2 0 1 2 A n n u Al R e p oR t
EMPLOYERS MUTUAL CASUALTY COMPANY
EMC PROPERTY &
CASUALTY COMPANY
EMC
RISK SERVICES, LLC
EMC INSURANCE
GROUP INC.
HAMILTON MUTUAL
INSURANCE COMPANY
Affiliated with
EMC National Life Company
UNION INSURANCE
COMPANY OF
PROVIDENCE
DAKOTA FIRE
INSURANCE COMPANY
EMCASCO
INSURANCE COMPANY
ILLINOIS EMCASCO
INSURANCE COMPANY
EMC REINSURANCE
COMPANY
EMC
UNDERWRITERS, LLC
coRpoRAte pRofile
EMC Insurance Companies (EMC)
writes property and casualty insurance
in both commercial and personal
lines, with a focus on medium-sized
commercial accounts. Reinsurance
business is also written, with an
emphasis on property business.
Products and services are offered
through independent insurance agents
who are supported by a network of 16
local branch offices. EMC is licensed
in all 50 states and the District
of Columbia and actively markets
insurance products in 40 states;
however, the majority of its business is
generated in the Midwest.
locAl offices
EMC Branch Offices
EMC Service Offices
EMC Insurance Group Inc. (EMCI) is a
publicly held insurance holding company with
operations in property and casualty insurance
and reinsurance. EMCI was formed in 1974 and
became publicly held in 1982. The Company’s
common stock trades on the NASDAQ OMX
Global Select Market tier of the NASDAQ OMX
Stock Market under the symbol EMCI. EMCI is
a controlled company in that its parent owns
greater than 50 percent of its outstanding
stock. As of December 31, 2012, EMCI’s parent
company, Employers Mutual Casualty Company,
owned 61 percent of EMCI’s outstanding stock
and public stockholders owned the remaining
39 percent. EMCI has no employees of its own.
Employers Mutual Casualty Company
(EMCC) is a mutual insurance company
founded in 1911 and is headquartered in Des
Moines, Iowa. EMCC employs more than 2,100
people countrywide and markets its products
exclusively through a network of independent
insurance agents. EMCI and EMCC, together
with each entity’s subsidiary and affiliated
companies, operate collectively under the trade
name EMC Insurance Companies.
LETTER TO OUR STOCKHOLDERS:
This year marked our return to underwriting
profitability with a GAAP combined ratio of 99.6
percent with increasing rate levels and a more
normal, although slightly above-average, level of
catastrophe and storm losses. Operating income
for the year was $2.54 per share and net income
was $2.95 per share. The past two years have been
record-breaking years for very different reasons. 2011
is remembered for its record catastrophe and storm
losses, whereas 2012 culminated with record net
written premiums and stockholders’ equity. While the
unprecedented catastrophe and storm losses of 2011
demonstrated our ability to meet policyholder claims
and the strength of our balance sheet, we prefer
setting records that enhance our book of business and
further strengthen our already solid financial base.
Premium Growth
Net written premiums increased 11.6 percent to a
record $478.5 million in 2012. Within the property
and casualty insurance segment, commercial lines
net written premiums increased 13.3 percent and
accounted for approximately 86 percent of total
production. The vast majority of the increase was
associated with renewal business and reflected a
combination of rate level increases and growth in
insured exposures on existing accounts. We are
pleased with the incremental rate level increases
achieved during the year and the compounding
effect those increases had on top of the rate level
increases implemented during 2011. Rate levels
also increased in the personal lines of business;
however, net written premiums were up only 0.9
percent due to an intentional reduction in policy
count to reduce exposure concentrations. The much-
needed rate level increases in both commercial
and personal lines of business were widespread
across all of our branch offices and all lines of
business. We will continue to push for additional
rate increases in 2013 in an effort to bring our
rates to more adequate levels and help offset an
anticipated decline in investment income associated
with the persistent low interest rate environment.
