EMC Insurance Group Inc. Reports 2011 Second Quarter Results

DES MOINES, Iowa--(BUSINESS WIRE)--EMC Insurance Group Inc. (Nasdaq:EMCI) today reported an operating loss of $1.05 per share for the second quarter ended June 30, 2011, compared to operating income of $0.29 per share for the second quarter of 2010¹. Operating loss for the six-month period ended June 30, 2011 was $1.06 per share, compared to operating income of $1.02 for the same period in 2010.

“We are now attaining commercial lines rate level increases and continue to achieve a higher level of rate adequacy in our personal lines”

Net loss, including realized investment gains and losses, totaled $12,481,000 ($0.96 per share) for the second quarter of 2011 compared to net income of $3,298,000 ($0.25 per share) for the second quarter of 2010. Net loss for the six-month period ended June 30, 2011 was $7,260,000 ($0.56 per share) compared to net income of $13,177,000 ($1.00 per share) for the same period in 2010.

“There is no question that we are currently in a very active weather cycle, which has significantly affected our operations,” stated Bruce G. Kelley, President and Chief Executive Officer. “Catastrophe losses for the second quarter totaled an unprecedented $41,065,000 ($2.06 per share after tax) and $50,469,000 ($2.53 per share after tax) year-to-date. Stated another way, second quarter catastrophe losses accounted for 40.7 percentage points of our combined ratio, and year-to-date that figure was 25.6 percentage points. Our most recent 10-year (2001 through 2010) average for the first half of the year is 8.5 percentage points.”

Kelley went on to say that, “during the past several years tornados and hail storms have tended to hit more densely populated areas with larger concentrations of exposures, resulting in higher levels of insured losses. Similar periods of increased storm activity have been seen historically as part of cyclical weather patterns, and individual years such as this have not necessarily been indicative of the future. Nonetheless, this active weather cycle accentuates the need for appropriate reinsurance coverage, and reinforces the value of our ongoing attention to property exposure concentrations.”

Premiums earned increased 4.7 percent to $100,932,000 for the second quarter of 2011, from $96,431,000 for the second quarter of 2010. For the six months ended June 30, 2011, premiums earned increased 4.5 percent to $197,218,000 from $188,776,000 in 2010. “We are now attaining commercial lines rate level increases and continue to achieve a higher level of rate adequacy in our personal lines,” stated Kelley. “In the reinsurance segment, premium rate levels increased somewhat for April renewals, but the majority of the premium increase is a result of new business.”

Investment income decreased 9.4 percent to $11,473,000 in the second quarter of 2011 from $12,662,000 in the second quarter of 2010. For the six months ended June 30, 2011, investment income decreased 6.5 percent to $23,552,000 from $25,179,000 in 2010. The large decline in second quarter investment income is attributed to a persistent decline in the average coupon rate on fixed maturity securities during the past several years and an increase in short-term investments, which carry far lower yields.

The Company experienced $9,190,000 ($0.46 per share after tax) of favorable development on prior years’ reserves during the second quarter of 2011, compared to $5,946,000 ($0.29 per share after tax) in the second quarter of 2010. For the six months ended June 30, 2011, the Company experienced $13,097,000 ($0.66 per share after tax) compared to $27,366,000 ($1.36 per share after tax) in 2010. Most of the increase in second quarter favorable development is attributed to the property and casualty insurance segment. As in prior periods, development on closed claims is the main driver of the favorable development.

Net realized investment gains totaled $1,105,000 ($0.09 per share) for the second quarter of 2011 compared to a net realized investment loss of $550,000 ($0.04 per share) in 2010. For the six-month period ended June 30, 2011, net realized investment gains totaled $6,493,000 ($0.50 per share) compared to a net realized loss of $208,000 ($0.02 per share) in 2010. During the first quarter of 2011 the Company’s outside equity manager rebalanced the equity portfolio to improve future performance, which triggered a significant amount of realized gains.

