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Employers Direct Announces Second Quarter 2006 Results

Agoura Hills, CA – August 31, 2006 – Employers Direct Insurance Company, California’s only specialty direct writer of workers’ compensation insurance, today announced its second quarter 2006 financial results.

“Our second quarter results are encouraging because we sustained both net income and growth of in-force premiums during the period despite rate reductions over the past year of 31%. We attribute the results to stronger-than-planned new policy sales and a continued high policy persistency ratio,” stated James E. Little, Chairman/President & CEO of Employers Direct Insurance Company.

With California workers’ comp premiums now cut in half, the compensation impact on independent agents and brokers is significant. Many of them have announced cut backs on important policyholder services, such as, loss control and claims consulting. “But we see this environment as a unique opportunity to partner more closely with our policyholders and are strengthening every level of our customer-focused services rather than cutting back,” Little added.

The second quarter 2006 Statutory Report, as filed with the California Department of Insurance, posted the following highlights:

  • Employers Direct ended the quarter with a statutory surplus of $76.7 million, an increase of $6.4 million (9%) from year-end 2005
  • Employers Direct’s statutory combined ratio for the quarter ended June 30, 2006, was 86.9% with an expense ratio of 18.6% – this resulted in net income of $4.6 million for the quarter ended June 30, 2006
  • Employers Direct had net premiums written of $36.3 million written for the quarter ended June 30, 2006 – about equal to the $36.9 million for the quarter ended June 30, 2005.

About EMPLOYERS DIRECT INSURANCE COMPANY
Employers Direct Insurance Company is California's only specialty direct writer of workers' compensation insurance. Founded in 2002, Employers Direct has been widely accepted by business owners throughout California as a result of providing highly competitive rates, claims services designed to fight fraud and abuse, and loss prevention services that assist employers to create safe work environments. As a newer company, Employers Direct is unburdened by legacy systems and takes advantage of the latest technology to provide its customers with 24/7 access to all policy and claims information via a secure Internet portal. Employers Direct is proud that a growing number of California’s best-run privately-held companies count themselves as policyholders. Niche industries include hotels, restaurants, golf and country clubs, new car dealers, food processors, manufacturing companies, specialty supermarket chains, and retailers. At the end of 2005, Employers Direct Insurance Company had more than $150 million in written workers' compensation premiums. Visit Employers Direct online at www.employersdirect.com.

CONTACT:
Employers Direct Insurance Company
Debbie Laskey
Tel: 818.575.2709
dlaskey@employersdirect.com