EMC Insurance Group Sees Q1 Operating Income of $1.02-1.06

EMC Insurance Group Inc. EMCI today announced that the GAAP combined ratio for the first quarter of 2012 is expected to be approximately 92.5 percent and that operating income1 is expected to be in the range of $1.02 to $1.06 per share. Favorable development on prior years' reserves is expected to total approximately $0.82 per share after taxes in the first quarter, compared to $0.20 per share after taxes in the first quarter of 2011. Both the property and casualty insurance segment and the reinsurance segment experienced a significant amount of favorable reserve development in the first quarter. First quarter catastrophe losses are expected to total approximately $0.49 per share after tax, compared to $0.47 per share after tax in the first quarter of 2011. Catastrophe losses were down in the reinsurance segment, but were up in the property and casualty insurance segment. Management's 2012 operating income guidance is currently a range of $1.30 to $1.55 per share, and is based on a projected GAAP combined ratio of 104.9 percent for the year. Despite the strong first quarter operating results, management is not revising its 2012 operating earnings guidance at this time because operating results in the second and third quarters can be extremely volatile depending on the frequency and severity of Midwest storms, and the potential for hurricane losses. Management currently expects losses associated with the April 13 through 16 storms that occurred in Iowa, Nebraska, Kansas and Oklahoma to total approximately $7,000,000, or $0.35 per share after tax. This is a very preliminary estimate based on currently available information and could change, perhaps materially, as additional loss information is reported. These losses will be included in the Company's second quarter results.