EMC Insurance Group Expects Q1 Operating Loss of $0.05 to $0.01

EMC Insurance Group Inc. EMCI today announced that first quarter 2011 operating results will be negatively impacted by a high level of catastrophe and storm losses and a significant decline in the amount of favorable development experienced on prior years' reserves. Based on current information, management anticipates that the Company will report a first quarter 2011 operating loss in the range of $0.05 per share to $0.01 per share. Catastrophe and storm losses are expected to approximate $0.47 per share after tax, compared to $0.17 per share after tax in the first quarter of 2010. Catastrophe and storm losses increased significantly in the reinsurance segment in the first quarter of 2011 due to the Japan earthquake and a high level of roof collapse losses associated with heavy winter snowfalls in the eastern United States. Catastrophe and storm losses were also up in the property and casualty insurance segment due to snow-related claims. Management anticipates that favorable development on prior years' reserves will approximate $0.15 per share after tax in the first quarter of 2011, compared to $1.06 per share after tax in the first quarter of 2010. The property and casualty insurance segment continued to experience favorable development on prior years' reserves, but the amount was substantially less than the amount experienced in the first quarter of 2010. The reinsurance segment experienced adverse development on its prior years' reserves.