EMC Insurance 8K Regulation FD Disclosure | EMCI 27 Sep 10

September 27,

Legal Disclaimer

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.

Bruce G. Kelley

President &

Chief Executive Officer

Company Overview

• Regional Property and Casualty Insurer; Headquartered in Des Moines, IA

– Midwestern focus

• Long History

– 1911 parent company formed (Employers Mutual Casualty Company (EMCC))

– 1982 IPO (net proceeds: $2,516,665)

– 1985 follow-on offering (net proceeds: $21,416,014)

– 2004 follow-on offering (net proceeds: $34,890,000)

• Property and Casualty Insurance Segment

– 30% participation in EMCC pool

– Benefit from capacity of the entire pool

– Diversified writings (86% commercial / 14% personal)

– Represents approximately 80% of total written premium in 2009

• Reinsurance Segment

– 100% Quota Share Agreement with EMCC

– Losses capped at $3.0 million per event (effective January 1, 2010), at a cost of 10.5% of written
premiums

– German contracts written outside the Quota Share Agreement with EMCC (approx. $5 million in
written premium)

– EMCC has been assuming reinsurance business since 1951

– Represents approximately 20% of total written premium in 2009

COMPANY OVERVIEW

Corporate Structure

COMPANY OVERVIEW

*As of June 30, 2010

EMC Insurance

Group Inc.

Employers Mutual

Casualty Company

Public Shareholders

60%*

40%*

Property and Casualty

Insurance Segment

Reinsurance Segment

(100% of Employers Mutual’s

Assumed Reinsurance Business -

Some direct writings beginning

In 2009)

Pooling Mechanism

- Cede 100% of direct

business to inter-company

pool

- Receive 30% of the

pooled underwriting

results

In May 2005, EMCC’s Board

Authorized a $15 million stock

purchase program, which is

70% complete.

Currently, $25 million stock

repurchase program authorized.

As of 9-21-10, $23.0 million

has been used to repurchase

974,633 shares.

Average Years w/ EMC: 23 years

Average Years in Industry: 29 years

Experienced Management Team

COMPANY OVERVIEW

Benefits of the Pooling Agreement

• Spread risk over a wide range of geographic locations, lines of insurance
written, rate filings, commission plans and policy forms

• Benefit from capacity of the entire pool: $1.1 billion in direct premiums
written in 2009 and $1.0 billion of statutory surplus as of 6/30/10

• The achievement of an “A-” (Excellent) rating from A.M. Best with
positive outlook

• Network of 2,300 insurance agencies in 41 state distribution network

• Merger and acquisition flexibility

• Economies of scale in operations and purchase of reinsurance

COMPANY OVERVIEW

Note: Percentages are
Direct Written Premium
in 2009

5.5%

4.4%

6.3%

3.4%

5.7%

15.9%

6.2%

4.7%

3.4%

8.2%

3.1%

3.5%

3.3%

6.3%

3.5%

Midwestern Focus

Local Market Presence

• 16 branch offices and 5 service offices

• Decentralized: each branch office performs its own marketing,
underwriting, risk management and claims functions

• Higher expenses, but this local presence allows us to enhance
relationships with agents and customers

• Structure allows us to develop products, develop marketing,
and develop pricing targeted to individual territories

COMPANY OVERVIEW

Diversified Book of Business

COMPANY OVERVIEW

2009 Net Premiums
Earned - Total

2009 Net Premiums

Earned - P&C only

$384.0 million

Note: P&C breakdown represents business produced by pool participants.

