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

                                 FORM 10-Q

              Quarterly Report Under Section 13 or 15(d) of the
                      Securities Exchange Act of 1934 

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH  31, 1998                         
                               ----------------------------------------
                                       OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from                  to                     
                              ------------------  ---------------------

Commission File Number: 0-10956     
                       --------

                          EMC INSURANCE GROUP INC.               
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)

             Iowa                                            42-6234555    
-------------------------------                          -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)


717 Mulberry Street, Des Moines, Iowa                            50309     
---------------------------------------                       ----------
(Address of principal executive office)                       (Zip Code)


                               (515) 280-2902                   
            ----------------------------------------------------
            (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X    No    
                                              -----    -----

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                  Class                      Outstanding at April 30, 1998  
                  -----                      -----------------------------
     Common stock, $1.00 par value                       11,420,259
                                                        

Total pages   16  
            ------
                                     
<PAGE>  
PART I.  FINANCIAL INFORMATION
-------  ---------------------
Item 1.  Financial Statements 
-------  ---------------------


                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                            Consolidated Balance Sheets

                                                     March 31,   December 31,
                                                       1998          1997    
                                                     ---------   ------------
ASSETS

Investments:
  Fixed maturities:
    Securities held-to-maturity, at amortized cost
      (market value $192,174,421 and $193,835,013) $184,455,468  $185,829,063
    Securities available-for-sale, at market value
      (amortized cost $169,824,924 and
      $172,717,206) ..............................  176,507,120   179,652,738
  Equity securities available-for-sale, at market 
    value (cost $25,867,407 and $26,261,157) .....   33,705,585    30,972,732
  Short-term investments, at cost ................   28,248,086    14,926,994
                                                   ------------  ------------
           Total investments .....................  422,916,259   411,381,527

Cash .............................................    1,820,850     1,200,300
Indebtedness of related party ....................            -       822,403
Accrued investment income ........................    5,778,665     5,752,295
Accounts receivable ..............................    1,326,362     1,457,312
Deferred policy acquisition costs ................   11,740,355    10,560,657
Deferred income taxes ............................    9,125,116     9,751,721
Intangible assets, including goodwill, at cost
  less accumulated amortization of $2,111,810
  and $2,078,182 .................................    1,446,010     1,479,638
Reinsurance receivables ..........................   14,359,605    13,601,691
Prepaid reinsurance premiums .....................    1,194,486     1,195,065
Other assets .....................................    2,232,573     1,907,187
                                                   ------------  ------------
           Total assets .......................... $471,940,281  $459,109,796
                                                   ============  ============

See accompanying Notes to Interim Consolidated Financial Statements.
                                      
<PAGE>  
                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                            Consolidated Balance Sheets

                                                    March 31,    December 31,
                                                       1998          1997    
                                                   ------------  ------------
LIABILITIES

Losses and settlement expenses ................... $223,061,605  $217,777,942
Unearned premiums ................................   56,107,897    54,857,463
Other policyholders' funds .......................    3,146,143     2,781,544
Indebtedness to related party ....................    2,302,544             -
Income taxes payable .............................    2,615,000     3,548,000
Postretirement benefits ..........................    5,665,640     5,428,913
Deferred income ..................................      399,766       446,678
Other liabilities ................................   10,954,069    11,922,800
                                                   ------------  ------------
       Total liabilities .........................  304,252,664   296,763,340
                                                  
STOCKHOLDERS' EQUITY

Common stock, $1 par value, authorized 20,000,000
  shares; issued and outstanding, 11,400,687
  shares in 1998 and 11,351,119 shares in 1997 ...   11,400,687    11,351,119
Additional paid-in capital .......................   66,536,404    65,916,681
Accumulated other comprehensive income ...........    9,583,447     7,687,092
Retained earnings ................................   80,167,079    77,391,564
                                                   ------------  ------------
       Total stockholders' equity ................  167,687,617   162,346,456
                                                  
       Total liabilities and stockholders' equity  $471,940,281  $459,109,796
                                                   ============  ============

See accompanying Notes to Interim Consolidated Financial Statements.
                                      
<PAGE>
                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

             Consolidated Statements of Income and Comprehensive Income
                                                

                                                       Three months ended
                                                            March 31,        
                                                     ------------------------
                                                         1998        1997    
                                                     -----------  -----------
REVENUES:
  Premiums earned .................................. $45,688,223  $42,458,343
  Investment income, net ...........................   6,277,273    5,744,736
  Realized investment gains ........................      89,165       57,305
  Other income .....................................      46,912       59,685
                                                     -----------  -----------
                                                      52,101,573   48,320,069

LOSSES AND EXPENSES:
  Losses and settlement expenses ...................  30,390,250   31,649,886
  Dividends to policyholders .......................   1,002,339      749,061
  Amortization of deferred policy acquisition costs    9,127,619    8,172,702
  Other underwriting expenses ......................   5,568,038    5,677,868
                                                     -----------  -----------
                                                      46,088,246   46,249,517
                                                     -----------  -----------
        Income before income taxes .................   6,013,327    2,070,552
                                                     -----------  -----------
INCOME TAXES:
  Current ..........................................   1,885,000      663,497
  Deferred .........................................    (350,307)    (340,844)
                                                     -----------  -----------
                                                       1,534,693      322,653
                                                     -----------  -----------
        Net income .................................   4,478,634    1,747,899
                                                     -----------  -----------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Unrealized holding gains arising during the
    period (deferred tax (benefit) of $1,005,725
    and($886,112)) .................................   1,952,289   (1,720,100)

  Reclassification adjustment for gains included
    in net income (income tax
    of $28,815 and $19,484) ........................     (55,934)     (37,821)
                                                     -----------  -----------
                                                       1,896,355   (1,757,921)
                                                     -----------  -----------
        Total comprehensive income ................. $ 6,374,988  $   (10,022)
                                                     ===========  ===========

Net income per common share - basic and diluted ....        $.39         $.16
                                                     ===========  ===========

Dividends per common share .........................        $.15         $.15
                                                     ===========  ===========

Average number of common shares outstanding 
  - basic and diluted ..............................  11,356,381   11,094,730
                                                     ===========  ===========

See accompanying Notes to Interim Consolidated Financial Statements.