Net written premiums increased 12.2 percent
in the reinsurance segment. Premium rate
levels increased on our renewal business,
partially due to rate increases stemming from
the significant catastrophe and storm losses
experienced in 2011. In addition, we entered into
a new offshore energy and liability proportional
account effective at the beginning of 2012.
Underwriting Results
Catastrophe and storm losses were higher than
average for the fifth consecutive year, although
significantly less than our record 2011 losses.
These losses accounted for 11.7 percentage points
of the combined ratio, which was 2.0 percentage
points above the most recent 10-year average of 9.7
percentage points. The severe drought conditions
across much of the United States contributed
to the decline in storm losses, but resulted in
an increase in crop reinsurance losses. While a
significant event for the industry and certainly
for those personally affected by the storm, losses
from Superstorm Sandy were limited by the
excess of loss reinsurance coverage carried by our
reinsurance subsidiary and our ongoing efforts
to control property exposures in the Northeast.
We continue to adjust our risk exposures across
our book of business by managing exposures in
certain geographic regions and diversifying within
lines of business and industries. The adjustments
made to the mix of our personal and commercial
lines of business give us the best opportunity
to succeed in the current market conditions.
Our 16 branch offices strategically located throughout
the United States operate on a largely decentralized
basis. This business model differentiates us from
our competitors and allows our branch office
employees to work closely with their agents and
be more responsive to their needs. In turn, we are
able to retain our best business, which allows us to
achieve a policy retention level that is consistently
above the industry average. Our overall policy
retention level remained at 87 percent for the
year. Our longstanding reputation as a financially
responsible company makes us one that our
independent agents want to do business with and
our policyholders trust to manage their claims.
Workplace Rankings
EMC Insurance Companies recently made its
way onto several distinguished lists. We were
listed as one of the 40 best companies for leaders
by Chief Executive magazine. The annual
ranking was based on a survey of organizations
worldwide conducted by Chief Executive
magazine, in cooperation with Chally Group
Worldwide, using specific leadership criteria.
We also debuted at number 115 on the National
Top Workplaces list for 2013. This was out
of 872 organizations with more than 1,000
employees that participated in the regional top
workplaces program. The rating was determined
solely on employee feedback from our Iowa
locations gathered through an objective survey
conducted by the firm WorkplaceDynamics.
We are very proud of these rankings and will
continue to emphasize leadership development at
all levels of our organization and reward employees
for their accomplishments. This recognition
highlights the efforts we have made to make EMC
Insurance Companies a great place to work.
Financial Strength
Our balance sheet remains strong, supported by a
well-diversified, high-quality investment portfolio
with just under $1.2 billion of invested assets. Our
record stockholders’ equity balance of $401.2 million,
representing an increase of 13.9 percent from the
prior year, coupled with our solid reserve position,
has us well-positioned to absorb future catastrophe
and storm losses and continue to create value for our
stockholders. Value creation for our stockholders
requires us to evaluate our financial position and
determine the best use of capital to maximize return,
whether that is through dividends, share repurchases,
reinvestment in our business or acquisitions.
Sincerely,
In 2012, we increased our quarterly dividend by
5 percent and increased the book value of our
stock by 13.6 percent to $31.08, aided by rising
premium rate levels and our $44.1 million of
investment income. The investment landscape
remains challenging due to the persistent low interest
rate environment, as evidenced by our 4.3 percent
decline in investment income. While investment
income is important to us, growth and stability
in stockholders’ equity is the primary goal of our
investment philosophy. During the first quarter of
2012 we reinvested approximately $35 million from
our core U.S. equity portfolio along with $10 million
of cash into a new equity strategy with an emphasis
on dividend income. In addition to a higher dividend
return, this new equity strategy is expected to carry
less market volatility. While we always look for yield
enhancement, we will not stretch for yield at the
expense of the quality or risk profile of our portfolio.