Commercial Lines Business

COMPANY OVERVIEW

COUNTRY-WIDE COMMERCIAL LINES WRITTEN PREMIUM

(Program business constitutes 40.5% of commercial lines written premium)

Program	Written Premium Increase	Ratio of Incurred Losses to Earned Premiums	Program Details
EMC Choice	8.5%	61.0%	(13 select business coverages, including auto services, boat dealers, artisan contractors, equipment dealers, financial institutions, metal manufacturers, motels, hospitals, dry cleaners, wholesalers, printers, auto repair, and religious institutions - local agents take the lead)
Target Markets	5.9%	67.4%	(schools, municipalities, auto/rv dealers, telecommunications, local towing, milk haulers, petroleum dealers, water/sanitation distribution, manufactured housing - branch specific)
Safety Groups	1.8%	47.5%	(target markets offering dividends)

Note: As of June 30, 2010

12/31/1995

12/31/2009

Split of Business

International business is 5.5% Property XS; 7.0% Property Pro Rata

EMC Reinsurance

COMPANY OVERVIEW

Premiums Earned

COMPANY OVERVIEW

Annual Growth 8.7% 9.6% 14.6% 11.9% 11.3% 4.5% 20.3% -5.8% 0.4% -1.0% -1.4% 0.7%

1Reflects increase in participation percentage in the inter-
company pool

2Reflects reduction in MRB premiums and revised terms of
quota share agreement for the reinsurance segment

Projected

$ in millions

Jason R. Bogart

Vice President -

Branch Operations

EMC Agency Relations

AGENCY RELATIONS

Our mission is to create stockholder value through
customer satisfaction and employee commitment to
excellence, and is designed to directly coincide
with our parent organization’s mission - to grow
profitably through partnership with independent
insurance agents and to enhance the ability of our
partners to deliver quality financial protection to
the people and businesses we mutually serve.

Benefits of Doing Business with EMC

AGENCY RELATIONS

EMC is represented
through local
independent insurance
agents and is committed
to the independent
agency system. We
believe independent
agents bring a superior
level of personalized
service to our insurance
customers.

Local Service

AGENCY RELATIONS

Our strategically located
branch offices provide local
service in the areas of
underwriting, claims,
marketing and loss control,
and our local market presence
allows us to meet the needs of
each unique territory.

Local Service

EMC Territories & Independent Agents

AGENCY RELATIONS

EMC Agency Relations

• 17.2% of EMC’s 2,300 member agency force consists of Premier
and Leading Partner agencies

― These Premier and Leading Partner agencies produced over 38% of the
pool’s new business volume in 2009

• EMC continues to seek out and appoint top-quality agents

― More than 150 new agencies joined EMC Insurance Companies in 2009 and
118 new agencies have been added in 2010.

• Some of which are located in the northwestern region where expansion initiatives are
being accomplished through our branch office structure.

AGENCY RELATIONS

Time-Saving Technology

AGENCY RELATIONS

EMC strives to provide exceptional service and efficient online services,

and is also a leader in real-time and download technology.

Quick, Efficient Business

Our secure, online environment for agents lets them conduct business quickly and efficiently,
from submitting an online quote to reporting claims to viewing past due account reports.

AGENCY RELATIONS

Agency Testimonials

AGENCY RELATIONS

A Winning Website

“I can tell you, as insurance websites go, yours in one of the nicest I have ever had the pleasure to work with.
You’ve definitely got a winner here. From an administrative point of view, it is awesome. Very easy to figure
out, even when I logged in the first time. Everything was very logical, clearly accessible and it made sense! I
work with over a hundred insurance websites and I only wish I could send your website design people to visit a
lot of them and show them how a great website should work.

The ease with which I was able to add the different roles to our employees was truly appreciated. From large
commercial to small business, to risk management, to claims, to accounting, each role was spelled out clearly
and, again, it made sense. I can already see that our producers are going to have no problems working with
your site, as I noticed several very handy tools to assist them. Our claims and accounting people are going to
appreciate the parts of your website that allow them to do their jobs with less work on their parts.

Thanks you very much for providing us with a clean and extremely efficient website to use. We are looking
forward to doing a lot of business with your company.”

Rosanna I, Krenn

Web Portal & Online Administration

Henderson Brothers, Inc.

Pittsburgh, Pennsylvania

Agency Testimonials

AGENCY RELATIONS

Ease and Efficiency

“The new EMC site is a perfect example of what we expect from the companies we represent - a comprehensive
and easy-to-navigate experience for our agency and customers.