“Other-than-temporary” investment impairment losses totaled $670,000 ($0.03 per share after tax) in the second quarter of 2011 compared to $1,577,000 ($0.08 per share after tax) in the second quarter of 2010. For the six-month period ended June 30, 2011, “other-than-temporary” investment impairment losses totaled $916,000 ($0.05 per share after tax), compared to $1,929,000 ($0.10 per share after tax) in 2010. During the first six months of 2011, seven equity securities and four fixed maturity securities were deemed to be “other-than-temporarily” impaired.

Large losses (which the Company defines as losses greater than $500,000 for the pool, excluding catastrophe losses) increased to $4,144,000 ($0.21 per share after tax) in the second quarter of 2011 from $3,562,000 ($0.18 per share after tax) in the second quarter of 2010. For the six months ended June 30, 2011, large losses increased to $8,181,000 from $6,971,000 in 2010.

The Company’s combined ratio using U.S. generally accepted accounting principles (GAAP) was 132.9 percent in the second quarter of 2011 compared to 108.3 percent in the second quarter of 2010. For the six months ended June 30, 2011, the GAAP combined ratio was 123.4 percent compared to 103.3 percent in 2010.

At June 30, 2011, consolidated assets totaled $1.2 billion, including $1.1 billion in the investment portfolio, and stockholders’ equity totaled $363.2 million, a decrease of 1.5 percent from December 31, 2010. Net book value of the Company’s stock decreased modestly to $28.06 per share from $28.52 per share at December 31, 2010. Book value excluding accumulated other comprehensive income decreased to $25.68 per share from $26.63 per share at December 31, 2010.

On July 20, 2011 management announced that, based on actual results for the first six months of the year and projections for the remainder of the year, it was projecting a 2011 operating loss in the range of ($0.30) to ($0.55) per share. This guidance is based on a projected GAAP combined ratio of 114.4 percent for the year. Management has reaffirmed that guidance.

During the second quarter of 2011 the Company repurchased 16,700 shares of its common stock at an average cost of $18.96 per share. Since the inception of the repurchase program in March, 2008, the Company has repurchased 997,233 shares of common stock at a cost of approximately $23.5 million, leaving approximately $1.5 million available for the repurchase of additional shares. The timing and terms of the purchases are determined by management based on market conditions, and the transactions are conducted in accordance with the applicable rules of the SEC. Common stock purchased under this program is being retired by the Company. The Company’s parent organization, Employers Mutual Casualty Company, has a stock purchase program in place as well, with about $4.5 million of its $15 million authorization remaining. This program is currently dormant and will not be reactivated until the Company’s repurchase program is completed.

The Company will hold an earnings teleconference call at 11:00 a.m. eastern daylight saving time on August 9, 2011 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company’s results for the quarter ended June 30, 2011, as well as its expectations for the remainder of 2011. Dial-in information for the call is toll-free 1-877-407-9205 (International: 1-201-689-8054). The event will be archived and available for digital replay through November 10, 2011. The replay access information is toll-free 1-877-660-6853 (International: 1-201-612-7415); passcodes required for playback: account number 286, conference ID number 375086.

Members of the news media, investors and the general public are invited to access a live webcast of the conference call via the Company’s investor relations page at www.emcins.com/ir. The webcast will be archived and available for replay until November 9, 2011. A transcript of the teleconference will also be available on the Company’s website shortly after the completion of the teleconference.

ABOUT EMCI: EMC Insurance Group Inc. is a publicly held insurance holding company with operations in property and casualty insurance and reinsurance, which was formed in 1974 and became publicly held in 1982. The Company’s common stock trades on the Global Select Market tier of the NASDAQ OMX Stock Market under the symbol EMCI. EMCI’s parent company is Employers Mutual Casualty Company (EMCC). EMCI and EMCC, together with their subsidiary and affiliated companies, conduct operations under the trade name EMC Insurance Companies. Additional information regarding EMC Insurance Companies may be found at www.emcins.com.