The duration of our bond portfolio decreased to 4.20
years at the end of 2012, down from 4.65 at the end
of 2011. Our moderate duration and laddered bond
maturities give us the flexibility needed to respond
to changes in the macro-environment as they occur.
Looking Ahead
Careful risk selection and appropriate pricing are
key to reaching our profitability goals in 2013.
We are confident in our book of business and
are well prepared to execute our plans for 2013.
Our continuing goal is to be a mark above the
competition, to be the carrier our independent
agents seek out for products and services, to provide
outstanding customer service to our policyholders
and to create value for our stockholders.
Thank you for your continued interest
in EMC Insurance Group Inc.
Bruce G. Kelley
President &
Chief Executive Officer
Ronald W. Jean
Executive Vice President for
Corporate Development
Kevin J. Hovick
Executive Vice President &
Chief Operating Officer
Financial Highlights
Financial Highlights
Financial Highlights
Financial Highlights
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
Revenues
Revenues
Revenues
Revenues
Revenues
Revenues
Revenues
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Realized Investment Gains (Losses)
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Income (Loss) Before Income Taxes
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
2012
2012
2012
2012
2012
2012
2012
2011*
2011*
2011*
2011
2011
2011
2011
2010*
2010*
2010*
2010
2010
2010
2010
2009*
2009*
2009*
2009
2009
2009
2009
2008*
2008*
2008*
2008
2008
2008
2008
2007*
2007*
2007*
2007
2007
2007
2007
$
503,851
$
503,851
$
503,851
$
503,851
$ 503,851
$ 503,851
$ 503,851
$
8,017
$
8,017
$
8,017
$
8,017
8,017
$
8,017
$
8,017
$
$
51,634
$
51,634
$
51,634
$
51,634
51,634
$
51,634
$
51,634
$
37,966
$
37,966
$
37,966
$
$
37,966
$
37,966
$
37,966
$
37,966
$
439,394
$
463,341
$
439,394
$
463,341
$
439,394
$
463,341
$
439,394
$
463,341
$ 439,394
$ 463,341
$ 439,394
$ 463,341
$ 439,394
$ 463,341
$
3,869
$
9,303
$
3,869
$
9,303
$
3,869
$
9,303
$
3,869
$
9,303
3,869
$
9,303
$
3,869
$
9,303
$
3,869
$
9,303
$
$
42,449
$
(10,992)
$
42,449
$
(10,992)
$
42,449
$
(10,992)
$
42,449
$
(10,992)
42,449
(10,992) $
$
42,449
(10,992) $
$
42,449
(10,992) $
$
31,349
(2,737) $
$
31,349
(2,737) $
$
31,349
(2,737) $
$
$
31,349
$
(2,737)
$
31,349
$
(2,737)
$
31,349
$
(2,737)
$
31,349
$
(2,737)
$
432,526
$
432,526
$
432,526
$
432,526
$ 432,526
$ 432,526
$ 432,526
$
17,922
$
17,922
$
17,922
$
17,922
17,922
$
17,922
$
17,922
$
$
61,427
$
61,427
$
61,427
$
61,427
61,427
$
61,427
$
61,427
$
44,657
$
44,657
$
44,657
$
$
44,657
$
44,657
$
44,657
$
44,657
$
438,348
$
438,348
$
438,348
$
438,348
$ 438,348
$ 438,348
$ 438,348
$
(24,456)
$
(24,456)
$
(24,456)
$
(24,456)
(24,456) $
$
(24,456) $
$
(24,456) $
$
$
(11,240)
$
(11,240)
$
(11,240)
$
(11,240)
(11,240) $
$
(11,240) $
$
(11,240) $
$
(2,323) $
$
(2,323) $
$
(2,323) $
$
$
(2,323)
$
(2,323)
$
(2,323)
$
(2,323)
$
442,086
$
442,086
$
442,086
$
442,086
$ 442,086
$ 442,086
$ 442,086
$
3,724
$
3,724
$
3,724
$
3,724
3,724
3,724
3,724
$
58,639
$
58,639
$
58,639
$
58,639
58,639
58,639
58,639
42,296
42,296
42,296
$
42,296
$
42,296
$
42,296
$
42,296
(per share)
(per share)
(per share)
(per share)
(per share)
(per share)
(per share)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)
Catastrophe Losses
Catastrophe Losses
Catastrophe Losses
Catastrophe Losses
Catastrophe and Storm Losses
Catastrophe and Storm Losses
Catastrophe and Storm Losses
Dividend Paid
Dividend Paid
Dividends Paid
Dividend Paid
Dividend Paid
Dividend Paid
Dividend Paid
Book Value
Book Value
Book Value
Book Value
Book Value
Book Value
Book Value
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.70
2.70
2.70
2.70
2.70
2.70
2.70
0.81
0.81
0.81
0.81
0.81
0.81
0.81
31.08
31.08
31.08
31.08
31.08
31.08
31.08
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(0.21)
