EMC Insurance Group Inc. Reports 2015 Second Quarter and Six Month Results

DES MOINES, Iowa--(BUSINESS WIRE)--

EMC Insurance Group Inc. 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/loss 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)
		Property and
		Casualty								Parent
Quarter Ended June 30, 2015		Insurance				Reinsurance				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)
		Property and
		Casualty								Parent
Quarter Ended June 30, 2014		Insurance				Reinsurance				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)
		Property and
		Casualty								Parent
Six Months Ended June 30, 2015		Insurance				Reinsurance				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)
		Property and
		Casualty								Parent
Six Months Ended June 30, 2014		Insurance				Reinsurance				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,			December 31,
		2015			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
					Losses				Loss and						Losses			Loss and
					and				settlement						and			settlement
		Premiums			settlement				expense			Premiums			settlement			expense
($ in thousands)		earned			expenses				ratio			earned			expenses			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
					Losses				Loss and						Losses				Loss and
					and				settlement						and				settlement
		Premiums			settlement				expense			Premiums			settlement				expense
($ in thousands)		earned			expenses				ratio			earned			expenses				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						Three months ended
		June 30, 2015						June 30, 2014
					Percent of						Percent of			Change in
		Written			net written			Written			net written			net written
($ in thousands)		premiums			premiums			premiums			premiums			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						Six months ended
		June 30, 2015						June 30, 2014
					Percent of						Percent of			Change in
		Written			net written			Written			net written			net written
($ in thousands)		premiums			premiums			premiums			premiums			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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