                                      
<PAGE>
                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                       Consolidated Statements of Cash Flows
                                              

                                                     Three months ended
                                                          March 31,         
                                                  --------------------------
                                                      1998          1997    
                                                  ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .................................... $  4,478,634  $  1,747,899
                                                 
  Adjustments to reconcile net income to net
     cash provided by operating activities:
      Losses and settlement expenses ............    1,975,325     5,471,177
      Unearned premiums .........................   (1,010,795)     (830,589)
      Other policyholders' funds ................      364,599       (12,109)
      Deferred policy acquisition costs .........   (1,179,698)     (690,834)
      Indebtedness of related party .............    3,124,947    (4,959,391)
      Accrued investment income .................      (26,370)      922,494
      Income taxes payable ......................     (933,000)   (1,554,000)
      Deferred income taxes .....................     (350,306)     (382,812)
      Realized investment gains .................      (89,165)      (57,305)
      Postretirement benefits ...................      236,727       128,838
      Reinsurance receivables ...................     (757,914)   (1,460,881)
      Prepaid reinsurance premiums ..............          579        67,740 
      Amortization of deferred income ...........      (46,912)      (59,685)
      Other, net ................................   (1,176,852)   (1,057,515)
                                                  ------------   -----------
                                                       131,165    (4,474,872)
      Cash provided by the change in the 
        property and casualty insurance
        subsidiaries' pooling agreement (note 2)     5,569,567     5,674,458

      Cash provided by the change in the 
        reinsurance subsidiary's quota share
        agreement (note 2) ......................            -     3,066,705
                                                  ------------  ------------
          Total adjustment ......................    5,700,732     4,266,291
                                                  ------------  ------------
            Net cash provided by
              operating activities .............. $ 10,179,366  $  6,014,190
                                                  ------------  ------------
<PAGE>
                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                 Consolidated Statements of Cash Flows, Continued
                                              

                                                     Three months ended
                                                          March 31,         
                                                  --------------------------
                                                      1998          1997    
                                                  ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of fixed maturity securities
    held-to-maturity ............................ $ (2,500,000) $ (2,499,700)
  Disposals of fixed maturity securities
    held-to-maturity ............................    3,893,187     1,803,525
  Purchases of fixed maturity securities
    available-for-sale ..........................   (6,025,815)  (15,672,330)
  Disposals of fixed maturity securities
    available-for-sale ..........................    8,951,500     9,384,110
  Net sales (purchases) of equity securities 
    available-for-sale ..........................      477,233      (792,787)
  Net (purchases) sales of short-term investments  (13,321,093)    1,894,294
                                                  ------------  ------------
      Net cash used in investing activities .....   (8,524,988)   (5,882,888)
                                                  ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock ......................       57,675       150,187
  Dividends paid to stockholders ................   (1,091,503)   (1,072,302)
                                                  ------------  ------------
      Net cash used in financing activities .....   (1,033,828)     (922,115)
                                                  ------------  ------------
NET INCREASE (DECREASE) IN CASH .................      620,550      (790,813)
Cash at beginning of year .......................    1,200,300     3,500,629
                                                  ------------  ------------
Cash at end of quarter .......................... $  1,820,850  $  2,709,816
                                                  ============  ============
Income taxes paid ............................... $  2,818,000  $  2,099,785

See accompanying Notes to Interim Consolidated Financial Statements.

<PAGE>


             EMC INSURANCE GROUP INC. AND SUBSIDIARIES

        Notes to Interim Consolidated Financial Statements
                     
                         March 31, 1998     
                                             

Note 1
------

The results of operations for the interim periods reported are
not necessarily indicative of results to be expected for the
year.  The information reflects all adjustments which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods.

In reading these financial statements, reference should be
made to the Company's 1997 Form 10-K or the 1997 Annual Report to
Shareholders for more detailed footnote information.

Note 2
------

Effective January 1, 1998, Farm and City Insurance Company (Farm
and City), a subsidiary of the Company that writes nonstandard
risk automobile insurance business, became a participant in the
EMC Insurance Companies pooling agreement.  Farm and City
assumes a 1.5 percent participation in the pool, which increased
the Company's aggregate participation in the pool from 22 percent
to 23.5 percent.  In connection with this change in the pooling
agreement, the Company's liabilities increased $6,224,586 and
invested assets increased $5,569,567.  The Company reimbursed
Employers Mutual Casualty Company (Employers Mutual) $726,509 for
commissions incurred to generate this business and Employers
Mutual paid the Company $71,490 in interest income as the actual
cash transfer did not occur until the end of March.

Effective January 1, 1997, a new affiliate of Employers Mutual 
began participating in the pooling agreement.  In connection with
this change in the pooling agreement, the Company's liabilities
increased $6,393,063 and invested assets increased $5,674,458. 
The Company reimbursed Employers Mutual $794,074 for commissions
incurred to generate this business and Employers Mutual paid the
Company $75,469 in interest income as the actual cash transfer
did not occur until the end of March.

Effective January 1, 1997, the reinsurance subsidiary's quota
share participation was increased from 95 percent to 100 percent.
In connection with this change in the quota share agreement, the
Company's liabilities increased $3,173,647 and invested assets
increased $3,066,705.  The Company reimbursed Employers Mutual
$106,942 for commissions incurred to generate this business.