$
(0.21)
$
(0.21)
(0.21)
$
(0.21) $
(0.21) $
(0.21) $
$
4.04
$
4.04
$
4.04
$
4.04
$
4.04
$
4.04
$
4.04
$
0.77
$
0.77
$
0.77
$
0.77
$
0.77
$
0.77
$
0.77
$
27.37
$
27.37
$
27.37
$
27.37
$
27.37
$
27.37
27.37
$
2.40
2.40
2.40
2.40
2.40
2.40
2.40
2.10
2.10
2.10
2.10
2.10
2.10
2.10
0.73
0.73
0.73
0.73
0.73
0.73
0.73
28.07
28.07
28.07
28.07
28.07
28.07
28.07
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3.38
3.38
3.38
3.38
3.38
3.38
3.38
1.55
1.55
1.55
1.55
1.55
1.55
1.55
0.72
0.72
0.72
0.72
0.72
0.72
0.72
25.67
25.67
25.67
25.67
25.67
25.67
25.67
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(0.17)
$
(0.17)
$
(0.17)
(0.17)
$
(0.17) $
(0.17) $
(0.17) $
$
2.52
$
2.52
$
2.52
$
2.52
$
2.52
$
2.52
$
2.52
$
0.72
$
0.72
$
0.72
$
0.72
$
0.72
$
0.72
$
0.72
$
20.94
$
20.94
$
20.94
$
20.94
$
20.94
$
20.94
20.94
$
3.07
3.07
3.07
3.07
3.07
3.07
3.07
1.37
1.37
1.37
1.37
1.37
1.37
1.37
0.69
0.69
0.69
0.69
0.69
0.69
0.69
25.83
25.83
25.83
25.83
25.83
25.83
25.83
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
($ in thousands)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Average Return on Equity (ROE)
Total Assets
Total Assets
Total Assets
Total Assets
Total Assets
Total Assets
Total Assets
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity
10.1%
10.1%
10.1%
10.1%
10.1%
10.1%
10.1%
$
1,290,709
$
1,290,709
$
1,290,709
$
1,290,709
$ 1,290,709
$ 1,290,709
$ 1,290,709
$
401,209
$
401,209
$
401,209
$
401,209
$ 401,209
$ 401,209
$ 401,209
(0.8)%
(0.8)%
(0.8)%
(0.8)%
(0.8)%
(0.8)%
(0.8)%
$
1,224,031
$
1,224,031
$
1,224,031
$
1,224,031
$ 1,224,031
$ 1,224,031
$ 1,224,031
$
352,341
$
352,341
$
352,341
$
352,341
$ 352,341
$ 352,341
$ 352,341
9.0%
9.0%
9.0%
9.0%
9.0%
9.0%
9.0%
$
1,182,006
$
1,182,006
$
1,182,006
$
1,182,006
$ 1,182,006
$ 1,182,006
$ 1,182,006
$
362,853
$
362,853
$
362,853
$
362,853
$ 362,853
$ 362,853
$ 362,853
14.5%
14.5%
14.5%
14.5%
14.5%
14.5%
14.5%
$
1,159,997
$
1,159,997
$
1,159,997
$
1,159,997
$ 1,159,997
$ 1,159,997
$ 1,159,997
$
336,627
$
336,627
$
336,627
$
336,627
$ 336,627
$ 336,627
$ 336,627
(0.7)%
(0.7)%
(0.7)%
(0.7)%
(0.7)%
(0.7)%
(0.7)%
$
1,103,022
$
1,103,022
$
1,103,022
$
1,103,022
$ 1,103,022
$ 1,103,022
$ 1,103,022
$
277,840
$
277,840
$
277,840
$
277,840
$ 277,840
$ 277,840
$ 277,840
12.8%
12.8%
12.8%
12.8%
12.8%
12.8%
12.8%
$
1,198,254
$
1,198,254
$
1,198,254
$
1,198,254
$ 1,198,254
$ 1,198,254
$ 1,198,254
$
355,893
$
355,893
$
355,893
$
355,893
$ 355,893
$ 355,893
$ 355,893
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
* Prior year amounts adjusted, where applicable, for new accounting guidance regarding deferrable acquisition costs
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
(effective January 1, 2012). See Note 1 of Notes to Consolidated Financial Statements.
Common Stock History
Common Stock History
Common Stock History
Common Stock History
1st Quarter
1st Quarter
1st Quarter
1st Quarter
2nd Quarter
2nd Quarter
2nd Quarter
2nd Quarter
3rd Quarter
3rd Quarter
3rd Quarter
3rd Quarter
4th Quarter
4th Quarter
4th Quarter
4th Quarter
Close at Dec. 31
Close at Dec. 31
Close at Dec. 31
Close at Dec. 31
High
High
High
High
2012
2012
2012
2012
Low
Low
Low
Low
Dividend
Dividend
Dividend
Dividend
High
High
High
High
2011
2011
2011
2011
Low
Low
Low
Low
Dividend
Dividend
Dividend
Dividend
$
$
$
$
24.28
24.28
24.28
24.28
$
$
$
$
19.48
19.48
19.48
19.48
$
$
$
$
0.20
0.20
0.20
0.20
$
$
$
$
25.91
25.91
25.91
25.91
$
$
$
$
21.48
21.48
21.48
21.48
$
$
$
$
0.19
0.19
0.19
0.19
21.25
21.25
21.25
21.25
22.32
22.32
22.32
22.32
24.04
24.04
24.04
24.04
23.88
23.88
23.88
23.88
19.00
19.00
19.00
19.00
19.05
19.05
19.05
19.05
19.85
19.85
19.85
19.85
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.21
0.21
0.21
0.21
25.40
25.40
25.40
25.40
20.38
20.38
20.38
20.38
21.41
21.41
21.41
21.41
20.57
20.57
20.57
20.57
18.59
18.59
18.59
18.59
16.45
