EMC Insurance Net Rises as Second-Quarter Rate Hikes Exceed Industry Average
August 11, 2015 by Renée Kiriluk-Hill, associate editor, BestWeek
DES MOINES, Iowa – EMC Insurance Group’s second-quarter net income increased nearly eight-fold as its property/casualty insurance segment continues to achieve targeted rate level increases that exceed the industry average, said Bruce Kelley, president and chief executive officer.
These increases helped to “improve overall premium rate adequacy and drive organic premium growth,” Kelley said in a statement. Net rose to $8.7 million from $1 million and its combined ratio improved by 8.5 points to 101.1.
Revenues rose 7%, to $155.5 million. Of that number, $119.6 million was generated by EMC’s property/casualty segment and $35.9 million by its reinsurance.
Net written premiums increased by 7.4% in property/casualty to $120.8 million, and in reinsurance by 18% to $31.3 million.
The company’s commercial lines each grew, with auto leading the way with an 11.1% increase, to $30.7 million in net premiums written, followed by liability with a 9.9% hike to $25.4 million and property, 9.4% more to $28.4 million.
In personal lines, EMC’s auto business grew by 7%, to $6 million, while its homeowners declined by 0.9%, to $5.7 million.
Net investment income increased 3.3% to $11.4 million for the second quarter of 2015, said EMC, because of a higher average invested balance in fixed maturity securities and an increase in dividend income.
EMC said its catastrophe and storm losses fell to $18.4 million from $27.9 million. That represented 12.7 points of the combined ratio, the company said in a statement, significantly lower than its 10-year, second-quarter average of 18.4 points.
A year ago EMC blamed hail, wind and tornado damage from several Midwest storms for higher-than-expected losses (Best’s News Service, July 22, 2014).
EMC Insurance companies have a current Best’s Financial Strength Rating of A (Excellent).
The morning of Aug. 7, shares of EMC (NASDAQ: EMCI) were trading at $24.80, up 1.89% from the previous close.
(By Renée Kiriluk-Hill, associate editor, BestWeek: renee.kiriluk-hill@ambest.com)