EMC INSURANCE GROUP INC - FORM 8-K - EX-99 - EXHIBIT 99 2Q15 EARNINGS RELEASE

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8-K - 8-K 2Q15 EARNINGS RELEASE - EMC INSURANCE GROUP INC	earnings8k2015630.htm

EXHIBIT 99

EMC Insurance Group Inc. Reports 2015

Second Quarter and Six Month Results

Second Quarter Ended June 30, 2015

Operating Income Per Share - $0.32

Net Income Per Share - $0.42

Net Realized Investment Gains Per Share - $0.10

Catastrophe and Storm Losses Per Share - $0.58

Large Losses Per Share - $0.22

GAAP Combined Ratio - 101.1 percent

Six Months Ended June 30, 2015

Operating Income Per Share - $1.29

Net Income Per Share - $1.42

Net Realized Investment Gains Per Share - $0.13

Catastrophe and Storm Losses Per Share - $0.73

Large Losses Per Share - $0.35

GAAP Combined Ratio - 94.5 percent

NOTE: All prior year share and per share amounts have been adjusted to reflect the three-for-two stock split that was completed on June 23, 2015.

2015 Operating Income Guidance - $1.80 to $2.00 per share

DES MOINES, Iowa (August 6, 2015) - EMC Insurance Group Inc. (NASDAQ OMX/GS:EMCI) today reported operating income of $6.6 million ($0.32 per share) for the second quarter ended June 30, 2015, compared to an operating loss of $509,000 ($0.03 per share) for the second quarter of 2014¹. For the six months ended June 30, 2015, the Company reported operating income of $26.4 million ($1.29 per share), compared to $9.3 million ($0.46 per share) for the same period in 2014.

Net income, including realized investment gains and losses, totaled $8.7 million ($0.42 per share) for the second quarter of 2015, compared to $1.0 million ($0.05 per share) for the second quarter of 2014. For the six months ended June 30, 2015, the Company reported net income of $29.1 million ($1.42 per share), compared to $11.6 million ($0.58 per share) for the same period in 2014.

The Company’s GAAP combined ratio was 101.1 percent in the second quarter of 2015, compared to 109.6 percent in the second quarter of 2014. For the first six months of 2015, the Company’s GAAP combined ratio was 94.5 percent, compared to 103.9 percent in 2014.

“Second quarter operating results improved in both segments,” stated President and Chief Executive Officer Bruce G. Kelley. “This improvement, combined with record-breaking first quarter results, keeps us on track to achieve 2015 operating income within our guidance.

“The property and casualty insurance segment continues to achieve targeted rate level increases that exceed the industry average, helping to improve overall premium rate adequacy and drive organic premium growth. Maintaining retention levels above the industry average while achieving above industry

average rate level increases is a testament to the value of our 16 local branch offices and strong independent agency network,” concluded Kelley.

Premiums earned increased 8.0 percent to $144.6 million for the second quarter of 2015, from $134.0 million in the second quarter of 2014. In the property and casualty insurance segment, premiums earned increased 7.5 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 9.6 percent, primarily due to a significant increase in pro rata liability business. It is important to note that this large increase also reflects a premium adjustment that was made in the second quarter of 2014, whereby the renewal date of two large facility contracts was extended from May 1 to July 1. This had the effect of reducing premiums earned in the pro rata property line of business in the second quarter of 2014. For the first six months of 2015, premiums earned increased 6.1 percent (7.2 percent in the property and casualty insurance segment and 2.6 percent in the reinsurance segment).

Catastrophe and storm losses totaled $18.4 million ($0.58 per share after tax) in the second quarter of 2015, compared to $27.9 million ($0.90 per share after tax) in the second quarter of 2014. Second quarter 2015 catastrophe and storm losses accounted for 12.7 percentage points of the combined ratio, which is well below the Company’s most recent 10-year average of 18.4 percentage points for this period and the 20.9 percentage points experienced in the second quarter of 2014. For the first six months of 2015, catastrophe and storm losses totaled $23.0 million ($0.73 per share after tax), compared to $35.4 million ($1.14 per share after tax) in 2014. On a segment basis, catastrophe and storm losses amounted to $17.0 million ($0.53 per share after tax) and $18.7 million ($0.60 per share after tax) in the property and casualty insurance segment, and $1.5 million ($0.05 per share after tax) and $4.3 million ($0.13 per share after tax) in the reinsurance segment, for the three months and six months ended June 30, 2015, respectively.

