EMC Insurance Group Inc Makes Announcement.DES MOINES, Iowa--(BUSINESS WIRE)--Oct. 29, 1998--EMC Insurance Group Inc. (Nasdaq/NM:EMCI EMCI Envirofacts Master Chemical Integrator EMCI External Memory Control Interface )today reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $18 per share for the third quarter ended September 30, 1998 compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $12 per share for the third quarter of 1997. Operating results for the first nine months of 1998 amounted to a loss of $.03 per share compared to operating income of $.43 per share in 1997. Operating results for the third quarter of 1998 were severely impacted by a significant increase in catastrophe and storm related losses as well as a substantial increase in both the frequency and severity of losses unrelated to catastrophe or storm activity. Third quarter catastrophe and storm losses totaled $3.8 million before tax, or $.22 per share after tax. This compares to catastrophe and storm losses of $1.8 million, or $.11 per share, in the third quarter of 1997. Major losses impacting results for the third quarter of 1998 included Hurricane Georges ($.05 per share), Hurricane Bonnie ($.02 per share) and additional reported losses associated with the late second quarter storms ($.05 per share). In addition to the items noted above, operating results for the third quarter and the first nine months of 1998 were negatively impacted by a general decline in overall rate adequacy. While there has been some indication of rate stabilization in the personal lines market during 1998, the commercial lines marketplace, in which the Company conducts the majority of its insurance business, continues to experience intense rate competition. Total net income for the third quarter and first nine months of 1998 was $.24 per share and $.39 per share, respectively. Included in these amounts are $.42 per share of realized gains resulting from the liquidation of the Company's common stock mutual fund portfolio during the third quarter of 1998. Proceeds from this liquidation were reinvested in individual stock issues that are being managed on a tax-aware basis. As a result of this change in investment strategy, realized gains reported by the Company are expected to decline significantly from the amounts reported over the last several years. Premium income increased 9.8% for the third quarter and 7.7% for the first nine months of 1998. These increases reflect growth in both the personal and commercial lines of business, with the personal lines showing the greatest percentage increase. The Company's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ration was 121.4% in the third quarter of 1998 compared to 111.0% in the same quarter in 1997. On a year to date basis, the GAAP combined ratio was 115.5% compared to 109.7% for the first nine months of 1997. Net book value of the Company's stock as of September 30, 1998 was $14.01 per share, a decrease from $14.30 per share as of December 31, 1997. EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. Insurance Group Inc. is a publicly held insurance holding company headquartered in Des Moines, Iowa “Des Moines” redirects here. For other uses, see Des Moines (disambiguation). Des Moines (pronounced /dɪˈmɔɪn/ in English, . It owns subsidiaries in property and casualty insurance, reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. and an excess and surplus lines insurance agency. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this press release regarding EMC Insurance Group's business which are not historical facts are "forward looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements, see "Cautionary Statement Regarding Forward Looking Statements" in the Company's Annual Report or Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1997. |
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