FORWARD-LOOKING STATEMENTS: 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 the property and casualty insurance industry, interest rates or the performance of financial markets and the general economy;
rating agency actions;
“other-than-temporary” investment impairment losses; 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 (loss)” 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 GAAP financial measure of net income (loss). Therefore, the Company has provided the following reconciliation of the non-GAAP financial measure of operating income (loss) to the GAAP financial measure of net income (loss). Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

Reconciliation of operating income (loss) to net income (loss):

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010

Operating income (loss)	$	(13,586,377	)	$	3,848,077		$	(13,732,854	)	$	13,384,976
Net realized investment gains (losses)		1,105,158			(549,604	)		6,472,985			(208,411	)
Net income (loss)	$	(12,481,219	)	$	3,298,473		$	(7,259,869	)	$	13,176,565

CONSOLIDATED BALANCE SHEETS - UNAUDITED
	June 30,			December 31,
	2011			2010
ASSETS
Investments:
Fixed maturities:
Securities held-to-maturity, at amortized cost
(fair value $371,456 and $389,679)	$	322,602		$	340,803
Securities available-for-sale, at fair value
(amortized cost $877,611,517 and $909,582,782)		920,197,839			941,537,026
Equity securities available-for-sale, at fair value
(cost $87,103,570 and $75,721,039)		110,941,324			101,138,982
Other long-term investments, at cost		22,177			29,827
Short-term investments, at cost		70,372,883			36,616,111
Total investments		1,101,856,825			1,079,662,749

Cash		276,864			491,994
Reinsurance receivables due from affiliate		36,261,477			30,256,586
Prepaid reinsurance premiums due from affiliate		9,211,749			9,530,426
Deferred policy acquisition costs (affiliated $39,315,029 and $37,584,448)		39,321,007			37,584,448
Prepaid pension benefits due from affiliate		4,260,282			5,125,701
Accrued investment income		10,339,597			10,925,854
Accounts receivable		1,226,136			1,716,150
Income taxes recoverable		9,326,943			2,350,864
Deferred income taxes		3,795,801			6,690,218
Goodwill		941,586			941,586
Other assets (affiliated $3,953,355 and $2,433,445)		4,230,738			2,517,922
Total assets	$	1,221,049,005		$	1,187,794,498

LIABILITIES
Losses and settlement expenses (affiliated $590,916,267 and $553,125,183)	$	595,478,577		$	556,140,956
Unearned premiums (affiliated $174,378,776 and $167,896,119)		174,409,257			167,896,119
Other policyholders' funds due to affiliate		6,858,887			8,315,751
Surplus notes payable to affiliate		25,000,000			25,000,000
Amounts due affiliate to settle inter-company transaction balances		12,549,689			18,380,813
Pension and postretirement benefits payable to affiliates		21,050,225			20,418,716
Other liabilities (affiliated $13,924,379 and $22,861,092)		22,458,336			23,001,141
Total liabilities		857,804,971			819,153,496

STOCKHOLDERS' EQUITY
Common stock, $1 par value, authorized 20,000,000
shares; issued and outstanding, 12,945,473
shares in 2011 and 12,927,678 shares in 2010		12,945,473			12,927,678
Additional paid-in capital		89,477,320			88,937,294
Accumulated other comprehensive income (loss):
Net unrealized losses on fixed maturity securities
with "other-than-temporary" impairments		-			(69,852	)
Other net unrealized gains		43,175,648			37,361,774
Unrecognized Pension and postretirement benefits payable (all affiliated)		(12,452,027	)		(12,796,435	)
Total accumulated other comprehensive income		30,723,621			24,495,487
Retained earnings		230,097,620			242,280,543
Total stockholders' equity		363,244,034			368,641,002
Total liabilities and stockholders' equity	$	1,221,049,005		$	1,187,794,498

