EMC First Quarter Net Is Up 75 Percent

NU Online News Service, May 2, 3:07 p.m. EDT?EMC Insurance Group Inc. said higher premiums and more disciplined underwriting led to a 75 percent rise in first-quarter net income to $6.5 million, or 57 cents per share.

In the corresponding period last year, the insurer posted a net profit of $3.7 million, or 33 cents on a per-share basis.

The Des Moines, Iowa-based insurer said its premiums earned increased 17.3 percent to $80.38 million for the 2003 first quarter compared to the year-ago period.

EMC said the improvement in premiums earned is mainly because of rate increases during the past two years in the property-casualty insurance business, as well as growth and improved pricing in the assumed reinsurance business.

The company added that, for the remainder of 2003, it will continue to boost rates in the p-c insurance business. These anticipated rate increases, however, will generally be smaller than the increases from the past several months, EMC said.

The improvement in the overall underwriting performance outweighed slightly bigger catastrophe and storm losses, which increased to $1.08 million in the 2003 first quarter from $883,000 one year ago.

Its net investment income also dropped slightly, to $7.85 million from $8.26 million in the 2002 first quarter.

“The first quarter of 2003 was our most profitable first quarter ever,” said Bruce G. Kelley, president and chief executive officer at EMC. “We are thrilled that improved pricing, prudent risk selection and careful claim management combined to produce these excellent results.”

EMC–through its EMCASCO Insurance, Illinois EMCASCO and Dakota Fire Insurance–offers a number of p-c lines, including auto, property, liability and workers’ compensation. The company also sells high-risk private auto insurance through its Farm and City Insurance, while its EMC Underwriters offers excess and surplus lines of insurance. Additionally, the company sells p-c treaty reinsurance through EMC Reinsurance.