TEXT-S&P affirms Employers Mutual Casualty 'BBBpi' rtgs

Fri Sep 7, 2012 12:27pm EDT

Sept 7 - Rating Action
On Aug. 31, 2012, Standard & Poor's Ratings Services affirmed its 'BBBpi' 
counterparty credit and financial strength ratings on Employers Mutual 
Casualty Co. and related pool members (see list below), and its reinsurance 
subsidiary, EMC Reinsurance Co. The companies are members of EMC Insurance 
Cos. Group and, with the exception of EMC Reinsurance, participate in an 
interaffiliate pooling agreement, so we rate them as a group.

Rationale
The ratings reflect the pooling members' and EMC Reinsurance's strong 
capitalization and well-diversified business mix. Underwriting results that 
are susceptible to severe weather events and catastrophes partially offset 
these positive factors. The group's underwriting results have varied in recent 
years as evidenced by a combined ratio that has ranged from 98% in 2007 to 
116% in 2011. The group reported a five-year (2007-2011) average combined 
ratio and return on revenue of 106% and 5%, respectively. The group's 
liquidity position is an added rating constraint.

Employers Mutual has 62% of the interaffiliate pooling agreement, EMCASCO 
Insurance Co. has 13.5%, Illinois EMCASCO Insurance Co. has 10%, Dakota Fire 
Insurance Co. has 6.5%, Hamilton Mutual Insurance Co. has 2%, EMC Property & 
Casualty Insurance Co. has 3.5%, and Union Insurance Co. of Providence has 
2.5%.

The group is one of the largest multiple-line property/casualty mutual 
insurance entities in Iowa and was organized in 1911. The group is based in 
Des Moines, Iowa, and had net premiums written of more than $1.2 billion in 
2011. It provides products and services throughout the U.S. and is licensed in 
all 50 states and the District of Columbia. The group's major lines of 
business are auto liability, workers' compensation, and other liability 
insurance.

Related Criteria And Research
Ratings Bearing A "pi" Subscript: Methodology And Assumptions, Feb. 9, 2011

Ratings List
Ratings Affirmed

Employers Mutual Casualty Co. (Unsolicited Ratings)
Union Insurance Co. of Providence (Unsolicited Ratings)
Illinois Emcasco Insurance Co. (Unsolicited Ratings)
Hamilton Mutual Insurance Co. of Cincinnati (Unsolicited Ratings)
Emcasco Insurance Co. (Unsolicited Ratings)
EMC Reinsurance Co. (Unsolicited Ratings)
EMC Property & Casualty Insurance Co. (Unsolicited Ratings)
Dakota Fire Insurance Co. (Unsolicited Ratings)
 Counterparty Credit Rating
  Local Currency                        BBBpi/--/--
 Financial Strength Rating
  Local Currency                        BBBpi/--/--



This unsolicited rating(s) was initiated by Standard & Poor's. It may be based 
solely on publicly available information and may or may not involve the 
participation of the issuer. Standard & Poor's has used information from 
sources believed to be reliable based on standards established in our Credit 
Ratings Information and Data Policy but does not guarantee the accuracy, 
adequacy, or completeness of any information used.

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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