Press Release - September 27, 2004
EMC INSURANCE GROUP INC. ANNOUNCES REDUCTION IN NUMBER OF SHARES TO BE OFFERED BY SELLING SHAREHOLDER IN PROPOSED FOLLOW-ON OFFERING
DES MOINES, Iowa (September 27, 2004) - EMC Insurance Group Inc. (Nasdaq/NM:EMCI) today announced that Employers Mutual Casualty Company is reducing the number of shares it will sell in the Company’s proposed follow-on offering to 1.8 million shares from the previously announced 2.4 million shares. Employers Mutual is also reducing the number of shares it will sell to the underwriters to cover over-allotments, if any, to 570,000 shares from the previously announced 660,000 shares.
Employers Mutual is reducing its participation in the offering in response to a notification recently received from A.M. Best Company concerning the financial stability rating currently assigned to the participants of the EMC Insurance Companies pooling agreement. In this notification, A.M. Best Company informed Employers Mutual that the insurance subsidiaries of EMC Insurance Group Inc. that participate in the pooling agreement would no longer qualify for a pool or group affiliation rating if Employers Mutual’s ownership of the Company should fall below 50.1 percent, as contemplated in the Company’s recently filed S-1 Registration Statement. A.M. Best Company stated that its standards require the lead company to maintain greater than 50% ownership and voting control of the boards of directors of each of the pool members in order for the pool members to receive the same financial stability rating (with a pool or group affiliation code) and the same financial size category as the lead company. A.M. Best Company’s position on this issue was not communicated to Employers Mutual prior to the filing of the S-1 Registration Statement. Employers Mutual has determined that the continuance of a pool or group affiliation rating is important to the continued success of its future operations and has, therefore, elected to reduce its participation in the offering to ensure that it will retain absolute voting control of the Company even if the over-allotment option is exercised in full by the underwriters.
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 Iowa and among the top 60 insurance entities nationwide.
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; rating agency actions and other risks and uncertainties inherent to the Company’s business. When we use the words “believe”, “expect”, “anticipate”, “estimate” or similar expressions, we intend to identify forward-looking statements. You should not place undue reliance on these forward-looking statements.
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
