losses and
expenses: |
|
|
|
|
|
|
|
Losses
and settlement expenses |
|
|
294,369 |
|
|
|
92,528 |
|
|
|
- |
|
|
|
386,897 |
|
Dividends
to policyholders |
|
|
13,800 |
|
|
|
- |
|
|
|
- |
|
|
|
13,800 |
|
Amortization of deferred policy acquisition costs |
|
|
78,493 |
|
|
|
29,910 |
|
|
|
- |
|
|
|
108,403 |
|
Other
underwriting expenses |
|
|
66,463 |
|
|
|
3,149 |
|
|
|
- |
|
|
|
69,612 |
|
Interest
expense |
|
|
337 |
|
|
|
- |
|
|
|
- |
|
|
|
337 |
|
Other
expenses |
|
|
721 |
|
|
|
- |
|
|
|
2,006 |
|
|
|
2,727 |
|
|
|
|
454,183 |
|
|
|
125,587 |
|
|
|
2,006 |
|
|
|
581,776 |
|
Operating
income (loss) before income taxes |
|
|
36,764 |
|
|
|
24,362 |
|
|
|
(1,993 |
) |
|
|
59,133 |
|
Realized investment
gains (losses) |
|
|
4,082 |
|
|
|
(8 |
) |
|
|
- |
|
|
|
4,074 |
|
Income
(loss) before income taxes |
|
|
40,846 |
|
|
|
24,354 |
|
|
|
(1,993 |
) |
|
|
63,207 |
|
Income tax expense
(benefit): |
|
|
|
|
|
|
|
Current |
|
|
12,071 |
|
|
|
6,723 |
|
|
|
(733 |
) |
|
|
18,061 |
|
Deferred |
|
|
(469 |
) |
|
|
(623 |
) |
|
|
35 |
|
|
|
(1,057 |
) |
|
|
|
11,602 |
|
|
|
6,100 |
|
|
|
(698 |
) |
|
|
17,004 |
|
Net
income (loss) |
|
$ |
29,244 |
|
|
$ |
18,254 |
|
|
$ |
(1,295 |
) |
|
$ |
46,203 |
|
Average shares
outstanding |
|
|
|
|
|
|
|
21,006,302 |
|
Per Share Data: |
|
|
|
|
|
|
|
Net
income (loss) per share - basic and diluted |
|
$ |
1.39 |
|
|
$ |
0.87 |
|
|
$ |
(0.06 |
) |
|
$ |
2.20 |
|
Catastrophe and storm losses (after tax) |
|
$ |
1.09 |
|
|
$ |
0.39 |
|
|
$ |
- |
|
|
$ |
1.48 |
|
Large
losses* (after tax) |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Reported
favorable development experienced on |
|
|
|
|
|
|
|
prior
years' reserves (after tax) |
|
$ |
0.93 |
|
|
$ |
0.34 |
|
|
$ |
- |
|
|
$ |
1.27 |
|
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings (after tax) |
|
|
(0.17 |
) |
|
|
- |
|
|
|
- |
|
|
|
(0.17 |
) |
Implied
favorable development that had an impact |
|
|
|
|
|
|
|
|
on
earnings (after tax) |
|
$ |
0.76 |
|
|
$ |
0.34 |
|
|
$ |
- |
|
|
$ |
1.10 |
|
Dividends
per share |
|
|
|
|
|
|
$ |
0.780 |
|
Book value per share |
|
|
|
|
|
|
$ |
26.07 |
|
Effective tax rate |
|
|
|
|
|
|
|
26.9 |
% |
Net
income as a percent of beg. SH equity |
|
|
|
|
|
|
|
|
8.8 |
% |
Other Information of
Interest: |
|
|
|
|
|
|
|
Premiums
written[2] |
|
$ |
463,673 |
|
|
$ |
131,030 |
|
|
$ |
- |
|
|
$ |
594,703 |
|
Catastrophe and storm losses |
|
$ |
35,299 |
|
|
$ |
12,608 |
|
|
$ |
- |
|
|
$ |
47,907 |
|
Large
losses* |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Reported
favorable development experienced on |
|
|
|
|
|
|
|
|
prior
years' reserves |
|
$ |
(30,013 |
) |
|
$ |
(10,928 |
) |
|
$ |
- |
|
|
$ |
(40,941 |
) |
Favorable
development that had no impact |
|
|
|
|
|
|
|
|
on
earnings |
|
|
5,592 |
|
|
|
- |
|
|
|
- |
|
|
|
5,592 |
|
Implied
favorable development that had an impact |
|
|
|
|
|
|
|
|
on
earnings |
|
$ |
(24,421 |
) |
|
$ |
(10,928 |
) |
|
$ |
- |
|
|
$ |
(35,349 |