16.45
16.45
16.45
17.10
17.10
17.10
17.10
0.19
0.19
0.19
0.19
0.19
0.19
0.19
0.19
0.20
0.20
0.20
0.20
Cautionary Statement
Cautionary Statement
Cautionary Statement
Cautionary Statement
FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to
FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to
FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to
FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform Act of 1995 provides issuers the opportunity to
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
make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based
make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based
make cautionary statements regarding forward-looking statements. Accordingly, any forward-looking statement contained in this report is based
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
on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information
on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information
on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking into account all information
on management’s current beliefs, assumptions and expectations of the Company’s future performance, taking all information currently available
currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not
currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not
currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not
currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not
into account. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not all of which are known
all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans
all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans
all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans
all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans
to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans and objectives may vary
and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual
and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual
and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual
and objectives may vary materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual
materially from those expressed in the forward-looking statements. The risks and uncertainties that may affect the actual results of the Company
results of the Company include, but are not limited to, the following:
results of the Company include, but are not limited to, the following:
results of the Company include, but are not limited to, the following:
results of the Company include, but are not limited to, the following:
include, but are not limited to, the following:
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catastrophic events and the occurrence of significant severe weather conditions;
catastrophic events and the occurrence of significant severe weather conditions;
catastrophic events and the occurrence of significant severe weather conditions;
catastrophic events and the occurrence of significant severe weather conditions;
catastrophic events and the occurrence of significant severe weather conditions;
the adequacy of loss and settlement expense reserves;
the adequacy of loss and settlement expense reserves;
the adequacy of loss and settlement expense reserves;
the adequacy of loss and settlement expense reserves;
the adequacy of loss and settlement expense reserves;
state and federal legislation and regulations;
state and federal legislation and regulations;
state and federal legislation and regulations;
state and federal legislation and regulations;
state and federal legislation and regulations;
changes in the property and casualty insurance industry, interest rates or the performance of financial markets
changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general
changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general
changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general
changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general
economy;
economy;
economy;
economy;
and the general economy;
rating agency actions;
rating agency actions;
rating agency actions;
rating agency actions;
rating agency actions;
“other-than-temporary” investment impairment losses; and
“other-than-temporary” investment impairment losses; and
“other-than-temporary” investment impairment losses; and
“other-than-temporary” investment impairment losses; and
“other-than-temporary” investment impairment losses; and
other risks and uncertainties inherent to the Company’s business, including those discussed
other risks and uncertainties inherent to the Company’s business, including those discussed
other risks and uncertainties inherent to the Company’s business, including those discussed
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.
under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.
under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.
under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.
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• 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,”
Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,”
Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,”
Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,”
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.
“project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements.
“project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements.
“project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements.
“project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements.
Common Stock
Stockholder Services
EMC Insurance Group Inc.’s common stock trades
on the NASDAQ OMX Global Select Market tier of
the NASDAQ OMX Stock Market under the symbol
EMCI. As of February 22, 2013, the number of
registered stockholders was 830.
There are certain regulatory restrictions relating
to the payment of dividends by the Company’s
insurance subsidiaries (see Note 6 of Notes
to Consolidated Financial Statements in the
Company’s 2012 Form 10-K). It is the present
intention of the Company’s Board of Directors
to declare quarterly cash dividends, but the
amount and timing thereof, if any, are determined
by the Board of Directors at its discretion.
Dividend Reinvestment and
Common Stock Purchase Plan
The Company has previously maintained a dividend
reinvestment and common stock purchase plan,
which provided stockholders with the option of
receiving additional shares of common stock instead
of cash dividends. Participants could also purchase
additional shares of common stock without incurring
broker commissions by making optional cash
contributions to the plan, and sell shares of common
stock through the plan (see Note 13 of Notes to
Consolidated Financial Statements in the Company’s
2012 Form 10-K). Effective March 14, 2012, the
Company temporarily suspended the issuance
of shares of common stock under the dividend
reinvestment and common stock purchase plan due
to the late filing of an amendment to a Current Report
on Form 8-K with the Securities and Exchange
Commission. The Company intends to resume the
issuance of shares of common stock under the plan
at such time that all required reports have been filed
in a timely manner with the Securities and Exchange
Commission. More information about the plan can
be obtained by calling American Stock Transfer &
Trust Company, LLC, the Company’s stock transfer
agent and plan administrator.
Corporate Headquarters
717 Mulberry Street
Des Moines, IA 50309
Phone: 515.280.2511
Transfer Agent
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Phone: 866.666.1597
www.amstock.com
SEC Counsel
Nyemaster Goode, P.C.
700 Walnut Street, Suite 1600
Des Moines, IA 50309
Insurance Counsel
Bradshaw, Fowler, Proctor and Fairgrave, P.C.
