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Employers Direct Announces Third Quarter 2006 Financial Results

AGOURA HILLS, CA - November 28, 2006 - Employers Direct Corporation, parent of Employers Direct Insurance Company, California's only specialty direct writer of workers' compensation insurance, today announced net income soared in its third quarter to over $21.6 million from $5 million reported in the same period last year.

"During the third quarter, our actuarial review of prior period loss reserves revealed remarkable improvement, and we adjusted our claim loss liabilities accordingly. A major milestone was achieved during the third quarter as our shareholder equity passed the $100 million mark. Total revenues were $34.1 million for the third quarter of 2006 compared to total revenues of $43 million for the same period last year, a direct result of the decrease in California workers' compensation rates approved by the Department of Insurance during 2006 totaling more than 30%," explained James E. Little, Chairman/President & CEO of Employers Direct.

Other highlights from third quarter financial statements include:
  • Net income for the first nine months of 2006 of $30.5 million compared to $18.2 million for the same period in 2005
  • Net income of $21.6 million for the third quarter of 2006, compared to $5 million for the third quarter of 2005  
  • Shareholders equity of $115.1 million at September 30, 2006, an increase of 36.5% from December 31, 2005 
  • A combined ratio of 63.5% for the first nine months of 2006
  • An expense ratio for nine months of 20.9%, one of the lowest in the industry and the result of the company's low-cost, direct-to-consumer model
  • Year-to-date 2006 revenues totaled $114.4 million as compared to $118.4 million for the first nine months of 2005 
  • Total assets at September 30, 2006 of $319.2 million, an increase of 21.7% ($57 million) from total assets at December 31, 2005.

Also, during the third quarter, Employers Direct expanded into several new markets, a reflection of management's confidence in the strength of California's growing economy and significant improvement in workers' compensation laws. Little said, "The recent reforms had a tremendous impact in lowering the cost drivers in certain segments of the construction, agriculture, manufacturing, and medical industries, among others. After careful research, we are confident that we can now successfully underwrite selected risks in these market segments." 

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