UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 23, 2004
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EMC INSURANCE GROUP INC.
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(Exact name of registrant as specified in its charter)
Iowa 0-10956 42-623455
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
717 Mulberry Street, Des Moines, Iowa 50309
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(Address of principal executive office) (Zip Code)
(515) 280-2902
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(Registrant's telephone number, including area code)
Item 5. Other Events and Regulation FD Disclosure
On January 23, 2004 EMC Insurance Group Inc. issued the following press
release announcing the discontinuance of Nonstandard Risk Automobile
Insurance Business:
EMC INSURANCE GROUP INC. ANNOUNCES
DISCONTINUANCE OF NONSTANDARD RISK
AUTOMOBILE INSURANCE BUSINESS
DES MOINES, Iowa (January 23, 2004) - EMC Insurance Group Inc.
(Nasdaq/NM:EMCI) today announced that Farm and City Insurance Company, a
wholly-owned subsidiary, will discontinue writing nonstandard risk automobile
insurance business and institute non-renewal procedures on all existing
business. The effective dates for these actions will be determined by the
requirements of the six states in which is conducts business and the terms of
the individual policies.
"Considerable study and evaluation was made before embarking on this
course of action," stated Bruce G. Kelley, President and Chief Executive
Officer. "Farm and City is not a significant player in the nonstandard risk
automobile insurance marketplace and has struggled with increasing
competition from both the standard and the nonstandard markets. Management
has determined that this line of business does not represent a core
competency of our insurance business and therefore could not justify the
substantial amount of resources that would be required to improve its
operating performance."
Discontinuing this line of business will not have a material impact on
the operations of EMC Insurance Group Inc. Farm and City has been a
participant in the EMC Insurance Companies' pooling agreement since 1998 and
will continue to participate in the pooling agreement even though it will no
longer write any direct business. As a result, the Company's cumulative pool
participation percentage will remain at 23.5 percent. In 2003, Farm and City
produced approximately $9.8 million of direct premium, of which approximately
$2.3 million (23.5 percent) was assumed by the Company's property and
casualty insurance subsidiaries. This $2.3 million represents less than 1.0
percent of the Company's projected premium volume for 2003.
"The impact of this action on Farm and City's 15 employees is certainly
a concern to our organization, even though the financial effect is
insignificant," stated Bruce G. Kelley. "Every effort will be made to move
these employees into other open positions within our organization."
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. For more information, visit our website
www.emcinsurance.com.
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; rate agency actions and other
risks and uncertainties inherent to the Company's business.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMC INSURANCE GROUP INC.
Registrant
/s/ Bruce G. Kelley
_____________________________
Bruce G. Kelley
President & Chief Executive Officer
/s/ Mark E. Reese
_____________________________
Mark E. Reese
Vice President and
Chief Financial Officer
Date: January 23, 2004