Note 3
------

The Company adopted Statement of Financial Accounting Standards
(SFAS) 130, "Reporting Comprehensive Income" in the first quarter
of 1998.  SFAS 130 requires certain disclosures of comprehensive
income.  Adoption of this statement had no impact on the net
income of the Company.

The Company will adopt the presentation requirements of SFAS 131,
"Disclosures about Segments of an Enterprise and Related
Information", in the fourth quarter of 1998.  Management is
currently in the process of evaluating the segment reporting
disclosure requirements.  Adoption of this statement will have no
effect on the income of the Company.  

<PAGE>

             EMC INSURANCE GROUP INC. AND SUBSIDIARIES

        Notes to Interim Consolidated Financial Statements
                     
                         March 31, 1998     


The Company will adopt the disclosure requirements of SFAS 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits", in the fourth quarter of 1998.  The applicable
disclosures will be included in the footnotes to the financial
statements for the year ended December 31, 1998.  Adoption of
this statement will have no effect on the income of the Company.  

<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
          
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                
                                           


OVERVIEW

     EMC Insurance Group Inc., an approximately 67 percent owned
subsidiary of Employers Mutual Casualty Company (Employers
Mutual), is an insurance holding company with operations in
property and casualty insurance, reinsurance and an excess and
surplus lines insurance agency.  Property and casualty insurance
is the most significant segment, representing 80.8 percent of
consolidated premium income.  For purposes of this discussion,
the term "Company" is used interchangeably to describe EMC
Insurance Group Inc. (Parent company only) and EMC Insurance
Group Inc. and its subsidiaries.

     The Company's property and casualty insurance subsidiaries
and two subsidiaries and an affiliate of Employers Mutual are
parties to reinsurance pooling agreements with Employers Mutual
(collectively the "pooling agreement").  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 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.  Operations of the
pool give rise to intercompany balances with Employers Mutual,
which are settled on a quarterly basis.  The investment
activities and income tax liabilities of the pool participants
are not subject to the pooling agreement.

     The purpose of the pooling agreement is to spread the risk
of an exposure insured by any of the pool participants among all
the companies.  The pooling agreement produces a more uniform and
stable underwriting result from year to year for all companies in
the pool than might be experienced individually.  In addition,
each company benefits from the capacity of the entire pool,
rather than being limited to policy exposures of a size
commensurate with its own assets, and from the wide range of
policy forms, lines of insurance written, rate filings and
commission plans offered by each of the companies.  A single set
of reinsurance treaties is maintained for the protection of all
companies in the pool.  

     Effective January 1, 1998, Farm and City Insurance Company
(Farm and City), a subsidiary of the Company that writes
nonstandard risk automobile insurance business, became a
participant in the pooling agreement.  Farm and City assumes a
1.5 percent participation in the pool, which increased the
Company's aggregate participation in the pool from 22 percent to
23.5 percent.  As a result of this change in structure, the
Company now has four subsidiaries that comprise the property and
casualty insurance segment and no longer has a separate segment
for the nonstandard risk automobile insurance business.

<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 


     The Company's reinsurance subsidiary assumes a 100 percent
quota share portion of Employers Mutual's assumed reinsurance
business, exclusive of certain reinsurance contracts.  This
includes all premiums and related losses and settlement expenses
of this business, subject to a maximum loss of $1,500,000 per
event.  The reinsurance subsidiary does not reinsure any of
Employers Mutual's direct insurance business, nor any
"involuntary" facility or pool business that Employers Mutual
assumes pursuant to state law.  In addition, the reinsurance
subsidiary is not liable for credit risk in connection with the
insolvency of any reinsurers of Employers Mutual.

     The excess and surplus lines insurance agency provides
insurance agents access to the excess and surplus lines markets
and also functions as managing underwriter for such lines for
Employers Mutual and several of the pool members.

     The results of operations for the interim periods reported
are not necessarily indicative of results to be expected for the
year.  The information reflects all adjustments which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods.  


CONSOLIDATED RESULTS OF OPERATIONS

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                             1998        1997  
                                           --------    --------
Premiums earned .......................... $ 45,688    $ 42,458
Losses and settlement expenses ...........   30,390      31,649
Acquisition and other expenses ...........   15,698      14,600
                                           --------    --------
Underwriting loss ........................     (400)     (3,791) 
Net investment income ....................    6,277       5,745 
Realized investment gains ................       89          57 
Other income .............................       47          60 
                                           --------    --------
Operating income before income taxes ..... $  6,013    $  2,071 
                                           ========    ========
Incurred losses and settlement expenses:
  Insured events of the current year ..... $ 34,768    $ 32,789 
  Decrease in provision for insured 
    events of prior years ................   (4,378)     (1,140)
                                           --------    --------
      Total losses and settlement expenses $ 30,390    $ 31,649 
                                           ========    ========
Catastrophe and storm losses ............. $    519    $    963
                                           ========    ========

     Operating income before income taxes increased substantially
for the three months ended March 31, 1998 from the same period in
1997.  This increase is primarily attributable to improved
operating results in the property and casualty insurance
subsidiaries and the reinsurance subsidiary.  Operating results
of the excess and surplus lines insurance agency also improved,
but to a lesser degree.

<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premium income increased 7.6 percent for the three months
ended March 31, 1998 from the same period in 1997.  This increase
reflects production growth in both the property and
casualty insurance subsidiaries and the reinsurance subsidiary.  

     Losses and settlement expenses decreased 4.0 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This improvement reflects a substantial increase in the amount of
favorable development experienced in the actual settlement of
claims and changes in reserves associated with prior year losses. 
Additionally, mild winter weather conditions in the Midwest and a
low level of catastrophe and storm losses contributed to the
decline.

