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1
2016 Investor
Meetings
November-December
2
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
presentation 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.
3
Table of Contents
Page/Slide Number
Who We Are 4
Corporate Structure 5
Benefits of Pooling Agreement 6
Benefits of Quota Share Agreement with EMCC 7
Key Reasons to Invest in EMCI 8
2015 Premiums Earned 9
Diversified Book of Business 10-11
Value of Local Market Presence 12
2015 Direct Premiums Written by Branch (CL) 13
New in 2016 14
GAAP Combined Ratios 15
Investment Portfolio 16
Stockholder Dividends 17
Maximizing Stockholder Value 18
Attractive Valuation 19
Appendix 20-29
4
• Downstream holding company of Employers Mutual
Casualty Company (EMCC)
• EMCC began in 1911, EMCI IPO in 1982
• Trade on NASDAQ: EMCI
• Property and Casualty Insurance Segment
(78% of premiums earned)
• 2,070 independent agency relationships
• 41 state distribution network, licensed in all 50 states and
District of Columbia
• Supported by decentralized network of 16 local branch
offices
• 30% participation in EMCC pool
• Diversified premiums (90% commercial / 10% personal)
• Reinsurance Segment (22% of premiums earned)
• EMCC has assumed reinsurance business since 1950s
• 100% Quota Share Agreement with EMCC, but some
contracts written directly
• 83% of business from 19 brokers (e.g. AON, Guy
Carpenter, etc.)
• 17% of business from participation in MRB underwriting
association
Who We Are
5
Corporate Structure
Reinsurance Segment
(100% Quota Share Agreement with EMCC)
Employers Mutual
Casualty Company
(Founded in 1911)
Public Shareholders
EMC Insurance Group Inc.
(IPO in 1982 - Follow-on offerings in 1985 and 2004)
56%* 44%*
*Ownership as of September 30, 2016
Dakota Fire
Insurance
Company
EMCASCO
Insurance
Company
Illinois
EMCASCO
Insurance Co.
EMC
Reinsurance
Company
EMC
Underwriters,
LLC
Property and Casualty
Insurance Segment
(Aggregate 30% pool participation)
6
Benefits of Pooling Agreement
• “A” (Excellent) rating with stable outlook from A.M. Best
Company
• Risks spread risk over a wide range of geographic locations,
lines of insurance written, rate filings, commission plans and
policy forms
• Produces more consistent underwriting results
• Benefits from capacity of the entire pool
• $1.6 billion in direct premiums written in 2015
• $1.4 billion of statutory surplus as of Dec. 31, 2015
• Merger and acquisition flexibility
• Economies of scale in operations and purchase of
reinsurance
7
Benefits of Quota Share Agreement with EMCC
• EMCC’s surplus ($1.3 billion as of Dec. 31, 2015) and
financial strength exhibits ability to pay claims owed to
ceding companies
• Name recognition and long-standing domestic and
international relationships with EMCC
• Competitive advantage being licensed in all 50 states and
District of Columbia
• Utilize EMCC’s “A” (Excellent) rating from A.M. Best
Company (EMC Re also rated “A”)
8
Key Reasons to Invest in EMCI
• Dividend yield of 3.2% as of
November 9, 2016
• Access to large capital base
• Diversified, seasoned book
of business
• Regional, decentralized
operating structure
• Conservative balance sheet
• Experienced senior
management
19.4%
13.5%
20.9%
15.4%
11.1%
16.3%
0%
5%
10%
15%
20%
25%
1-Year 3-Year 5-Year
EMCI S&P 500
Total Stockholder Return*
*Total annual stockholder return is the percentage change in the stock price plus the amount of dividends paid, assuming dividend
reinvestment, to the stock price at the beginning of the one-year, three-year and five-year periods ending September 30, 2016.
Source: Bloomberg
9
2015 Premiums Earned
Reinsurance
Segment
$123.1
P&C
Insurance
Segment
$447.2
EMCC, Subs.
