OMB APPROVAL
                                                      --------------------------
                                                      OMB Number:      3235-0059
                                                      Expires: February 28, 2006
                                                      Estimated average burden
                                                      hours per response...12.75

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 14A

          Proxy Statement Pursuant to Section 14(a) of the Securities
                     Exchange Act of 1934 (Amendment No.  )
 
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ]  Preliminary Proxy Statement      
[ ]  CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY 
     RULE 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Section 240.14a-12
 
                            EMC INSURANCE GROUP INC.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
     1) Title of each class of securities to which transaction applies:
 
--------------------------------------------------------------------------------
 
     2) Aggregate number of securities to which transaction applies:
 
--------------------------------------------------------------------------------
 
     3) Per unit price or other underlying value of transaction computed
        pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
        filing fee is calculated and state how it was determined):
 
--------------------------------------------------------------------------------
 
     4) Proposed maximum aggregate value of transaction:
 
--------------------------------------------------------------------------------
 
     5) Total fee paid:
 
--------------------------------------------------------------------------------
 
[ ]  Fee paid previously with preliminary materials.

[ ]  Check box if any part of the fee is offset as provided by Exchange Act
     Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
     paid previously. Identify the previous filing by registration statement
     number, or the Form or Schedule and the date of its filing.
 
     1) Amount Previously Paid:
 
--------------------------------------------------------------------------------
 
     2) Form, Schedule or Registration Statement No.:
 
--------------------------------------------------------------------------------
 
     3) Filing Party:
 
--------------------------------------------------------------------------------
 
     4) Date Filed:
 
--------------------------------------------------------------------------------
PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.

SEC 1913 (02-02)

                                       

 
(EMC GROUP INC. LETTERHEAD)
 
                                 April 18, 2005
 
Dear Stockholder:
 
     I am pleased to extend to you my personal invitation to attend the 2005
Annual Meeting of Stockholders of EMC Insurance Group Inc. on May 26, 2005, at
1:30 p.m., at the offices of Employers Mutual Casualty Company, 700 Walnut
Street, Des Moines, Iowa 50309.
 
     The accompanying Notice of Annual Meeting and Proxy Statement contains a
description of the formal business to be acted upon by the stockholders. At the
meeting, I intend to discuss the Company's 2004 performance and its plans for
2005. Certain members of the Company's Board of Directors and Officers of the
Company, as well as representatives of Ernst & Young LLP, the Company's
independent auditors, will be available to answer questions you may have.
 
     While I am looking forward to seeing you at the meeting, it is very
important that those of you who cannot personally attend assure that your shares
are represented. I urge you, therefore, to sign and date the enclosed form of
proxy and return it promptly in the accompanying envelope. If you attend the
meeting, you may, if you wish, withdraw any proxy previously given and vote your
shares in person.
 
                                         Sincerely,
 
                                         /s/ Bruce G. Kelley
                                         Bruce G. Kelley
                                         President and CEO

 
                            EMC INSURANCE GROUP INC.
 
                                   NOTICE OF
                      2005 ANNUAL MEETING OF STOCKHOLDERS
 
                                  MAY 26, 2005
 
TO THE STOCKHOLDERS OF EMC INSURANCE GROUP INC.:
 
     Notice is hereby given that the Annual Meeting of Stockholders of EMC
Insurance Group Inc. (the "Company"), an Iowa corporation, will be held on
Thursday, May 26, 2005 at 1:30 p.m. local time, at Employers Mutual Casualty
Company's office, 700 Walnut Street, Des Moines, Iowa, for the following
purposes:
 
     1. To elect a Board of Directors;
 
     2. To amend Employers Mutual Casualty Company's 2003 Incentive Stock Option
        Plan to increase the number of shares subject thereto;
 
     3. To ratify the appointment of Ernst & Young LLP as the Company's
        independent auditors for the current fiscal year; and
 
     4. To transact such other business as may properly come before the meeting
        or any adjournment thereof.
 
     Each share of the Company's common stock will be entitled to one vote upon
all matters described above. Stockholders of record at the close of business on
April 6, 2005 will be entitled to notice of and to vote at the meeting. The
stock transfer books of the Company will not be closed.
 
     April 18, 2005
 
                                      BY ORDER OF THE BOARD OF DIRECTORS
 
                                      DONALD D. KLEMME, Secretary
 
PLEASE VOTE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY. AN
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED
FOR YOUR CONVENIENCE.

 
                            EMC INSURANCE GROUP INC.
                              717 MULBERRY STREET
                             DES MOINES, IOWA 50309
 
                                PROXY STATEMENT
                      2005 ANNUAL MEETING OF STOCKHOLDERS
                                  MAY 26, 2005
 
                              GENERAL INFORMATION
 
     This proxy statement is furnished in connection with the solicitation by
the Board of Directors of EMC Insurance Group Inc. (the "Company") of proxies
from the holders of the Company's $1.00 par value common stock (the "Common
Stock") for use at the 2005 Annual Meeting of Stockholders to be held on May 26,
2005, and at any adjournment thereof (the "Annual Meeting").
 
     The Company's 2004 Annual Report to Stockholders was sent to the Company's
stockholders on or about April 15, 2005. This proxy statement, along with the
accompanying form of proxy, was sent to the Company's stockholders on or about
April 18, 2005.
 
     The accompanying proxy may be revoked by the person giving it at any time
before it is voted; such revocation may be accomplished by a letter, or by a
properly signed proxy bearing a later date, filed with the Secretary of the
Company prior to the Annual Meeting. If the person giving the proxy is present
at the meeting and wishes to vote in person, he or she may withdraw his or her
proxy at that time.
 
     The Company has borne all costs of solicitation of proxies. In addition to
solicitation by mail, there may be incidental personal solicitations made by
directors and officers of the Company, its parent, Employers Mutual Casualty
Company ("Employers Mutual"), and their subsidiaries. The cost of solicitation,
including payments to nominees who at the request of the Company mail such
material to their customers, will be borne by the Company.
 
THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF THE NOMINEES NAMED HEREIN AND A
VOTE "FOR" EACH OF THE OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING.
 
                               VOTING SECURITIES
 
     All stockholders of record of the Common Stock at the close of business on
April 6, 2005 are entitled to notice of and to vote at the Annual Meeting. At
the close of business on April 6, 2005, there were 13,595,398 shares of
outstanding Common Stock, each entitled to one vote per share on all matters to
be voted upon at the Annual Meeting. The Company's stockholders do not have
cumulative voting rights. Shares of Common Stock of the Company present in
person or represented by proxy at the Annual Meeting will be tabulated for
determination of whether or not a quorum is present. A quorum will be present if
a majority of the outstanding shares entitled to vote is represented at the
Annual Meeting. If a quorum exists, directors will be elected by a majority of
the votes cast by the shares entitled to vote in the election and action on
other matters, including appointment of auditors, will be approved if the votes
cast favoring the action exceed the votes cast opposing the action. Votes
withheld for any director, abstentions and broker non-votes will be treated as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but will not be counted as votes cast with respect to any
matter submitted to the stockholders for a vote and will not affect the outcome
of any matter.
                                        1

 
                             ELECTION OF DIRECTORS
 
NOMINEES
 
     At the Annual Meeting, the stockholders will elect a board of eight
directors to serve for terms extending until the 2006 Annual Meeting and until
their respective successors are duly elected and qualified. Proxies in the
accompanying form which are received by management of the Company in response to
this solicitation will, unless contrary instructions are given therein, be voted
in favor of the eight nominees for director listed in the table below. The Board
of Directors of the Company has no reason to believe that any of such nominees
may not be available to serve or will not serve as a director if elected;
however, if any nominee is not so available at the time of the election, the
proxies may be voted in the discretion of the persons named therein for the
election of a substitute nominee.
 
     The table below contains certain information with respect to the Board of
Directors' nominees for election as directors.
 


                                              DIRECTOR
NAME                                    AGE    SINCE           POSITION WITH THE COMPANY
----                                    ---   --------         -------------------------
                                                
Margaret A. Ball......................  67      2004     Director
George C. Carpenter III...............  77      1981     Director
David J. Fisher.......................  68      1985     Director
Bruce G. Kelley.......................  51      1991     President, Chief Executive Officer and
                                                         Director
George W. Kochheiser..................  79      1974     Chairman of the Board
Raymond A. Michel.....................  79      1981     Director
Fredrick A. Schiek....................  70      1994     Director
Joanne L. Stockdale...................  58      2004     Director

 
     Margaret A. Ball was Senior Vice President of Underwriting of the Company
and of Employers Mutual from 1997 until her retirement on January 1, 2001. She
was a Vice President of Employers Mutual from 1983 until 1997. Ms. Ball has
served as a director of Hamilton Mutual Insurance Company, an affiliate of
Employers Mutual, since 2002. Ms. Ball was employed by Employers Mutual from
1971 to 2001.
 
