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EMC Insurance Group Inc. (Nasdaq:EMCI) today reported operating income of $1.04 per share for the first quarter ended March 31, 2012, compared to $0.03 per share for the first quarter of 2011
Net income, including realized investment gains and losses, totaled $19,224,000 ($1.49 per share) for the first quarter of 2012 compared to $5,740,000 ($0.44 per share) for the first quarter of 2011.
“The Company experienced another strong quarter,” stated Bruce G. Kelley, President and Chief Executive Officer. “Our property and casualty insurance segment and our reinsurance segment both benefited from increases in premium income and favorable reserve development.”
Premiums earned increased 14.0 percent to $109,760,000 for the first quarter of 2012, from $96,287,000 for the first quarter of 2011. The property and casualty insurance segment reported a 10.0 percent increase in premiums earned, while the reinsurance segment reported a 30.3 percent increase.
“The increase in premium income in the property and casualty insurance segment is the result of several factors, including rate level increases in all lines of business, growth in insured exposures, and strong retention of policies,” continued Kelley. “The large increase in the reinsurance segment was primarily driven by Employers Mutual’s participation in a new offshore energy and liability proportional account written through a specialty marine underwriter, but also reflects double-digit rate level increases implemented on January 1, 2012 renewals as well. The new marine account is expected to generate between $17 and $21 million of annual premiums, which will more than offset the loss of a large account in the Mutual Reinsurance Bureau book of business that was cancelled in the first quarter of 2012 due to poor experience.”
Investment income decreased 7.6 percent to $11,157,000 in the first quarter of 2012 from $12,078,000 in the first quarter of 2011. This decrease is attributed to the continued decline in the average coupon rate on the Company’s fixed maturity portfolio, as well as an increase in short-term investments, which carry even lower yields.