STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2012

Summary of significant assumptions used to estimate fair value of stock options

The weighted average fair value of options granted during the nine months ended September 30, 2012 and 2011 amounted to $3.83 and $4.44, respectively. Employers Mutual estimated the fair value of each option grant on the date of grant using the Black-Scholes-Merton option-pricing model and the following weighted-average assumptions:

	2012			2011
Estimated dividend yield		3.81	%		3.11	%
Expected volatility		25.2% - 44.7	%		20.9% - 51.2	%
Weighted-average volatility		35.61	%		32.76	%
Risk-free interest rate		0.06% - 1.51	%		0.17% - 2.75	%
Expected term (years)		0.25 - 6.40			0.25 - 6.40