     George C. Carpenter III was Executive Director of Iowa Public Television
from November 1985 until his retirement in 1993. Prior to that he served as Vice
President of Palmer Communications and as Vice President and General Manager of
WHO Broadcasting Company, a division of Palmer Communications. He was employed
by WHO Broadcasting Company for 20 years.
 
     David J. Fisher has been Chairman of the Board and President of Onthank
Company, a Des Moines based wholesale distributor of floor, window and wall
covering products, since 1978 and has been employed by that firm since 1962.
 
     Bruce G. Kelley has been President and Chief Executive Officer of the
Company and of Employers Mutual since 1992 and was Treasurer of Employers Mutual
from 1996 until 2000, and of the Company from 1996 until 2001. He was President
and Chief Operating Officer of the Company and of Employers Mutual from 1991 to
1992 and was Executive Vice President of both companies from 1989 to 1991. Mr.
Kelley has been employed by Employers Mutual since 1985 and has been a director
of that company since 1984.
 
                                        2

 
     George W. Kochheiser has been Chairman of the Board of the Company since
1994, and was President and Chief Operating Officer of the Company and of
Employers Mutual from 1982 until his retirement in 1991. Mr. Kochheiser also
serves as a director of Employers Mutual and was an employee of that company
from 1949 to 1991.
 
     Raymond A. Michel is a member of the Board of Directors of Koss
Construction Company, a highway and airport construction firm, and was its
Chairman and Chief Executive Officer from 1972 until his retirement in 1989. He
has been affiliated with that company in one capacity or another since 1955.
 
     Fredrick A. Schiek was Executive Vice President and Chief Operating Officer
of the Company and of Employers Mutual from 1992 until his retirement on March
1, 2001. He was Vice President of Employers Mutual from 1983 until 1992 and has
served as a director of Employers Mutual since 1998. Mr. Schiek was employed by
Employers Mutual from 1959 to 2001.
 
     Joanne L. Stockdale has been President/owner of Northern Iowa Die Casting,
Inc. since 1983. Ms. Stockdale, who is a CPA, also serves on the Iowa Strategy
2010 Committee.
 
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
 
     During the year ended December 31, 2004, the Board of Directors of the
Company held four regular meetings and one special meeting. In 2004, each member
of the Board of Directors attended at least 75 percent of the aggregate of (i)
the total number of meetings of the Board of Directors held and (ii) the total
number of meetings held by all committees of the Board of Directors on which
they served. All of the members of the Board of Directors attended the Company's
2004 annual meeting and the Company expects all of the members of the Board of
Directors to attend this year's Annual Meeting. The Board has determined that
Board members Ball, Carpenter, Fisher, Michel and Stockdale are independent
directors as defined by the rules of the Nasdaq Stock Market.
 
     The Board of Directors of the Company has five standing committees: the
Executive Committee, the Audit Committee, the Compensation Committee, the
Inter-Company Committee and the Nominating Committee. The Executive Committee
members are Bruce G. Kelley, Fredrick A. Schiek and George W. Kochheiser. This
Committee has authority to exercise all of the authority of the Board of
Directors when the Board of Directors is not in session, with the exception of
certain actions which, under Iowa law and the Company's By-laws, require action
by the Board of Directors; these include amending the Company's Articles of
Incorporation, declaring dividends, adopting a plan of merger or consolidation
of the Company, appointing or removing executive officers, filling officer
vacancies, approving or recommending to the Company's stockholders a voluntary
dissolution or revocation of its Articles of Incorporation, or amending the
Company's By-laws. The Executive Committee met one time during the year ended
December 31, 2004.
 
     The members of the Audit Committee are George C. Carpenter III, David J.
Fisher and Joanne L. Stockdale. Each member of the Audit Committee is
"independent" under the standards established by the corporate governance rules
of the Nasdaq Stock Market and the rules of the Securities and Exchange
Commission. The Board of Directors has determined that Committee member Joanne
L. Stockdale qualifies and is designated as an "audit committee financial
expert" as defined by the rules of the Securities and Exchange Commission. The
functions performed by this Committee are detailed in the Audit Committee
Charter, which is available on the Company's website at www.EMCInsurance.com.
Their duties are to assist the Board of Directors in its general oversight of
the Company's financial reporting, internal control and audit functions. The
Audit Committee met eight times during the year ended December 31, 2004.
 
                                        3

 
     For 2004, Employers Mutual's Senior Executive Compensation and Stock Option
Committee provided the function of administration of the compensation and
benefits for all of the employees of Employers Mutual. The Senior Executive
Compensation and Stock Option Committee of Employers Mutual met three times
during the year ended December 31, 2004. The Board of Directors of the Company
established its own Compensation Committee in July, 2004 with the responsibility
for approving the compensation and benefit programs for the Company's Chief
Executive Officer and other executives commencing in 2005. The Company's
Compensation Committee members are Margaret A. Ball, George C. Carpenter III and
Joanne L. Stockdale. In 2004, the Company's Compensation Committee held no
meetings. The Company's Compensation Committee will provide its first report in
the Company's 2006 proxy statement. The charter of the Compensation Committee is
available on the Company's web site at www.EMCInsurance.com.
 
     The Inter-Company Committee was established by mutual agreement of the
Boards of Directors of the Company and Employers Mutual. Each of the Company's
representatives appointed to the Inter-Company Committee are required to be
"independent" under the standards established by the rules of the Nasdaq Stock
Market. The Company is represented on the Inter-Company Committee by George C.
Carpenter III, David J. Fisher and Raymond A. Michel. Employers Mutual is
represented on the Inter-Company Committee by three independent members of its
Board of Directors. The primary responsibility of the Inter-Company Committee is
to review any new material agreement or transaction (or material change to an
existing agreement) between the two entities to ensure those transactions are
fair and reasonable to the Company and its shareholders and to Employers Mutual
and its policyholders. Approval of an agreement or transaction by the
Inter-Company Committee requires a unanimous vote of all members of the
Committee. The Inter-Company Committee met three times during the year ended
December 31, 2004.
 
     The members of the Nominating Committee are George C. Carpenter III, David
J. Fisher and Raymond A. Michel. Each of these members are "independent" under
the standards established by the rules of the Nasdaq Stock Market. The
Nominating Committee ensures that the Board of Directors of the Company is
appropriately constituted to meet its fiduciary obligations to stockholders. To
accomplish this purpose, the Nominating Committee assists the Board of Directors
in assessing its membership needs, identifies individuals qualified to become
members of the Board of Directors and makes recommendations regarding potential
director candidates to the Board of Directors. Criteria for the nomination of a
director and the process of consideration of director candidates recommended by
stockholders are set forth in the Nominating Committee Charter, which is located
on the Company's web site at www.EMCInsurance.com. In considering a nominee for
a position on the Company's Board of Directors, the Nominating Committee will
seek to identify individuals who, in addition to having a reputation for
integrity, honesty and adherence to high ethical standards, also have
demonstrated business knowledge, experience and the ability to exercise sound
judgment in matters related to current and long-term objectives of the Company
and a willingness and ability to contribute positively to the decision-making
process of the Company. The Nominating Committee met one time during the year
ended December 31, 2004.
 
DIRECTORS' COMPENSATION
 
     In 2004, each member of the Company's Board of Directors who was not an
officer or employee of the Company was paid $1,200 for each board meeting or
committee meeting attended, plus expenses, and a $9,000 annual fee payable
irrespective of attendance at meetings. In addition, any non-employee director
serving as a committee chair was paid a $3,000 annual fee. Non-employee
directors of the Company are also eligible to participate in Employers Mutual's
Non-Employee Director Stock Option Plan. Under this Plan, directors are granted
an option to purchase Common Stock in an amount up to 100 percent of their
annual
 
                                        4

 
retainer at an option price equal to 75 percent of the fair market value of the
Common Stock on the option exercise date. During 2004, one director participated
in the plan by exercising options for 601 shares.
 
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
 
     The following table sets forth certain information regarding the only
entity known to the Company which owns beneficially more than five (5) percent
of the Company's Common Stock:
 


                                                                        AMOUNT AND NATURE
TITLE OF                          NAME AND ADDRESS                        OF BENEFICIAL      PERCENT
 CLASS                          OF BENEFICIAL OWNER                         OWNERSHIP        OF CLASS
--------      --------------------------------------------------------  -----------------    --------
                                                                                    
Common        Employers Mutual Casualty Company.......................     7,293,069(1)       53.7%
              717 Mulberry Street
              Des Moines, Iowa 50309

 
---------------
 
(1) On April 6, 2005, Employers Mutual owned 53.7% of the outstanding Common
    Stock of the Company. Employers Mutual intends to retain ownership of a
    majority of the Company's Common Stock in the foreseeable future. This
    majority stock ownership will give Employers Mutual the right to determine
    whether or not all of the proposals presented at the Annual Meeting are
    carried and will enable it to control the election of the Board of Directors
    of the Company. The Company's operations are integrated with the operations
    of Employers Mutual and are largely dependent upon a continuing relationship
    with Employers Mutual. The Company does not anticipate any disruptions in
    this relationship.
 
