EX-99 2 ex99.htm EXHIBIT 99 ex99.htm
EXHIBIT 99

EMC INSURANCE GROUP INC. REPORTS
2008 THIRD QUARTER RESULTS

Third Quarter 2008
Net Operating Loss Per Share – $0.02
Net Loss Per Share – $0.70
Catastrophe and Storm Losses Per Share – $0.96
GAAP Combined Ratio – 114.8%
Annual Operating Income Guidance Per Share – $0.65 to $0.95

DES MOINES, Iowa (October 24, 2008) - EMC Insurance Group Inc. (Nasdaq/NGS:EMCI) today reported that record storm losses during the third quarter of 2008 resulted in an operating loss of $295,000 ($0.02 per share) for the quarter.  This compares to third quarter operating income of $6,911,000 ($0.50 per share) reported in the third quarter of 20071.  For the first nine months of 2008, operating income was $8,635,000 ($0.63 per share), compared to $34,619,000 ($2.52 per share) in 2007.

Net loss for the third quarter of 2008, including realized investment gains/losses, totaled $9,458,000 ($0.70 per share) compared to net income of $6,728,000 ($0.49 per share) for the third quarter of 2007.  For the first nine months of 2008, net loss was $2,179,000 ($0.16 per share), compared to net income of $35,420,000 ($2.57 per share) in 2007.

“Midwest storm losses continued to be the driving force behind our third quarter results,” stated President and CEO Bruce G. Kelley. “As they have all year, storms continued to ravage our underwriting territories especially Hurricane Ike, which clipped both our direct and assumed reinsurance results. As the massive hurricane advanced away from the coast, it merged with a cold front traveling across the Midwest and generated a significant amount of wind damage in Ohio and Kentucky. Total losses associated with Hurricane Ike were $5.4 million or $0.27 per share after tax, which is consistent with our estimates released on September 25, 2008.”

“An earlier storm, Hurricane Gustav, also affected third quarter earnings,” continued Kelley. “Hurricane Gustav losses totaled $3.1 million or $0.15 per share after tax. Storm losses for the quarter totaled $19.8 million or $0.96 per share after tax.”

For the first nine months of 2008, catastrophe and storm losses totaled $49,071,000 ($2.34 per share) compared to $19,474,000 ($0.92 per share) in 2007, and the combined ratio was 109.3 percent compared to 94.9 percent in 2007.  Assuming normal storm activity for the remainder of the year, management is currently projecting that catastrophe and storm losses will approximate 14.2 percent of earned premiums in 2008, compared to an average of 5.4 percent of earned premiums during the period 1998 through 2007.

 
 
 

“It is important to note,” continued Kelley, “that our underlying book of business remains sound and is performing as expected.  We are well capitalized and have the resources to handle this unprecedented level of storm activity.”

Premiums earned decreased 0.4 percent to $96,409,000 for the third quarter of 2008 from $96,815,000 for the same period in 2007.  For the first nine months of 2008, premiums earned declined 1.0 percent to $288,005,000 from $290,820,000 in 2007.  Premium income was down 1.9 percent in the property and casualty insurance segment during the third quarter of 2008 as new business premium was not sufficient to offset the premium lost from declining premium rates and business not renewed. Premium income for the reinsurance segment was up 6.6 percent; however, management expects premiums for the reinsurance segment to decline slightly for calendar year 2008 as compared to 2007.

Investment income was flat at $12,251,000 for the third quarter of 2008 compared to $12,252,000 for the same period in 2007.  For the first nine months of 2008, investment income increased 0.8 percent to $36,191,000 from $35,895,000 in 2007.

“Our overall revenues were stable as competition for premium dollars continued,” commented Kelley. “Total revenues declined 0.3 percent for the quarter ended September 30, 2008 as compared to the same period in 2007. Year to date, revenues declined 0.7 percent compared to 2007.”

The Company experienced $4,239,000 ($0.21 per share after tax) of favorable development on prior years’ reserves in the third quarter of 2008, compared to $7,502,000 ($0.35 per share after tax) in the third quarter of 2007.  For the first nine months of 2008, favorable development totaled $30,181,000 ($1.44 per share after tax), compared to $39,004,000 ($1.84 per share after tax) for the same period in 2007.

“Lack of earnings and poor investment returns combined to lower our book value,” stated Kelley.  “As we reported in an earlier press release, the Company recorded an “other-than-temporary” investment impairment loss in the third quarter of 2008 on its investments in the perpetual preferred stock issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) as a result of the U.S. government placing these companies under conservatorship.  The actual impairment of these preferred shares was $14,904,000 or $0.72 per share after tax.”

