NU Online News Service, Feb. 25, 9:50 a.m.EST

Des Moines, Iowa-based insurer EMC Insurance Group Inc. reportedfourth-quarter net income dropped 61 percent from the prior year,but excluding the investment gain from the sale of stock investmentin 2009 kept earnings virtually flat, the company said.

EMC reported net income for the fourth quarter dropped $17million to $11 million. Earnings per share fell from $2.10 a shareto 83 cents. Revenues increased 3 percent, or close to $4 million,to $115 million. The company's combined ratio rose 4.9 points to99.6.

For the year, net income was off 31 percent, or $14 million tomore than $31 million. Earnings per share dropped from $3.44 ashare to $2.40. Revenues increased by less than 2 percent, or $7million, to $439 million.

Also, the combined ratio on the year rose 2.1 points to102.3.

The company noted that net income for 2009 included the $15million realized investment gain from the sale of stock in VeriskAnalytics Inc.

“Excluding this one-time transaction, net income for 2010 wascomparable to 2009,” Bruce G. Kelley, president and chief executiveofficer, said in a statement.

During a conference call with financial analysts, EMC ChiefFinancial Officer Mark Reese said that considering the competitiveproperty and casualty insurance market, increased losses and theeconomic downturn, “we had a successful year.”

He said that while rates declined in 2010, the company's ownexperience was “more favorable” than its competitors. In 2011,rates are expected to “increase moderately and personal lines willrecover faster than commercial lines.”

The company experienced catastrophe and storm losses of morethan $3 million in the fourth quarter of 2010 compared to $520,000during the same period in 2009. For the year, catastrophe and stormlosses amounted to more than $42 million compared to $31 millionfor the prior year.

Mr. Reese said the company's experience with storm loss is thatstorms are not trending up. Instead, they are hitting morepopulated areas, causing greater losses. While the catastrophe andstorm losses were significantly higher in 2010 compared to 2009,2010 losses were comparable to 2008, he said.