EMCI EMC Insurance Group Inc

EMC Insurance Group Inc. (Nasdaq:EMCI) today reported operating income of $0.58 per share for the fourth quarter ended December 31, 2011, compared to $0.71 per share for the fourth quarter of 20101. Operating loss for the twelve-month period ended December 31, 2011 was $0.63 per share, compared to operating income of $2.21 for the same period in 2010.

Net income, including realized investment gains and losses, totaled $9,306,000 ($0.72 per share) for the fourth quarter of 2011 compared to $10,711,000 ($0.83 per share) for the fourth quarter of 2010. Net loss for the twelve-month period ended December 31, 2011 was $2,098,000 ($0.16 per share) compared to net income of $31,346,000 ($2.40 per share) for the same period in 2010.

“Our financial results for the fourth quarter were much closer to what we expected during 2011,” stated Bruce G. Kelley, President and Chief Executive Officer. “Catastrophe losses were within expectations, the equity portfolio improved, and we recorded premium growth in both our property and casualty insurance segment and our reinsurance segment.”

“Unfortunately, our fourth quarter results could not undo the damage caused by the record catastrophe losses experienced during the first three quarters of the year,” continued Kelley. “For the year, catastrophe losses added an unprecedented 19.3 percentage points to our combined ratio, which is 11.6 percentage points greater than the Company’s most recent 10-year (2001 through 2010) average of 7.7 percentage points. 2011 also marked the fourth consecutive year of above average catastrophe losses. While this is not unprecedented, having most recently occurred during the period 1998 through 2001, it is also not common. What is unusual and will be remembered most about this current period of above average catastrophe losses is the fact that we established new records for catastrophe losses in two of the four years.”

Premiums earned increased 8.4 percent to $111,768,000 for the fourth quarter of 2011, from $103,062,000 for the fourth quarter of 2010. For the year ended December 31, 2011, premiums earned increased 7.0 percent to $416,402,000 from $389,122,000 in 2010.

“Premiums earned are now reflecting previously implemented rate increases,” stated Kelley. “We continue to see moderate rate improvement in the personal lines and are beginning to see small rate increases in most commercial lines as well, although that market remains very competitive. Other factors contributing to the increase in premiums earned are increases in commercial lines’ policy retentions, exposures and endorsements, as well as a decline in return premiums resulting from audits of policyholders’ insured exposures. In our reinsurance segment, premium rates improved during 2011 due to the large number of severe global events. Looking ahead, we do not expect commercial lines premium rate levels to increase significantly in 2012 as a result of the record catastrophe losses of 2011, however, we do expect steady rate improvement throughout the year and into 2013.”

Investment income decreased 7.0 percent to $11,228,000 in the fourth quarter of 2011 from $12,075,000 in the fourth quarter of 2010. For the year ended December 31, 2011, investment income decreased 6.8 percent to $46,111,000 from $49,489,000 in 2010. The large declines in investment income are attributed to a persistent decline in the average coupon rate on fixed maturity securities during the past several years and an increase in short-term investments, which carry far lower yields.

Catastrophe losses totaled $3,495,000 ($0.18 per share after tax) in the fourth quarter of 2011 compared to $3,051,000 ($0.15 per share after tax) in the fourth quarter of 2010. For the year ended December 31, 2011, catastrophe losses totaled a record $80,331,000 ($4.04 per share after tax) compared to $42,144,000 ($2.10 per share after tax) in 2010. On a segment basis, 2011 catastrophe losses amounted to$52,448,000 ($2.64 per share after taxes) in the property and casualty insurance segment and $27,883,000 ($1.40 per share after tax) in the reinsurance segment.

The Company experienced $11,390,000 ($0.58 per share after tax) of favorable development on prior years’ reserves during the fourth quarter of 2011, compared to $4,562,000 ($0.23 per share after tax) in the fourth quarter of 2010. For the year ended December 31, 2011, the Company experienced $33,099,000 ($1.67 per share after tax) of favorable development compared to $50,749,000 ($2.53 per share after tax) in 2010. As in recent periods, development resulting from the final settlement of prior accident years’ claims was the main driver of the favorable development. The most recent actuarial analysis of the Company’s carried reserves indicates a level of adequacy consistent with other recent evaluations.

Net realized investment gains totaled $1,863,000 ($0.14 per share) for the fourth quarter of 2011 compared to $1,586,000 ($0.12 per share) in 2010. For the year ended December 31, 2011, net realized investment gains totaled $6,047,000 ($0.47 per share), compared to $2,515,000 ($0.19 per share) in 2010. The large amount of realized investment gains for 2011 resulted from first quarter activity in the equity portfolio, when market prices were at elevated levels.