At September 30, 2008, consolidated assets totaled $1.1 billion, including $956.8 million in the investment portfolio; stockholders’ equity was $303.4 million; and the net book value of the Company’s stock was $22.72 per share, a decrease of 13.1 percent from $26.15 per share at December 31, 2007.

On September 25, 2008, the Company lowered its annual operating income guidance to a range of $0.65 per share to $0.95 per share. Management affirms that guidance.

 
 
 

On March 10, 2008, the Company’s Board of Directors authorized a $15 million stock repurchase program.  This program became effective immediately and does not have an expiration date.  The timing and terms of the purchases are determined by management based on market conditions and are conducted in accordance with the applicable rules of the SEC.  Common stock purchased under this program is being retired by the Company.  As of September 30, 2008, 475,458 shares of stock had been repurchased at a cost of approximately $12.3 million.  Additional repurchases have been made during October, bringing the total, as of October 20, 2008, to 508,488 shares at a cost of approximately $13.1 million.  The Company’s parent organization, Employers Mutual Casualty Company, has a stock purchase program in effect as well with about $4.5 million of its $15 million authorization remaining.  This program will remain dormant while the Company’s repurchase program is active.

The Company will host an earnings call in conjunction with today’s release. The teleconference will begin at 11:00 a.m. eastern daylight time, October 24, 2008, to allow securities analysts, shareholders and other interested parties the opportunity to hear management discuss the Company’s quarterly results, as well as its expectations for the remainder of 2008. Dial-in information for the call is toll-free 1-877-407-8031 (International: 201-689-8031). The event will be archived and available for digital replay through November 7, 2008. The replay access information is toll-free 1-877-660-6853 (International: 201-612-7415); passcodes (both required for playback) are account no. 286; conference ID no. 300010. A webcast of the teleconference will be presented by PrecisionIR and can be accessed at http://www.investorcalendar.com or from the Company’s investor relations page at www.emcinsurance.com. The archived webcast will be available until January 24, 2008. A transcript of the teleconference will also be available on the Company’s website shortly after the completion of the teleconference.

EMC Insurance Group Inc., the publicly-held insurance holding company of EMC Insurance Companies, owns subsidiaries with operations in property and casualty insurance and reinsurance. EMC Insurance Companies is one of the largest property and casualty entities in Iowa and among the top 60 insurance entities nationwide based on premium volume. For more information, visit our website www.emcinsurance.com.

 
 
 

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 our industry, interest rates or the performance of financial markets and the general economy; rating agency actions 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.

¹The Company uses a non-GAAP financial measure called “operating income” that management believes 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 U.S. GAAP financial measure of net income. Therefore, we have provided a reconciliation of this non-GAAP financial measure to the U.S. GAAP financial measure of net income in the Consolidated Statements of Income schedule contained in this release. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

 
 
 

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
 
   
Property and
                    
   
Casualty
          
Parent
        
Quarter Ended September 30, 2008
  
Insurance
    
Reinsurance
    
Company
    
Consolidated
  
Revenues:
                        
Premiums earned
   $ 78,959,188     $ 17,450,027     $ -     $ 96,409,215  
Investment income, net
     9,174,650       3,017,725       58,817       12,251,192  
Other income
     191,161       -       -       191,161  
      88,324,999       20,467,752       58,817       108,851,568  
Losses and expenses:
                                
Losses and settlement expenses
     65,502,605       16,141,656       -       81,644,261  
Dividends to policyholders
     752,432       -       -       752,432  
Amortization of deferred policy acquisition costs
     16,715,247       3,534,945       -       20,250,192  
Other underwriting expenses
     7,447,269       596,420       -       8,043,689  
Interest expense
     225,000       -       -       225,000  
Other expenses
     113,730       (247,243 )     362,045       228,532  
      90,756,283       20,025,778       362,045       111,144,106  
Operating income (loss) before income taxes
     (2,431,284 )     441,974       (303,228 )     (2,292,538 )
Realized investment losses
     (9,516,502 )     (4,580,015 )     -       (14,096,517 )
Loss before income taxes
     (11,947,786 )     (4,138,041 )     (303,228 )     (16,389,055 )
Income tax benefit:
                                