) |
GAAP Ratios: |
|
|
|
|
|
|
|
Loss and
settlement expense ratio |
|
|
64.5 |
% |
|
|
68.1 |
% |
|
|
- |
|
|
|
65.3 |
% |
Acquisition expense ratio |
|
|
34.8 |
% |
|
|
24.3 |
% |
|
|
- |
|
|
|
32.4 |
% |
Combined
ratio |
|
|
99.3 |
% |
|
|
92.4 |
% |
|
|
- |
|
|
|
97.7 |
% |
|
|
|
|
|
|
|
|
|
*Large losses are defined as reported current accident year
losses greater than $500 for the EMC Insurance Companies' pool,
excluding catastrophe and storm losses. Under the property and
casualty insurance segment's prior reserving methodology, large
losses had a direct impact on earnings. Under the new reserving
methodology implemented during the third quarter of 2016, large
losses are taken into consideration when establishing the current
accident quarter/year ultimate estimates of losses, but there is no
longer a direct relationship between large losses and earnings. As
a result, it is no longer meaningful to report large losses
separately. The amount of large losses previously reported for the
first six months of 2016 has not been carried forward and disclosed
for the year ended December 31, 2016, because it would not be
comparable to the amount reported for 2015. |
|
|
|
|
|
|
|
|
|
EMC INSURANCE GROUP INC. |
|
|
CONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
($ in thousands, except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
Property and |
|
|
|
|
|
|
|
|
Casualty |
|
|
|
Parent |
|
|
Year
ended December 31, 2015 |
|
Insurance |
|
Reinsurance |
|
Company |
|
Consolidated |
Revenues: |
|
|
|
|
|
|
|
|
Premiums
earned |
|
$ |
447,197 |
|
|
$ |
123,069 |
|
|
$ |
- |
|
|
$ |
570,266 |
|
Investment income, net |
|
|
32,668 |
|
|
|
12,923 |
|
|
|
(9 |
) |
|
|
45,582 |
|
Other
income |
|
|
771 |
|
|
|
954 |
|
|
|
- |
|
|
|
1,725 |
|
|
|
|
480,636 |
|
|
|
136,946 |
|
|
|
(9 |
) |
|
|
617,573 |
|
Losses and
expenses: |
|
|
|
|
|
|
|
Losses
and settlement expenses |
|
|
291,883 |
|
|
|
78,853 |
|
|
|
- |
|
|
|
370,736 |
|
Dividends
to policyholders |
|
|
7,705 |
|
|
|
- |
|
|
|
- |
|
|
|
7,705 |
|
Amortization of deferred policy acquisition costs |
|
|
75,701 |
|
|
|
26,483 |
|
|
|
- |
|
|
|
102,184 |
|
Other
underwriting expenses |
|
|
63,954 |
|
|
|
4,464 |
|
|
|
- |
|
|
|
68,418 |
|
Interest
expense |
|
|
337 |
|
|
|
- |
|
|
|
- |
|
|
|
337 |
|
Other
expenses |
|
|
748 |
|
|
|
- |
|
|
|
1,942 |
|
|
|
2,690 |
|
|
|
|
440,328 |
|
|
|
109,800 |
|
|
|
1,942 |
|
|
|
552,070 |
|
Operating
income (loss) before income taxes |
|
|
40,308 |
|
|
|
27,146 |
|
|
|
(1,951 |
) |
|
|
65,503 |
|
Realized investment
gains |
|
|
4,163 |
|
|
|
1,990 |
|
|
|
- |
|
|
|
6,153 |
|
Income
(loss) before income taxes |
|
|
44,471 |
|
|
|
29,136 |
|
|
|
(1,951 |
) |
|
|
71,656 |
|
Income tax expense
(benefit): |
|
|
|
|
|
|
|
Current |
|
|
10,830 |
|
|
|
8,463 |
|
|
|
(682 |
) |
|
|
18,611 |
|
Deferred |
|
|
2,174 |
|
|
|
709 |
|
|
|
- |
|
|
|
2,883 |
|
|
|
|
13,004 |
|
|
|
9,172 |
|
|
|
(682 |
) |
|
|
21,494 |
|
Net
Income (loss) |
|
$ |