During the fourth quarter of 2011, the Company recognized $132,000 (less than $0.01 per share after tax) of “other-than-temporary” investment impairment losses on 2 equity securities because management determined that it would likely not hold those securities until they recovered to their cost basis. This compares to $89,000 (less than $0.01 per share after tax) of “other-than-temporary” investment impairment losses in the fourth quarter of 2010. During 2011, “other-than-temporary” investment impairment losses totaled $5,960,000 ($0.30 per share after tax), compared to $2,384,000 ($0.12 per share after tax) in 2010.

Large losses (which the Company defines as losses greater than $500,000 for the EMC Insurance Companies’ pool, excluding catastrophe losses) increased to $11,200,000 ($0.57 per share after tax) in the fourth quarter of 2011 from $6,055,000 ($0.30 per share after tax) in the fourth quarter of 2010. For the year ended December 31, 2011, large losses totaled $24,044,000 ($1.21 per share after tax) compared to $19,634,000 ($0.98 per share after tax) in 2010.

The Company’s GAAP combined ratio was 100.8 percent in the fourth quarter of 2011 compared to 99.6 percent in the fourth quarter of 2010. For the year ended December 31, 2011, the GAAP combined ratio was 115.1 percent compared to 102.3 percent in 2010.

At December 31, 2011, consolidated assets totaled $1.2 billion, including $1.1 billion in the investment portfolio, and stockholders’ equity totaled $358.8 million, a decrease of 2.7 percent from December 31, 2010. Net book value of the Company’s stock decreased to $27.86 per share from $28.52 per share at December 31, 2010. Book value excluding accumulated other comprehensive income decreased to $25.74 per share from $26.63 per share at December 31, 2010.

Effective January 1, 2012, the Company will adopt new accounting guidance that clarifies which costs associated with the acquisition of insurance contracts should be capitalized and deferred for recognition during the coverage period. Adoption of this guidance will have an impact on the consolidated financial position and operating results of the Company since certain costs associated with contract acquisition that are currently deferred do not meet the criteria for deferral under this new guidance. The Company is adopting this guidance retrospectively, which will result in a decline in consolidated stockholders’ equity at December 31, 2011 of approximately $6.4 million, net of tax, and a corresponding decline in book value of approximately $0.50 per share. If this guidance had been in effect during 2011, operating results would have been reduced by approximately $640,000, net of tax ($0.05 per share).

Management is projecting that 2012 operating income will be within a range of $1.30 to $1.55 per share. This guidance is based on a projected GAAP combined ratio of 104.9 percent for the year.

As previously disclosed, on November 3, 2011 the Company’s board of directors authorized a new $15 million stock repurchase program. This program became effective immediately and does not have an expiration date. The timing and terms of the purchases are determined by management based on market conditions and are conducted in accordance with the applicable rules of the Securities and Exchange Commission. Common stock repurchased under this new program will be retired by the Company. No shares were repurchased under this new program during the fourth quarter.

The Company’s parent organization, Employers Mutual Casualty Company, currently has a stock purchase program in place, with about $4.5 million of its $15 million authorization remaining. This program has been dormant and will remain so while the Company’s new repurchase program is active.

The Company will hold an earnings teleconference call at 11:00 a.m. eastern standard time on February 21, 2012 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company’s results for the quarter and the year ended December 31, 2011, as well as its expectations for 2012. Dial-in information for the call is toll-free 1-877-407-9205 (International: 1-201-689-8054). The event will be archived and available for digital replay through May 20, 2012. The replay access information is toll-free 1-877-660-6853 (International: 1-201-612-7415); passcodes required for playback: account number 286 and conference ID number 387600.

Members of the news media, investors and the general public are invited to access a live webcast of the conference call via the Company’s investor relations page at www.emcins.com/ir. The webcast will be archived and available for replay until May 20, 2012. A transcript of the teleconference will also be available on the Company’s website shortly after the completion of the teleconference.

ABOUT EMCI: EMC Insurance Group Inc. is a publicly held insurance holding company with operations in property and casualty insurance and reinsurance, which was formed in 1974 and became publicly held in 1982. The Company’s common stock trades on the Global Select Market tier of the NASDAQ OMX Stock Market under the symbol EMCI. EMCI’s parent company is Employers Mutual Casualty Company (EMCC). EMCI and EMCC, together with their subsidiary and affiliated companies, conduct operations under the trade name EMC Insurance Companies. Additional information regarding EMC Insurance Companies may be found at www.emcins.com.

FORWARD-LOOKING STATEMENTS: 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 beliefs, assumptions and expectations of the Company’s future performance, taking into account all information currently available to management. These beliefs, assumptions and expectations can change as the result of many possible events or factors, not all of which are known to management. If a change occurs, the Company’s business, financial condition, liquidity, results of operations, plans and objectives may vary materially from those expressed in the forward-looking statements. 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;
• the adequacy of loss and settlement expense reserves;
• state and federal legislation and regulations;
• changes in the property and casualty insurance industry, interest rates or the performance of financial markets and the general economy;
• rating agency actions;
• “other-than-temporary” investment impairment losses; and
• other risks and uncertainties inherent to the Company’s business, including those discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K.

Management intends to identify forward-looking statements when using the words “believe,” “expect,” “anticipate,” “estimate,” “project,” or similar expressions. Undue reliance should not be placed on these forward-looking statements.

¹The Company uses a non-GAAP financial measure called “operating income (loss)” that management believes is useful to investors because it illustrates the performance of our normal, ongoing operations, which is important in understanding and evaluating our financial condition and results of operations. While this measure is consistent with measures utilized by investors to evaluate performance, it is not a substitute for the GAAP financial measure of net income (loss). Therefore, the Company has provided the following reconciliation of the non-GAAP financial measure of operating income (loss) to the GAAP financial measure of net income (loss). Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.

Reconciliation of operating income (loss) to net income (loss):

    Three Months Ended December 31,   Year Ended December 31, 2011   2010 2011   2010   Operating income (loss) $   7,443,091 $   9,125,505 $   (8,144,754 ) $   28,831,601 Net realized investment gains     1,863,247       1,585,678       6,047,140       2,514,722   Net income (loss) $   9,306,338   $   10,711,183   $   (2,097,614 ) $   31,346,323           CONSOLIDATED STATEMENTS OF INCOME     Property and Casualty Parent Quarter Ended December 31, 2011 Insurance   Reinsurance   Company   Consolidated

Revenues:

Premiums earned $   83,660,958 $   28,106,755 $   - $   111,767,713 Investment income, net 8,212,872 3,017,858 (2,759 ) 11,227,971 Other income     152,332       37,308       -       189,640       92,026,162       31,161,921       (2,759 )     123,185,324  

Losses and expenses:

Losses and settlement expenses 57,132,128 19,341,265 - 76,473,393 Dividends to policyholders 1,174,194 - - 1,174,194 Amortization of deferred policy acquisition costs 20,607,873 6,004,831 - 26,612,704 Other underwriting expenses 8,053,650 315,947 - 8,369,597 Interest expense 225,000 - - 225,000 Other expenses     214,875       (6,078 )     332,382       541,179       87,407,720       25,655,965       332,382       113,396,067   Operating income (loss) before income taxes     4,618,442       5,505,956       (335,141 )     9,789,257   Realized investment gains     2,036,893       829,642       -       2,866,535   Income (loss) before income taxes     6,655,335       6,335,598       (335,141 )     12,655,792  

Income tax expense (benefit):

Current (1,397,937 ) 1,743,848 (117,301 ) 228,610 Deferred     2,962,903       157,941       -       3,120,844       1,564,966       1,901,789       (117,301 )     3,349,454   Net income (loss) $   5,090,369   $   4,433,809   $   (217,840 ) $   9,306,338   Average shares outstanding 12,870,862

Per Share Data:

Net income (loss) per share - basic and diluted $ 0.40 $ 0.34 $ (0.02 ) $ 0.72

Decrease in provision for insured events of prior years (after tax)

$ 0.14 $ 0.44 $ - $ 0.58 Catastrophe and storm losses (after tax) $ (0.01 ) $ (0.17 ) $ - $ (0.18 ) Dividends per share $ 0.20

Other Information of Interest:

Net written premiums $ 69,460,236 $ 28,212,718 $ - $ 97,672,954

Decrease in provision for insured events of prior years

$ (2,659,359 ) $ (8,730,979 ) $ - $ (11,390,338 ) Catastrophe and storm losses $ 147,895 $ 3,347,038 $ - $ 3,494,933

GAAP Combined Ratio:

Loss ratio 68.3 % 68.8 % - 68.4 % Expense ratio     35.7 %     22.5 %     -       32.4 %     104.0 %     91.3 %     -       100.8 %     CONSOLIDATED STATEMENTS OF INCOME           Property and Casualty Parent Quarter Ended December 31, 2010 Insurance   Reinsurance   Company   Consolidated