                                        5

 
                 SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
 
     The following information is furnished as to the Common Stock of the
Company owned beneficially as of April 6, 2005, by each of the Company's
directors, director nominees and named executive officers individually and the
directors and executive officers of the Company as a group. The information
concerning beneficial ownership has been furnished by the persons listed below
or was determined by the Company from reports filed by such persons with the
Securities and Exchange Commission regarding such ownership.
 


                                                              AMOUNT AND NATURE
                                                                OF BENEFICIAL     PERCENT
NAME                                                            OWNERSHIP (1)     OF CLASS
----                                                          -----------------   --------
                                                                            
Margaret A. Ball............................................         2,005            *
George C. Carpenter III.....................................         5,490            *
Raymond W. Davis............................................        19,209(2)         *
David J. Fisher.............................................         1,914            *
Ronald W. Jean..............................................        31,008(3)         *
Bruce G. Kelley.............................................       150,403(4)       1.1%
George W. Kochheiser........................................        55,000            *
Raymond A. Michel...........................................         5,000            *
William A. Murray...........................................        34,060(5)         *
David O. Narigon............................................        15,550(6)         *
Fredrick A. Schiek..........................................        14,261            *
Joanne L. Stockdale.........................................            --            *
All Directors and Executive Officers as a Group (21 persons,
  including those listed above).............................       442,295          3.4%

 
---------------
 
* Less than one percent
 
(1) All named holders of the Common Stock listed in this table have sole voting
    and investment power with respect to the shares held, except as stated
    otherwise below.
 
(2) Raymond W. Davis directly owns 13,109 shares of Common Stock and has
    presently exercisable options to purchase 6,100 shares, which shares are
    included in the table.
 
(3) Ronald W. Jean directly owns 11,395 shares of Common Stock and has presently
    exercisable options to purchase 19,613 shares, which shares are included in
    the table.
 
(4) Bruce G. Kelley owns 94,605 shares of Common Stock directly and 26,198
    shares indirectly. Of the 26,198 shares indirectly owned, 1,500 are owned by
    his spouse and 24,698 are owned by his children. In addition, he owns
    presently exercisable options to purchase 29,600 shares, which shares are
    included in the table.
 
(5) William A. Murray directly owns 12,304 shares of Common Stock and has
    presently exercisable options to purchase 21,756 shares, which shares are
    included in the table.
 
(6) David O. Narigon terminated his employment with the Company on March 1,
    2005.
 
                                        6

 
                           COMPENSATION OF MANAGEMENT
 
     The Company has no employees of its own and, consequently, has no payroll
and no employee benefit plans. Approximately 15 employees of Employers Mutual
devote a portion of their time performing administrative duties for the Company.
The Company's four property and casualty insurance subsidiaries (Dakota Fire
Insurance Company, EMCASCO Insurance Company, Farm and City Insurance Company
and Illinois EMCASCO Insurance Company) and two subsidiaries and an affiliate of
Employers Mutual are parties to reinsurance pooling agreements with Employers
Mutual (collectively, the "Pooling Agreement"). The compensation of Employers
Mutual's employees during 2004 was shared by the Company's property and casualty
insurance subsidiaries in accordance with the terms of the Pooling Agreement.
The compensation paid to the employees of Employers Mutual who perform duties
for EMC Reinsurance Company and EMC Underwriters, LLC, the other two
subsidiaries of the Company, is not allocated to the Pooling Agreement and is
charged directly to those subsidiaries. The aggregate participation of the
Company's property and casualty insurance subsidiaries in the Pooling Agreement
during 2004 was 23.5% and this percentage represents the portion of the
compensation expenses described below which were allocated to the Company during
the year.
 
     The following table sets forth information with respect to compensation
paid by Employers Mutual to its Chief Executive Officer and the other four most
highly compensated executive officers serving as such on December 31, 2004.
 
                           SUMMARY COMPENSATION TABLE
 


                                                       ANNUAL COMPENSATION(1)
                                              ----------------------------------------
                                                                            SECURITIES
                                                                            UNDERLYING    ALL OTHER
                                                                             OPTIONS     COMPENSATION
NAME AND PRINCIPAL POSITION                   YEAR   SALARY($)   BONUS($)     (#)(2)        ($)(3)
---------------------------                   ----   ---------   --------   ----------   ------------
                                                                          
Bruce G. Kelley.............................  2004    584,690         --       6,000        45,858
President & CEO                               2003    507,962    302,890       5,000        39,644
                                              2002    452,388    391,004       4,000        36,379
Ronald W. Jean..............................  2004    315,670         --       5,000        26,973
Executive Vice President                      2003    267,658    147,151       5,000        24,073
for Corporate Development                     2002    240,634    191,799      10,000        20,665
William A. Murray...........................  2004    315,670         --       5,000        31,796
Executive Vice President & COO                2003    266,463    146,494       5,000        22,439
                                              2002    239,475    190,874      10,000        88,330
Raymond W. Davis............................  2004    229,854         --       1,000        20,272
Sr. Vice President & Treasurer                2003    200,704    101,260       1,000        19,396
                                              2002    173,943    127,118       2,000        12,744
David O. Narigon............................  2004    212,946         --       1,000        21,970
Sr. Vice President -- Claims(4)               2003    189,347     95,526       1,000        24,772
                                              2002    169,772    123,980          --         8,688

 
---------------
 
(1) Compensation deferred at election of executive includable in category and
    year earned.
 
(2) All stock options granted were at option prices equal to the fair market
    value of the Common Stock on the date of grant, have a term of ten years and
    vest at a rate of 20 percent per year commencing in the second year of the
    term.
 
                                        7

 
(3) The amounts shown for all other compensation include employer matching
    contributions to the Employers Mutual Casualty Company 401(k) Savings Plan
    (the "401(k) Plan"), employer matching contributions to the Employers Mutual
    Casualty Company Executive "Non Qualified" Excess Plan, a recognition
    payment for professional education designation awards, excess group life
    insurance premiums and professional tax preparation fees. During 2004,
    contributions to the 401(k) Plan and the Executive "Non Qualified" Excess
    Plan on behalf of Messrs. Kelley, Jean, Murray, Davis and Narigon were
    $34,827, $22,173, $22,282, $17,768 and $17,043, respectively. Excess life
    insurance premiums paid during 2004 on behalf of Messrs. Kelley, Jean,
    Murray, Davis and Narigon were $1,518, $2,758, $2,639, $1,984 and $977,
    respectively. Professional tax preparation and financial planning fees paid
    on behalf of Messrs. Kelley, Murray and Davis were $4,650, $1,350, and $520,
    respectively. None of the executives received professional education
    payments. Personal use of company automobiles paid on behalf of Messrs.
    Kelley, Jean, Murray and Narigon were $2,229, 2,042, 2,984 and $3,950,
    respectively. Also included are country club memberships dues for Mr. Kelley
    and Mr. Murray in the amounts of $2,634 and $2,542, respectively. Mr. Murray
    was reimbursed for moving expenses of $65,643 during 2002.
 
(4) Mr. Narigon submitted his resignation as an officer of the Company and
    Employers Mutual effective March 1, 2005.
 
STOCK OPTIONS
 
     The following table sets forth details regarding stock options granted to
the named executive officers during 2004. In addition, the table shows the
hypothetical gain, or "option spread", that would exist for the respective
options based on assumed rates of annual compound stock appreciation of five and
ten percent over the full term of the options. Employers Mutual grants the stock
options which are utilized to purchase the Common Stock of the Company. Upon the
exercise of these options, Employers Mutual pays to the Company the spread
between the fair market value and the exercise price.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 


                                                                                      POTENTIAL REALIZABLE
                                                                                        VALUES BASED ON
                                                                                        ASSUMED RATES OF
                                   NUMBER OF      % OF                                    STOCK PRICE
                                    OPTIONS       TOTAL     EXERCISE                    APPRECIATION(2)
                                    GRANTED      OPTIONS      PRICE      EXPIRATION   --------------------
NAME                                (#)(1)       GRANTED     ($/SH)         DATE       5% ($)     10% ($)
----                             -------------   -------   -----------   ----------   --------   ---------
                                                                               
Bruce G. Kelley................      6,000         8.5        22.28        2/6/14      84,070     213,051
Ronald W. Jean.................      5,000         7.1        22.28        2/6/14      70,059     177,543
William A. Murray..............      5,000         7.1        22.28        2/6/14      70,059     177,543
Raymond W. Davis...............      1,000         1.4        22.28        2/6/14      18,651      35,509
David O. Narigon...............      1,000         1.4        22.28        2/6/14      18,651      35,509

 
---------------
 
(1) All stock options granted were at option prices equal to the fair market
    value of the Common Stock on the date of grant, have a term of ten years and
    vest at a rate of 20 percent per year commencing in the second year of the
    term.
 