31,467 |
|
|
$ |
19,964 |
|
|
$ |
(1,269 |
) |
|
$ |
50,162 |
|
Average shares
outstanding |
|
|
|
|
|
|
|
20,621,919 |
|
Per Share Data: |
|
|
|
|
|
|
|
Net
income (loss) per share - basic and diluted |
|
$ |
1.52 |
|
|
$ |
0.97 |
|
|
$ |
(0.06 |
) |
|
$ |
2.43 |
|
Catastrophe and storm losses (after tax) |
|
$ |
0.93 |
|
|
$ |
0.47 |
|
|
$ |
- |
|
|
$ |
1.40 |
|
Large
losses* (after tax) |
|
$ |
1.08 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1.08 |
|
Reported
favorable development |
|
|
|
|
|
|
|
experienced on prior years' reserves (after tax) |
$ |
0.44 |
|
|
$ |
0.67 |
|
|
$ |
- |
|
|
$ |
1.11 |
|
(Favorable) adverse development that had no impact |
|
|
|
|
|
|
|
on
earnings (after tax) |
|
|
(0.02 |
) |
|
|
0.03 |
|
|
|
- |
|
|
|
0.01 |
|
Implied
favorable development that had an impact |
|
|
|
|
|
|
|
|
on
earnings (after tax) |
|
$ |
0.42 |
|
|
$ |
0.70 |
|
|
$ |
- |
|
|
$ |
1.12 |
|
Dividends
per share |
|
|
|
|
|
|
$ |
0.693 |
|
Book value per share |
|
|
|
|
|
|
$ |
25.26 |
|
Effective tax rate |
|
|
|
|
|
|
|
30.0 |
% |
Net
income as a percent of beg. SH equity |
|
|
|
|
|
|
|
|
10.0 |
% |
Other Information of
Interest: |
|
|
|
|
|
|
|
Premiums
written[2] |
|
$ |
454,434 |
|
|
$ |
124,504 |
|
|
$ |
- |
|
|
$ |
578,938 |
|
Catastrophe and storm losses |
|
$ |
29,609 |
|
|
$ |
14,765 |
|
|
$ |
- |
|
|
$ |
44,374 |
|
Large
losses* |
|
$ |
34,239 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
34,239 |
|
Reported
favorable development |
|
|
|
|
|
|
|
|
experienced on prior years' reserves |
|
$ |
(13,839 |
) |
|
$ |
(21,275 |
) |
|
$ |
- |
|
|
$ |
(35,114 |
) |
Favorable (adverse) development that had no impact |
|
|
|
|
|
|
|
on
earnings |
|
|
423 |
|
|
|
(1,041 |
) |
|
|
- |
|
|
|
(618 |
) |
Implied
favorable development that had an impact |
|
|
|
|
|
|
|
|
on
earnings |
|
$ |
(13,416 |
) |
|
$ |
(22,316 |
) |
|
$ |
- |
|
|
$ |
(35,732 |
) |
GAAP Ratios: |
|
|
|
|
|
|
|
Loss and
settlement expense ratio |
|
|
65.3 |
% |
|
|
64.1 |
% |
|
|
- |
|
|
|
65.0 |
% |
Acquisition expense ratio |
|
|
32.9 |
% |
|
|
25.1 |
% |
|
|
- |
|
|
|
31.3 |
% |
Combined
ratio |
|
|
98.2 |
% |
|
|
89.2 |
% |
|
|
- |
|
|
|
96.3 |
% |
|
|
|
|
|
|
|
|
|
*Large losses are defined as reported current accident year
losses greater than $500 for the EMC Insurance Companies' pool,
excluding catastrophe and storm losses. |
EMC INSURANCE GROUP INC. |
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
2015 |
($ in thousands, except
share and per share amounts) |
(Unaudited) |
|
|
ASSETS |
|
|
|
Investments: |
|
|
|
Fixed
maturity securities available-for-sale, at fair value |
|
|
|
(amortized cost $1,189,525 and $1,130,217) |
$ |
1,199,699 |
|
$ |
1,161,025 |
Equity
securities available-for-sale, at fair value |
|
|
|
(cost
$147,479 and $144,176) |
|
213,839 |
|
|
206,243 |
Other
long-term investments |
|
12,506 |
|
|
9,930 |
Short-term investments |
|
39,670 |
|
|
38,599 |
Total
investments |
|
1,465,714 |
|
|
1,415,797 |