Revenues:

Premiums earned $   78,048,084 $   25,013,652 $   - $   103,061,736 Investment income, net 8,968,750 3,101,499 4,948 12,075,197 Other income     126,779       -       -       126,779       87,143,613       28,115,151       4,948       115,263,712  

Losses and expenses:

Losses and settlement expenses 50,865,926 9,007,382 - 59,873,308 Dividends to policyholders 2,235,526 - - 2,235,526 Amortization of deferred policy acquisition costs 20,618,178 5,383,060 - 26,001,238 Other underwriting expenses 7,995,277 6,506,377 - 14,501,654 Interest expense 225,000 - - 225,000 Other expenses     119,456       (108,862 )     265,810       276,404       82,059,363       20,787,957       265,810       103,113,130   Operating income (loss) before income taxes     5,084,250       7,327,194       (260,862 )     12,150,582   Realized investment gains     1,943,407       496,098       -       2,439,505   Income (loss) before income taxes     7,027,657       7,823,292       (260,862 )     14,590,087  

Income tax expense (benefit):

Current (674,740 ) 1,465,422 (91,302 ) 699,380 Deferred     2,277,325       902,199       -       3,179,524       1,602,585       2,367,621       (91,302 )     3,878,904   Net income (loss) $   5,425,072   $   5,455,671   $   (169,560 ) $   10,711,183   Average shares outstanding 12,920,702

Per Share Data:

Net income (loss) per share - basic and diluted $ 0.42 $ 0.42 $ (0.01 ) $ 0.83

Decrease (increase) in provision for insured events of prior years (after tax)

$ (0.12 ) $ 0.35 $ - $ 0.23 Catastrophe and storm losses (after tax) $ (0.06 ) $ (0.09 ) $ - $ (0.15 ) Dividends per share $ 0.19

Other Information of Interest:

Net written premiums $ 63,201,500 $ 24,914,176 $ - $ 88,115,676

(Decrease) increase in provision for insured events of prior years

$ 2,456,661 $ (7,018,676 ) $ - $ (4,562,015 ) Catastrophe and storm losses $ 1,308,310 $ 1,742,867 $ - $ 3,051,177

GAAP Combined Ratio:

Loss ratio 65.2 % 36.0 % - 58.1 % Expense ratio     39.5 %     47.5 %     -       41.5 %     104.7 %     83.5 %     -       99.6 %     CONSOLIDATED STATEMENTS OF INCOME           Property and Casualty Parent Year ended December 31, 2011 Insurance   Reinsurance   Company   Consolidated

Revenues:

Premiums earned $   321,649,215 $   94,753,098 $   - $   416,402,313 Investment income, net 33,718,436 12,395,350 (2,861 ) 46,110,925 Other income     790,802       37,308       -       828,110       356,158,453       107,185,756       (2,861 )     463,341,348  

Losses and expenses:

Losses and settlement expenses 251,449,247 91,525,190 - 342,974,437 Dividends to policyholders 5,255,568 - - 5,255,568 Amortization of deferred policy acquisition costs 77,810,011 19,742,819 - 97,552,830 Other underwriting expenses 32,678,652 617,916 - 33,296,568 Interest expense 900,000 - - 900,000 Other expenses     750,675       591,850       1,330,129       2,672,654       368,844,153       112,477,775       1,330,129       482,652,057   Operating loss before income taxes     (12,685,700 )     (5,292,019 )     (1,332,990 )     (19,310,709 ) Realized investment gains     6,970,028       2,333,265       -       9,303,293   Loss before income taxes     (5,715,672 )     (2,958,754 )     (1,332,990 )     (10,007,416 )

Income tax expense (benefit):

Current (7,960,371 ) (1,391,340 ) (466,548 ) (9,818,259 ) Deferred     2,805,843       (897,386 )     -       1,908,457       (5,154,528 )     (2,288,726 )     (466,548 )     (7,909,802 ) Net loss $   (561,144 ) $   (670,028 ) $   (866,442 ) $   (2,097,614 ) Average shares outstanding 12,912,718

Per Share Data:

Net loss per share - basic and diluted $ (0.04 ) $ (0.05 ) $ (0.07 ) $ (0.16 )

Decrease in provision for insured events of prior years (after tax)