& Affil.,
$1,050.2
EMCI
EMC Insurance Companies premiums earned ~$1.6 billion, consists of:
($ in millions)
• EMC Insurance Group Inc. and its subsidiaries
• Employers Mutual Casualty Company and its subsidiaries and affiliate
10
Reinsurance Segment
$123.1 million
P&C Insurance Segment
$447.2 million
Diversified Book of Business
Property and Casualty Insurance Segment Premiums Earned
Commercial
Auto
23.7%
Commercial
Liability
20.7%
Commercial
Property
23.3%
Workers’
Compensation
20.8%
Bonds
1.8%
Personal
Lines
9.7%
11
Diversified Book of Business
Reinsurance Segment Premiums Earned
Domestic 87%
International (mainly Europe & Japan) 13%
P&C Insurance Segment
$447.2 million
Reinsurance Segment
$123.1 million
Excess of
Loss
61.5%
Pro Rata
38.5%
Types of Reinsurance
Coverage Definition
Excess of Loss Reinsurance for portion of losses that exceed predetermined retention limits
Pro Rata Reinsurer assumes stated percentage of all premiums, losses and related expenses
12
Value of Local Market Presence
• Decentralized Decision Making/Guided Autonomy:
• Marketing
• Underwriting
• Risk Improvement
• Claims
• Strengthens agency relationships, which we believe
allows us to quote their best performing business
• Develop products, marketing strategies and pricing
targeted to specific territories
• Individual approaches within EMC risk appetite and
framework
• Retention levels consistently stay between 80%-90%
• 86.7% at September 30, 2016
13
2015 Direct Premiums Written by Branch
Property and Casualty Insurance Segment Commercial Lines
5.8%
4.2%
14.1%
7.3%
3.5%
4.1%
5.1%
3.9%
15.2%
4.6%
5.1%
4.1%
4.9%
5.3%
9.1%
3.7%
14
• New and revised intercompany reinsurance agreements
• New reserving methodology (implemented in third quarter) –
Accident year ultimate estimate approach
• Increased transparency of drivers of performance
• Better conform to industry practices
• Personal lines focused accountability
• Accelerate commercial auto profitability
New in 2016
15
GAAP Combined Ratios
NOTE: Record catastrophe and storm losses were reported in 2008 and again in 2011. Over the most recent 10-year period, catastrophe and storm losses have
annually averaged 10.3 percentage points of the combined ratio, calculated as of Dec. 31, 2015. However, excluding the record losses reported in 2008 and 2011,
catastrophe and storm losses would have annually averaged 8.8 percentage points of the combined ratio.
90.2% 83.3% 84.2% 84.7% 82.5% 89.5%
19.3%
11.7% 9.4% 10.6% 7.8%
10.3%
5.8%
4.6% 4.3% 6.6% 6.0%
0%
20%
40%
60%
80%
100%
120%
2011 2012 2013 2014 2015 2016
Q3 YTD
Large Losses (greater than $500,000 for EMC Insurance Companies' Pool, excluding catastrophe and storm losses)*
Catastrophe and Storm Losses
GAAP Combined Ratio Excluding Catastrophe and Storm Losses, and Large Losses
99.6% 97.9% 101.9% 99.8%96.3%
115.3%
*Under the property and casualty insurance segment’s prior reserving methodology, large losses had a direct impact on earnings. Under the new reserving
methodology implemented in the third quarter of 2016, large losses are taken into consideration when establishing the current accident quarter/year ultimate estimates
of losses, but there is no longer a direct relationship between large losses and earnings. As a result, it is no longer meaningful to report large losses separately.
16
Investment Portfolio
September 30, 2016
($ in millions)
*Investment securities purchased under reverse repurchase agreements of $16.9 million are not reflected in total investments; however, income from
these agreements is included in net investment income.
**Securitized assets include commercial mortgage-backed, residential mortgage-backed and other asset-backed securities.
• Fixed income asset class remains rich; however, value can be
found on security by security basis
• Equities fully valued
• Maintain tail-risk hedge to alleviate downside risk
• Hedge cost reduces equity portfolio return by 1.5% – 2% annually,
dependent upon equity market volatility
Portfolio Summary
Fixed Income $ 1,237.2
Equities 219.3
Other 52.5
Total* $ 1,509.0
Treasuries/Agencies
16%
Corporate Bonds
31%
S-T Investments
4%
Equities
15%
Municipal Bonds
23%
Securitzed Assets**
11%
17
$-
$0.03
$0.06
$0.09
$0.12
$0.15
$0.18
$0.21
2011 2012 2013 2014 2015 2016
Quarterly Cash Dividend
1Q 2Q 3Q 4Q
Stockholder Dividends
• Paid dividend quarterly
since IPO in 1982
• Dividend has never been
reduced
• Increased quarterly
dividend 10.5% in 2016,
demonstrating:
• Confidence in financial
condition and long-term
outlook
• Desire to improve total
stockholder return
• Dividend yield of 3.2% as
of November 9, 2016
18
$18.24
$20.72
$22.81*
$24.72 $25.26
$26.67
$18.75
$21.77
$24.44
$26.97
$28.21
$30.40
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
2011 2012 2013 2014 2015 2016 Q3 YTD
Book Value Per Share Cumulative Dividends
Maximizing Stockholder Value
* Approximately $0.88 per share of the increase in 2013 is attributable to a change in EMCC’s postretirement healthcare plan.
