EMC Insurance announces income for fourth quarter
EMC Insurance Group Inc today reported operating income of $12,729,000 ($0.99 per share) for the fourth quarter ended December 31, 2012, compared to $8,136,000 ($0.63 per share) for the fourth quarter of 20111. For the year ended December 31, 2012, operating income totaled $32,755,000 ($2.54 per share), compared to an operating loss of $8,784,000 ($0.68 per share) for the same period in 2011.
Net income, including realized investment gains and losses, totaled $12,998,000 ($1.01 per share) for the fourth quarter of 2012, compared to $9,999,000 ($0.78 per share) for the fourth quarter of 2011. For the year ended December 31, 2012, net income totaled $37,966,000 ($2.95 per share), compared to a net loss of $2,737,000 ($0.21 per share) for the same period in 2011.
We are very pleased with our strong fourth quarter and full-year results, stated Bruce G. Kelley, President and Chief Executive Officer. Rate levels continued to increase on all lines of business throughout the year, while overall policy retention levels remained consistent with past experience. The compounding effect of the increasing rate levels over the past two years, coupled with our relatively flat loss cost trend for the year, resulted in improved profitability. We remain committed to our strategy of careful risk selection and appropriate rate levels to build on our current year results, continued Kelley.
Premiums earned increased 4.9 percent to $117,271,000 for the fourth quarter of 2012, from $111,768,000 for the fourth quarter of 2011. For the year ended December 31, 2012, premiums earned increased 10.2 percent to $458,846,000 from $416,402,000 in 2011. In the property and casualty insurance segment, premium income increased 11.0 percent for the year, with the majority of the increase attributable to rate level increases, growth in insured exposures and an increase in retained policies. In the reinsurance segment, premium income declined 14.4 percent in the fourth quarter, but increased 7.3 percent for the year. The decline for the fourth quarter is primarily attributed to a significant decline in the year-end estimate of "earned but not reported" premiums on several pro rata accounts, including the new offshore energy and liability account that Employers Mutual Casualty Company began participating in effective January 1, 2012. The increase for the year is primarily attributed to rate level increases implemented during the January 1 renewal season, as well as the new offshore energy and liability proportional account.
The offshore energy and liability account generated approximately $12.4 million of annual premiums (after the 10.0 percent charge for the excess of loss coverage) during the 2012 underwriting year. Since the underlying policies have effective dates throughout the 2012 underwriting year, approximately 48.0 percent of this amount was earned during calendar year 2012, with the balance to be earned during calendar year 2013. Annual premiums for the 2013 underwriting year are currently projected to be approximately $14.0 million.