801 Grand Avenue, Suite 3700
Des Moines, IA 50309
Independent Registered
Public Accounting Firm
Ernst & Young LLP
801 Grand Avenue, Suite 3000
Des Moines, IA 50309
Information Availability
Interested parties can request news releases, annual
reports, Forms 10-Q and 10-K, quarterly financial
brochures and other information at no cost by
contacting:
Investor Relations
Steve Walsh, CPA
EMC Insurance Group Inc.
717 Mulberry Street
Des Moines, IA 50309
Phone: 515.345.2515
Fax: 515.345.2895
Email: EMCIns.Group@EMCIns.com
Website: www.emcins.com/ir
Annual Meeting
We welcome attendance at our annual meeting on
May 23, 2013, at 1:30 p.m. CDT.
EMC Insurance Companies
700 Walnut Street
Des Moines, IA 50309
eMci BoARd of diRectoRs
CHAIRMAN OF THE BOARD
George C. Carpenter III
85, E, C, N
Chair – Corp.Gov./Nominating Committee
Retired Executive Director
Iowa Public Television (broadcasting)
DIRECTORS
Stephen A. Crane
67, A, C, N
Chair – Compensation Committee
Independent Consultant
Retired Chief Executive Officer
AlphaStar Insurance Group Ltd.
Jonathan R. Fletcher
39, I, C
Managing Director and Portfolio Manager
BTC Capital Management, Inc.
(finance, investments)
Robert L. Howe*, CFE, CIE, CGFM, AIR
70, A, N, I
Chair – Inter-Company Committee
Consultant, Insurance Strategies Consulting, LLC
Retired Deputy Commissioner and Chief Examiner,
Iowa Insurance Division
eMci officeRs
Karey S. Anderson, CFA
Assistant Secretary
Jason R. Bogart, CPCU, ARM
Vice President, Branch Operations
Bradley J. Fredericks
Assistant Secretary
Richard W. Hoffmann, J.D.
Vice President, General Counsel & Secretary
Kevin J. Hovick, CPCU
Executive Vice President and COO
Ronald W. Jean, FCAS, MAAA
Executive Vice President for Corporate Development
Scott R. Jean, FCAS, MAAA
Vice President & Chief Actuary
Bruce G. Kelley, J.D., CPCU, CLU
President and CEO
Robert L. Link, CAM, CM
Vice President & Assistant Secretary
Bruce G. Kelley, J.D., CPCU, CLU
59, E
Chair – Executive Committee
President and Chief Executive Officer
EMC Insurance Group Inc.
Gretchen H. Tegeler
57, E, A, I
Chair – Audit Committee
Executive Director
Taxpayers Association of Central Iowa
INDEPENDENT DIRECTORS
George C. Carpenter III
Stephen A. Crane
Jonathan R. Fletcher
Robert L. Howe
Gretchen H. Tegeler
BOARD COMMITTEES
A Audit Committee
C Compensation Committee
E Executive Committee
I
N Corporate Governance and Nominating Committee
Inter-Company Committee
EMCI’s Board-designated financial expert *
Mick A. Lovell, CPCU
Vice President, Director of Business Development
Elizabeth A. Nigut, J.D.
Vice President, Human Resources
Ronald A. Paine, CPA, CIA
Vice President, Internal Audit
Carla A. Prather
Assistant Vice President & Controller
Mark E. Reese, CPA
Senior Vice President & CFO
Richard K. Schulz
Senior Vice President, Claims
Kelvin B. Sederburg, ACAS, MAAA
Vice President & Appointed Actuary
Lisa A. Stange, CFA
Vice President, Chief Investment Officer & Treasurer
EMC Insurance Group Inc.
Dakota Fire Insurance Company
EMC Reinsurance Company
EMC Underwriters, LLC
EMCASCO Insurance Company
llinois EMCASCO Insurance Company
717 Mulberry Street | Des Moines, IA 50309 | 515-280-2511 | 800-447-2295 | emcins.group@emcins.com | www.emcins.com/ir