Net income, including realized investment gains and losses, totaled $6,967,000 ($0.53 per share) for the second quarter of 2009 compared to a net loss of $940,000 ($0.07 per share) for the second quarter of 2008. For the six-month period ended June 30, 2009, net income was $12,771,000 ($0.96 per share) compared to $7,279,000 ($0.53 per share) for the same period in 2008.

"Through the first six months of 2009 our operating results are pretty much in line with our expectations," stated Bruce G. Kelley, President and Chief Executive Officer. "Premium rates continue to show some signs of stabilization and storm losses, while slightly higher than our 10-year average, are significantly lower than the record amount experienced in 2008. We continue to review and adjust our branch operations to keep current with changing market conditions and to maximize our earnings potential; however, we do not anticipate any major changes to our operating plan during the remainder of the year."

Premiums earned decreased 0.5 percent to $96,098,000 for the three months ended June 30, 2009 from $96,618,000 for the same period in 2008. For the six months ended June 30, 2009, premiums earned decreased 1.6 percent to $188,553,000 from $191,595,000 for the same period in 2008.

Investment income decreased 6.9 percent to $11,173,000 for the second quarter of 2009 from $11,999,000 for the same period in 2008. For the six-month period ended June 30, 2009, net investment income decreased 2.0 percent to $23,450,000 from $23,940,000 for the same period in 2008. This decrease in investment income is attributed to a high level of call activity that occurred on the Company's U.S. Government Agency securities during the first quarter of 2009 as a result of the low interest rate environment, a decline in yield on short-term investments and the elimination of dividends on the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) preferred stocks in 2008. The proceeds from the called securities are being invested in short-term securities until attractive long-term opportunities can be identified.

"Other-than-temporary" investment impairment losses declined to $759,000 in the second quarter of 2009 from $1,695,000 for the same period in 2008. For the first six months of 2009, "other-than-temporary" investment impairment losses totaled $9,117,000, compared to $4,597,000 for the same period in 2008.

Catastrophe and storm losses totaled $9,065,000 ($0.45 per share after tax) in the second quarter of 2009 compared to a record $23,518,000 ($1.12 per share after tax) in the second quarter of 2008. For the first six months of 2009, catastrophe and storm losses totaled $12,777,000 ($0.63 per share after tax) compared to $29,248,000 ($1.39 per share after tax) for the same period in 2008. Catastrophe and storm losses accounted for 6.8 percentage points of the combined ratio for the first six months of 2009, which is slightly higher than the 10-year average of 6.5 percentage points.

Large losses, which the Company defines as losses greater than $250,000, excluding catastrophe and storm losses, increased to $7,356,000 ($0.36 per share after taxes) in the second quarter of 2009 from $6,330,000 ($0.30 per share after taxes) for the same period in 2008. For the first six months of 2009, large losses totaled $15,370,000 ($0.75 per share after taxes), compared to $12,336,000 ($0.58 per share after taxes) for the same period in 2008.

The Company's GAAP combined ratio was 102.9 percent in the second quarter of 2009 compared to 116.0 percent in the second quarter of 2008. For the six month period ended June 30, 2009, the Company's GAAP combined ratio was 99.5 percent compared to 106.6 percent for the same period in 2008.

At June 30, 2009, consolidated assets totaled $1.1 billion, including $1.0 billion in the investment portfolio; stockholders' equity increased 8.6 percent to $307.3 million; and the net book value of the Company's stock was $23.22 per share, an increase of 8.9 percent from $21.32 per share at December 31, 2008.

Based on actual results for the first six months of 2009 and management's expectations for the remainder of the year, management is increasing its 2009 operating income guidance from the previous range of $1.45 to $1.70 per share to a revised range of $1.80 to $2.05 per share. The revised range is based on a projected GAAP combined ratio of 103.5 percent for the year.

As of June 30, 2009, 601,119 shares of the Company's common stock have been purchased under the Company's $25 million stock repurchase program at a cost of approximately $15.0 million. The timing and terms of the purchases are determined by management based on market conditions, and the transactions are conducted in accordance with the applicable rules of the SEC. Common stock purchased under this program is being retired by the Company. The Company's parent organization, Employers Mutual Casualty Company, has a stock purchase program in place as well, with about $4.5 million of its $15 million authorization remaining. This program is currently dormant and will not be reactivated until the Company's repurchase program is completed.

The Company will hold an earnings teleconference call at 11:00 a.m. eastern daylight time on July 23, 2009 to allow securities analysts, stockholders and other interested parties the opportunity to hear management discuss the Company's results for the first six months of 2009, as well as its expectations for the remainder of the year. Dial-in information for the call is toll-free 1-877-407-8031 (International: 1-201-689-8031). The event will be archived and available for digital replay through August 6, 2009. The replay access information is toll-free 1-877-660-6853 (International: 1-201-612-7415); passcodes required for playback: account number 286, conference ID number 327390.

Members of the news media, investors and the general public are invited to access a live webcast of the conference call via http://www.investorcalendar.com or the Company's investor relations page at www.emcins.com/ir. The webcast will be archived and available for replay until July 23, 2010. A transcript of the teleconference will also be available on the Company's website shortly after the completion of the teleconference.

EMC Insurance Group Inc., the publicly-held insurance holding company of EMC Insurance Companies, owns subsidiaries with operations in property and casualty insurance and reinsurance. EMC Insurance Companies is one of the largest property and casualty entities in Iowa and among the top 60 insurance entities nationwide based on premium volume. For more information, visit our website www.emcinsurance.com.

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" 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 U.S. GAAP financial measure of net income. Therefore, the Company has provided the following reconciliation of this non-GAAP financial measure to the U.S. GAAP financial measure of net income. Management also uses non-GAAP financial measures for goal setting, determining employee and senior management awards and compensation, and evaluating performance.