NOTE: All prior period per share amounts have been adjusted to reflect the three for two stock split completed on June 23, 2015.
19
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
EMCI Peer Group SNL U.S. Insurance P&C
2012 2013 2014 2015 2016
Attractive Valuation
EMCI Price/Book
Value
1-Year Avg. 1.01x
3-Year Avg. 0.95x
5-Year Avg. 0.89x
Note: Peer Group consists of Cincinnati Financial Corporation, Donegal Group Inc., Selective Insurance Group, Inc., State Auto
Financial Corporation and United Fire Group, Inc.
Source: SNL Financial
11/4/16
Price/Book Value
0.92X
20
Appendix
21
New in 2016 - Accelerate Commercial Auto Profitability
• Commercial auto represents ~25% of property and casualty
insurance segment’s commercial business
• Projected combined ratio of 109% for industry in 2017
• Lower gas prices led to increase in miles driven and loss frequency,
coupled with increase in severity
• Forecasting similar deterioration in our book of business if no steps
taken to improve profitability
• Implemented multi-year Accelerate Commercial Auto
Profitability project
• Anticipate returning to underwriting profitability within next three years,
with improvement starting in late 2016
• Eight teams to complement local branch efforts, each focused on
different opportunities such as underwriting, pricing and claims
handling
• Introduce better tools to help agencies struggling with commercial
auto profitability, such as telematics solution
22
2016 Intercompany Reinsurance Treaties
$20M
$15M
$24M
$12M
JANUARY 1 - JUNE 30
AGGREGATE TREATY
JULY 1 - DECEMBER 31
AGGREGATE TREATY
Retention Limit
Cost: $6.3M
Property and Casualty Insurance Segment
Catastrophe Treaties Between EMCI and EMCC
Cost: $1.5M
$10M $20M
$10M
$100M
ONE ‐T IME PER OCCURRENCE
TREATY
ANNUAL AGGREGATE TREATY
Retention Limit
Reinsurance Segment Catastrophe
Treaties Between EMCI and EMCC
Cost: $2.0M
Cost: $3.1M
Per Occurrence
Treaty
Annual Aggregate
Treaty
Jan. 1 – June 30
Aggregate Treaty
July 1 – Dec. 31
Aggregate Treaty
20% Co-participation
• EMC Re will purchase additional reinsurance protections
(Industry Loss Warranties) in peak exposure territories
• Ceded premiums earned of approximately $3.5 million in 2016
23
Award-Winning Workplace
• No. 2 Best Companies for Leaders
(Chief Executive)
• 50 Most Trustworthy Financial
Companies (Forbes)
• No. 16 Top Workplaces in Iowa (The
Des Moines Register)
• Best Property/Casualty Company in
Des Moines (Business Record)
• Child Support Lien Network
Partnership Award
• American Heart Association’s Platinum
Level Fit-Friendly Worksite
Forbes 2016 America’s
Most Trustworthy
Financial Companies
24
Kevin J. Hovick
CPCU
Executive Vice President
& Chief Operating Officer
37 years with EMC
Experienced Executive Management Team
Scott R. Jean
FCAS, MAAA
Executive Vice President
for Finance & Analytics
25 years with EMC
Mick A. Lovell
CPCU
Executive Vice President
for Corporate Development
13 years with EMC
Bruce G. Kelley
J.D., CPCU, CLU
President, Chief Executive
Officer & Director
31 years with EMC
Jason R. Bogart
CPCU, ARM
Senior Vice President/
Branch Operations
23 years with EMC
AVERAGE YEARS
With EMC:
26
25
Local Service Focus
Agencies Represented by Territory
z68
117
141
81
133
83
96
95
73
143
120
146
91172
282
230
• Feedback from annual agent
survey drives future product
and service enhancements
• Formal tiering program ties
compensation to performance
26
2015 Premium Distribution by Account Size
37%
30%
33%
$1-$25K
$25-$100K
$100K+
• Approximately 90% of commercial accounts are under $25,000 in account
premium, but only represent 37% of commercial lines premiums written volume
• Invest more than most of our competitors on loss control services, available to
all commercial policyholders
Property and Casualty Insurance Segment Commercial Lines
27
33%
13%
13%
17%
14%
10%
Fixed Income Securities
Expected Maturity
0-2 Years 2-4 Years
4-6 Years 6-8 Years
8-10 Years 10+ Years
Fixed Income Portfolio
September 30, 2016
Bond Ratings
AAA 36.6%
AA 30.9%
A 25.7%
BAA 6.6%
BA and below 0.2%
Total 100.0%
Portfolio Characteristics
Average Life: 5.2 Years
Duration: 4.7
Pre-tax Book Yield: 3.5%
28
Selected Financial Results
(1) Operating income and operating income per share are non-GAAP financial measures. See p.30 for additional information regarding its calculation.
