EMC Insurance Group Inc. Reports Results for Third Quarter of 2001 and Declares Quarterly Dividend.Business Editors DES MOINES Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , Iowa--(BUSINESS WIRE)--Nov. 1, 2001 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. (Nasdaq: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 $0.01 per share for the third quarter ended September September: see month. 30, 2001 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 $0.08 per share in the third quarter of 2000. Net loss, including realized investment gains/losses, was $64,000 ($0.01 per share) for the third quarter ended September 30, 2001 compared to net income of $1,204,000 ($0.11 per share) for the third quarter of 2000. Operating loss for the first nine months of 2001 was $0.10 per share compared to operating income of $0.22 per share for the same period of 2000. Net loss for the first nine months of 2001, including realized investment gains, was $844,000 ($0.07 per share) compared to net income of $3,017,000 ($0.27 per share) for the same period in 2000. Operating results for the third quarter and the nine-month period ended September 30, 2001 were severely impacted by catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). and storm losses. Catastrophe and storm losses amounted to $0.40 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. during the third quarter of 2001 compared to $0.13 per share for the same period in 2000. Included in the amount for the third quarter of 2001 is $0.10 per share of losses associated with the September 11, 2001 terrorist attack on the World Trade Center. The majority of the Company's exposure to the World Trade Center came from the 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. business assumed by the Company's reinsurance subsidiary from Employers Mutual Casualty Company. Under the quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). agreement in place between the Company's reinsurance subsidiary and Employers Mutual Casualty Company, the Company's losses from this tragic event were capped at $1,500,000. For the nine-month period ended September 30, 2001, catastrophe and storm losses totaled $1.13 per share compared to $0.45 per share for the same period of 2000. Premiums earned increased 17.9% for the third quarter and 15.2% for the first nine months of 2001. These increases are attributable to rate increases that were implemented during the last two years, an increase in the exposure base of the commercial lines of business and significant growth in the assumed reinsurance business. Premium rate levels for property and casualty insurance continued to improve during the third quarter of 2001 as rate increases ranging from six to thirteen percent were implemented in most lines of business. Premium rate increases have grown progressively larger during the first nine months of 2001 and this trend is expected to intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: through 2002 as a result of the terrorist attack on the World Trade Center; however, it will take time for premium rates to return to adequate levels. Management continues to work toward improving profitability through re-underwriting programs for both the existing book of business and the agency force and by controlling the usage of discretionary rate credits. The Company's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio for the third quarter of 2001 was 112.5% compared to 110.9% in the third quarter of 2000. For the nine months ended September 30, 2001, the GAAP combined ratio was 113.7% compared to 111.6% for the same period in 2000. Net book value of the Company's stock as of September 30, 2001 was $12.79 per share, a decrease from $13.14 per share as of December December: see month. 31, 2000. The Board of Directors of EMC Insurance Group Inc. has declared a quarterly dividend of $0.15 per share of common stock payable November 19, 2001 to shareholders of record as of November 12, 2001. This is the 80th consecutive quarterly dividend paid. EMC 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 and reinsurance. 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 provides issuers the opportunity to make cautionary statements regarding forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. and environmental claims; rate agency actions and other risks and uncertainties inherent to the Company's business.
Summary of Consolidated Financial Data
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
----------- ----------- ------------ ------------
Premiums earned...$69,138,856 $58,617,746 $192,548,093 $167,177,512
Net investment
income........... 7,932,760 7,328,475 23,082,657 21,508,117
Other income...... 148,046 271,702 590,002 1,264,753
----------- ----------- ------------ ------------
Total revenues.... 77,219,662 66,217,923 216,220,752 189,950,382
Losses and
expenses......... 77,947,150 65,363,979 219,897,913 187,715,979
----------- ----------- ------------ ------------
Operating (loss)
income before
income tax...... (727,488) 853,944 (3,677,161) 2,234,403
Realized
investment
(losses) gains... (39,421) 574,984 562,317 904,237
----------- ----------- ------------ ------------
(Loss) income
before income
tax (benefit)
expense......... (766,909) 1,428,928 (3,114,844) 3,138,640
Income tax
(benefit) expense (703,381) 224,712 (2,270,604) 121,406
----------- ----------- ------------ ------------
Net (loss) income $(63,528) $1,204,216 $(844,240) $3,017,234
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Operating (loss)
income per share
- basic and
diluted.......... $(0.01) $0.08 $(0.10) $0.22
=========== =========== ============ ============
Net (loss) income
per share - basic
and diluted...... $(0.01) $.0.11 $(0.07) $0.27
=========== =========== ============ ============
Dividend per share $0.15 $.0.15 $0.45 $0.45
=========== =========== ============ ============
Average number of
shares
outstanding -
basic and diluted 11,316,708 11,290,979 11,308,273 11,281,968
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