Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant

EMC INSURANCE GROUP INC. AND SUBSIDIARIES

Schedule II – Condensed Financial Information of Registrant

Condensed Balance Sheets

	December 31,
($ in thousands, except share and per share amounts)	2017		2016
ASSETS
Investments:
Common stock of subsidiaries (equity method)	$	599,036	$	540,249
Equity securities available-for-sale, at fair value (cost $2,000 and $2,000)	2,000		2,000
Short-term investments	1,900		10,874
Total investments	602,936		553,123
Cash	255		184
Accrued investment income	1		3
Prepaid assets	136		154
Income taxes recoverable	777		700
Total assets	$	604,105	$	554,164
LIABILITIES
Accounts payable	$	80	$	46
Amounts due affiliate to settle inter-company transaction balances	160		740
Deferred income taxes	19		36
Total liabilities	259		822
STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized 30,000,000 shares; issued and outstanding, 21,455,545 shares in 2017 and 21,222,535 shares in 2016	21,455		21,223
Additional paid-in capital	124,556		119,054
Accumulated other comprehensive income	83,384		46,081
Retained earnings	374,451		366,984
Total stockholders' equity	603,846		553,342
Total liabilities and stockholders' equity	$	604,105	$	554,164

All affiliated balances presented above are the result of related party transactions with Employers Mutual.

EMC INSURANCE GROUP INC. AND SUBSIDIARIES

Schedule II – Condensed Financial Information of Registrant, Continued

Condensed Statements of Income

	Year ended December 31,
($ in thousands)	2017			2016			2015
REVENUES
Dividends received from subsidiaries	$	5,719		$	9,707		$	9,180
Investment income (loss)	38			13			(9		)
Total revenues	5,757			9,720			9,171
Operating expenses (affiliated $1,124, $1,139 and $1,074)	2,269			2,006			1,942
Income before income tax benefit and equity in undistributed net income of subsidiaries	3,488			7,714			7,229
Income tax benefit	(794		)	(698		)	(682		)
Income before equity in undistributed net income of subsidiaries	4,282			8,412			7,911
Equity in undistributed net income of subsidiaries	34,956			37,791			42,251
Net income	$	39,238		$	46,203		$	50,162

All affiliated balances presented above are the result of related party transactions with Employers Mutual.

EMC INSURANCE GROUP INC. AND SUBSIDIARIES

Schedule II – Condensed Financial Information of Registrant, Continued

Condensed Statements of Comprehensive Income

	Year ended December 31,
($ in thousands)	2017			2016			2015
Net income	$	39,238		$	46,203		$	50,162
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains (losses) on investment securities, net of deferred income taxes	27,278			(3,885		)	(13,037		)
Reclassification adjustment for realized investment gains included in net income, net of income taxes	(8,326		)	(6,736		)	(4,956		)
Reclassification adjustment for amounts amortized into net periodic pension and postretirement benefit income, net of deferred income taxes:
Net actuarial loss	958			1,549			863
Prior service credit	(2,047		)	(2,399		)	(2,150		)
Total reclassification adjustment associated with affiliate's pension and postretirement benefit plans	(1,089		)	(850		)	(1,287		)
Change in funded status of affiliate's pension and postretirement benefit plans, net of deferred income taxes:
Net actuarial gain (loss)	5,571			(542		)	(3,637		)
Prior service credit (cost)	96			(339		)	(312		)
Total change in funded status of affiliate's pension and postretirement benefit plans	5,667			(881		)	(3,949		)
Other comprehensive income (loss)	23,530			(12,352		)	(23,229		)
Total comprehensive income	$	62,768		$	33,851		$	26,933

All balances labeled with "affiliate" above are the result of related party transactions with Employers Mutual. All other comprehensive income (loss) balances presented above are from the Registrant's subsidiaries.

EMC INSURANCE GROUP INC. AND SUBSIDIARIES

Schedule II – Condensed Financial Information of Registrant, Continued

Condensed Statements of Cash Flows

	Year ended December 31,
($ in thousands)	2017			2016			2015
Net cash provided by operating activities	$	3,726		$	9,170		$	7,893
Cash flows from investing activities
Capital contributions to subsidiaries	(300		)	(500		)	—
Purchases of equity securities available-for-sale	—			(2,000		)	—
Net (purchases) disposals of short-term investments	8,974			(1,113		)	(3,030		)
Net cash (used in) provided by investing activities	8,674			(3,613		)	(3,030		)
Cash flows from financing activities
Issuance of common stock through affiliate’s stock plans	7,527			11,070			9,078
Excess tax benefit associated with affiliate’s stock plans	—			—			95
Repurchase of common stock	(1,858		)	(383		)	—
Dividends paid to stockholders (affiliated $(10,006), $(9,182) and $(8,162))	(17,998		)	(16,196		)	(14,174		)
Net cash used in financing activities	(12,329		)	(5,509		)	(5,001		)
Net increase (decrease) in cash	71			48			(138		)
Cash at the beginning of the year	184			136			274
Cash at the end of the year	$	255		$	184		$	136
Income taxes recovered	$	700		$	716		$	559
Interest paid	$	—		$	—		$	—

All affiliated balances presented above are the result of related party transactions with Employers Mutual.