(2) Reflects a significant reduction in the amount of pension and postretirement benefit costs allocated to the Company, as a result of a plan amendment.
(3) Based on PLRB event occurrence numbers for the P&C insurance segment and PCS catastrophe serial numbers for the reinsurance segment.
(4) The Company defines as reported current accident year losses greater than $500 for the EMC Insurance Companies pool, excluding catastrophe and
storm losses. See p. 16 for additional information regarding why it is no longer meaningful to report large losses separately for the nine months ended
September 30, 2016.
NOTE: All prior period per share amounts have been adjusted to reflect the three for two stock split completed on June 23, 2015.
Nine Months Ended
September 30, Year Ended December 31,
($ in thousands, except per share amounts) 2016 2015 2015 2014 2013
Revenues $ 477,228 $ 464,692 $ 617,573 $ 590,118 $ 558,988
Net realized investment gains (losses) (643) 11,555 6,153 4,349 8,997
Losses and expenses (442,574) (418,514) (552,070) (553,560) (507,132)
Income tax expense (9,100) (17,466) (21,494) (10,915) (17,334)
Net income $ 24,911 $ 40,267 $ 50,162 $ 29,992 $ 43,519
Net income per share $ 1.19 $ 1.96 $ 2.43 $ 1.48 $ 2.22
Operating income (1) $ 25,329 $ 32,756 $ 46,163 $ 27,165 $ 37,671
Operating income per share (1) $ 1.21 $ 1.59 $ 2.24 $ 1.34 $ 1.92
Loss and settlement expense ratio 67.1% 65.4% 65.0% 71.3% 64.7%
Acquisition expense ratio 32.7% 31.6% 31.3% 30.6% 33.2%
Combined ratio 99.8% 97.0% 96.3% 101.9% 97.9%
After-tax per share data:
Catastrophe and storm losses (3) $ (1.41) $ (1.29) $ (1.40) $ (1.84) $ (1.61)
Favorable development that had an impact on earnings $ 0.73 $ 0.70 $ 1.12 $ 0.60 $ 0.21
Large losses (4) N/A $ (0.68) $ (1.08) $ (1.15) $ (0.73)
(2) (2)
29
Non-GAAP Information
• 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 (or 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 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 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 non-GAAP financial measure of operating income to the GAAP financial measure of net income.
The reconciliations of operating income to net income is as follows:
Nine Months Ended September 30, Year Ended December 31,
($ in thousands) 2016 2015 2015 2014 2013
Operating income $ 25,329 $ 32,756 $ 46,163 $ 27,165 $ 37,671
Net realized investment gains (losses) (after tax) (418) 7,511 3,999 2,827 5,848
Net income $ 24,911 $ 40,267 $ 50,162 $ 29,992 $ 43,519
Nine Months Ended September 30, Year Ended December 31,
($ in thousands) 2016 2015 2015 2014 2013
Operating income $ 1.21 $ 1.59 $ 2.24 $ 1.34 $ 1.92
Net realized investment gains (losses) (after tax) (0.02) 0.37 0.19 0.14 0.30
Net income $ 1.19 $ 1.96 $ 2.43 $ 1.48 $ 2.22
• Statutory data is prepared in accordance with statutory accounting principles as defined by the National Association of Insurance Commissioners’ (NAIC)
Accounting Practices and Procedures Manual. Statutory data is publicly available, and various organizations use it to calculate aggregate industry data,
study industry trends and compare insurance companies. Under statutory accounting principles, property/casualty premiums written is the cost of insurance
coverage, and refers to premiums for all policies sold during a specified reporting period. Management analyzes trends in premiums written to assess
business efforts. 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 unearned premiums, and represents the
portion that would be returned to a policyholder upon cancellation.
The reconciliations of operating income per share to net income per share is as follows: