EMC Insurance Group Reports 2004 Q2 Reserve Strengthening, Estimated Storm Losses

June 15, 2004

Iowa-based EMC Insurance Group Inc. announced that it will strengthen its bulk loss and settlement expense reserves by approximately $2,940,000 in the second quarter of 2004.

This increase in reserves will reduce second quarter earnings by approximately $1,910,000 ($0.17 per share) on an after tax basis. In addition, active storm patterns during the month of May resulted in estimated storm losses of $4,148,000. Storm losses for the first two months of the second quarter of 2004 now total $5,044,000 ($0.28 per share after taxes).

For comparative purposes, storm losses for the three months ended June 30, 2003 totaled $10,341,000 ($0.59 per share after tax). The reserve strengthening is being implemented in response to recently completed actuarial evaluations of the carried reserves for the company’s property and casualty insurance segment.

Based on the results of these evaluations, it was decided that the company’s carried reserves should be increased in response to a continued upward trend in projected ultimate losses. The adjustment in reserves being implemented in the second quarter of 2004 represents an increase of only 0.8 percent of the total loss and settlement expense reserves carried at March 31, 2004.

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.

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