     Acquisition and other expenses increased 7.5 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This increase is the result of higher production levels in the
first quarter of 1998. 

     Net investment income increased 9.3 percent for the three
months ended March 31, 1998 from the same period in 1997.  This
increase reflects a rise in the average invested asset balance
coupled with lower investment expenses. 


SEGMENT RESULTS 

Property and Casualty Insurance

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                             1998        1997  
                                           --------    --------
Premiums earned .......................... $ 36,910    $ 31,974
Losses and settlement expenses ...........   24,904      23,122
Acquisition and other expenses ...........   12,704      11,230
                                           --------    --------
Underwriting loss ........................     (698)     (2,378) 
Net investment income ....................    4,409       3,763  
Realized investment gains ................       85          45  
                                           --------    --------
Operating income before income taxes ..... $  3,796    $  1,430 
                                           ========    ========
Incurred losses and settlement expenses:
  Insured events of the current year ..... $ 29,069    $ 24,577 
  Decrease in provision for insured 
    events of prior years ................   (4,165)     (1,455) 
                                           --------    --------
      Total losses and settlement expenses $ 24,904    $ 23,122  
                                           ========    ========
Catastrophe and storm losses ............. $    356    $    460  
                                           ========    ========

     As previously noted, the property and casualty insurance
subsidiaries' aggregate participation in the pooling agreement
was increased from 22 percent to 23.5 percent on January 1, 1998
with the addition of Farm and City.  Beginning in 1998,
underwriting results of the nonstandard risk automobile insurance
business written by Farm and City are included in the pool, with
23.5 percent of this business assumed by the property and casualty
subsidiaries. Prior year amounts have not been restated for this
change in structure.

<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premium income increased 15.4 percent (6.0 percent excluding
the addition of Farm and City to the property and casualty
insurance segment) for the three months ended March 31, 1998 from
the same period in 1997.  Increased production of both personal
and commercial lines of business from the existing
branch structure, supplemented with growth in new geographic
areas, contributed to this increase.  Competitive rates and an
emphasis on building and maintaining strong working relationships
with local agents are given credit for producing growth during
this period of intense market competition.  The workers'
compensation line of business, however, continues to be hampered
by rate reductions. 

     Losses and settlement expenses increased 7.7 percent (1.3
percent decrease excluding the addition of Farm and City to the
property and casualty insurance segment) for the three months
ended March 31, 1998 from the same period in 1997.  Results for
the first three months of 1998 reflect a significant increase in
the amount of favorable development experienced in the actual
settlement of claims and changes in reserves associated with
prior year losses.  Mild winter weather conditions in the Midwest
and a low level of catastrophe and storm losses also contributed
to the favorable loss experience. 

     Acquisition and other expenses increased 13.1 percent (3.4
percent excluding the addition of Farm and City to the property
and casualty insurance segment) for the three months ended March
31, 1998 from the same period in 1997.  This increase reflects
the growth in production achieved during the first quarter of
1998. 

     Net investment income increased 17.2 percent (9.2 percent
excluding the addition of Farm and City to the property and
casualty insurance segment) for the three months ended March 31,
1998 from the same period in 1997.  A higher average invested
balance in fixed maturity securities, coupled with a decrease in
investment expenses, contributed to this increase. 


Reinsurance
      
     Operating results for the three months ended March 31, 1998
and 1997 are as follows:

($ in thousands)                               1998       1997   
                                             --------   --------
Premiums earned ............................ $  8,778   $  8,141
Losses and settlement expenses .............    5,486      5,833 
Acquisition and other expenses .............    3,012      2,681 
                                             --------   --------
Underwriting gain (loss) ...................      280       (373)
Net investment income ......................    1,703      1,581 
Realized investment gains ..................        5          8 
Other income ...............................       47         60 
                                             --------   --------
Operating income before income taxes ....... $  2,035   $  1,276  
                                             ========   ========
Incurred losses and settlement expenses:
  Insured events of the current year ....... $  5,699   $  5,560  
  (Decrease) increase in provision for 
    insured events of prior years ..........     (213)       273
                                             --------   --------
      Total losses and settlement expenses   $  5,486   $  5,833 
                                             ========   ========
Catastrophe losses ......................... $    163   $    503  
                                             ========   ========
<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premiums earned increased 7.8 percent for the three months
ended March 31, 1998 from the same period in 1997.  The Company
increased production with the addition of several new accounts in
the first quarter of 1998, while maintaining its commitment to
profitability over premium volume in a very competitive
reinsurance market.
 
     Losses and settlement expenses decreased 5.9 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This decrease is primarily due to an increase in the amount of
benefit realized from the actual settlement of claims and changes
in reserves associated with prior year losses and a decline in
catastrophe and storm losses.

     Acquisition and other expenses incurred in 1998 exceeded the
amount reported for 1997 by 12.3 percent.  This increase reflects
the growth in production and an increase in contingent
commissions resulting from the favorable loss experience on the
assumed book of business. 


Nonstandard Risk Automobile Insurance

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                              1998        1997    
                                            --------    --------
Premiums earned ........................... $      -    $  2,343
Losses and settlement expenses ............        -       2,694
Other underwriting expenses ...............        -         670
                                            --------    --------
Underwriting loss .........................        -      (1,021)
Net investment income .....................        -         269 
Realized investment gains .................        -           4
                                            --------    --------
Operating loss before income taxes ........ $      -    $   (748) 
                                            ========    ========
                                             
Losses and settlement expenses:
  Insured events of the current year ...... $      -    $  2,652  
  Increase in provision for  
    insured events of prior years .........        -          42 
                                            --------    --------
      Total losses and settlement expenses  $      -    $  2,694  
                                            ========    ========

     As previously noted, effective January 1, 1998 the
underwriting results of the nonstandard risk automobile insurance
business are included in the pooling agreement and the operating
results of Farm and City are included in the property and
casualty insurance segment.  Separate operating results for the
nonstandard risk automobile insurance business will no longer be
presented.