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Property and
	Casualty						Parent
Quarter Ended June 30, 2011	Insurance			Reinsurance			Company			Consolidated
Revenues:
Premiums earned	$	78,381,208		$	22,550,321		$	-		$	100,931,529
Investment income, net		8,385,878			3,087,022			208			11,473,108
Other income		236,483			-			-			236,483
		87,003,569			25,637,343			208			112,641,120
Losses and expenses:
Losses and settlement expenses		72,619,520			29,151,246			-			101,770,766
Dividends to policyholders		(144,931	)		-			-			(144,931	)
Amortization of deferred policy acquisition costs		19,130,231			4,714,931			-			23,845,162
Other underwriting expenses		8,732,780			(97,668	)		-			8,635,112
Interest expense		225,000			-			-			225,000
Other expenses		163,725			520,562			338,760			1,023,047
		100,726,325			34,289,071			338,760			135,354,156
Operating loss before income taxes		(13,722,756	)		(8,651,728	)		(338,552	)		(22,713,036	)
Realized investment gains		1,303,670			396,573			-			1,700,243
Loss before income taxes		(12,419,086	)		(8,255,155	)		(338,552	)		(21,012,793	)
Income tax expense (benefit):
Current		(5,704,120	)		(2,732,807	)		(118,493	)		(8,555,420	)
Deferred		505,451			(481,605	)		-			23,846
		(5,198,669	)		(3,214,412	)		(118,493	)		(8,531,574	)
Net loss	$	(7,220,417	)	$	(5,040,743	)	$	(220,059	)	$	(12,481,219	)
Average shares outstanding											12,958,292
Per Share Data:
Net loss per share - basic and diluted	$	(0.56	)	$	(0.39	)	$	(0.01	)	$	(0.96	)
Decrease in provision for
insured events of prior years (after tax)	$	0.44		$	0.02		$	-		$	0.46
Catastrophe and storm losses (after tax)	$	(1.48	)	$	(0.58	)	$	-		$	(2.06	)
Dividends per share										$	0.19
Other Information of Interest:
Net written premiums	$	84,905,926		$	22,299,695		$	-		$	107,205,621
Decrease in provision for
insured events of prior years	$	(8,725,061	)	$	(464,668	)	$	-		$	(9,189,729	)
Catastrophe and storm losses	$	29,534,341		$	11,530,250		$	-		$	41,064,591
GAAP Combined Ratio:
Loss ratio		92.6	%		129.3	%		-			100.8	%
Expense ratio		35.4	%		20.4	%		-			32.1	%
		128.0	%		149.7	%		-			132.9	%

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Property and
	Casualty						Parent
Quarter Ended June 30, 2010	Insurance			Reinsurance			Company			Consolidated
Revenues:
Premiums earned	$	75,836,899		$	20,594,212		$	-		$	96,431,111
Investment income, net		9,469,605			3,194,077			(1,658	)		12,662,024
Other income		220,361			-			-			220,361
		85,526,865			23,788,289			(1,658	)		109,313,496
Losses and expenses:
Losses and settlement expenses		56,797,026			14,355,042			-			71,152,068
Dividends to policyholders		1,518,624			-			-			1,518,624
Amortization of deferred policy acquisition costs		18,023,579			4,617,706			-			22,641,285
Other underwriting expenses		9,099,442			35,193			-			9,134,635
Interest expense		225,000			-			-			225,000
Other expenses		199,084			(343,097	)		444,720			300,707
		85,862,755			18,664,844			444,720			104,972,319
Operating income (loss) before income taxes		(335,890	)		5,123,445			(446,378	)		4,341,177
Realized investment losses		(611,369	)		(234,176	)		-			(845,545	)
Income (loss) before income taxes		(947,259	)		4,889,269			(446,378	)		3,495,632
Income tax expense (benefit):
Current		(946,448	)		1,485,634			(156,233	)		382,953
Deferred		(89,612	)		(96,182	)		-			(185,794	)
		(1,036,060	)		1,389,452			(156,233	)		197,159
Net income (loss)	$	88,801		$	3,499,817		$	(290,145	)	$	3,298,473
Average shares outstanding											13,129,167
Per Share Data:
Net income (loss) per share - basic and diluted	$	0.01		$	0.26		$	(0.02	)	$	0.25
Decrease (increase) in provision for
insured events of prior years (after tax)	$	0.30		$	(0.01	)	$	-		$	0.29
Catastrophe and storm losses (after tax)	$	(0.69	)	$	(0.13	)	$	-		$	(0.82	)
Dividends per share										$	0.18
Other Information of Interest:
Net written premiums	$	82,019,661		$	19,804,119		$	-		$	101,823,780
(Decrease) increase in provision for
insured events of prior years	$	(6,129,939	)	$	183,690		$	-		$	(5,946,249	)
Catastrophe and storm losses	$	13,861,767		$	2,723,075		$	-		$	16,584,842
GAAP Combined Ratio:
Loss ratio		74.9	%		69.7	%		-			73.8	%
Expense ratio		37.8	%		22.6	%		-			34.5	%
		112.7	%		92.3	%		-			108.3	%

