Wednesday, EMC Insurance Group Inc. (EMCI) raised its opearting income outlook for fiscal year 2009 and provided guidance for fiscal year 2010. The company also revised its quota share reinsurance agreement for 2010.
The Des Moines, Iowa-based company increased its full year 2009 operating income estimate in the range of $2.50 to $2.60 per share, on a projected GAAP combined ratio of 100.2% from the prior guidance of $1.80 to $2.50 per share, on a projected GAAP combined ratio of 103.5% for the year.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $2.40 per share for the full year. Analysts' estimates typically exclude one-time items.
For the fiscal 2010, the company expects operating income in a range of $1.90 to $2.15 per share, on a projected GAAP combined ratio of 103.7%. Analysts currently expect earnings of $1.58 per share for fiscal year 2010.
EMC Insurance also revised the terms of the quota share reinsurance agreement for 2010 between its reinsurance subsidiary, EMC Reinsurance Co., and its parent firm Employers Mutual Casualty Co., approved at a joint meeting of the Inter-Company Committees of the boards of directors of the company and Employers Mutual on January 28. Effective January 1, 2010, the reinsurance subsidiary's retention, or cap, on losses assumed per event increased from $2.0 million to $3.0 million.
EMCI is currently trading at $20.77, up $0.52 or 2.57% on a volume of 36,055 shares on the NYSE.
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