|
|
|
|
Cash |
|
307 |
|
|
224 |
Reinsurance receivables
due from affiliate |
|
21,326 |
|
|
24,236 |
Prepaid reinsurance
premiums due from affiliate |
|
9,309 |
|
|
6,563 |
Deferred
policy acquisition costs (affiliated $40,660 and $40,535) |
|
40,939 |
|
|
40,720 |
Prepaid
pension and postretirement benefits due from affiliate |
|
12,314 |
|
|
12,133 |
Accrued investment
income |
|
11,050 |
|
|
10,789 |
Amounts receivable
under reverse repurchase agreements |
|
20,000 |
|
|
16,850 |
Accounts
receivable |
|
2,076 |
|
|
804 |
Income taxes
recoverable |
|
- |
|
|
1,735 |
Goodwill |
|
942 |
|
|
942 |
Other assets
(affiliated $4,632 and $4,595) |
|
4,836 |
|
|
5,162 |
Total
assets |
$ |
1,588,813 |
|
$ |
1,535,955 |
|
|
|
|
LIABILITIES |
|
|
|
Losses and settlement
expenses (affiliated $685,533 and $671,169) |
$ |
690,532 |
|
$ |
678,774 |
Unearned premiums
(affiliated $243,682 and $238,637) |
|
244,885 |
|
|
239,435 |
Other policyholders'
funds (all affiliated) |
|
13,068 |
|
|
8,721 |
Surplus notes payable
to affiliate |
|
25,000 |
|
|
25,000 |
Amounts due affiliate
to settle inter-company transaction balances |
|
11,222 |
|
|
6,408 |
Pension benefits
payable to affiliate |
|
4,097 |
|
|
4,299 |
Income taxes
payable |
|
2,359 |
|
|
- |
Deferred income
taxes |
|
11,321 |
|
|
19,029 |
Other liabilities
(affiliated $27,871 and $28,598) |
|
32,987 |
|
|
29,351 |
Total
liabilities |
|
1,035,471 |
|
|
1,011,017 |
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock, $1 par
value, authorized 30,000,000 |
|
|
|
shares;
issued and outstanding, 21,222,535 |
|
|
|
shares in
2016 and 20,780,439 shares in 2015 |
|
21,223 |
|
|
20,781 |
Additional paid-in
capital |
|
119,054 |
|
|
108,747 |
Accumulated other
comprehensive income |
|
46,081 |
|
|
58,433 |
Retained earnings |
|
366,984 |
|
|
336,977 |
Total
stockholders' equity |
|
553,342 |
|
|
524,938 |
Total
liabilities and stockholders' equity |
$ |
1,588,813 |
|
$ |
1,535,955 |
|
EMC INSURANCE GROUP INC. |
|
|
LOSS AND SETTLEMENT EXPENSE BY LINE OF
BUSINESS |
|
|
Three months ended December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
($ in thousands) |
|
Premiums earned |
|
Losses and settlement expenses |
|
Loss and settlement expense ratio |
|
Premiums earned |
|
Losses and settlement expenses |
|
Loss and settlement expense ratio |
Property and casualty
insurance |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
|
|
|
|
|
Automobile |
|
$ |
28,492 |
|
$ |
23,601 |
|
|
82.8 |
% |
|
$ |
27,206 |
|
|
$ |
24,291 |
|
|
89.3 |
% |
Property |
|
|
27,720 |
|
|
11,822 |
|
|
42.6 |
% |
|
|
26,785 |
|
|
|
12,154 |
|
|
45.4 |
% |
Workers'
compensation |
|
|
25,245 |
|
|
11,691 |
|
|
46.3 |
% |
|
|
23,678 |
|
|
|
18,212 |
|
|
76.9 |
% |
Liability |
|
|
24,544 |
|
|
18,693 |
|
|
76.2 |
% |
|
|
23,713 |
|
|
|
13,731 |
|
|
57.9 |
% |
Other |
|
|
2,128 |
|
|
(660 |
) |
|
(31.0 |
)% |
|
|
2,035 |
|
|
|
60 |
|
|
3.0 |
% |
Total
commercial lines |
|
|
108,129 |
|
|
65,147 |
|
|
60.2 |
