Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2018

Condensed Financial Information 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)	2018		2017
ASSETS
Investments:
Common stock of subsidiaries (equity method)	$	556,977	$	599,036
Equity investments, at fair value (cost $0 and $2,000)	—		2,000
Equity investments, at alternative measurement of cost less impairments	1,200		—
Other long-term investments	3,811		—
Short-term investments	2,368		1,900
Total investments	564,356		602,936
Cash	206		255
Accrued investment income	3		1
Prepaid assets	119		136
Income taxes recoverable	510		777
Deferred income taxes	6		—
Amounts due from affiliate to settle inter-company transaction balances	705		—
Total assets	$	565,905	$	604,105
LIABILITIES
Accounts payable	$	123	$	80
Amounts due affiliate to settle inter-company transaction balances	—		160
Deferred income taxes	—		19
Total liabilities	123		259
STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized 30,000,000 shares; issued and outstanding, 21,615,105 shares in 2018 and 21,455,545 shares in 2017	21,615		21,455
Additional paid-in capital	128,451		124,556
Accumulated other comprehensive income	1,620		83,384
Retained earnings	414,096		374,451
Total stockholders' equity	565,782		603,846
Total liabilities and stockholders' equity	$	565,905	$	604,105

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)	2018			2017			2016
REVENUES
Dividends received from subsidiaries	$	21,124		$	5,719		$	9,707
Investment income	44			38			13
Net realized investment gains (losses) and, beginning in 2018, change in unrealized gains on equity investments	(90		)	—			—
Total revenues	21,078			5,757			9,720
Operating expenses (affiliated $1,243, $1,124 and $1,139)	2,552			2,269			2,006
Income before income tax benefit and equity in undistributed net income (loss) of subsidiaries	18,526			3,488			7,714
Income tax benefit	(535		)	(794		)	(698		)
Income before equity in undistributed net income (loss) of subsidiaries	19,061			4,282			8,412
Equity in undistributed net income (loss) of subsidiaries	(26,529		)	34,956			37,791
Net income (loss)	$	(7,468	)	$	39,238		$	46,203

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)	2018			2017			2016
Net income (loss)	$	(7,468	)	$	39,238		$	46,203
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains (losses) on investment securities not reflected in net income, net of deferred income taxes	(24,192		)	27,278			(3,885		)
Reclassification adjustment for net realized investment gains (losses) included in net income, net of income taxes	14,653			(8,326		)	(6,736		)
Reclassification adjustment for amounts amortized into net periodic pension and postretirement benefit income, net of deferred income taxes:
Net actuarial loss	333			958			1,549
Prior service credit	(2,489		)	(2,047		)	(2,399		)
Total reclassification adjustment associated with affiliate's pension and postretirement benefit plans	(2,156		)	(1,089		)	(850		)
Change in funded status of affiliate's pension and postretirement benefit plans, net of deferred income taxes:
Net actuarial gain (loss)	(4,885		)	5,571			(542		)
Prior service credit (cost)	1,050			96			(339		)
Total change in funded status of affiliate's pension and postretirement benefit plans	(3,835		)	5,667			(881		)
Other comprehensive income (loss)	(15,530		)	23,530			(12,352		)
Total comprehensive income (loss)	$	(22,998	)	$	62,768		$	33,851

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)	2018			2017			2016
Net cash provided by operating activities	$	18,669		$	3,726		$	9,170
Cash flows from investing activities
Capital contributions to subsidiaries	—			(300		)	(500		)
Purchases of equity investments	(1,200		)	—			(2,000		)
Purchases of other long-term investments	(1,900		)	—			—
Net (purchases) disposals of short-term investments	(468		)	8,974			(1,113		)
Net cash (used in) provided by investing activities	(3,568		)	8,674			(3,613		)
Cash flows from financing activities
Issuance of common stock through affiliate’s stock plans	5,426			7,527			11,070
Repurchase of common stock	(1,455		)	(1,858		)	(383		)
Dividends paid to stockholders (affiliated $(10,477), $(10,006) and $(9,182))	(19,121		)	(17,998		)	(16,196		)
Net cash used in financing activities	(15,150		)	(12,329		)	(5,509		)
Net increase (decrease) in cash	(49		)	71			48
Cash at the beginning of the year	255			184			136
Cash at the end of the year	$	206		$	255		$	184
Income taxes recovered	$	777		$	700		$	716
Interest paid	$	—		$	—		$	—

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