The Company reported $3.1 million ($0.10 per share after tax) of favorable development on prior years’ reserves during the second quarter of 2015, compared to $6.6 million ($0.21 per share after tax) in the second quarter of 2014. For the first six months of 2015, favorable development totaled $17.7 million ($0.56 per share after tax), compared to $9.2 million ($0.30 per share after tax) in 2014. 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) decreased to $6.9 million ($0.22 per share after tax) in the second quarter of 2015 from $9.9 million ($0.32 per share after tax) in the second quarter of 2014. For the first six months of 2015, large losses decreased to $11.1 million ($0.35 per share after tax) from $14.1 million ($0.46 per share after tax) in 2014.

Net investment income increased 3.3 percent to $11.4 million for the second quarter of 2015, from $11.1 million in 2014 due to a higher average invested balance in fixed maturity securities and an increase in dividend income. Net investment income declined 1.2% to $22.6 million for the first six months of 2015, from $22.9 million for the same period in 2014; however, net investment income for the first six months of 2014 included approximately $442,000 that 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. Excluding this amount, net investment income would have increased 0.7 percent for the first six months of 2015.

Net realized investment gains totaled $3.3 million ($0.10 per share after tax) and $4.1 million ($0.13 per share after tax) for the second quarter and first six months of 2015, compared to $2.3 million ($0.08 per share after tax) and $3.6 million ($0.12 per share after tax) for the same periods in 2014. Included in net realized investment gains reported for the second quarter and first six months of 2015 are $2.0 million and $3.4 million, respectively, of net realized investment losses attributed to declines in the carrying value of a limited partnership that helps to protect the Company from a sudden and significant decline in the value of its equity portfolio, compared to $820,000 and $1.2 million, respectively, for the same periods in 2014.

At June 30, 2015, consolidated assets totaled $1.5 billion, including $1.4 billion in the investment portfolio, and stockholders’ equity totaled $515.4 million, an increase of 2.5 percent from December 31, 2014. Book value of the Company’s stock increased 0.9 percent to $24.95 per share from $24.72 per share at December 31, 2014, but declined 2.7 percent from March 31, 2015 due to a reduction in unrealized gains on the investment portfolio. Book value excluding accumulated other comprehensive income increased to $21.78 per share from $20.70 per share at December 31, 2014.

Based on results for the first six months of 2015 and projections for the remainder of the year, management is reaffirming its 2015 operating income guidance in the range of $1.80 to $2.00 per share. This guidance is based on a projected GAAP combined ratio of 97.8 percent for the year and investment income consistent with the amount reported in 2014. The load for catastrophe and storm losses has been reduced to 9.5 points from the previous load of 11.0 points; however, the 1.5 point decline in the loss ratio attributable to this reduction was offset by increases in the settlement and acquisition expense ratios.

The Company will hold an earnings teleconference call at noon Eastern time on August 6, 2015 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company’s results for the quarter and six months ended June 30, 2015, as well as its expectations for the remainder of 2015. 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 6, 2015. 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 to net income is as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
($ in thousands)
Operating income (loss)	$	6,620	$	(509	)	$	26,441	$	9,266
Net realized investment gains	2,128		1,523			2,637		2,343
Net income	$	8,748	$	1,014		$	29,078	$	11,609




CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
($ in thousands, except share and per share amounts)
Quarter Ended June 30, 2015	Property and Casualty Insurance			Reinsurance			Parent Company			Consolidated
Revenues:
Premiums earned	$	111,254		$	33,351		$	—		$	144,605
Investment income, net	8,150			3,294			(3		)	11,441
Other income	190			(702		)	—			(512		)
	119,594			35,943			(3		)	155,534
Losses and expenses:
Losses and settlement expenses	82,817			19,316			—			102,133
Dividends to policyholders	37			—			—			37
Amortization of deferred policy acquisition costs	18,888			8,355			—			27,243
Other underwriting expenses	16,024			761			—			16,785
Interest expense	85			—			—			85
Other expenses	166			—			484			650
	118,017			28,432			484			146,933
Operating income (loss) before income taxes	1,577			7,511			(487		)	8,601
Realized investment gains	2,277			997			—			3,274
Income (loss) before income taxes	3,854			8,508			(487		)	11,875
Income tax expense (benefit):
Current	185			3,293			(170		)	3,308
Deferred	367			(548		)	—			(181		)
	552			2,745			(170		)	3,127
Net income (loss)	$	3,302		$	5,763		$	(317	)	$	8,748
Average shares outstanding										20,611,286
Per Share Data:
Net income (loss) per share - basic and diluted	$	0.16		$	0.28		$	(0.02	)	$	0.42
Catastrophe and storm losses (after tax)	$	0.53		$	0.05		$	—		$	0.58
Large losses* (after tax)	$	0.22		$	—		$	—		$	0.22
Reported favorable development experienced on prior years' reserves (after tax)	$	0.01		$	0.09		$	—		$	0.10
Dividends per share										$	0.167
Other Information of Interest:
Net written premiums	$	120,811		$	31,340		$	—		$	152,151
Catastrophe and storm losses	$	16,970		$	1,451		$	—		$	18,421
Large losses*	$	6,891		$	—		$	—		$	6,891
Reported favorable development experienced on prior years' reserves	$	(190	)	$	(2,947	)	$	—		$	(3,137	)
GAAP Ratios:
Loss and settlement expense ratio	74.4		%	57.9		%	—			70.6		%
Acquisition expense ratio	31.5		%	27.3		%	—			30.5		%
Combined ratio	105.9		%	85.2		%	—			101.1		%

*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses.




CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
($ in thousands, except share and per share amounts)
Quarter Ended June 30, 2014	Property and Casualty Insurance			Reinsurance			Parent 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			—			362
	111,670			33,722			(2		)	145,390
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			—			363			597
	114,815			32,285			363			147,463
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										20,206,458
Per Share Data:
Net income (loss) per share - basic and diluted	$	(0.02	)	$	0.08		$	(0.01	)	$	0.05
Catastrophe and storm losses (after tax)	$	0.69		$	0.21		$	—		$	0.90
Large losses* (after tax)	$	0.32		$	—		$	—		$	0.32
Reported favorable development experienced on prior years' reserves (after tax)	$	0.15		$	0.06		$	—		$	0.21
Dividends per share										$	0.153
Other Information of Interest:
Net written premiums	$	112,464		$	26,560		$	—		$	139,024
Catastrophe and storm losses	$	21,465		$	6,480		$	—		$	27,945
Large losses*	$	9,913		$	—		$	—		$	9,913
Reported favorable development experienced on prior years' reserves	$	(4,740	)	$	(1,903	)	$	—		$	(6,643	)
GAAP Ratios:
Loss and settlement expense ratio	78.0		%	82.3		%	—			79.0		%
Acquisition expense ratio	32.6		%	23.8		%	—			30.6		%
Combined ratio	110.6		%	106.1		%	—			109.6		%

*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses.



CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
($ in thousands, except share and per share amounts)
Six Months Ended June 30, 2015	Property and Casualty Insurance			Reinsurance			Parent Company			Consolidated
Revenues:
Premiums earned	$	219,459		$	63,877		$	—		$	283,336
Investment income, net	16,176			6,478			(7		)	22,647
Other income	372			731			—			1,103
	236,007			71,086			(7		)	307,086
Losses and expenses:
Losses and settlement expenses	139,492			38,426			—			177,918
Dividends to policyholders	2,937			—			—			2,937
Amortization of deferred policy acquisition costs	37,267			15,417			—			52,684
Other underwriting expenses	32,197			2,109			—			34,306
Interest expense	169			—			—			169
Other expenses	372			—			945			1,317
	212,434			55,952			945			269,331
Operating income (loss) before income taxes	23,573			15,134			(952		)	37,755
Realized investment gains	2,977			1,080			—			4,057
Income (loss) before income taxes	26,550			16,214			(952		)	41,812
Income tax expense (benefit):
Current	7,770			5,076			(333		)	12,513
Deferred	77			144			—			221
	7,847			5,220			(333		)	12,734
Net income (loss)	$	18,703		$	10,994		$	(619	)	$	29,078
Average shares outstanding										20,523,794
Per Share Data:
Net income (loss) per share - basic and diluted	$	0.91		$	0.54		$	(0.03	)	$	1.42
Catastrophe and storm losses (after tax)	$	0.60		$	0.13		$	—		$	0.73
Large losses* (after tax)	$	0.35		$	—		$	—		$	0.35
Reported favorable development experienced on prior years' reserves (after tax)	$	0.30		$	0.26		$	—		$	0.56
Dividends per share										$	0.333
Book value per share										$	24.95
Effective tax rate										30.5		%
Annualized net income as a percent of beg. SH equity										11.6		%
Other Information of Interest:
Net written premiums	$	229,607		$	65,468		$	—		$	295,075
Catastrophe and storm losses	$	18,731		$	4,260		$	—		$	22,991
Large losses*	$	11,149		$	—		$	—		$	11,149
Reported favorable development experienced on prior years' reserves	$	(9,455	)	$	(8,275	)	$	—		$	(17,730	)
GAAP Ratios:
Loss and settlement expense ratio	63.6		%	60.2		%	—			62.8		%
Acquisition expense ratio	33.0		%	27.4		%	—			31.7		%
Combined ratio	96.6		%	87.6		%	—			94.5		%

