Financial Strength

EMC Insurance Companies has maintained its reputation as a strong, financially stable company for 100 years. We have the capital to write high-quality, well-priced business, and we are confident that our underlying book of business is sound.

Corporate Financial Results

The most recent year-end financial results for EMC Insurance Companies are published in the Corporate Review.

EMC Insurance Group Inc. (EMCI), the publicly held company traded on NASDAQ, represents about one-third of EMC Insurance Companies’ financial results. For the financial results of EMCI, visit the Investors section of our website.

Financial Strength Rating

EMC currently has a rating of A- (Excellent) with a positive outlook from A.M. Best Company. This rating is assigned to companies that have an excellent ability to meet their ongoing obligations to policyholders, in A.M. Best’s opinion.

The outlook was revised to positive from stable in May 2010. A. M. Best states: “The revised outlook reflects EMC management’s actions to strengthen claims handling, risk selection and pricing, which will produce improved underwriting and operating results while preserving the group’s historically strong balance sheet, even as soft market conditions persist. These improvements could result in rating upgrades should the group’s underwriting and operating performance continue to improve relative to its peers and the industry.”

The 2010 evaluation goes on to state: “The rating reflects the group’s [EMC’s] excellent risk-adjusted capitalization, generally improved core underwriting performance (albeit with weather and catastrophe losses impacting 2008 and 2009 results), and the continued benefits it will derive from management’s actions over the past several years associated with pricing and risk selection, claims management and reserving methodology. Partially offsetting these positive factors are the group’s exposure to weather events, including catastrophes, and its above average level of common stock leverage (both of which contributed to the changes in surplus in 2008 and 2009), as well as above-average policyholder dividends and the possibility of a lower level of favorable prior year loss reserve development in future years. The outlook reflects A.M. Best’s expectation that continued improvement in the group’s underwriting and pricing processes will result in increasingly favorable results in the near to mid-term."

Strong Balance Sheet

EMC has a Best’s Capital Adequacy Ratio (BCAR)* of approximately 280 percent at year-end 2009, which indicates the company’s capitalization is excellent. This ratio compares an insurer’s surplus to the capital required to support its operating and investment risks. Companies deemed to have strong balance sheet strength generate a BCAR score over 200 percent; companies deemed to have an adequate balance sheet only have a BCAR score over 100 percent.