     The loss ratio of the nonstandard risk automobile
insurance business improved substantially in 1998 from the
substandard results of 1997.  This improvement was attributable to
better winter driving conditions in the Midwest.


Excess and Surplus Lines Insurance Agency

     Operating income before income taxes increased to $155,000
for the three months ended March 31, 1998 from $83,000 for the
same period in 1997.  The increase for 1998 reflects increased
commission income resulting from a long-haul trucking program
introduced during 1997.
<PAGE>
                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 


Parent Company

     Operating income before income taxes declined slightly to
$28,000 for the three months ended March 31, 1998 from $30,000
for the same period in 1997.


LIQUIDITY AND CAPITAL RESOURCES

     The Company maintains a portion of the investment portfolio
in relatively short-term and highly liquid investments to ensure
the availability of funds to meet claims and expenses.  The
remainder of the investment portfolio is invested in securities
with maturities that approximate the anticipated liabilities of
the insurance issued.  Unrealized holding gains on fixed maturity
securities available-for-sale, net of tax, totaled $4,410,000 at
March 31, 1998 compared to $4,577,000 at December 31, 1997. 
Since the Company does not actively trade in the bond market,
such fluctuations in the fair value of these investments are not
expected to have a material impact on the operations of the
Company, as forced liquidations of investments are not
anticipated.  The Company closely monitors the bond market and
makes appropriate adjustments in investment policy as changing
conditions warrant.

     The majority of the Company's assets are invested in fixed
maturities.   These investments provide a substantial amount of
income which supplements underwriting results and contributes to
net earnings.  As these investments mature the proceeds will be
reinvested at current rates, which may be higher or lower than
those now being earned; therefore, more or less investment income
may be available to contribute to net earnings depending on the
interest rate level.

     The major ongoing sources of the Company's liquidity are
insurance premium income, investment income and cash provided
from maturing or liquidated investments.  The principal outflows
of cash are payments of claims, commissions, premium taxes,
operating expenses, income taxes, dividends and investment
purchases.    

During the first quarter of 1998, the Company generated positive
cash flows from operations of $10,179,366 compared to $6,014,190
for the same period of 1997. The amount for the first quarter of
1998 includes $5,569,567 received from Employers Mutual in
connection with the change in the pooling agreement.  The amount
for the first quarter of 1997 includes $8,741,163 received from
Employers Mutual in connection with a change in the pooling
agreement and an increase in the quota share percentage.
 
     As of March 31, 1998, the Company had no material
commitments for capital expenditures.   


NEW ACCOUNTING PRONOUNCEMENTS

     The Company adopted Statement of Financial Accounting
Standards (SFAS) 130, "Reporting Comprehensive Income" in the
first quarter of 1998.  SFAS 130 requires certain disclosures of
comprehensive income.  Adoption of this statement had no impact
on the net income of the Company.

<PAGE>

                  EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     The Company will adopt the presentation requirements of SFAS
131, "Disclosures about Segments of an Enterprise and Related
Information", in the fourth quarter of 1998.  Management is
currently in the process of evaluating the segment reporting
disclosure requirements.  Adoption of this statement will have no
effect on the income of the Company.  

     The Company will adopt the disclosure requirements of SFAS
132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits", in 1998.  The applicable disclosures
will be included in the footnotes to the financial statements for
the year ended December 31, 1998.  Adoption of this statement
will have no effect on the income of the Company.  


CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

     The 1995 Private Securities Litigation Reform Act provides
issuers the opportunity to make cautionary statements regarding
forward-looking statements.  Accordingly, any forward-looking
statement contained herein or in any other oral or written
statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the
Company may differ materially from such statement due to the
following important factors, among other risks and uncertainties
inherent in the Company's business: catastrophic events, state
insurance regulations, rate competition, adverse changes in
interest rates, unforeseen losses with respect to loss and
settlement expense reserves for unreported and reported claims,
including asbestos and environmental claims.  
 



PART II.  OTHER INFORMATION
--------  -----------------
 
Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

    (a)  None.

    (b)  No Form 8-K was filed by the registrant during the 
         quarter ended March 31, 1998.
                                                                  
               
<PAGE>                
                                 SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                              EMC INSURANCE GROUP INC.
                              Registrant



                              /s/  Bruce G. Kelley      
                              -----------------------------------
                              Bruce G. Kelley   
                              President & Chief Executive Officer



                              /s/  Mark Reese           
                              -----------------------------------
                              Mark Reese
                              Vice President and
                              Chief Financial Officer

Date:  May 13, 1998
[{"type": "10-Q", "sequence": "1", "description": "FIRST QUARTER 10-Q EMC INSURANCE GROUP INC.", "secsgml_size_bytes": 43089}]
{"company-data": {"conformed-name": "EMC INSURANCE GROUP INC", "cik": "0000356130", "assigned-sic": "6331", "irs-number": "426234555", "state-of-incorporation": "IA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-10956", "film-number": "98622020"}, "business-address": {"street1": "717 MULBERRY ST", "city": "DES MOINES", "state": "IA", "zip": "50309", "phone": "5152802902"}}
UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-Q

              Quarterly Report Under Section 13 or 15(d) of the
                      Securities Exchange Act of 1934 

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH  31, 1998                         
                               ----------------------------------------
                                       OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from                  to                     
                              ------------------  ---------------------

Commission File Number: 0-10956     
                       --------

                          EMC INSURANCE GROUP INC.               
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)

             Iowa                                            42-6234555    
-------------------------------                          -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

717 Mulberry Street, Des Moines, Iowa                            50309     
---------------------------------------                       ----------
(Address of principal executive office)                       (Zip Code)

                               (515) 280-2902                   
            ----------------------------------------------------
            (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X    No    
                                              -----    -----

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                  Class                      Outstanding at April 30, 1998  
                  -----                      -----------------------------
     Common stock, $1.00 par value                       11,420,259
                                                        

Total pages   16  
            ------
PART I.  FINANCIAL INFORMATION
-------  ---------------------
Item 1.  Financial Statements 
-------  ---------------------

                     EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                            Consolidated Balance Sheets

                                                     March 31,   December 31,
                                                       1998          1997    
                                                     ---------   ------------
ASSETS

Investments:
  Fixed maturities:
    Securities held-to-maturity, at amortized cost
      (market value $192,174,421 and $193,835,013) $184,455,468  $185,829,063
    Securities available-for-sale, at market value
      (amortized cost $169,824,924 and
      $172,717,206) ..............................  176,507,120   179,652,738
  Equity securities available-for-sale, at market 
    value (cost $25,867,407 and $26,261,157) .....   33,705,585    30,972,732
  Short-term investments, at cost ................   28,248,086    14,926,994
                                                   ------------  ------------
           Total investments .....................  422,916,259   411,381,527

Cash .............................................    1,820,850     1,200,300
Indebtedness of related party ....................            -       822,403
Accrued investment income ........................    5,778,665     5,752,295
Accounts receivable ..............................    1,326,362     1,457,312
Deferred policy acquisition costs ................   11,740,355    10,560,657
Deferred income taxes ............................    9,125,116     9,751,721
Intangible assets, including goodwill, at cost
  less accumulated amortization of $2,111,810
  and $2,078,182 .................................    1,446,010     1,479,638
Reinsurance receivables ..........................   14,359,605    13,601,691
Prepaid reinsurance premiums .....................    1,194,486     1,195,065
Other assets .....................................    2,232,573     1,907,187
                                                   ------------  ------------
           Total assets .......................... $471,940,281  $459,109,796
                                                   ============  ============

See accompanying Notes to Interim Consolidated Financial Statements.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                            Consolidated Balance Sheets

                                                    March 31,    December 31,
                                                       1998          1997    
                                                   ------------  ------------
LIABILITIES

Losses and settlement expenses ................... $223,061,605  $217,777,942
Unearned premiums ................................   56,107,897    54,857,463
Other policyholders' funds .......................    3,146,143     2,781,544
Indebtedness to related party ....................    2,302,544             -
Income taxes payable .............................    2,615,000     3,548,000
Postretirement benefits ..........................    5,665,640     5,428,913
Deferred income ..................................      399,766       446,678
Other liabilities ................................   10,954,069    11,922,800
                                                   ------------  ------------
       Total liabilities .........................  304,252,664   296,763,340
                                                  
STOCKHOLDERS' EQUITY

Common stock, $1 par value, authorized 20,000,000
  shares; issued and outstanding, 11,400,687
  shares in 1998 and 11,351,119 shares in 1997 ...   11,400,687    11,351,119
Additional paid-in capital .......................   66,536,404    65,916,681
Accumulated other comprehensive income ...........    9,583,447     7,687,092
Retained earnings ................................   80,167,079    77,391,564
                                                   ------------  ------------
       Total stockholders' equity ................  167,687,617   162,346,456
                                                  
       Total liabilities and stockholders' equity  $471,940,281  $459,109,796
                                                   ============  ============

See accompanying Notes to Interim Consolidated Financial Statements.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

             Consolidated Statements of Income and Comprehensive Income
                                                

                                                       Three months ended
                                                            March 31,        
                                                     ------------------------
                                                         1998        1997    
                                                     -----------  -----------
REVENUES:
  Premiums earned .................................. $45,688,223  $42,458,343
  Investment income, net ...........................   6,277,273    5,744,736
  Realized investment gains ........................      89,165       57,305
  Other income .....................................      46,912       59,685
                                                     -----------  -----------
                                                      52,101,573   48,320,069

LOSSES AND EXPENSES:
  Losses and settlement expenses ...................  30,390,250   31,649,886
  Dividends to policyholders .......................   1,002,339      749,061
  Amortization of deferred policy acquisition costs    9,127,619    8,172,702
  Other underwriting expenses ......................   5,568,038    5,677,868
                                                     -----------  -----------
                                                      46,088,246   46,249,517
                                                     -----------  -----------
        Income before income taxes .................   6,013,327    2,070,552
                                                     -----------  -----------
INCOME TAXES:
  Current ..........................................   1,885,000      663,497
  Deferred .........................................    (350,307)    (340,844)
                                                     -----------  -----------
                                                       1,534,693      322,653
                                                     -----------  -----------
        Net income .................................   4,478,634    1,747,899
                                                     -----------  -----------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
  Unrealized holding gains arising during the
    period (deferred tax (benefit) of $1,005,725
    and($886,112)) .................................   1,952,289   (1,720,100)

  Reclassification adjustment for gains included
    in net income (income tax
    of $28,815 and $19,484) ........................     (55,934)     (37,821)
                                                     -----------  -----------
                                                       1,896,355   (1,757,921)
                                                     -----------  -----------
        Total comprehensive income ................. $ 6,374,988  $   (10,022)
                                                     ===========  ===========

Net income per common share - basic and diluted ....        $.39         $.16
                                                     ===========  ===========

Dividends per common share .........................        $.15         $.15
                                                     ===========  ===========