$ 1.01 $ 0.66 $ - $ 1.67 Catastrophe and storm losses (after tax) $ (2.64 ) $ (1.40 ) $ - $ (4.04 ) Dividends per share $ 0.77 Book value per share $ 27.86 Effective tax rate 79.0 % Annualized net loss as a percent of beg. SH equity (0.6 )%

Other Information of Interest:

Net written premiums $ 333,294,142 $ 96,493,350 $ - $ 429,787,492

Decrease in provision for insured events of prior years

$ (20,162,952 ) $ (12,936,231 ) $ - $ (33,099,183 ) Catastrophe and storm losses $ 52,447,963 $ 27,882,541 $ - $ 80,330,504

GAAP Combined Ratio:

Loss ratio 78.2 % 96.6 % - 82.4 % Expense ratio     36.0 %     21.5 %     -       32.7 %     114.2 %     118.1 %     -       115.1 %         CONSOLIDATED STATEMENTS OF INCOME     Property and Casualty Parent Year Ended December 31, 2010 Insurance   Reinsurance   Company   Consolidated

Revenues:

Premiums earned $   305,646,658 $   83,475,492 $   - $   389,122,150 Investment income, net 36,966,159 12,523,505 (449 ) 49,489,215 Other income     783,346       -       -       783,346       343,396,163       95,998,997       (449 )     439,394,711  

Losses and expenses:

Losses and settlement expenses 208,114,161 46,526,358 - 254,640,519 Dividends to policyholders 8,013,843 - - 8,013,843 Amortization of deferred policy acquisition costs 74,298,312 17,799,907 - 92,098,219 Other underwriting expenses 34,184,263 9,240,176 - 43,424,439 Interest expense 900,000 - - 900,000 Other expenses     753,014       (345,978 )     1,334,234       1,741,270       326,263,593       73,220,463       1,334,234       400,818,290   Operating income (loss) before income taxes     17,132,570       22,778,534       (1,334,683 )     38,576,421   Realized investment gains     3,078,289       790,514       -       3,868,803   Income (loss) before income taxes     20,210,859       23,569,048       (1,334,683 )     42,445,224  

Income tax expense (benefit):

Current 1,449,805 6,308,402 (467,139 ) 7,291,068 Deferred     3,212,310       595,523       -       3,807,833       4,662,115       6,903,925       (467,139 )     11,098,901   Net income (loss) $   15,548,744   $   16,665,123   $   (867,544 ) $   31,346,323   Average shares outstanding 13,038,263

Per Share Data:

Net income (loss) per share - basic and diluted $ 1.19 $ 1.28 $ (0.07 ) $ 2.40

Decrease in provision for insured events of prior years (after tax)

$ 1.43 $ 1.10 $ - $ 2.53 Catastrophe and storm losses (after tax) $ (1.65 ) $ (0.45 ) $ - $ (2.10 ) Dividends per share $ 0.73 Book value per share $ 28.52 Effective tax rate 26.1 % Annualized net income as a percent of beg. SH equity

 

9.2 %

Other Information of Interest:

Net written premiums $ 310,794,289 $ 84,054,820 $ - $ 394,849,109

Decrease in provision for insured events of prior years

$ (28,726,238 ) $ (22,022,632 ) $ - $ (50,748,870 ) Catastrophe and storm losses $ 33,062,100 $ 9,081,615 $ - $ 42,143,715

GAAP Combined Ratio:

Loss ratio 68.1 % 55.7 % - 65.4 % Expense ratio     38.1 %     32.4 %     -       36.9 %     106.2 %     88.1 %     -       102.3 %           CONSOLIDATED BALANCE SHEETS December 31, December 31, 2011 2010 ASSETS Investments: Fixed maturities: Securities held-to-maturity, at amortized cost (fair value $0 and $389,679) $   - $   340,803 Securities available-for-sale, at fair value (amortized cost $899,939,616 and $909,582,782) 958,203,576 941,537,026 Equity securities available-for-sale, at fair value (cost $90,866,131 and $75,721,039) 111,300,053 101,138,982 Other long-term investments, at cost 14,527 29,827 Short-term investments, at cost     42,628,926       36,616,111   Total investments 1,112,147,082 1,079,662,749   Cash 255,042 491,994 Reinsurance receivables due from affiliate 39,517,108 30,256,586 Prepaid reinsurance premiums due from affiliate 9,378,026 9,530,426 Deferred policy acquisition costs (all affiliated) 40,738,565 37,584,448 Prepaid pension benefits due from affiliate - 5,125,701 Accrued investment income 10,256,499 10,925,854 Accounts receivable 1,644,782 1,716,150 Income taxes recoverable 9,670,459 2,350,864 Deferred income taxes 3,249,821 6,690,218 Goodwill 941,586 941,586 Other assets (affiliated $2,584,111 and $2,433,445)     2,659,942       2,517,922   Total assets $   1,230,458,912   $   1,187,794,498     LIABILITIES