What impresses us most about the new EMC site is its maneuverability. It’s easy for us to get to the
information we need - marketing manuals, policy snapshots complete with endorsements and forms, and loss
control information. The online training and certification is something we have been looking to proved to
customers, and we are happy to direct them to emcins.com for this valuable service.

We may not access company sites on a daily basis and often times, when we return to those sites, it’s difficult
for us to remember how to navigate them. This will not be the case with emcins.com. It’s clean, simple to
understand and will be a welcome asset to improving the efficiency of our agency.”

Amy W. Smith, CPCU, CIC, AU

Vice President

Ross & Yerger Insurance, Inc.

Jackson, Mississippi

Agency Testimonials

AGENCY RELATIONS

Design and Function

“We use our agency website to market the resources of Van Wyk Corporation, but we depend on our carriers’
sites to help us service that business. The new EMC website will be of tremendous value in responding to our
customers’ needs.

Go to emcins.com and you’ll see what I mean:

•The clean look of the home page makes it simple to quickly locate the information you need

•The choice of soothing colors makes this site easy on your eyes

•Go from page to page and you’ll soon realize how effortlessly you can navigate through the new site

From design to functionality, EMC has done an outstanding job of streamlining every aspect of the website,
which streamlines our agency’s ability to serve our EMC policyholders.”

Max Van Wyk

Chief Executive Officer

Van Wyk Corporation

Grand Rapids, Michigan

Loss Control Services

AGENCY RELATIONS

EMC offers a wide range of

loss control services

to protect our commercial
customers from losses,
including an online training
system, loss prevention
information, industry
specific resources and
safety tools and resources.

Online Training

AGENCY RELATIONS

EMC’s online training
system allows managers to
administer training at their
convenience and track
employee progress.

Experienced Staff

AGENCY RELATIONS

EMC’s high employee retention rate and dedication
to professional development and continuing
education for employees means our customers can
count on a highly experienced staff.

Kelvin B. Sederburg

Actuarial Perspective: Loss/LAE Reserves

• Reserving Philosophy

• Loss Reserving Methodology

• Reserve Adequacy

• EMCI vs. Industry Loss Development

• Composition of Accident Year Reserves

• Distribution of Bulk IBNR Reserves

ACTUARIAL REVIEW

Reserving Philosophy

Consistency of Focus and Execution

Focus:

• Consistent Level of Overall Reserve Adequacy

Execution:

• Consistent approach to reserving reported claims

• Consistent actuarial evaluations of reserve adequacy

• Consistent allocation of Bulk Reserves to Accident
Quarter

ACTUARIAL REVIEW

Loss Reserving Methodology - Direct

ACTUARIAL REVIEW

1. Claims department establishes individual case reserves.

2. Overall bulk reserve level established on basis of
actuarial reserve evaluations.

3. Bulk reserves allocated to accident years on basis of
consistent methodology.

4. Allocated accident year bulk reserves added to accident
year individual case reserves.

5. Accident year reserve levels are NOT determined by
“explicit” or “targeted” accident year “loss picks”.

Loss and LAE Reserve Adequacy

ACTUARIAL REVIEW

Development of Accident Year Reserves
through 12/31/20091

Standard Deviation

EMC Group Inc: 11.2%

Industry Peers2: 19.9%

1 1998 & 1999 Development as of 12/31/2007

2 A M Best Commercial Casualty Composite

ACTUARIAL REVIEW

Average Developed Adequacy

EMC Group Inc: +8.0%

Industry Peers2 : -4.4%

Accident Year Direct Loss Reserves

ACTUARIAL REVIEW

Direct IBNR Loss Reserves

Distribution by Accident Year @ 12/31/2009

ACTUARIAL REVIEW

Reserves

ACTUARIAL REVIEW

Indicated Reserve Adequacy

($ in millions)

ACTUARIAL REVIEW

Scott R. Jean

Vice President -

Chief Actuary

ACTUARIAL REVIEW

Best’s Capital Adequacy Ratio

Source: A. M. Best

Adjusted Policyholder Surplus

Net Required Capital

ACTUARIAL REVIEW

Best’s Capital Adequacy Ratio

EMC BCAR: 67th Percentile of A Rated
Companies

Includes Group or un-affiliated singles with >$250,000 of premium and a BCAR between 100 and 998