*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses.



CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
($ in thousands, except share and per share amounts)
Six Months Ended June 30, 2014	Property and Casualty Insurance			Reinsurance			Parent Company			Consolidated
Revenues:
Premiums earned	$	204,764		$	62,268		$	—		$	267,032
Investment income, net	16,588			6,349			(6		)	22,931
Other income	382			14			—			396
	221,734			68,631			(6		)	290,359
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			—			717			1,125
	216,795			61,293			717			278,805
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										20,114,777
Per Share Data:
Net income (loss) per share - basic and diluted	$	0.30		$	0.30		$	(0.02	)	$	0.58
Catastrophe and storm losses (after tax)	$	0.92		$	0.22		$	—		$	1.14
Large losses* (after tax)	$	0.46		$	—		$	—		$	0.46
Reported favorable development experienced on prior years' reserves (after tax)	$	0.18		$	0.12		$	—		$	0.30
Dividends per share										$	0.307
Book value per share										$	24.03
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
Large losses*	$	14,109		$	—		$	—		$	14,109
Reported favorable development experienced on prior years' reserves	$	(5,679	)	$	(3,552	)	$	—		$	(9,231	)
GAAP Ratios:
Loss and settlement expense ratio	72.5		%	74.4		%	—			73.0		%
Acquisition expense ratio	33.1		%	24.0		%	—			30.9		%
Combined ratio	105.6		%	98.4		%	—			103.9		%

*Large losses are defined as losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and storm losses.



CONSOLIDATED BALANCE SHEETS
	June 30, 2015		December 31, 2014
($ in thousands, except share and per share amounts)	(Unaudited)
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost $1,122,459 and $1,080,006)	$	1,154,962	$	1,127,499
Equity securities available-for-sale, at fair value (cost $135,044 and $123,972)	199,286		197,036
Other long-term investments	8,109		6,227
Short-term investments	32,758		53,262
Total investments	1,395,115		1,384,024

Cash	349		383
Reinsurance receivables due from affiliate	25,933		28,603
Prepaid reinsurance premiums due from affiliate	6,482		8,865
Deferred policy acquisition costs (affiliated $42,239 and $38,930)	42,404		39,343
Prepaid pension and postretirement benefits due from affiliate	17,056		17,360
Accrued investment income	10,609		10,295
Amounts receivable under reverse repurchase agreements	16,850		—
Accounts receivable	849		1,767
Goodwill	942		942
Other assets (affiliated $3,175 and $4,900)	3,481		6,238
Total assets	$	1,520,070	$	1,497,820

LIABILITIES
Losses and settlement expenses (affiliated $664,135 and $650,652)	$	671,586	$	661,309
Unearned premiums (affiliated $241,397 and $230,460)	242,017		232,093
Other policyholders' funds (all affiliated)	8,600		10,153
Surplus notes payable to affiliate	25,000		25,000
Amounts due affiliate to settle inter-company transaction balances	1,127		8,559
Pension benefits payable to affiliate	4,018		4,162
Income taxes payable	3,911		3
Deferred income taxes	20,190		28,654
Other liabilities (affiliated $20,520 and $23,941)	28,227		25,001
Total liabilities	1,004,676		994,934

STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized 30,000,000 shares; issued and outstanding, 20,653,399 shares in 2015 and 20,344,409 shares in 2014	20,653		20,344
Additional paid-in capital	105,933		99,891
Accumulated other comprehensive income	65,533		81,662
Retained earnings	323,275		300,989
Total stockholders' equity	515,394		502,886
Total liabilities and stockholders' equity	$	1,520,070	$	1,497,820



LOSS AND SETTLEMENT EXPENSE BY LINE OF BUSINESS

	Three Months Ended June 30,
	2015							2014
($ 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	$	26,222	$	20,437		77.9	%	$	23,855	$	18,376	77.0	%
Property	25,926		22,029			85.0	%	23,328		23,688		101.5	%
Workers' compensation	23,006		15,982			69.5	%	21,910		13,137		60.0	%
Liability	23,087		13,006			56.3	%	21,055		12,470		59.2	%
Other	2,046		349			17.1	%	1,812		63		3.5	%
Total commercial lines	100,287		71,803			71.6	%	91,960		67,734		73.7	%

Personal lines:
Automobile	5,779		4,843			83.8	%	6,304		5,320		84.4	%
Homeowners	5,188		6,171			118.9	%	5,253		7,733		147.1	%
Total personal lines	10,967		11,014			100.4	%	11,557		13,053		112.9	%
Total property and casualty insurance	$	111,254	$	82,817		74.4	%	$	103,517	$	80,787	78.0	%

Reinsurance
Pro rata reinsurance:
Multiline	$	2,156	$	(22	)	(1.0	)%	$	3,267	$	1,993	61.0	%
Property	3,859		3,229			83.7	%	1,063		2,853		268.3	%
Liability	5,367		3,424			63.8	%	2,721		2,771		101.8	%
Marine	3,430		(2,558		)	(74.6	)%	4,837		2,081		43.0	%
Total pro rata reinsurance	14,812		4,073			27.5	%	11,888		9,698		81.6	%

Excess of loss reinsurance:
Property	15,714		10,577			67.3	%	15,800		14,141		89.5	%
Liability	2,825		4,666			165.1	%	2,747		1,220		44.4	%
Total excess of loss reinsurance	18,539		15,243			82.2	%	18,547		15,361		82.8	%
Total reinsurance	$	33,351	$	19,316		57.9	%	$	30,435	$	25,059	82.3	%

Consolidated	$	144,605	$	102,133		70.6	%	$	133,952	$	105,846	79.0	%



LOSS AND SETTLEMENT EXPENSE BY LINE OF BUSINESS

	Six Months Ended June 30,
	2015							2014
($ 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	$	51,618	$	37,288		72.2	%	$	46,657	$	34,890		74.8	%
Property	50,992		34,362			67.4	%	46,645		39,700			85.1	%
Workers' compensation	45,373		27,493			60.6	%	42,963		26,549			61.8	%
Liability	45,503		23,942			52.6	%	41,510		24,507			59.0	%
Other	4,012		446			11.1	%	3,591		485			13.5	%
Total commercial lines	197,498		123,531			62.5	%	181,366		126,131			69.5	%

Personal lines:
Automobile	11,596		7,296			62.9	%	12,715		10,186			80.1	%
Homeowners	10,365		8,665			83.6	%	10,683		12,196			114.2	%
Total personal lines	21,961		15,961			72.7	%	23,398		22,382			95.7	%
Total property and casualty insurance	$	219,459	$	139,492		63.6	%	$	204,764	$	148,513		72.5	%

Reinsurance
Pro rata reinsurance:
Multiline	$	3,394	$	433		12.8	%	$	4,331	$	2,613		60.3	%
Property	7,715		9,257			120.0	%	7,307		6,274			85.9	%
Liability	9,168		5,564			60.7	%	5,513		3,694			67.0	%
Marine	6,840		(1,453		)	(21.2	)%	8,219		3,124			38.0	%
Total pro rata reinsurance	27,117		13,801			50.9	%	25,370		15,705			61.9	%

Excess of loss reinsurance:
Property	30,176		18,517			61.4	%	31,259		31,132			99.6	%
Liability	6,584		6,108			92.8	%	5,639		(535		)	(9.5	)%
Total excess of loss reinsurance	36,760		24,625			67.0	%	36,898		30,597			82.9	%
Total reinsurance	$	63,877	$	38,426		60.2	%	$	62,268	$	46,302		74.4	%