Losses and settlement expenses (affiliated $588,846,586 and $553,125,183)

$ 593,300,247 $ 556,140,956 Unearned premiums due to affiliate 180,689,377 167,896,119 Other policyholders' funds due to affiliate 5,061,160 8,315,751 Surplus notes payable to affiliate 25,000,000 25,000,000 Amounts due affiliate to settle inter-company transaction balances 21,033,627 18,380,813 Pension and postretirement benefits payable to affiliate 29,671,835 20,418,716 Other liabilities (affiliated $16,744,447 and $22,861,092)     16,934,321       23,001,141   Total liabilities     871,690,567       819,153,496     STOCKHOLDERS' EQUITY

Common stock, $1 par value, authorized 20,000,000 shares; issued and outstanding, 12,875,591 shares in 2011 and 12,927,678 shares in 2010

12,875,591 12,927,678 Additional paid-in capital 88,310,632 88,937,294 Accumulated other comprehensive income (loss):

Net unrealized losses on fixed maturity securities with "other-than-temporary" impairments

- (69,852 ) Other net unrealized gains 51,153,622 37,361,774 Unrecognized pension and postretirement benefits (all affiliated)     (23,813,112 )     (12,796,435 ) Total accumulated other comprehensive income     27,340,510       24,495,487   Retained earnings     230,241,612       242,280,543   Total stockholders' equity     358,768,345       368,641,002   Total liabilities and stockholders' equity $   1,230,458,912   $   1,187,794,498               INVESTMENTS  

The Company had total cash and invested assets with a carrying value of $1.1 billion as of December 31, 2011 and 2010. The following table summarizes the Company's cash and invested assets as of the dates indicated:

  December 31, 2011 Percent of Amortized Fair Total Carrying ($ in thousands) Cost Value Fair Value Value Fixed maturity securities available-for-sale $   899,940 $   958,204 86.1 % $   958,204 Equity securities available-for-sale 90,866 111,300 10.0 % 111,300 Cash 255 255 - 255 Short-term investments 42,629 42,629 3.9 % 42,629 Other long-term investments     14       14   -       14   $   1,033,704   $   1,112,402   100.0 % $   1,112,402     December 31, 2010 Percent of Amortized Fair Total Carrying ($ in thousands) Cost Value Fair Value Value Fixed maturity securities held-to-maturity $ 341 $ 390 - $ 341 Fixed maturity securities available-for-sale 909,583 941,537 87.2 % 941,537 Equity securities available-for-sale 75,721 101,139 9.4 % 101,139 Cash 492 492 - 492 Short-term investments 36,616 36,616 3.4 % 36,616 Other long-term investments     30       30   -       30   $   1,022,783   $   1,080,204   100.0 % $   1,080,155       NET WRITTEN PREMIUMS     Three Months Ended     Year Ended December 31, 2011 December 31, 2011   Percent of   Percent of Increase/ Increase/ Percent of (Decrease) in Percent of (Decrease) in Net Written Net Written Net Written Net Written Premiums Premiums Premiums Premiums Property and Casualty Insurance Commercial Lines: Automobile 15.3 % 10.7 % 16.2 % 5.8 % Liability 13.5 % 15.1 % 14.6 % 8.4 % Property 15.3 % 10.8 % 16.8 % 7.9 % Workers' Compensation 12.9 % 9.6 % 16.5 % 9.5 % Other 1.6   % (2.9 ) % 1.8   % (5.5 ) % Total Commercial Lines 58.6   % 11.0 % 65.9   % 7.5 %   Personal Lines: Automobile 7.1 % 4.2 % 6.6 % (1.4 ) % Property 5.3 % 5.8 % 5.1 % 17.4 % Liability 0.1   % 14.7 % 0.1   % 7.4 % Total Personal Lines 12.5   % 5.0 % 11.8   % 6.0 % Total Property and Casualty Insurance 71.1   % 9.9 % 77.7   % 7.2 %   Reinsurance (1) 28.9   % 13.2 % 22.3   % 13.7 % Total 100.0   % 10.8 % 100.0   % 8.6 %   (1) Excludes $920,597 positive portfolio adjustment related to the January 1, 2011 increased participation in the MRB pool.