Business Model for Property and Casualty Insurance Segment

EMC writes both commercial and personal lines of property and casualty insurance, with a focus on small and medium-sized commercial accounts. Products and services are offered exclusively through a network of approximately 2,160 independent insurance agency relationships who are supported by 16 local branch offices. This business accounted for approximately 78% of EMCI’s premiums earned in 2017.


Reinsurance Pooling Agreement With EMCC – 30% Participation

Reinsurance Pooling Agreement With EMCC – 30% Participation

Reinsurance Pooling Agreement With EMCC – 30% Participation

Reinsurance Pooling Agreement With EMCC – 30% Participation

EMCI Benefits From Participation in the Pooling Agreement

EMCI's three property and casualty insurance subsidiaries (EMCASCO, Illinois EMCASCO and Dakota Fire) and two subsidiaries of EMCC (Union Insurance Company of Providence and EMC Property & Casualty Company) are parties to reinsurance pooling agreements with EMCC (collectively the pooling agreement). The purpose of the pooling agreement is to spread the risk of an exposure insured by any of the pool participants among all of the companies. Benefits to EMCI’s property and casualty insurance subsidiaries include the following:

  • The ability to produce a more uniform and stable underwriting result from year to year than might be experienced individually, by spreading the risks over a wide range of geographic locations, lines of insurance written, rate filings, commission plans and policy forms.
  • The ability to benefit from the capacity of the entire pool (representing ~$1.7 billion in premiums earned in 2017 and ~$1.5 billion in statutory surplus as of December 31, 2017) rather than being limited to policy exposures of a size commensurate with each participant’s own surplus level.
  • The achievement of an A (Excellent) rating from A.M. Best Company on a “group” basis.
  • The ability to take advantage of a significant distribution network of independent agencies that the participants most likely could not access on an individual basis.
  • The ability to negotiate and purchase reinsurance from third-party reinsurers on a combined basis, thereby achieving larger retentions and better pricing.
  • The ability to achieve and benefit from economies of scale in operations.

Diversified Book of Business

Value of Local Market Presence

A strength that sets EMC apart from other insurance companies is the local service provided through our 16 local branch offices and 4 service offices located across the country. Our unique branch office structure puts us in close proximity to our customers and agents so that we can provide exemplary local service in underwriting, claims, marketing and risk improvement. Agents and policyholders can communicate directly with an EMC representative who understands their local insurance needs and who has the authority to make decisions.

Value of Local Market Presence

Intercompany Reinsurance Program

An intercompany reinsurance program, consisting of two semi-annual aggregate catastrophe excess of loss treaties, is in place between EMCI’s three property and casualty insurance subsidiaries and Employers Mutual. This program is intended to reduce the volatility of the company’s quarterly results caused by excessive catastrophe and storm losses.

The terms and structure were developed internally. Their effectiveness was evaluated using our actuarial models to analyze the relevant data across the entire organization. Approval by the Intercompany Committees of the Boards of Directors of EMCI and EMCC is required to ensure that the terms of the agreements are fair and equitable to both parties. In addition, the program must be approved by regulatory authorities before it becomes effective.


Property and Casualty Insurance Segment Catastrophe Treaties Between EMCI and EMCC

Property and Casualty Insurance Segment Catastrophe Treaties Between EMCI and EMCC Property and Casualty Insurance Segment Catastrophe Treaties Between EMCI and EMCC
EMC Insurance Companies
717 Mulberry Street | P.O. Box 712 |
Des Moines, Iowa 50306-0712

800-447-2295