EMC BCAR: 78th Percentile of A- Rated
Companies

Market Barometer
6/30/2010

ACTUARIAL REVIEW

Source: MarketScout

ACTUARIAL REVIEW

Countrywide Cumulative Rate Changes

*Projected

June 2010 vs. June 2009

Business Owners

Commercial Property

Workers’ Compensation

General Liability

Commercial Auto

Home Owners

Personal Auto

+2.5%

+2.0%

-1.4%

-2.6%

-0.8%

0.0%

Estimated Changes in Rate Levels on P&C
Insurance Policies

ACTUARIAL REVIEW

Sources for Industry Data: Market Scout and Conning

P&C Insurance Segment Written Premiums

FINANCIAL REVIEW

Note: Direct business only; excludes assumed
and ceded premiums.

New premium year over year: 4% increase

ACTUARIAL REVIEW

Loss Trends

ACTUARIAL REVIEW

Loss Trends

ACTUARIAL REVIEW

Storm Prediction Center
Severe Storms

ACTUARIAL REVIEW

Storm Prediction Center
EMC Premium Weighted Storms

Source: Storm Prediction Center and SNL Financial

Storm counts by individual state were weighted with
EMC state level property premium to arrive at the
EMC Premium Weighted Storm counts displayed on
this slide.

ACTUARIAL REVIEW

Storm Prediction Center
EMC Premium Weighted Storms
5 Year Trends

Source: Storm Prediction Center and SNL Financial

Storm counts by individual state were weighted with
EMC state level property premium to arrive at the
EMC Premium Weighted Storm counts displayed on
this slide.

Lisa A. Stange

Vice President - Investments
& Treasurer

INVESTMENTS

Invested Assets of $1.1 Billion

EQUITIES

Focus on lower volatility/ more
downside protection

5 yr avg portfolio ROR = -0.51%

5 yr avg S&P 500 ROR = -0.79%

BONDS & CASH

Effective Duration 5.6 yrs.

Yield of 5.12%

Avg Quality AA

As of 6/30/2010

Investment Portfolio

As of June 30, 2010

Fair Values

($ in thousands)

INVESTMENTS

Investment Income

$ in thousands

* Change in Pool Participation effective 1/1/2005

Projected

INVESTMENTS

Bond Quality vs. Industry - 12/31/2009
NAIC Ratings

*Source: SNL; 12/31/2009 data is most
recent available for industry

Bond Quality*
as of June 30, 2010

INVESTMENTS

Equity Portfolio

As of June 30, 2010

Mark E. Reese

Senior Vice President &

Chief Financial Officer

Catastrophe and Storm Losses - $20.0 million ($14.9 million in 2009)

• $0.99 per share after tax ($0.73 per share after tax in 2009)

Large Losses - $7.0 million ($7.5 million in 2009)

• $0.35 per share after tax ($0.37 per share after tax in second quarter 2009)

Realized Investment Losses/Gains - $0.3 million ($7.7 million in 2009)

• $0.02 per share after tax ($0.38 per share after tax in 2009)

Investment Impairment Losses - $1.9 million ($9.1 million in 2009)

• $0.10 per share after tax ($0.45 per share after tax in 2009)

Premiums Earned - $188.8 million ($188.6 million in 2009)

GAAP Combined Ratio - 103.3 percent (99.5 percent in 2009)

Net Operating Income - $1.02 per share ($1.34 per share in 2009)

Net Income - $1.00 per share ($0.96 per share in 2009)

Book Value - $27.62 per share ($23.22 at June 30, 2009)

First Six Months of 2010 - At a Glance

SHAREHOLDER VALUE

Selected Financial Results

Source: Bloomberg

The Company has paid 115 consecutive quarterly dividends
since the Company’s inception in 1982; current quarterly
dividend is $0.18 per share.

Peer Comparison of
Returns to Shareholders

SHAREHOLDER VALUE

Book Value Per Share

SHAREHOLDER VALUE

* 10/20/2004 follow-on stock offering resulted in an increase of 2,000,000 shares of common
stock and an increase in additional paid-in capital of $32,890,058.

Annual Growth 4.3% -5.6% 11.6% 13.6% 7.1% 14.0% 16.9% 16.5% -18.4% 22.5%

June

Retention Ratios

NOTE: At 06/30/2010, Commercial Lines
retention, excluding bonds, was 86% and
Personal Lines retention was 84.4%.

FINANCIAL REVIEW

GAAP Combined Ratios

*Note: As of June 30, 2010

FINANCIAL REVIEW

Total

Combined Ratio

115.2% 113.5% 112.4% 101.3% 99.8% 104. 2% 94.7% 92.8% 96.8% 109.1% 100.3% 103.3%

COMPANY OVERVIEW

Source: Company statutory filings and A.M. Best.

EMC Insurance Group has outperformed the property and casualty insurance industry
annually on a statutory basis by an average of 4.1 percentage points since 1990.

Total Loss Ratio includes Loss Ratio and LAE Ratio

Reserve Strengthening

Heavy Midwest storms

Hurricane Andrew

Average 4.1%

Record Midwest Storms

Significantly Lower Total Statutory Loss Ratio

FINANCIAL REVIEW

Net Income (Loss) Per Share

* Other-than-temporary impairments (OTTI) were not reportable before 2002

June

FINANCIAL REVIEW

June

EMCI Historical Results/Returns

SHAREHOLDER VALUE

8.3%

Net ROE -0.5 % 1.6% -1.5% 10.8% 12.0% 6.4% 17.5% 18.8% 12.7% -0.5% 14.5% 7.5%

*Annualized as of June 30, 2010

Op ROE -0.6 % 0.9% -1.8% 12.2% 11.6% 5.1% 16.5% 17.8% 12.0% 4.4% 10.8% 7.6%

NOTE: Net ROE equals net income for the periods presented divided by average stockholders’
equity for the year-to-date period, and the return in annualized if necessary.; Operating ROE
substitutes operating income for net income in the calculation.

Note: Average cat & storm losses as a percent of earned premium for the
period 1999-2009 was 6.6%. Excluding the excess cat & storm losses
incurred in 2008, 2009 and 2010, the results and returns are as follows:

EMCI Historical Results/Returns

SHAREHOLDER VALUE

8.3%

Net ROE -0.5% 14.5% 7.5%*

10.1%

Net ROE 4.8% 15.3% 10.2%*

*Annualized as of June 30, 2010

8.9%

Op ROE 4.4% 10.8% 7.6%*

Op ROE 9.6% 11.7% 10.3%*

Selected Balance Sheet Amounts

FINANCIAL REVIEW

Balance Sheet
June 30, 2010

• Investments

– $1.1 billion invested assets

– 86.6% fixed maturity securities (based on amortized cost)

• 98.6% investment grade

• Effective duration : 5.60 years

• Annualized yield on bond portfolio and cash: 5.12%

– 5-yr average total rate of return on equity portfolio: - 0.51%

• 5-yr average S&P 500 total rate of return: - 0.79%

• Loss and Settlement Expense Reserves

– Quarterly internal actuarial reviews

– Any necessary adjustments are made on a timely basis

• Debt

– Only debt is $25 million of surplus notes issued by the property and casualty insurance
subsidiaries to Employers Mutual - annual interest rate of 3.60%

FINANCIAL REVIEW

2010 Guidance

FINANCIAL REVIEW

Operating Income of $1.65 to $1.90 per share

Investment Highlights

• Access to a large capital base and a diversified book
of business through participation in the EMCC pool

• Regional, decentralized operating structure (Midwest focus)

• Proven ability to deliver attractive returns to shareholders:

– Compound annual total shareholder return of
13.2% over the past ten years and 10.0% over the past twenty years*

– Dividend yield of 3.29 percent as of 6/30/2010

• Conservative balance sheet

• Experienced senior management team

FINANCIAL REVIEW

* Source: Bloomberg

Thank You!

EMC Insurance (EMCI) Inactive 8-KRegulation FD Disclosure