Consolidated	$	283,336	$	177,918		62.8	%	$	267,032	$	194,815		73.0	%



NET WRITTEN PREMIUMS
	Three Months Ended June 30, 2015				Three Months Ended June 30, 2014
($ in thousands)	Written premiums		Percent of net written premiums		Written premiums		Percent of net written premiums		Change in net written premiums
Property and casualty insurance
Commercial lines:
Automobile	$	30,690	20.2	%	$	27,617	19.9	%	11.1%
Property	28,407		18.7	%	25,972		18.7	%	9.4%
Workers' compensation	22,289		14.6	%	21,323		15.3	%	4.5%
Liability	25,419		16.7	%	23,124		16.6	%	9.9%
Other	2,238		1.5	%	2,150		1.6	%	4.1%
Total commercial lines	109,043		71.7	%	100,186		72.1	%	8.8%

Personal lines:
Automobile	6,043		4.0	%	6,501		4.7	%	(7.0)%
Homeowners	5,725		3.7	%	5,777		4.1	%	(0.9)%
Total personal lines	11,768		7.7	%	12,278		8.8	%	(4.2)%
Total property and casualty insurance	$	120,811	79.4	%	$	112,464	80.9	%	7.4%

Reinsurance
Pro rata reinsurance:
Multiline	$	1,079	0.7	%	$	2,005	1.4	%	(46.2)%
Property	2,802		1.8	%	82		0.1	%	3,340.1%
Liability	7,379		4.9	%	3,893		2.8	%	89.5%
Marine	2,077		1.4	%	2,404		1.7	%	(13.6)%
Total pro rata reinsurance	13,337		8.8	%	8,384		6.0	%	59.1%

Excess of loss reinsurance:
Property	15,206		10.0	%	15,444		11.1	%	(1.5)%
Liability	2,797		1.8	%	2,732		2.0	%	2.4%
Total excess of loss reinsurance	18,003		11.8	%	18,176		13.1	%	(1.0)%
Total reinsurance	$	31,340	20.6	%	$	26,560	19.1	%	18.0%

Consolidated	$	152,151	100.0	%	$	139,024	100.0	%	9.4%



NET WRITTEN PREMIUMS
	Six Months Ended June 30, 2015				Six Months Ended June 30, 2014
($ in thousands)	Written premiums		Percent of net written premiums		Written premiums		Percent of net written premiums		Change in net written premiums
Property and casualty insurance
Commercial lines:
Automobile	$	58,043	19.7	%	$	52,543	19.1	%	10.5%
Property	52,962		17.9	%	49,257		18.0	%	7.5%
Workers' compensation	43,527		14.8	%	41,467		15.1	%	5.0%
Liability	49,209		16.7	%	45,294		16.5	%	8.6%
Other	4,200		1.4	%	3,555		1.3	%	18.1%
Total commercial lines	207,941		70.5	%	192,116		70.0	%	8.2%

Personal lines:
Automobile	11,611		3.9	%	12,621		4.6	%	(8.0)%
Homeowners	10,055		3.4	%	10,240		3.7	%	(1.8)%
Total personal lines	21,666		7.3	%	22,861		8.3	%	(5.2)%
Total property and casualty insurance	$	229,607	77.8	%	$	214,977	78.3	%	6.8%

Reinsurance
Pro rata reinsurance:
Multiline	$	2,264	0.8	%	$	3,982	1.5	%	(43.1)%
Property	6,683		2.2	%	6,192		2.3	%	7.9%
Liability	13,346		4.5	%	6,447		2.3	%	107.0%
Marine	5,836		2.0	%	5,788		2.1	%	0.8%
Total pro rata reinsurance	28,129		9.5	%	22,409		8.2	%	25.5%

Excess of loss reinsurance:
Property	30,742		10.4	%	31,413		11.4	%	(2.1)%
Liability	6,597		2.3	%	5,630		2.1	%	17.2%
Total excess of loss reinsurance	37,339		12.7	%	37,043		13.5	%	0.8%
Total reinsurance	$	65,468	22.2	%	$	59,452	21.7	%	10.1%

Consolidated	$	295,075	100.0	%	$	274,429	100.0	%	7.5%

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EMC INSURANCE GROUP INC Reports