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Property and
	Casualty						Parent
Six Months Ended June 30, 2011	Insurance			Reinsurance			Company			Consolidated
Revenues:
Premiums earned	$	155,692,500		$	41,525,843		$	-		$	197,218,343
Investment income, net		17,283,528			6,267,569			606			23,551,703
Other income		440,313			-			-			440,313
		173,416,341			47,793,412			606			221,210,359
Losses and expenses:
Losses and settlement expenses		123,787,208			51,353,159			-			175,140,367
Dividends to policyholders		2,368,038			-			-			2,368,038
Amortization of deferred policy acquisition costs		38,862,928			8,793,016			-			47,655,944
Other underwriting expenses		17,823,387			433,049			-			18,256,436
Interest expense		450,000			-			-			450,000
Other expenses		326,441			941,848			687,136			1,955,425
		183,618,002			61,521,072			687,136			245,826,210
Operating loss before income taxes		(10,201,661	)		(13,727,660	)		(686,530	)		(24,615,851	)
Realized investment gains		7,657,024			2,301,415			-			9,958,439
Loss before income taxes		(2,544,637	)		(11,426,245	)		(686,530	)		(14,657,412	)
Income tax expense (benefit):
Current		(2,872,418	)		(3,825,642	)		(240,285	)		(6,938,345	)
Deferred		370,929			(830,127	)		-			(459,198	)
		(2,501,489	)		(4,655,769	)		(240,285	)		(7,397,543	)
Net loss	$	(43,148	)	$	(6,770,476	)	$	(446,245	)	$	(7,259,869	)
Average shares outstanding											12,946,923
Per Share Data:
Net loss per share - basic and diluted	$	-		$	(0.52	)	$	(0.04	)	$	(0.56	)
Decrease (increase) in provision for insured
events of prior years (after tax)	$	0.67		$	(0.01	)	$	-		$	0.66
Catastrophe and storm losses (after tax)	$	(1.65	)	$	(0.88	)	$	-		$	(2.53	)
Dividends per share										$	0.38
Book value per share										$	28.06
Effective tax rate											50.5	%
Annualized net loss as a percent of beg. SH equity											(3.9	)%
Other Information of Interest:
Net written premiums	$	161,534,226		$	42,456,561		$	-		$	203,990,787
Increase (decrease) in provision for
insured events of prior years	$	(13,407,086	)	$	310,068		$	-		$	(13,097,018	)
Catastrophe and storm losses	$	32,957,679		$	17,511,594		$	-		$	50,469,273
GAAP Combined Ratio:
Loss ratio		79.5	%		123.7	%		-			88.8	%
Expense ratio		37.9	%		22.2	%		-			34.6	%
		117.4	%		145.9	%		-			123.4	%