(2) The potential realizable values indicated are based on the assumption that
    the stock price appreciates at the annual rate shown from the date of grant
    until the expiration date. These numbers do not reflect the historical
    increase in the price of the stock and do not represent the Company's
    estimate of future appreciation in the stock price.
 
                                        8

 
     The following table sets forth information with respect to the named
executive officers concerning the exercise of stock options during 2004, the
realized gains from those exercises, the number of unexercised options held as
of December 31, 2004, and the amount of unrealized gains attributed to them on
that date.
 
              AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
 


                                                                                       VALUE OF
                                                                     NUMBER OF       UNEXERCISED
                                                                    UNEXERCISED      IN-THE-MONEY
                                                                    OPTIONS AT        OPTIONS AT
                                            SHARES       VALUE      YEAR-END(#)      YEAR END($)
                                          ACQUIRED ON   REALIZED   EXERCISABLE/      EXERCISABLE/
NAME                                      EXERCISE(#)    ($)(1)    UNEXERCISABLE   UNEXERCISABLE(2)
----                                      -----------   --------   -------------   ----------------
                                                                       
Bruce G. Kelley.........................    10,000      138,575    36,600/14,440   372,797/52,528
Ronald W. Jean..........................        --           --    15,669/18,500   143,650/83,545
William A. Murray.......................     5,906       63,088    22,010/21,780   210,590/117,476
Raymond W. Davis........................        --           --     5,300/4,460     51,057/25,438
David O. Narigon........................     5,150       84,504     2,200/3,800     21,601/23,386

 
---------------
 
(1) Value realized is the fair market value on the date(s) of exercise less the
    exercise price(s).
 
(2) The value of unexercised options is calculated by subtracting the exercise
    price(s) from the fair market value of the stock at year-end, which was
    $21.72 per share.
 
                                RETIREMENT PLANS
 
DEFINED BENEFIT PLANS
 
     Employers Mutual sponsors a tax qualified defined benefit plan, the
Employers Mutual Casualty Company Retirement Plan (the "Pension Plan"), covering
all employees of Employers Mutual and its subsidiaries. Employers Mutual also
sponsors a non-qualified defined benefit supplemental retirement plan, the
Employers Mutual Casualty Company Supplemental Retirement Plan (the "SRP"),
covering certain of its (and its subsidiaries') management and highly
compensated employees. The pension plan contains a traditional defined benefit
formula pension benefit (based on a combination of average pay and years of
service) for certain eligible employees and a cash balance account benefit for
all other eligible employees. The SRP applies to both formulas under the pension
plan.
 
                              TRADITIONAL FORMULA
 
     The table below sets forth the annual retirement benefits at age 65 payable
to those executives named in the Summary Compensation Table who are eligible
under the traditional defined benefit formula portion of the Pension Plan and
the SRP. These plans are described in more detail below. The Assumed Annual
Earnings is an average of the five consecutive pay years, out of all pay years,
which gives the highest average. The assumed annual earnings shown in the table
have been computed to reflect a range adequate to cover the current and future
salaries of eligible named executives. Generally, compensation utilized for
pension formula purposes (and in the table below) includes salary and annual
bonus reported in the Summary Compensation Table. Company contributions received
under the 401(k) Plan and the Employers Mutual Casualty Company
 
                                        9

 
Non-Qualified Excess Plan and amounts related to stock options are not included
in the calculation of compensation for purposes of the pension benefit. The
benefits in the table do take into account any reduction for applicable Social
Security retirement benefits.
 
                      ESTIMATED ANNUAL RETIREMENT BENEFITS
 


                                      YEARS OF SERVICE CREDITED AT NORMAL RETIREMENT DATE
                                ---------------------------------------------------------------
ASSUMED ANNUAL EARNINGS            15         20         25         30         35         40
-----------------------         --------   --------   --------   --------   --------   --------
                                                                     
    $ 250,000.................  $ 83,482   $105,357   $127,232   $149,107   $170,982   $192,857
       300,000................   100,179    126,429    152,679    178,929    205,179    231,429
       350,000................   116,875    147,500    178,125    208,750    239,375    270,000
       400,000................   133,571    168,571    203,571    238,571    273,571    308,571
       450,000................   150,268    189,643    229,018    268,393    307,768    347,143
       500,000................   166,964    210,714    254,464    298,214    341,964    385,714
       550,000................   183,661    231,786    279,911    328,036    376,161    424,286
       600,000................   200,357    252,857    305,357    357,857    410,357    462,857
       650,000................   217,054    273,929    330,804    387,679    444,554    501,429
       700,000................   233,750    295,000    356,250    417,500    478,750    540,000
       750,000................   250,446    316,071    381,696    447,321    512,946    578,571
       800,000................   267,143    337,143    407,143    477,143    547,143    617,143
       850,000................   283,839    358,214    432,589    506,964    581,339    655,714
       900,000................   300,536    379,286    458,036    536,786    615,536    694,286

 
PENSION PLAN
 
     Employees employed prior to January 1, 1989 and who were 50 years old, or
older, on January 1, 2000, have their benefits determined under the Pension Plan
(a tax qualified noncontributory plan), using a traditional defined benefit
formula where benefits are based on a percentage of (a) the employee's average
compensation (five consecutive pay years that results in the highest average),
or (b) $205,000 for 2004 (the limit set by the Internal Revenue Code of 1986, as
amended, (the "Code")), whichever is lower, multiplied by the employee's
credited service (maximum of 40 years). The normal form of benefit is a single
life annuity with payments guaranteed for 10 years. This is the form of benefit
that would be paid under the table shown above. Various joint and survivor
annuities, a single life annuity with no term certain, and a single life annuity
with various term certain options are also available under the Pension Plan (in
addition to a lump sum option). All alternative payment options are the
actuarial equivalent of the normal form of benefit. Early retirement can be
elected by a participant who has reached age 55. The benefit paid on early
retirement is a percentage of the benefit that would be payable upon normal
retirement and ranges from 52% at age 55 to 92% at age 64.
 
                                        10

 
SUPPLEMENTAL RETIREMENT PLAN
 
     Effective October 1, 2004, Employers Mutual established the SRP, which
replaced individual Excess Retirement Benefit Agreements with certain executives
and replaced the Employers Mutual Supplemental Executive Retirement Plan for
certain executives. Accrued benefits under the replaced plans were assumed under
the SRP. The SRP is an unfunded, non-qualified retirement plan maintained to
provide additional deferred compensation for a select group of management and
highly compensated employees. The SRP provides a benefit to eligible persons
whenever 100% of their pension benefits under the Pension Plan are not permitted
to be funded or paid through that plan because of limits impose by the Code
(limit on compensation that can be taken into account and limit on benefits that
can be paid) and/or because of elective deferrals of covered compensation under
any non-qualified deferred compensation plan. For those executives eligible
under the traditional defined benefit formula in the Pension Plan, the SRP
benefit is the benefit as calculated under the formula in the Pension Plan
(without regard to compensation or benefit limits), offset by the benefit under
the Pension Plan. This accrued benefit under the SRP is calculated as a single
life annuity (with 10 years certain) and is converted to an actuarially
equivalent lump sum, which is then paid to the executive over a period of years,
ranging from one year if the present value of the benefit is less than $50,000
to ten years if the present value of the benefit is $450,000 or greater.
However, for purposes of the table shown on page 10, it is assumed that the SRP
benefit is paid as a single life annuity (with ten years certain), the same as
under the Pension Plan, so that a total equivalent pension at normal retirement
can be determined.
 
ESTIMATED BENEFITS OF NAMED INDIVIDUALS
 
     The individuals named in the Summary Compensation Table who are
participants in the traditional defined benefit portion of the Pension Plan and
SRP are Messrs. Jean, Murray and Davis. If each of these individuals had retired
on December 31, 2004, the years of credited service and the five-year average
compensation used to calculate retirement benefits at age 65 in the table would
have been 25 and $305,367 for Mr. Jean, 19 and $303,360 for Mr. Murray, and 25
and $223,695 for Mr. Davis. If each of these individuals retire at age 65,
assuming the benefit formula in the Pension Plan does not change, and assuming a
6% annual increase in covered compensation between 2004 and the year each one
reaches age 65, the years of credited service at age 65 and the five-year
average compensation used to calculate retirement benefits at age 65 would be 35
and $710,719 for Mr. Jean, 25 and $599,314 for Mr. Murray, and 31 and $401,033
for Mr. Davis.
 
