EMC Insurance Companies
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EMC Insurance Companies

Press Release - April 29, 2004

EMC INSURANCE GROUP INC. REPORTS 2004 FIRST QUARTER RESULTS

DES MOINES, Iowa (April 29, 2004) - EMC Insurance Group Inc. (Nasdaq/NM:EMCI) today reported record operating income of $0.70 per share for the first quarter ended March 31, 2004 compared to operating income of $0.67 per share for the first quarter of 20031. Net income, including realized investment gains/losses, was $8,349,000 ($0.72 per share) for the first quarter of 2004 compared to $6,446,000 ($0.57 per share) for the first quarter of 2003.

“We are pleased to report another record-breaking quarter,” stated President and CEO Bruce G. Kelley. “These record-breaking earnings are the result of focused underwriting initiatives and some necessary rate increases that were implemented during the last three years. Achieving an underwriting profit is always stressed, but has become even more critical in this lingering low interest rate environment.”

Premiums earned increased 3.8 percent to $83,458,000 for the three months ended March 31, 2004 from $80,382,000 for the same period in 2003. This increase is primarily attributed to rate increases implemented during the last three years in the property and casualty insurance business as well as moderate growth and improved pricing in the assumed reinsurance business. The market for property and casualty insurance remained firm during the first quarter of 2004 and no significant changes are forecasted for the remainder of the year. The Company will continue to implement rate increases in those lines of business and/or territories where such action is warranted, but the overall level of these rate increases is expected to be smaller than those implemented during 2003.

Catastrophe and storm losses declined slightly to $1,015,000 ($0.06 per share after tax) in the first quarter of 2004 from $1,087,000 ($0.06 per share after tax) in the first quarter of 2003.

The Company’s GAAP combined ratio was 93.8 percent in the first quarter of 2004 compared to 94.8 percent in the first quarter of 2003.

Net book value of the Company’s stock as of March 31, 2004 was $16.58 per share, an increase of 5.0 percent from $15.72 per share at December 31, 2003.

EMC Insurance Group Inc., the publicly-held insurance holding company of EMC Insurance Companies, owns subsidiaries with operations in property and casualty insurance and reinsurance. EMC Insurance Companies is one of the largest property and casualty entities in Iowaand among the top 60 insurance entities nationwide. For more information, visit our website www.emcinsurance.com.

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 expectations and actual results of the Company may differ materially from such expectations.  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; state and federal legislation and regulations; rate competition; changes in interest rates and the performance of financial markets; the adequacy of loss and settlement expense reserves, including asbestos and environmental claims; rate agency actions and other risks and uncertainties inherent to the Company’s business.

ąThe Company uses a non-GAAP financial measure called “operating income” 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 U.S. GAAP financial measure of net income. Therefore, we have provided a reconciliation of this non-GAAP financial measure to the U.S. GAAP financial measure of net income in the Summary of Consolidated Financial Data schedule contained in this release. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

*Statutory data rather than GAAP. However, this data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners’ Accounting Practices and Procedures Manual. Consequently, no reconciliation to GAAP is required by the SEC’s Regulation G.

Consolidated Balance Sheets

* Statutory data rather than GAAP. However, this data is prepared in accordance with statutory accounting rules as defined by the National Association of Insurance Commissioners’ Accounting Practices and Procedures Manual. Consequently, no reconciliation to GAAP is required by the SEC’s Regulation G.

EMC Insurance Group Inc., Des Moines

Anita Novak (Investors)
515-280-2515
Lisa Hamilton (Media)
515-362-7589
717 Mulberry Street
Des Moines, IA 50309

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