Average number of common shares outstanding 
  - basic and diluted ..............................  11,356,381   11,094,730
                                                     ===========  ===========

See accompanying Notes to Interim Consolidated Financial Statements.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                       Consolidated Statements of Cash Flows
                                              

                                                     Three months ended
                                                          March 31,         
                                                  --------------------------
                                                      1998          1997    
                                                  ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .................................... $  4,478,634  $  1,747,899
                                                 
  Adjustments to reconcile net income to net
     cash provided by operating activities:
      Losses and settlement expenses ............    1,975,325     5,471,177
      Unearned premiums .........................   (1,010,795)     (830,589)
      Other policyholders' funds ................      364,599       (12,109)
      Deferred policy acquisition costs .........   (1,179,698)     (690,834)
      Indebtedness of related party .............    3,124,947    (4,959,391)
      Accrued investment income .................      (26,370)      922,494
      Income taxes payable ......................     (933,000)   (1,554,000)
      Deferred income taxes .....................     (350,306)     (382,812)
      Realized investment gains .................      (89,165)      (57,305)
      Postretirement benefits ...................      236,727       128,838
      Reinsurance receivables ...................     (757,914)   (1,460,881)
      Prepaid reinsurance premiums ..............          579        67,740 
      Amortization of deferred income ...........      (46,912)      (59,685)
      Other, net ................................   (1,176,852)   (1,057,515)
                                                  ------------   -----------
                                                       131,165    (4,474,872)
      Cash provided by the change in the 
        property and casualty insurance
        subsidiaries' pooling agreement (note 2)     5,569,567     5,674,458

      Cash provided by the change in the 
        reinsurance subsidiary's quota share
        agreement (note 2) ......................            -     3,066,705
                                                  ------------  ------------
          Total adjustment ......................    5,700,732     4,266,291
                                                  ------------  ------------
            Net cash provided by
              operating activities .............. $ 10,179,366  $  6,014,190
                                                  ------------  ------------
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

                 Consolidated Statements of Cash Flows, Continued
                                              

                                                     Three months ended
                                                          March 31,         
                                                  --------------------------
                                                      1998          1997    
                                                  ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of fixed maturity securities
    held-to-maturity ............................ $ (2,500,000) $ (2,499,700)
  Disposals of fixed maturity securities
    held-to-maturity ............................    3,893,187     1,803,525
  Purchases of fixed maturity securities
    available-for-sale ..........................   (6,025,815)  (15,672,330)
  Disposals of fixed maturity securities
    available-for-sale ..........................    8,951,500     9,384,110
  Net sales (purchases) of equity securities 
    available-for-sale ..........................      477,233      (792,787)
  Net (purchases) sales of short-term investments  (13,321,093)    1,894,294
                                                  ------------  ------------
      Net cash used in investing activities .....   (8,524,988)   (5,882,888)
                                                  ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock ......................       57,675       150,187
  Dividends paid to stockholders ................   (1,091,503)   (1,072,302)
                                                  ------------  ------------
      Net cash used in financing activities .....   (1,033,828)     (922,115)
                                                  ------------  ------------
NET INCREASE (DECREASE) IN CASH .................      620,550      (790,813)
Cash at beginning of year .......................    1,200,300     3,500,629
                                                  ------------  ------------
Cash at end of quarter .......................... $  1,820,850  $  2,709,816
                                                  ============  ============
Income taxes paid ............................... $  2,818,000  $  2,099,785

See accompanying Notes to Interim Consolidated Financial Statements.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

        Notes to Interim Consolidated Financial Statements
                     
                         March 31, 1998     
                                             

Note 1
------

The results of operations for the interim periods reported are
not necessarily indicative of results to be expected for the
year.  The information reflects all adjustments which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods.

In reading these financial statements, reference should be
made to the Company's 1997 Form 10-K or the 1997 Annual Report to
Shareholders for more detailed footnote information.

Note 2
------

Effective January 1, 1998, Farm and City Insurance Company (Farm
and City), a subsidiary of the Company that writes nonstandard
risk automobile insurance business, became a participant in the
EMC Insurance Companies pooling agreement.  Farm and City
assumes a 1.5 percent participation in the pool, which increased
the Company's aggregate participation in the pool from 22 percent
to 23.5 percent.  In connection with this change in the pooling
agreement, the Company's liabilities increased $6,224,586 and
invested assets increased $5,569,567.  The Company reimbursed
Employers Mutual Casualty Company (Employers Mutual) $726,509 for
commissions incurred to generate this business and Employers
Mutual paid the Company $71,490 in interest income as the actual
cash transfer did not occur until the end of March.

Effective January 1, 1997, a new affiliate of Employers Mutual 
began participating in the pooling agreement.  In connection with
this change in the pooling agreement, the Company's liabilities
increased $6,393,063 and invested assets increased $5,674,458. 
The Company reimbursed Employers Mutual $794,074 for commissions
incurred to generate this business and Employers Mutual paid the
Company $75,469 in interest income as the actual cash transfer
did not occur until the end of March.

Effective January 1, 1997, the reinsurance subsidiary's quota
share participation was increased from 95 percent to 100 percent.
In connection with this change in the quota share agreement, the
Company's liabilities increased $3,173,647 and invested assets
increased $3,066,705.  The Company reimbursed Employers Mutual
$106,942 for commissions incurred to generate this business.

Note 3
------

The Company adopted Statement of Financial Accounting Standards
(SFAS) 130, "Reporting Comprehensive Income" in the first quarter
of 1998.  SFAS 130 requires certain disclosures of comprehensive
income.  Adoption of this statement had no impact on the net
income of the Company.