                              CASH BALANCE FORMULA
 
PENSION PLAN
 
     Those employees who were not employed prior to January 1, 1989 or who were
not at least age 50 on January 1, 2000, have their pension benefit determined
under the cash balance formula in the Pension Plan. The benefit earned is
expressed in the form of a hypothetical account balance. Benefit credits accrue
monthly at a rate between 3.25% and 13.50% of eligible monthly compensation; the
rate increases with age. Interest credits are applied annually at the end of
each year to the prior year's balance; these credits are based on the yield on
30-year Treasury bonds (as published by the Internal Revenue Service). Although
the normal form of benefit is an annuity, the hypothetical account balance is
also payable as a lump sum.
 
                                        11

 
SUPPLEMENTAL RETIREMENT PLAN
 
     As with those executives eligible for the traditional defined benefit
formula in the Pension Plan who accrue additional benefits under the SRP, the
executives eligible in the cash balance formula under the Pension Plan accrue
benefits under the SRP (using a similar hypothetical account balance as under
the Pension Plan) to the extent that either compensation or benefits are limited
in the Pension Plan by the Code and/or because of elective deferral of covered
compensation under any non-qualified deferred compensation plans.
 
ESTIMATED BENEFITS OF NAMED INDIVIDUALS
 
     The individuals named in the Summary Compensation Table who are
participants in the cash balance formula portion of the Pension Plan and SRP are
Messrs. Kelley and Narigon. If Mr. Kelley had retired on December 31, 2004, his
hypothetical account balance of $878,272 (combining both the Pension Plan and
SRP accounts), based on annuity conversion factors being used for current
retirees, would provide a single life annuity with 10 years certain of
approximately $155,469 per year beginning at age 65. If Mr. Kelley remains
employed and retires at age 65, assuming (1) an interest crediting rate of 5.5%
per year, (2) annual compensation credit percentages under the current formula,
and (3) annual salary growth of 6% per year to age 65, Mr. Kelley's hypothetical
account balance would be approximately $5,389,144 at the end of the year in
which he reaches age 65 (2019) and, based on annuity conversion factors being
used for current retirees, would provide a single life annuity with 10 years
certain of approximately $433,385 per year. Mr. Narigon terminated employment
March 1, 2005. Assuming an annual interest crediting rate of 5.5% on Mr.
Narigon's January 1, 2005 account balance of $401,835 (combining both the
Pension Plan and SRP accounts), his hypothetical account balance would be
approximately $764,000 at the end of the year in which he reaches age 65 (2017).
Based on annuity conversion factors being used for current retirees, this would
provide a single life annuity with 10 years certain of approximately $61,439 per
year.
 
                           DEFINED CONTRIBUTION PLANS
 
401(K) PLAN
 
     Employers Mutual also sponsors a tax qualified defined contribution plan,
the 401(k) Plan. This plan is available to all employees of Employers Mutual and
its subsidiaries. Under the 401(k) Plan, Employers Mutual matches 50% of the
first 6% of covered compensation that an employee defers. With the exception of
the highly compensated group, the employee participants can make pre-tax
deferrals of up to 50% of their covered compensation to this plan (and up to an
annual limit under the Code -- for 2004, $13,000 for those under age 50 and
$16,000 for those at least age 50).
 
ENEP
 
     In 2001, the Executive Non-Qualified Excess Plan (the "ENEP") was created
for the highly compensated group who were limited in their 401(k) deferral
percentage. This plan allows the highly compensated employees to defer up to 25%
of their covered compensation between the 401(k) Plan and the ENEP. Employers
Mutual matches 100% of the first 5% of covered compensation deferred under the
ENEP for certain officers.
 
                                        12

 
BENEFITS FOR NAMED INDIVIDUALS
 
     The contributions made by Employers Mutual under the 401(k) Plan and ENEP
in 2004 for all the individuals named in the Summary Compensation Table are set
forth in footnote (3) to that table.
 
            SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     During 2004, there were two occasions when a Form 4 was not filed on a
timely basis by Employers Mutual. Employers Mutual sold 1,800,000 shares of the
Company's Common Stock in October and 260,542 shares in November. These
transactions were made pursuant to the S-1 Registration Statement filed in
conjunction with the Company's follow-on stock offering. The Form 4 on these two
transactions was filed thirty days and twelve days late, respectively.
 
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The property and casualty insurance operations of the Company are
integrated with those of Employers Mutual through the participation in a pooling
arrangement. As a result of this operational relationship there are numerous
transactions between the Company and the Employers Mutual pool participants that
occur on an ongoing basis in the ordinary course of business. Under the terms of
the pooling agreement, each company cedes to Employers Mutual all of its
insurance business, with the exception of any voluntary reinsurance business
assumed from nonaffiliated insurance companies, and assumes from Employers
Mutual an amount equal to its participation in the pool. All premiums, losses,
settlement expenses and other underwriting and administrative expenses,
excluding the voluntary reinsurance business assumed by Employers Mutual from
nonaffiliated insurance companies, are prorated among the parties on the basis
of participation in the pool. The aggregate participation of the Company's
property and casualty insurance subsidiaries is 23.5 percent. Employers Mutual
negotiates reinsurance agreements that provide protection to the pool and each
of its participants, including protection against losses arising from
catastrophic events.
 
     Premiums assumed by the reinsurance subsidiary from Employers Mutual
amounted to $97,637,066 in 2004. It is customary in the reinsurance business for
the assuming company to compensate the ceding company for the acquisition
expenses incurred in the generation of the business. Commissions paid by the
reinsurance subsidiary to Employers Mutual amounted to $20,621,898 in 2004.
 
     The Company's reinsurance subsidiary pays an annual override commission to
Employers Mutual in connection with the $1,500,000 cap on losses assumed per
event. The override commission rate is charged at 4.50 percent of written
premiums. Total override commission paid to Employers Mutual in 2004 amounted to
$4,393,668. Employers Mutual retained losses and settlement expenses under this
agreement totaling $11,277,246 in 2004. The reinsurance subsidiary also pays for
100 percent of the outside reinsurance protection Employers Mutual purchases to
protect itself from catastrophic losses on the assumed reinsurance business,
excluding reinstatement premiums. This cost is recorded as a reduction to the
premiums received by the reinsurance subsidiary and amounted to $3,626,833 in
2004.
 
     Employers Mutual provides various services to all of its subsidiaries and
affiliates, including the Company and its subsidiaries. Such services include
data processing, claims, financial, legal, actuarial, auditing, marketing and
underwriting. Employers Mutual allocates a portion of the cost of these services
to the subsidiaries that do not participate in the pooling agreement based upon
a number of criteria. The remaining costs are charged to the pooling agreement
and each pool participant shares in the total cost in accordance with its pool
participation percentage. Costs allocated to the Company by Employers Mutual for
services
                                        13

 
provided to the holding company and its subsidiaries that do not participate in
the pooling agreement amounted to $2,300,700 in 2004. Costs allocated to the
Company through the operation of the pooling agreement amounted to $73,305,162
in 2004.
 
     Investment expenses are based on actual expenses incurred by the Company
plus an allocation of other investment expenses incurred by Employers Mutual,
which is based on a weighted average of total invested assets and number of
investment transactions. Investment expenses allocated to the Company by
Employers Mutual amounted to $699,807 in 2004. In the third quarter of 2004,
subsidiaries of the Company sold $4,447,000 of MCI Communications Corporation
bonds to an affiliated company at market value. In addition, a subsidiary of the
Company leased office space from an affiliate of Employers Mutual which is used
as a branch office. These lease payments amounted to $352,000 in 2004.
 
                                        14

 
                            STOCK PERFORMANCE GRAPH
 
     The following graph compares the cumulative total stockholder return on the
Company's Common Stock to the NASDAQ Total Return Index for U.S. companies and a
published Industry Index, which is the Media General Industry Group 432, over a
five-year period beginning December 31, 1999 and ending December 31, 2004. The
total stockholder return assumes $100.00 invested at the beginning of the period
in the Company's Common Stock, the NASDAQ Market Index and the Industry Index.
It also assumes reinvestment of all dividends for the period.
 
                   COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
              AMONG EMC INSURANCE GROUP INC., NASDAQ MARKET INDEX
                               AND INDUSTRY INDEX
 
                              (PERFORMANCE GRAPH)
 


                                            1999      2000     2001     2002     2003     2004
                                           -------   ------   ------   ------   ------   ------
                                                                       
EMC INSURANCE GROUP INC. ................  $100.00   137.43   210.29   226.66   276.74   291.56
INDUSTRY INDEX...........................  $100.00   137.29   117.41    93.17   114.18   122.56
NASDAQ MARKET INDEX......................  $100.00    62.85    50.10    34.95    52.55    56.97

 
                         EXECUTIVE COMPENSATION REPORT
 
     This Report has historically been provided by the Senior Executive
Compensation and Stock Option Committee of the Board of Directors of Employers
Mutual (the "Compensation Committee"), as the executive officers of the Company
are employed by Employers Mutual. For 2004, the compensation of the executive
officers of the Company was initially determined by the Compensation Committee,
with subsequent
 
                                        15

 
approval by the full Board of Directors of Employers Mutual. In 2004, the
Company's Board of Directors established its own compensation committee (the
"Company Compensation Committee") and, commencing in 2005, the Company
Compensation Committee will consider and approve the compensation and benefit
programs for the Company's Chief Executive Officer and other executive officers
and will provide its first report in the Company's 2006 proxy statement.
 