Current
     (2,331,754 )     (533,162 )     (106,130 )     (2,971,046 )
Deferred
     (2,668,411 )     (1,292,029 )     -       (3,960,440 )
      (5,000,165 )     (1,825,191 )     (106,130 )     (6,931,486 )
Net loss
   $ (6,947,621 )   $ (2,312,850 )   $ (197,098 )   $ (9,457,569 )
Average shares outstanding
                             13,413,718  
Per Share Data:
                                
Net loss per share - basic and diluted
   $ (0.52 )   $ (0.17 )   $ (0.01 )   $ (0.70 )
(Increase) decrease in provision for insured events of prior years (after tax)
   $ (0.01 )   $ 0.22     $ -     $ 0.21  
Catastrophe and storm losses (after tax)
   $ (0.73 )   $ (0.23 )   $ -     $ (0.96 )
Dividends per share
                           $ 0.18  
Other Information of Interest:
                                
Net Written Premiums
   $ 95,377,772     $ 17,942,428     $ -     $ 113,320,200  
Increase (decrease) in provision for insured events of prior years
   $ 228,987     $ (4,468,010 )   $ -     $ (4,239,023 )
Catastrophe and storm losses
   $ 14,998,906     $ 4,824,128     $ -     $ 19,823,034  
GAAP Combined Ratio:
                                
Loss ratio
     83.0 %     92.5 %     -       84.7 %
Expense ratio
     31.5 %     23.7 %     -       30.1 %
      114.5 %     116.2 %     -       114.8 %

 
 
 

   
Property and
                    
   
Casualty
          
Parent
        
Quarter Ended September 30, 2007
  
Insurance
    
Reinsurance
    
Company
    
Consolidated
  
Revenues:
                      
Premiums earned
   $ 80,451,433     $ 16,363,233     $ -     $ 96,814,666  
Investment income, net
     9,056,171       3,142,939       53,324       12,252,434  
Other income
     111,646       -       -       111,646  
      89,619,250       19,506,172       53,324       109,178,746  
Losses and expenses:
                                
Losses and settlement expenses
     52,198,985       12,336,487       -       64,535,472  
Dividends to policyholders
     2,443,572       -       -       2,443,572  
Amortization of deferred policy acquisition costs
     17,494,753       3,454,065       -       20,948,818  
Other underwriting expenses
     10,283,831       899,528       -       11,183,359  
Interest expense
     193,125       84,975       -       278,100  
Other expenses
     168,647       305,399       246,312       720,358  
      82,782,913       17,080,454       246,312       100,109,679  
Operating income (loss) before income taxes
     6,836,337       2,425,718       (192,988 )     9,069,067  
Realized investment losses
     (136,583 )     (144,609 )     -       (281,192 )
Income (loss) before income taxes
     6,699,754       2,281,109       (192,988 )     8,787,875  
Income tax expense (benefit):
                                
Current
     1,485,673       573,706       (67,546 )     1,991,833  
Deferred
     172,496       (104,491 )     -       68,005  
      1,658,169       469,215       (67,546 )     2,059,838  
Net income (loss)
   $ 5,041,585     $ 1,811,894     $ (125,442 )   $ 6,728,037  
Average shares outstanding
                             13,764,763  
Per Share Data:
                                
Net income (loss) per share - basic and diluted
   $ 0.37     $ 0.13     $ (0.01 )   $ 0.49  
Decrease in provision for insured events of prior years (after tax)
   $ 0.30     $ 0.05     $ -     $ 0.35  
Catastrophe and storm losses (after tax)
   $ (0.31 )   $ (0.03 )   $ -     $ (0.34 )
Dividends per share
                           $ 0.17  
Other Information of Interest:
                                
Net Written Premiums
   $ 94,319,209     $ 16,937,515     $ -     $ 111,256,724  
Decrease in provision for insured events of prior years
   $ (6,307,280 )   $ (1,195,050 )   $ -     $ (7,502,330 )
Catastrophe and storm losses
   $ 6,634,984     $ 578,028     $ -     $ 7,213,012  
GAAP Combined Ratio:
                                
Loss ratio
     64.9 %     75.4 %     -       66.7 %
Expense ratio
     37.5 %     26.6 %     -       35.7 %
      102.4 %     102.0 %     -       102.4 %

 
 
 

   
Property and
                    
   
Casualty
          
Parent
        
Nine Months Ended September 30, 2008
  
Insurance
    
Reinsurance
    
Company
    
Consolidated
  
Revenues:
                      
Premiums earned
   $ 236,513,542     $ 51,491,154     $ -     $ 288,004,696  
Investment income, net
     27,112,376       8,940,490       137,913       36,190,779  
Other income
     499,059       -       -       499,059  
      264,124,977       60,431,644       137,913       324,694,534  
Losses and expenses:
                                