% |
|
|
103,417 |
|
|
|
68,448 |
|
|
66.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
lines |
|
|
9,749 |
|
|
4,015 |
|
|
41.2 |
% |
|
|
10,568 |
|
|
|
7,967 |
|
|
75.4 |
% |
Total
property and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
insurance |
|
$ |
117,878 |
|
$ |
69,162 |
|
|
58.7 |
% |
|
$ |
113,985 |
|
|
$ |
76,415 |
|
|
67.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata
reinsurance |
|
$ |
12,142 |
|
$ |
5,131 |
|
|
42.3 |
% |
|
$ |
7,267 |
|
|
$ |
5,965 |
|
|
82.1 |
% |
Excess of
loss reinsurance |
|
|
21,024 |
|
|
16,502 |
|
|
78.5 |
% |
|
|
19,890 |
|
|
|
7,753 |
|
|
39.0 |
% |
Total
reinsurance |
|
$ |
33,166 |
|
$ |
21,633 |
|
|
65.2 |
% |
|
$ |
27,157 |
|
|
$ |
13,718 |
|
|
50.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
151,044 |
|
$ |
90,795 |
|
|
60.1 |
% |
|
$ |
141,142 |
|
|
$ |
90,133 |
|
|
63.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
($ in thousands) |
|
Premiums earned |
|
Losses and settlement expenses |
|
Loss and settlement expense ratio |
|
Premiums earned |
|
Losses and settlement expenses |
|
Loss and settlement expense ratio |
Property and casualty
insurance |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
|
|
|
|
|
Automobile |
|
$ |
110,941 |
|
$ |
93,364 |
|
|
84.2 |
% |
|
$ |
105,904 |
|
|
$ |
86,134 |
|
|
81.3 |
% |
Property |
|
|
105,012 |
|
|
64,509 |
|
|
61.4 |
% |
|
|
104,303 |
|
|
|
65,806 |
|
|
63.1 |
% |
Workers'
compensation |
|
|
96,517 |
|
|
51,371 |
|
|
53.2 |
% |
|
|
92,828 |
|
|
|
57,803 |
|
|
62.3 |
% |
Liability |
|
|
96,630 |
|
|
56,738 |
|
|
58.7 |
% |
|
|
92,665 |
|
|
|
48,399 |
|
|
52.2 |
% |
Other |
|
|
8,374 |
|
|
(12 |
) |
|
(0.1 |
)% |
|
|
8,079 |
|
|
|
854 |
|
|
10.6 |
% |
Total
commercial lines |
|
|
417,474 |
|
|
265,970 |
|
|
63.7 |
% |
|
|
403,779 |
|
|
|
258,996 |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
lines |
|
|
38,993 |
|
|
28,399 |
|
|
72.8 |
% |
|
|
43,418 |
|
|
|
32,887 |
|
|
75.7 |
% |
Total
property and casualty |
|
|
|
|
|
|
|
|
|
|
|
|
insurance |
|
$ |
456,467 |
|
$ |
294,369 |
|
|
64.5 |
% |
|
$ |
447,197 |
|
|
$ |
291,883 |
|
|
65.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata
reinsurance |
|
$ |
56,317 |
|
$ |
31,498 |
|
|
55.9 |
% |
|
$ |
47,421 |
|
|
$ |
29,433 |
|
|
62.1 |
% |
Excess of
loss reinsurance |
|
|
79,624 |
|
|
61,030 |
|
|
76.6 |
% |
|
|
75,648 |
|
|
|
49,420 |
|
|
65.3 |
% |
Total
reinsurance |
|
$ |
135,941 |
|
$ |
92,528 |
|
|
68.1 |
% |
|
$ |
123,069 |
|
|
$ |
78,853 |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
592,408 |
|
$ |
386,897 |
|
|
65.3 |
% |
|
$ |
570,266 |
|
|
$ |
370,736 |
|
|
65.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EMC INSURANCE GROUP INC. |
|
|
PREMIUMS
WRITTEN[2] |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
Percent of |
|
|
|
Percent of |
|
Change
in |
|
Premiums |
|
premiums |
|
Premiums |
|
premiums |
|
premiums |
($ in thousands) |
written |
|
written |
|
written |
|
written |
|
written |
