EMC Insurance Says Q3 Results Below Expectations; Cuts 2014 Operating EPS View

(RTTNews) - EMC Insurance Group Inc. (EMCI) announced that third quarter 2014 operating results were impacted by a higher than anticipated level of losses. It anticipates that the Company will report third quarter 2014 operating income in the range of $0.11 to $0.15 per share, and that the GAAP combined ratio for the third quarter will be approximately 107.9 percent.

"We continue to benefit from rate increases implemented over the past several years; however, due to an increase in both large losses, stemming from auto accidents and many fires, and catastrophe and storm losses, third quarter results were below our expectations," stated President and Chief Executive Officer Bruce Kelley.

Third quarter catastrophe and storm losses are expected to approximate $0.84 per share after tax, compared to $0.75 per share after tax in the third quarter of 2013. The increase is attributed to the reinsurance segment, which had a significant amount of additional losses reported on three events that occurred in the second quarter.

One was a severe wind and hail storm in Europe that had no reported losses until the third quarter. The other two were severe Midwest storms that had higher levels of losses than estimated at the end of the second quarter. On a segment basis, catastrophe and storm losses are expected to total approximately $10.1 million, or $0.48 per share after tax, in the property and casualty insurance segment and $7.4 million, or $0.36 per share after tax, in the reinsurance segment.

The company has revised its 2014 operating income guidance from the previous range of $2.00 to $2.25 per share to a revised range of $1.55 to $1.80 per share.