Losses and settlement expenses
     179,680,545       42,307,401       -       221,987,946  
Dividends to policyholders
     3,028,440       -       -       3,028,440  
Amortization of deferred policy acquisition costs
     53,993,008       10,662,451       -       64,655,459  
Other underwriting expenses
     23,447,432       1,726,158       -       25,173,590  
Interest expense
     664,375       -       -       664,375  
Other expenses
     412,606       46,960       996,982       1,456,548  
      261,226,406       54,742,970       996,982       316,966,358  
Operating income (loss) before income taxes
     2,898,571       5,688,674       (859,069 )     7,728,176  
Realized investment losses
     (11,283,993 )     (5,353,531 )     -       (16,637,524 )
Income (loss) before income taxes
     (8,385,422 )     335,143       (859,069 )     (8,909,348 )
Income tax expense (benefit):
                                
Current
     (3,016,027 )     1,426,153       (300,674 )     (1,890,548 )
Deferred
     (2,402,894 )     (2,436,993 )     -       (4,839,887 )
      (5,418,921 )     (1,010,840 )     (300,674 )     (6,730,435 )
Net income (loss)
   $ (2,966,501 )   $ 1,345,983     $ (558,395 )   $ (2,178,913 )
Average shares outstanding
                             13,615,224  
Per Share Data:
                                
Net income (loss) per share – basic and diluted
   $ (0.22 )   $ 0.10     $ (0.04 )   $ (0.16 )
Decrease in provision for insured events of prior years (after tax)
   $ 0.93     $ 0.51     $ -     $ 1.44  
Catastrophe and storm losses (after tax)
   $ (2.03 )   $ (0.31 )   $ -     $ (2.34 )
Dividends per share
                           $ 0.54  
Book value per share
                           $ 22.72  
Effective tax rate
                             (75.5 )%
Annualized net loss as a percent of beg. SH equity
                             (0.9 )%
Other Information of Interest:
                                
Net Written Premiums
   $ 249,674,985     $ 51,490,156     $ -     $ 301,165,141  
Decrease in provision for insured events of prior years
   $ (19,480,355 )   $ (10,700,503 )   $ -     $ (30,180,858 )
Catastrophe and storm losses
   $ 42,614,357     $ 6,456,438     $ -     $ 49,070,795  
GAAP Combined Ratio:
                                
Loss ratio
     76.0 %     82.2 %     -       77.1 %
Expense ratio
     34.0 %     24.0 %     -       32.2 %
      110.0 %     106.2 %     -       109.3 %

 
 
 

   
Property and
                    
   
Casualty
          
Parent
        
Nine Months Ended September 30, 2007
  
Insurance
    
Reinsurance
    
Company
    
Consolidated
  
Revenues:
                      
Premiums earned
   $ 239,458,912     $ 51,360,823     $ -     $ 290,819,735  
Investment income, net
     26,617,782       9,090,610       186,582       35,894,974  
Other income
     382,547       -       -       382,547  
      266,459,241       60,451,433       186,582       327,097,256  
Losses and expenses:
                                
Losses and settlement expenses
     139,932,347       34,493,197       -       174,425,544  
Dividends to policyholders
     6,180,287       -       -       6,180,287  
Amortization of deferred policy acquisition costs
     55,125,324       10,095,122       -       65,220,446  
Other underwriting expenses
     28,266,278       1,897,892       -       30,164,170  
Interest expense
     579,375       254,925       -       834,300  
Other expenses
     641,873       481,199       730,338       1,853,410  
      230,725,484       47,222,335       730,338       278,678,157  
Operating income (loss) before income taxes
     35,733,757       13,229,098       (543,756 )     48,419,099  
Realized investment gains
     1,189,693       42,406       -       1,232,099  
Income (loss) before income taxes
     36,923,450       13,271,504       (543,756 )     49,651,198  
Income tax expense (benefit):
                                
Current
     11,397,574       4,021,905       (190,315 )     15,229,164  
Deferred
     (567,055 )     (430,776 )     -       (997,831 )
      10,830,519       3,591,129       (190,315 )     14,231,333  
Net income (loss)
   $ 26,092,931     $ 9,680,375     $ (353,441 )   $ 35,419,865  
Average shares outstanding
                             13,759,465  
Per Share Data:
                                