COMPENSATION PHILOSOPHY
 
     The philosophy followed in establishing executive officer compensation is
to provide a structure that will allow for a level of compensation that is
competitive within the insurance industry and, more particularly, with a peer
group of companies within the property and casualty insurance industry. That
peer group, certain members of which are included in the industry index used in
the performance graph appearing on the previous page of this proxy statement, is
comprised of companies that are similar in size, have comparable insurance
products and that have been identified as the competition with respect to such
things as the quality of the products and services provided, and which tend to
compete in the same targeted markets as does Employers Mutual. The philosophy
also seeks to provide a level of compensation that will attract and retain
highly qualified, motivated executive officers who will enhance Employers
Mutual's ability to continue its long history of steady growth and financial
strength.
 
EXECUTIVE OFFICER COMPENSATION COMPONENTS
 
     The compensation of executive officers is provided primarily through the
use of three major components, consisting of a base salary, a cash bonus program
and stock option awards. Each of these elements is designed to achieve
particular results and to award compensation based on measurement of individual
and collective executive officer performance.
 
     BASE SALARIES.  In establishing the base salaries of executive officers,
the Compensation Committee obtains salary surveys from three industry-recognized
sources. From these surveys, salary ranges are established for each executive
officer position. An executive officer's salary is then set within that range.
The factors considered in placement within the range include the executive
officer's contribution to the achievement of identified business objectives,
demonstrated leadership skills, overall management effectiveness, length of
service and the Chief Executive Officer's report on the overall performance and
progress of each executive officer during the past year.
 
     BONUS PROGRAM.  The Employers Mutual Senior Executive Compensation Bonus
Program is designed to provide short-term incentives based on annual
performance. The program provides that eligible executive officers may receive a
cash bonus based on three areas of performance measured against targets
established by the Compensation Committee on an annual basis. This program
compares consolidated written premium growth to an established goal, growth of
consolidated statutory surplus and comparison of the consolidated statutory
combined ratio to both a target ratio and the combined ratio experienced in the
industry. Each performance standard is weighted in its importance in the bonus
formula. The maximum bonuses that may be earned vary by executive officer levels
and range from 50 to 65 percent of an executive officer's base salary. Any bonus
earned is paid in the following year. In 2004, the established goals of this
program were not met, and therefore no cash bonuses were earned by the executive
officers.
 
     STOCK OPTIONS.  Long-term incentive compensation opportunities are provided
for executive officers through the use of incentive stock option grants. Because
of the Pooling Agreement that Employers Mutual has with two of its subsidiaries,
an affiliate and four subsidiaries of the Company, the Compensation
 
                                        16

 
Committee believes that superior performance by the executive officers of
Employers Mutual has a significant impact on the performance of the Common Stock
of the Company, thereby providing long-term appreciation in the value of the
options held by the executive officers. Therefore, the Common Stock of the
Company is utilized for these option grants. The incentive stock option plan
provides that all stock options be granted at option prices equal to the fair
market value of the Common Stock on the date of grant. The options have a term
of ten years and a vesting period of two, three, four or five years, with
options generally becoming exercisable in equal annual cumulative increments.
The Compensation Committee has established formal guidelines for granting stock
options to eligible executive officers.
 
     Those guidelines provide for base option award ranges for executive
officers based upon their level of authority and responsibility and provide for
the granting of discretionary option awards to executive officers based upon
such factors as individual performance, attainment of agreed goals and
objectives, and other contributions to overall results.
 
     OTHER COMPENSATION.  The executive officers also receive other forms of
compensation pursuant to certain plans adopted by Employers Mutual, some of
which are generally available to all employees of Employers Mutual (subject to
standard eligibility requirements) and some of which are limited to executive
officers. Employers Mutual maintains an Executive Non-Qualified Excess Plan
(ENEP) which allows those executive officers whose compensation level limits
their deferral percentage under Employers Mutual's defined contribution 401(k)
Plan to defer up to 25 percent of their salary between the 401(k) Plan and the
ENEP. Employers Mutual matches 100 percent of the first five percent of covered
compensation deferred under the ENEP for certain officers. Employers Mutual
maintains a program under which an executive can elect to forgo up to 100% of
his or her annual bonus in exchange for the right to discounted phantom units of
various mutual funds.
 
     During 2004, Employers Mutual also maintained an Excess Retirement Benefit
Agreement and a Supplemental Executive Retirement Plan. These non-qualified
supplemental retirement plans restore benefits to eligible executive officers
who are prevented from receiving full benefits from Employers Mutual's qualified
pension plan because of their deferral of bonus income and the restrictions
imposed by the IRS on the amount of covered compensation that can be credited
to, and the maximum benefits that can be received from, qualified pension plans.
 
     Effective October 1, 2004, Employers Mutual established a new Supplemental
Retirement Plan. This plan is an unfunded, non-qualified retirement plan
maintained primarily for providing additional deferred compensation for a select
group of executive officers as designated under the provisions of the Employee
Retirement Income Security Act of 1974. This plan replaced the Excess Retirement
Benefit Agreement and the Supplemental Executive Retirement Plan identified
above. Accrued benefits under the previous plans were transferred to the new
Supplemental Retirement Plan. While no payments were made under this plan in
2004, plan benefits began to accrue for the participating executive officers as
of the plan's effective date.
 
     Certain executive officers of the Company may receive other compensation in
the form of professional education designation awards, excess group life
insurance premiums paid on their behalf and automobile and country club
membership allowances. The Compensation Committee considers all of these forms
of compensation in its process of setting compensation pursuant to the three
components noted above.
 
COMPENSATION OF CHIEF EXECUTIVE OFFICER
 
     For 2004, the Compensation Committee established Mr. Kelley's base salary
at $565,200, which was 11% percent higher than his base salary for 2003. Under
the terms of the Senior Executive Compensation Bonus
                                        17

 
Program, no bonus was earned by Mr. Kelley for 2004. Mr. Kelley was granted a
stock option award for 6,000 shares at an option price of $22.28. During 2004,
Mr. Kelley received a matching payment under the ENEP of $43,822, and has
accrued a retirement benefit of $954,548 from all qualified and non-qualified
plans. Mr. Kelley also benefited from premium payments totaling $496 made on his
behalf for excess group life insurance. Employers Mutual provided Mr. Kelley
with an automobile, a country club membership, and access to financial and tax
planning services at a total cost to Employers Mutual of $9,514.
 
     In establishing the total compensation package for 2004 for Mr. Kelley, the
Compensation Committee considered, among other factors, the following:
 
     - achievement of a low combined ratio compared to that experienced by the
       industry;
 
     - significant surplus growth from results of both operations and investment
       portfolio management;
 
     - improvements in branch office organization and operation;
 
     - a loan to the Property Loss Reserve Bureau, which preserved that
       organization's existence as a resource for Employers Mutual's efficient
       claims handling activities;
 
     - the successful affiliation of Employers Mutual's life insurance
       subsidiary with National Travelers Life Company; and
 
     - the completion of an asbestos reserve study which provided the basis for
       maintenance of a consistent level of reserve adequacy.
 
     Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held companies for compensation of more than $1.0 million
paid to a company's chief executive officer or any executive officer named in
its Summary Compensation Table. Qualifying performance-based compensation is not
subject to the deduction limit if certain requirements are met. The policy of
the Compensation Committee is to structure the compensation of our executive
officers, including Mr. Kelley, to avoid the loss of the deductibility of any
compensation, although Section 162(m) will not preclude our Compensation
Committee from awarding compensation in excess of $1.0 million, if it should be
warranted in the future. We believe that Section 162(m) will not have any effect
on the deductibility of the compensation of Mr. Kelley and the other executive
officers named in the Summary Compensation Table for 2004.
 
     The members of the Senior Executive Compensation and Stock Option Committee
of Employers Mutual are as follows and hereby submit this Executive Compensation
Report.
 
                                          Blaine A. Briggs -- Chairman
                                          Thomas W. Booth
                                          John C. Burgeson
                                          Gale L. Griffin
                                          Lanning MacFarland, Jr.
                                          Philip T. Van Ekeren
 
                                        18

 
              PROPOSAL TO AMEND THE 2003 EMPLOYERS MUTUAL CASUALTY
           COMPANY INCENTIVE STOCK OPTION PLAN TO INCREASE THE NUMBER
                              OF SHARES AUTHORIZED
 
     In March 2005, the Boards of Directors of Employers Mutual and the Company
approved an amendment to the 2003 Employers Mutual Casualty Company Incentive
Stock Option Plan (the "Plan"), subject to the approval of Employers Mutual's
policyholders and the Company's stockholders. The policyholders of Employers
Mutual approved the amendment to the Plan on March 9, 2005.
 