Property and casualty
insurance |
|
|
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
|
|
Automobile |
$ |
23,199 |
|
18.5 |
% |
|
$ |
21,735 |
|
18.5 |
% |
|
6.7 |
% |
Property |
|
21,066 |
|
16.8 |
% |
|
|
20,818 |
|
17.7 |
% |
|
1.2 |
% |
Workers'
compensation |
|
18,613 |
|
14.9 |
% |
|
|
17,717 |
|
15.0 |
% |
|
5.1 |
% |
Liability |
|
19,359 |
|
15.5 |
% |
|
|
19,095 |
|
16.2 |
% |
|
1.4 |
% |
Other |
|
1,783 |
|
1.4 |
% |
|
|
1,619 |
|
1.4 |
% |
|
10.1 |
% |
Total
commercial lines |
|
84,020 |
|
67.1 |
% |
|
|
80,984 |
|
68.8 |
% |
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
Personal
lines |
|
8,949 |
|
7.1 |
% |
|
|
9,121 |
|
7.8 |
% |
|
(1.9 |
)% |
Total
property and casualty insurance |
$ |
92,969 |
|
74.2 |
% |
|
$ |
90,105 |
|
76.6 |
% |
|
3.2 |
% |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
|
Pro rata
reinsurance |
$ |
10,918 |
|
8.7 |
% |
|
$ |
8,420 |
|
7.1 |
% |
|
29.7 |
% |
Excess of
loss reinsurance |
|
21,358 |
|
17.1 |
% |
|
|
19,170 |
|
16.3 |
% |
|
11.4 |
% |
Total
reinsurance |
$ |
32,276 |
|
25.8 |
% |
|
$ |
27,590 |
|
23.4 |
% |
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
125,245 |
|
100.0 |
% |
|
$ |
117,695 |
|
100.0 |
% |
|
6.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
Percent of |
|
|
|
Percent of |
|
Change in |
|
Premiums |
|
premiums |
|
Premiums |
|
premiums |
|
premiums |
($ in thousands) |
written |
|
written |
|
written |
|
written |
|
written |
Property and casualty
insurance |
|
|
|
|
|
|
|
|
|
Commercial lines: |
|
|
|
|
|
|
|
|
|
Automobile |
$ |
113,173 |
|
19.1 |
% |
|
$ |
108,682 |
|
18.7 |
% |
|
4.1 |
% |
Property |
|
106,600 |
|
17.9 |
% |
|
|
106,671 |
|
18.4 |
% |
|
(0.1 |
)% |
Workers'
compensation |
|
99,509 |
|
16.7 |
% |
|
|
94,629 |
|
16.4 |
% |
|
5.2 |
% |
Liability |
|
97,815 |
|
16.5 |
% |
|
|
94,860 |
|
16.4 |
% |
|
3.1 |
% |
Other |
|
8,646 |
|
1.4 |
% |
|
|
8,032 |
|
1.4 |
% |
|
7.6 |
% |
Total
commercial lines |
|
425,743 |
|
71.6 |
% |
|
|
412,874 |
|
71.3 |
% |
|
3.1 |
% |
|
|
|
|
|
|
|
|
|
|
Personal
lines |
|
37,930 |
|
6.4 |
% |
|
|
41,560 |
|
7.2 |
% |
|
(8.7 |
)% |
Total
property and casualty insurance |
$ |
463,673 |
|
78.0 |
% |
|
$ |
454,434 |
|
78.5 |
% |
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
|
Pro rata
reinsurance |
$ |
52,996 |
|
8.9 |
% |
|
$ |
48,652 |
|
8.4 |
% |
|
8.9 |
% |
Excess of
loss reinsurance |
|
78,034 |
|
13.1 |
% |
|
|
75,852 |
|
13.1 |
% |
|
2.9 |
% |
Total
reinsurance |
$ |
131,030 |
|
22.0 |
% |
|
$ |
124,504 |
|
21.5 |
% |
|
5.2 |
% |
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
594,703 |
|
100.0 |
% |
|
$ |
578,938 |
|
100.0 |
% |
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
Contacts
Investors:
Steve Walsh, 515-345-2515
steve.t.walsh@emcins.com
Media:
Lisa Hamilton, 515-345-7589
lisa.l.hamilton@emcins.com
EMC Insurance (NASDAQ:EMCI)
Historical Stock Chart
From Feb 2024 to Mar 2024
EMC Insurance (NASDAQ:EMCI)
Historical Stock Chart
From Mar 2023 to Mar 2024