Net income (loss) per share - basic and diluted
   $ 1.90     $ 0.70     $ (0.03 )   $ 2.57  
Decrease in provision for insured events of prior years (after tax)
   $ 1.50     $ 0.34     $ -     $ 1.84  
Catastrophe and storm losses (after tax)
   $ (0.87 )   $ (0.05 )   $ -     $ (0.92 )
Dividends per share
                           $ 0.51  
Book value per share
                           $ 25.14  
Effective tax rate
                             28.7 %
Annualized net income as a percent of beg. SH equity
                             15.3 %
Other Information of Interest:
                                
Net Written Premiums
   $ 253,260,789     $ 51,310,636     $ -     $ 304,571,425  
Decrease in provision for insured events of prior years
   $ (31,817,037 )   $ (7,186,640 )   $ -     $ (39,003,677 )
Catastrophe and storm losses
   $ 18,486,880     $ 987,162     $ -     $ 19,474,042  
GAAP Combined Ratio:
                                
Loss ratio
     58.4 %     67.2 %     -       60.0 %
Expense ratio
     37.4 %     23.3 %     -       34.9 %
      95.8 %     90.5 %     -       94.9 %

 
 
 
 
           
   
September 30,
    
December 31,
  
   
2008
    
2007
  
ASSETS
            
Investments:
            
Fixed maturities:
            
Securities held-to-maturity, at amortized cost (fair value $667,640 and $688,728)
   $ 613,036     $ 636,969  
Securities available-for-sale, at fair value (amortized cost $802,768,974 and $766,462,351)
     785,615,615       785,253,286  
Fixed maturity securities on loan:
                
Securities available-for-sale, at fair value (amortized cost $1,044,805 and $58,865,232)
     937,957       58,994,666  
Equity securities available-for-sale, at fair value (cost $83,457,209 and $97,847,545)
     105,931,049       139,427,726  
Other long-term investments, at cost
     75,727       101,988  
Short-term investments, at cost
     63,600,655       53,295,310  
Total investments
     956,774,039       1,037,709,945  
                 
Balances resulting from related party transactions with Employers Mutual:
                
Reinsurance receivables
     37,440,114       33,272,405  
Prepaid reinsurance premiums
     4,793,915       4,465,836  
Deferred policy acquisition costs
     37,979,430       34,687,804  
Defined benefit retirement plan, prepaid asset
     10,525,477       11,451,758  
Other assets
     3,834,031       2,488,309  
Indebtedness of related party
     11,403,530       -  
                 
Cash
     428,764       262,963  
Accrued investment income
     11,282,159       11,288,005  
Accounts receivable
     146,024       81,141  
Income taxes recoverable
     5,701,683       3,595,645  
Deferred income taxes
     26,128,999       1,682,597  
Goodwill
     941,586       941,586  
Securities lending collateral
     999,786       60,785,148  
Total assets
   $ 1,108,379,537     $ 1,202,713,142  

 
 
 

   
September 30,
    
December 31,
  
   
2008
    
2007
  
LIABILITIES
            
Balances resulting from related party transactions with
            
Employers Mutual:
            
Losses and settlement expenses
   $ 576,131,898     $ 551,602,006  
Unearned premiums
     171,191,039       158,156,683  
Other policyholders' funds
     4,493,372       8,273,187  
Surplus notes payable
     25,000,000       25,000,000  
Indebtedness to related party
     -       5,918,396  
Employee retirement plans
     11,694,384       10,518,351  
Other liabilities
     15,465,590       22,107,379  
                 
Securities lending obligation
     999,786       60,785,148  
Total liabilities
     804,976,069       842,361,150  
                 
STOCKHOLDERS' EQUITY
                
Common stock, $1 par value, authorized 20,000,000 shares; issued and outstanding, 13,354,329 shares in 2008 and 13,777,880 shares in 2007
     13,354,329       13,777,880  
Additional paid-in capital
     97,418,888       108,030,228  
Accumulated other comprehensive income
     6,773,412       42,961,904  
Retained earnings
     185,856,839       195,581,980  
Total stockholders' equity
     303,403,468       360,351,992  
Total liabilities and stockholders' equity
   $ 1,108,379,537     $ 1,202,713,142  
 
 
 
 

 
                         
   
September 30, 2008
  
               
Percent of
        
   
Amortized
    
Fair
    
Total
    
Carrying
  
($ in thousands)
  