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Property and
	Casualty						Parent
Six Months Ended June 30, 2010	Insurance			Reinsurance			Company			Consolidated
Revenues:
Premiums earned	$	150,624,262		$	38,151,915		$	-		$	188,776,177
Investment income, net		18,886,101			6,298,177			(5,267	)		25,179,011
Other income		427,047			-			-			427,047
		169,937,410			44,450,092			(5,267	)		214,382,235
Losses and expenses:
Losses and settlement expenses		100,811,314			26,383,378			-			127,194,692
Dividends to policyholders		3,873,086			-			-			3,873,086
Amortization of deferred policy acquisition costs		36,274,583			8,231,817			-			44,506,400
Other underwriting expenses		18,150,455			1,349,374			-			19,499,829
Interest expense		450,000			-			-			450,000
Other expenses		426,808			(653,292	)		725,394			498,910
		159,986,246			35,311,277			725,394			196,022,917
Operating income (loss) before income taxes		9,951,164			9,138,815			(730,661	)		18,359,318
Realized investment losses		(205,858	)		(114,774	)		-			(320,632	)
Income (loss) before income taxes		9,745,306			9,024,041			(730,661	)		18,038,686
Income tax expense (benefit):
Current		2,123,514			2,668,621			(255,732	)		4,536,403
Deferred		497,533			(171,815	)		-			325,718
		2,621,047			2,496,806			(255,732	)		4,862,121
Net income (loss)	$	7,124,259		$	6,527,235		$	(474,929	)	$	13,176,565
Average shares outstanding											13,126,489
Per Share Data:
Net income (loss) per share - basic and diluted	$	0.54		$	0.50		$	(0.04	)	$	1.00
Decrease in provision for
insured events of prior years (after tax)	$	0.98		$	0.38		$	-		$	1.36
Catastrophe and storm losses (after tax)	$	(0.80	)	$	(0.19	)	$	-		$	(0.99	)
Dividends per share										$	0.36
Book value per share										$	27.62
Effective tax rate											27.0	%
Annualized net income as a percent of beg. SH equity											7.7	%
Other Information of Interest:
Net written premiums	$	154,575,303		$	37,800,248		$	-		$	192,375,551
Decrease in provision for
insured events of prior years	$	(19,741,712	)	$	(7,624,499	)	$	-		$	(27,366,211	)
Catastrophe and storm losses	$	16,225,296		$	3,780,162		$	-		$	20,005,458
GAAP Combined Ratio:
Loss ratio		66.9	%		69.2	%		-			67.4	%
Expense ratio		38.7	%		25.1	%		-			35.9	%
		105.6	%		94.3	%		-			103.3	%

INVESTMENTS

The Company had total cash and invested assets with a carrying value of $1.1 billion as of June 30, 2011 and
December 31, 2010. The following table summarizes the Company's cash and invested assets of the dates indicated:

	June 30, 2011
								Percent of
	Amortized			Fair				Total		Carrying
($ in thousands)	Cost			Value				Fair Value		Value
Fixed maturity securities held-to-maturity	$	323		$	372			-		$	323
Fixed maturity securities available-for-sale		877,611			920,198			83.5%			920,198
Equity securities available-for-sale		87,104			110,941			10.1%			110,941
Cash		277			277			-			277
Short-term investments		70,373			70,373			6.4%			70,373
Other long-term investments		22			22			-			22
	$	1,035,710		$	1,102,183			100.0%		$	1,102,134

	December 31, 2010
								Percent of
	Amortized			Fair				Total		Carrying
($ in thousands)	Cost			Value				Fair Value		Value
Fixed maturity securities held-to-maturity	$	341		$	390			-		$	341
Fixed maturity securities available-for-sale		909,583			941,537			87.2%			941,537
Equity securities available-for-sale		75,721			101,139			9.4%			101,139
Cash		492			492			-			492
Short-term investments		36,616			36,616			3.4%			36,616
Other long-term investments		30			30			-			30
	$	1,022,783		$	1,080,204			100.0%		$	1,080,155

NET WRITTEN PREMIUMS
	Three Months Ended							Six Months Ended
	June 30, 2011							June 30, 2011
				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		17.3	%		-		%	17.3	%		2.3		%
Liability		15.5	%		5.1		%	15.5	%		5.3		%
Property		16.8	%		2.0		%	17.1	%		5.6		%
Workers' Compensation		14.8	%		(0.6	)	%	15.3	%		5.1		%
Other		1.9	%		(2.1	)	%	1.8	%		(10.0	)	%
Total Commercial Lines		66.3	%		1.5		%	67.0	%		4.1		%

Personal Lines:
Automobile		7.2	%		3.5		%	7.2	%		(4.5	)	%
Property		5.6	%		36.3		%	5.2	%		27.8		%
Liability		0.1	%		2.1		%	0.1	%		3.7		%
Total Personal Lines		12.9	%		15.5		%	12.5	%		6.8		%
Total Property and Casualty Insurance		79.2	%		3.5		%	79.5	%		4.5		%

Reinsurance (1)		20.8	%		12.6		%	20.5	%		9.9		%
Total		100.0	%		5.3		%	100.0	%		5.6		%

(1) Excludes $920,597 positive portfolio adjustment related to the January 1, 2011 increased participation in the MRB pool.