     The amendment being submitted for stockholder approval would increase the
number of shares of Common Stock reserved for issuance under the Plan from
500,000 to 1,500,000. The Boards of Directors of Employers Mutual and the
Company believe that the existing plan has been effective in attracting and
retaining executives and key employees for Employers Mutual, the Company and
their subsidiaries.
 
PURPOSE OF THE PLAN
 
     The purpose of the Plan is to promote the interests of the stockholders of
the Company, Employers Mutual, its subsidiaries and its policyholders, and the
Company and its subsidiaries, by strengthening the ability of such companies to
attract and retain valuable employees by encouraging such employees to acquire
or to increase their ownership of the Company's Common Stock, thereby
maintaining their personal interest in the continued success and progress of the
Company, Employers Mutual and their subsidiaries.
 
SHARES SUBJECT TO THE PLAN
 
     The total amount of stock on which options may be granted under the Plan
shall not exceed 1,500,000 shares. This number is subject to adjustment to
reflect the payment of any stock dividends, a subdivision or combination of
shares of stock, a stock split or a reclassification of stock or any merger or
consolidation in which the Company is the surviving corporation.
 
ELIGIBLE EMPLOYEES
 
     Approximately 86 persons are presently eligible to participate in the Plan,
these being key employees and certain officers of Employers Mutual, the Company
and their subsidiaries.
 
ADMINISTRATION OF THE PLAN
 
     The Senior Executive Compensation and Stock Option Committee (the
"Committee") of Employers Mutual's Board of Directors will be the administrator
of the Plan and will select the individuals to whom options will be granted and
the number of shares of Common Stock for which options will be granted.
 
     As administrator of the Plan, the Committee has the authority to establish
such rules and regulations with respect to the Plan as it deems appropriate and
to interpret and implement such rules and regulations. If at any time the
Committee consists of any individuals who are eligible to participate in the
Plan, all authority to administer the Plan will pass to such other committee as
may be appointed by the Board of Employers Mutual.
 
     The Board of Directors of Employers Mutual may at any time terminate, amend
or modify the Plan, provided that no amendment, modification or termination of
the Plan may affect any option right previously granted to an optionee under the
Plan without the consent of the optionee.
 
                                        19

 
GRANT OF OPTIONS
 
     Options under the Plan may be granted any time through December 31, 2012.
Generally, the Plan provides for the vesting of options commencing one year
after the date such option was granted, with vesting in increments of two,
three, four or five years. At the discretion of the Committee, options may be
granted with terms of two or more years, not to exceed ten years.
 
     The following table reflects all options granted under the Plan from its
inception through April 6, 2005.
 


                                                               NUMBER OF OPTIONS
2003 INCENTIVE STOCK OPTION PLAN BENEFITS                           GRANTED
-----------------------------------------                      -----------------
                                                            
NAME AND POSITION
Bruce G. Kelley, President & CEO............................         29,000
Ronald W. Jean, Executive Vice President for Corporate
  Development...............................................         25,000
William A. Murray, Executive Vice President & COO...........         25,000
Raymond W. Davis, Senior Vice President -- Investments &
  Treasurer.................................................          7,000
David O. Narigon, Senior Vice President -- Claims...........          2,000
Executive Officer Group.....................................        142,300
Non-Executive Officer Employee Group........................        288,950

 
OPTION PRICE
 
     The option price per share of Common Stock granted under the Plan must not
be less than 100% of the fair market value of the Company's Common Stock on the
date of grant, fair market value being the mean between the high and low price
published in The Wall Street Journal for such date.
 
     Neither the Company nor Employers Mutual will receive any payment from the
optionee at the time the option is granted. Payment for options exercised by an
optionee must be made in full in cash or by surrendering to the Company shares
of the Company's Common Stock already owned by the optionee at the time of
exercise.
 
SPECIAL PLAN PROVISIONS
 
     The Plan prohibits grants of incentive stock options to any one employee
which would permit the employee to receive options which are exercisable for the
first time in any one calendar year which exceed $100,000 in aggregate fair
market value, determined as of the date of grant. The Plan does not contain any
restriction on the total number of options which may be granted to any one
employee under the Plan, although incentive stock options generally may not be
granted to any one employee owning more than 10 percent of the combined voting
power of such person's employer and its parent and subsidiaries. No individuals
possessed such voting power as of April 6, 2005.
 
     No option may be transferred by an optionee other than by will or the laws
of descent and distribution, and, during an optionee's lifetime, options granted
to an employee may be exercised only by such employee.
 
     The Plan has special provisions concerning the exercise of options in the
event of the termination of employment, or the death or disability of an
optionee, but in no event may options be exercised more than twelve months after
the occurrence of any such event.
 
                                        20

 
TAX CONSEQUENCES OF THE PLAN
 
     The Federal income tax consequences incident to the issuance and exercise
of options pursuant to the Plan are as follows: no regular tax consequences
result from the grant of an incentive stock option nor from the exercise of an
incentive stock option by the optionee. When the stock is sold or exchanged
after completion of the holding period (that is, after the stock has been held
to a date that is both two years after the date on which the option was granted
and one year after the date of exercise of the option), the optionee will
recognize, as capital gains income (or loss), the difference between the sale
price and the basis of the stock (normally the option price). Neither the
Company nor Employers Mutual will receive any deduction with respect to stock
acquired pursuant to the exercise of an incentive stock option, except for a
disposition prior to the end of the required holding period.
 
     If the stock acquired through the exercise of an incentive stock option is
sold before the end of the required holding period, the optionee would
recognize, as compensation, the amount of the spread between the option price
and the fair market value of the stock at the time of the exercise of the
option. This compensation income is then added to the stock basis in determining
the gain or loss on the sale. The amount which the optionee recognizes as income
is deductible by the participating company as compensation and will be allocated
among the Company and Employers Mutual and its subsidiaries and affiliates in
the same manner as any other deduction. Although the exercise of an incentive
stock option does not result in taxable income, the spread between the option
price and the fair market value at the time of exercise is an item of tax
preference for alternative minimum tax purposes.
 
STOCKHOLDER APPROVAL
 
     Any increase in the maximum number of shares available under the Plan will
be conditional upon the subsequent approval by the stockholders.
 
     The following table presents information regarding all of the Employers
Mutual's equity compensation plans as of April 6, 2005.
 


                                                                                     NUMBER OF
                                                                                     SECURITIES
                                                                                     REMAINING
                                                                                   AVAILABLE FOR
                                              NUMBER OF                           FUTURE ISSUANCE
                                          SECURITIES TO BE                          UNDER EQUITY
                                             ISSUED UPON      WEIGHTED-AVERAGE      COMPENSATION
                                             EXERCISE OF      EXERCISE PRICE OF   PLANS (EXCLUDING
                                             OUTSTANDING         OUTSTANDING         SECURITIES
                                          OPTIONS, WARRANTS   OPTIONS, WARRANTS     REFLECTED IN
                                             AND RIGHTS          AND RIGHTS          COLUMN (A)
PLAN CATEGORY                                    (A)                 (B)                (C)
-------------                             -----------------   -----------------   ----------------
                                                                         
Equity compensation plans approved by
  security holders......................       798,792             $16.12              62,950
Equity compensation plans not approved
  by security holders...................            --                N/A                 N/A
Total...................................       798,792             $16.12              62,950
                                               =======             ======              ======

 
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT TO
THE 2003 EMPLOYERS MUTUAL CASUALTY COMPANY INCENTIVE STOCK OPTION PLAN TO
INCREASE THE NUMBER OF SHARES AUTHORIZED.
 
                                        21

 
                             AUDIT COMMITTEE REPORT
 
     As reported earlier, the Audit Committee of the Board of Directors is
composed of three members. All members of the Audit Committee are independent
under NASDAQ Corporate Governance Rules and SEC Rules. The Audit Committee's
responsibilities are described in a written charter. A copy of the Audit
Committee's written charter may be obtained on the Company's website at
www.EMCInsurance.com.
 
     Management is responsible for the internal controls and financial reporting
processes of the Company. The independent auditors are responsible for
performing an independent audit of the consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report to
the Company's stockholders and Board of Directors on the results of this audit.
The Committee's responsibility is to monitor and oversee these processes.
 
     At each of its eight meetings during calendar year 2004, the Committee met
and held discussions with management and Ernst & Young LLP, independent auditors
for the Company. Two of these meetings included sessions at which management was
not present. The Committee discussed with Ernst & Young the results of its
examination of the consolidated financial statements and its assessment of the
overall quality of the Company's financial reporting controls.
 