Cost
    
Value
    
Fair Value
    
Value
  
Fixed maturity securities held-to-maturity
   $ 613     $ 667       0.1 %   $ 613  
Fixed maturity securities available-for-sale
     803,814       786,554       82.2 %     786,554  
Equity securities available-for-sale
     83,457       105,931       11.1 %     105,931  
Cash
     429       429       -       429  
Short-term investments
     63,600       63,600       6.6 %     63,600  
Other long-term investments
     76       76       -       76  
    $ 951,989     $ 957,257       100.0 %   $ 957,203  
                                 
   
December 31, 2007
  
                   
Percent of
          
   
Amortized
    
Fair
    
Total
    
Carrying
  
($ in thousands)
  
Cost
    
Value
    
Fair Value
    
Value
  
Fixed maturity securities held-to-maturity
   $ 637     $ 689       0.1 %   $ 637  
Fixed maturity securities available-for-sale
     825,328       844,248       81.4 %     844,248  
Equity securities available-for-sale
     97,847       139,428       13.4 %     139,428  
Cash
     263       263       -       263  
Short-term investments
     53,295       53,295       5.1 %     53,295  
Other long-term investments
     102       102       -       102  
    $ 977,472     $ 1,038,025       100.0 %   $ 1,037,973  

 
 
 

The amortized cost and estimated fair value of securities held-to-maturity and available-for-sale as of September 30, 2008 are as follows:
  
                         
   
Held-to-Maturity
  
         
Gross
    
Gross
        
   
Amortized
    
Unrealized
    
Unrealized
    
Estimated
  
($ in thousands)
  
Cost
    
Gains
    
Losses
    
Fair Value
  
Mortgage-backed securities
   $ 613     $ 54     $ -     $ 667  
Total securities held-to-maturity
   $ 613     $ 54     $ -     $ 667  
                                 
   
Available-for-Sale
  
           
Gross
    
Gross
          
   
Amortized
    
Unrealized
    
Unrealized
    
Estimated
  
($ in thousands)
  
Cost
    
Gains
    
Losses
    
Fair Value
  
U.S. treasury securities
   $ 4,729     $ 333     $ -     $ 5,062  
U.S. government-sponsored agencies
     297,334       1,388       1,929       296,793  
Obligations of states and political subdivisions
     303,236       3,894       12,324       294,806  
Mortgage-backed securities
     51,348       158       2,111       49,395  
Public utility securities
     6,002       80       -       6,082  
Debt securities issued by foreign governments
     6,641       15       63       6,593  
Corporate securities
     134,524       960       7,661       127,823  
Total fixed maturity securities
     803,814       6,828       24,088       786,554  
                                 
Common stocks
     72,861       28,883       3,822       97,922  
Non-redeemable preferred stocks
     10,596       -       2,587       8,009  
Total equity securities
     83,457       28,883       6,409       105,931  
Total securities available-for-sale
   $ 887,271     $ 35,711     $ 30,497     $ 892,485  

 
 
 

NET WRITTEN PREMIUMS
                        
   
Three Months Ended
    
Nine Months Ended
  
   
September 30, 2008
    
September 30, 2008
  
         
Percent of
          
Percent of
  
         
Increase/
          
Increase/
  
   
Percent of
    
(Decrease) in
    
Percent of
    
(Decrease) in
  
   
Net Written
    
Net Written
    
Net Written
    
Net Written
  
   
Premiums
    
Premiums
    
Premiums
    
Premiums
  
Property and Casualty Insurance
                        
Commercial Lines:
                        
Automobile
     16.7 %     (0.3 ) %     17.8 %     (4.3 ) %
Liability
     16.8 %     (2.6 ) %     17.9 %     (4.9 ) %
Property
     17.2 %     (0.3 ) %     16.3 %     (0.3 ) %
Workers' Compensation
     21.3 %     8.4 %     17.9 %     4.9 %
Other
     2.3 %     11.2 %     2.3 %     5.2 %
Total Commercial Lines
     74.3 %     1.8 %     72.2 %     (1.1 ) %
                                 
Personal Lines:
                                
Automobile
     5.0 %     (2.1 ) %     5.7 %     (2.5 ) %
Property
     4.7 %     (5.9 ) %     4.8 %     (4.0 ) %
Liability
     0.2 %     (3.3 ) %     0.2 %     (5.4 ) %
Total Personal Lines
     9.9 %     (4.0 ) %     10.7 %     (3.2 ) %
Total Property and Casualty Insurance
     84.2 %     1.1 %     82.9 %     (1.4 ) %
                                 
Reinsurance
     15.8 %     5.9 %     17.1 %     0.3 %
Total
     100.0 %     1.9 %     100.0 %     (1.1 ) %