     Management represented to the Committee that the consolidated financial
statements were prepared in accordance with U.S. generally accepted accounting
principles. The Committee reviewed and discussed the consolidated financial
statements with management and Ernst & Young. The Committee also discussed with
Ernst & Young matters related to the financial reporting process required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees) issued by and as amended by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
 
     Ernst & Young provided to the Committee the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Committee reviewed with Ernst &
Young that firm's independence. The Committee determined that the non-audit
services provided by Ernst & Young during the 2004 calendar year are compatible
with maintaining its independence.
 
     Based on the Committee's discussions with management and Ernst & Young, the
Committee's review of the representations of management, and the report of Ernst
& Young to the Committee, the Committee recommended that the Board of Directors
include the audited consolidated financial statements in the Company's Annual
Report on Form 10-K to be filed with the Securities and Exchange Commission for
the year ended December 31, 2004. The Committee also has recommended that the
shareholders ratify the Committee's selection of Ernst & Young as independent
auditors for calendar year 2005.
 
                                          AUDIT COMMITTEE
                                          David J. Fisher, Chairman
                                          George C. Carpenter III
                                          Joanne L. Stockdale
 
                                        22

 
     The following table sets forth the fees for professional audit services
rendered by Ernst & Young for the audit of the Company's annual financial
statements for the years ended December 31, 2004 and 2003, and fees billed for
other services rendered by Ernst & Young during 2004 and 2003.
 


                                            2004       2003
                                          --------   --------
                                               
Audit Fees(1)...........................  $328,743   $142,127
Audit Related Fees(2)...................     1,116     27,979
Tax Fees(3).............................    36,001     18,426
All Other Fees(4).......................       862      6,057
                                          --------   --------
Total Fees..............................  $366,722   $194,589
                                          ========   ========

 
---------------
 
Notes:
 
(1) Audit fees consist of fees for the audit of the Company's annual financial
    statements, review of financial statements included in the Company's
    quarterly reports on Form 10-Q and services normally provided by the
    independent auditor in connection with the statutory and regulatory filings
    or engagements. The audit fees reported for 2004 include $156,420 paid to
    Ernst & Young in connection with the Company's public offering of stock and
    the preparation of the related S-1 Registration Statement.
 
(2) Audit-related fees consisted primarily of services related to either
    internal control related matters or services regarding financial and
    accounting reporting standards for matters not addressed during the audit.
 
(3) Tax fees consist of fees for tax advisory and compliance services for the
    Company and Employers Mutual's employee benefit plans.
 
(4) All other fees consist of fees for all other services other than those
    reported above.
---------------
 
     The Audit Committee pre-approves all audit and permissible non-audit
services provided by the independent auditors. These services may include audit
services, audit-related services, tax services and other services. Pre-approval
is generally provided for up to one year and any pre-approval is detailed with
regard to each particular service and its related fees. In addition, the Audit
Committee may pre-approve any services not anticipated or services whose costs
exceed the previously pre-approved amounts. In addition, the Audit Committee has
delegated its pre-approval authority to the Chairman of the Audit Committee, who
has the authority to pre-approve any services not anticipated or services whose
costs exceed previously pre-approved amounts, provided all pre-approval
decisions made by the Chairman are reported to the Audit Committee at its next
meeting.
 
              RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
 
     Ernst & Young LLP (E&Y) audited the financial statements of the Company for
the year ended December 31, 2004. The Board of Directors has selected E&Y as
auditors for the fiscal year ending December 31, 2005 and the stockholders are
asked to ratify that selection. During 2004, in connection with its audit
function, E&Y provided services to the Company which included the examination of
the annual consolidated financial statements, assistance with requirements of
the Securities and Exchange Commission under the Securities Exchange Act of 1934
and advisory services regarding various financial and accounting matters.
 
                                        23

 
     A representative of E&Y will be present at the Annual Meeting. The
auditor's representative will have the opportunity to make a statement if he or
she desires to do so, and will be available to respond to appropriate questions.
 
     We are asking our stockholders to ratify the selection of E&Y as our
independent auditor. Although this ratification is not required by current laws,
rules and regulations, or the Company's By-Laws, Audit Committee Charter or
otherwise, the Board of Directors is submitting the selection of E&Y to our
stockholders for ratification as a matter of good corporate practice. Even if
the selection is ratified, the Audit Committee, in its discretion, may select a
different registered public accounting firm at any time during the year if it
determines that such a change would be in the best interests of the Company and
our stockholders.
 
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THIS
APPOINTMENT. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED IN THE
ABSENCE OF DIRECTION TO THE COMPANY.
 
                                 OTHER MATTERS
 
     The Board, in addition to the Company's Code of Corporate Conduct, has
adopted a Code of Ethics applicable to the Company's senior financial officers,
including the Company's Chief Executive Officer, Chief Financial Officer,
Treasurer, and principal accounting officer or controller, or persons performing
similar functions. The Company's Code of Ethics for senior financial officers is
available on the Company's website at www.EMCInsurance.com.
 
     The Board of Directors knows of no matters other than those described above
that may come before the Annual Meeting. As to other matters, if any, that
properly may come before the Annual Meeting, the Board of Directors intends that
proxies in the accompanying form will be voted in respect thereof in accordance
with the judgment of the person or persons voting the proxies.
 
                 STOCKHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
           AND STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
 
     Stockholder proposals for inclusion in the Company's Proxy Statement for
the 2006 Annual Meeting of Stockholders must be received by the Company no later
than December 17, 2005. The person submitting the proposal must have been a
record or beneficial owner of the Company's Common Stock for at least one year,
the securities so held must have a market value of at least $2,000 and the
securities must be held on the date of the meeting. Any such proposal will be
included in the Proxy Statement for the 2006 Annual Meeting if the rules of the
Securities and Exchange Commission are satisfied with respect to the timing and
form of such proposal, and if the content of such stockholder proposal is
determined by the Company to be appropriate under the rules promulgated by the
Securities and Exchange Commission.
 
                                        24

 
     The Board has implemented a process whereby stockholders may send
communications directly to the Board's attention. Any stockholder wanting to
communicate with the Board, or one or more specific members thereof, should send
his or her written communication to the Office of the General Counsel, EMC
Insurance Group Inc., P.O. Box 712, Des Moines, Iowa 50303. The General Counsel
of the Company has been instructed by the Board to screen such communications
for validation and then promptly forward all such communications to the
specified addressee thereof.
 
April 18, 2005.
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
                                          DONALD D. KLEMME, Secretary
 
                                        25

                            EMC INSURANCE GROUP INC.
                             PROXY FOR COMMON STOCK
                  ANNUAL MEETING OF STOCKHOLDERS-MAY 26, 2005
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Bruce G. Kelley and George W. Kochheiser, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of stock of EMC Insurance Group Inc. held of record by the undersigned on
April 6, 2005 at the Annual Meeting of Stockholders to be held on May 26, 2005
or any adjournment thereof.


                                                                    
        1. ELECTION OF DIRECTORS    [ ] FOR all nominees listed below     [ ] WITHHOLD AUTHORITY
                             (except as marked to the contrary below)         to vote for all nominees listed below

Margaret A. Ball, George C. Carpenter III, David J. Fisher, Bruce G. Kelley, George W. Kochheiser, Raymond A. Michel,
Fredrick A. Schiek, Joanne L. Stockdale

(INSTRUCTION: To withhold authority to vote for any individual nominee, write that name on the space provided below.)

------------------------------------------------------------------------------------------------------------------------

        2. PROPOSAL TO AMEND EMPLOYERS MUTUAL CASUALTY COMPANY'S 2003 INCENTIVE STOCK OPTION PLAN TO INCREASE THE NUMBER
        OF SHARES SUBJECT THERETO.

                                     [ ] FOR          [ ] AGAINST          [ ] ABSTAIN

        3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.

                                     [ ] FOR          [ ] AGAINST          [ ] ABSTAIN

        4. OTHER BUSINESS in their discretion, the proxies are authorized to vote upon such other business as may 
        properly come before the meeting.






THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.


                                   Please sign exactly as your name appears.
                                   When shares are held by joint tenants, both
                                   should sign. When signing as attorney,
                                   executor, administrator, trustee or guardian,
                                   please give full title as such. If a
                                   corporation, please sign in full corporate
                                   name by President or other authorized
                                   officer. If a partnership, please sign in
                                   partnership name by authorized person.

                                   DATE:                                 ,2005.
                                        --------------------------------

                                   ---------------------------------------------
                                   Signature

                                   ---------------------------------------------
                                   Signature if held jointly

                                   PLEASE MARK, SIGN, DATE AND RETURN THE PROXY 
                                   CARD PROMPTLY. USING THE ENCLOSED ENVELOPE.