The Company will adopt the presentation requirements of SFAS 131,
"Disclosures about Segments of an Enterprise and Related
Information", in the fourth quarter of 1998.  Management is
currently in the process of evaluating the segment reporting
disclosure requirements.  Adoption of this statement will have no
effect on the income of the Company.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES

        Notes to Interim Consolidated Financial Statements
                     
                         March 31, 1998     

The Company will adopt the disclosure requirements of SFAS 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits", in the fourth quarter of 1998.  The applicable
disclosures will be included in the footnotes to the financial
statements for the year ended December 31, 1998.  Adoption of
this statement will have no effect on the income of the Company.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
          
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                
                                           

OVERVIEW

     EMC Insurance Group Inc., an approximately 67 percent owned
subsidiary of Employers Mutual Casualty Company (Employers
Mutual), is an insurance holding company with operations in
property and casualty insurance, reinsurance and an excess and
surplus lines insurance agency.  Property and casualty insurance
is the most significant segment, representing 80.8 percent of
consolidated premium income.  For purposes of this discussion,
the term "Company" is used interchangeably to describe EMC
Insurance Group Inc. (Parent company only) and EMC Insurance
Group Inc. and its subsidiaries.

     The Company's property and casualty insurance subsidiaries
and two subsidiaries and an affiliate of Employers Mutual are
parties to reinsurance pooling agreements with Employers Mutual
(collectively the "pooling agreement").  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 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.  Operations of the
pool give rise to intercompany balances with Employers Mutual,
which are settled on a quarterly basis.  The investment
activities and income tax liabilities of the pool participants
are not subject to the pooling agreement.

     The purpose of the pooling agreement is to spread the risk
of an exposure insured by any of the pool participants among all
the companies.  The pooling agreement produces a more uniform and
stable underwriting result from year to year for all companies in
the pool than might be experienced individually.  In addition,
each company benefits from the capacity of the entire pool,
rather than being limited to policy exposures of a size
commensurate with its own assets, and from the wide range of
policy forms, lines of insurance written, rate filings and
commission plans offered by each of the companies.  A single set
of reinsurance treaties is maintained for the protection of all
companies in the pool.  

     Effective January 1, 1998, Farm and City Insurance Company
(Farm and City), a subsidiary of the Company that writes
nonstandard risk automobile insurance business, became a
participant in the pooling agreement.  Farm and City assumes a
1.5 percent participation in the pool, which increased the
Company's aggregate participation in the pool from 22 percent to
23.5 percent.  As a result of this change in structure, the
Company now has four subsidiaries that comprise the property and
casualty insurance segment and no longer has a separate segment
for the nonstandard risk automobile insurance business.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     The Company's reinsurance subsidiary assumes a 100 percent
quota share portion of Employers Mutual's assumed reinsurance
business, exclusive of certain reinsurance contracts.  This
includes all premiums and related losses and settlement expenses
of this business, subject to a maximum loss of $1,500,000 per
event.  The reinsurance subsidiary does not reinsure any of
Employers Mutual's direct insurance business, nor any
"involuntary" facility or pool business that Employers Mutual
assumes pursuant to state law.  In addition, the reinsurance
subsidiary is not liable for credit risk in connection with the
insolvency of any reinsurers of Employers Mutual.

     The excess and surplus lines insurance agency provides
insurance agents access to the excess and surplus lines markets
and also functions as managing underwriter for such lines for
Employers Mutual and several of the pool members.

     The results of operations for the interim periods reported
are not necessarily indicative of results to be expected for the
year.  The information reflects all adjustments which are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods.  

CONSOLIDATED RESULTS OF OPERATIONS

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                             1998        1997  
                                           --------    --------
Premiums earned .......................... $ 45,688    $ 42,458
Losses and settlement expenses ...........   30,390      31,649
Acquisition and other expenses ...........   15,698      14,600
                                           --------    --------
Underwriting loss ........................     (400)     (3,791) 
Net investment income ....................    6,277       5,745 
Realized investment gains ................       89          57 
Other income .............................       47          60 
                                           --------    --------
Operating income before income taxes ..... $  6,013    $  2,071 
                                           ========    ========
Incurred losses and settlement expenses:
  Insured events of the current year ..... $ 34,768    $ 32,789 
  Decrease in provision for insured 
    events of prior years ................   (4,378)     (1,140)
                                           --------    --------
      Total losses and settlement expenses $ 30,390    $ 31,649 
                                           ========    ========
Catastrophe and storm losses ............. $    519    $    963
                                           ========    ========

     Operating income before income taxes increased substantially
for the three months ended March 31, 1998 from the same period in
1997.  This increase is primarily attributable to improved
operating results in the property and casualty insurance
subsidiaries and the reinsurance subsidiary.  Operating results
of the excess and surplus lines insurance agency also improved,
but to a lesser degree.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premium income increased 7.6 percent for the three months
ended March 31, 1998 from the same period in 1997.  This increase
reflects production growth in both the property and
casualty insurance subsidiaries and the reinsurance subsidiary.  

     Losses and settlement expenses decreased 4.0 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This improvement reflects a substantial increase in the amount of
favorable development experienced in the actual settlement of
claims and changes in reserves associated with prior year losses. 
Additionally, mild winter weather conditions in the Midwest and a
low level of catastrophe and storm losses contributed to the
decline.

     Acquisition and other expenses increased 7.5 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This increase is the result of higher production levels in the
first quarter of 1998. 

     Net investment income increased 9.3 percent for the three
months ended March 31, 1998 from the same period in 1997.  This
increase reflects a rise in the average invested asset balance
coupled with lower investment expenses. 

SEGMENT RESULTS 

Property and Casualty Insurance

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                             1998        1997  
                                           --------    --------
Premiums earned .......................... $ 36,910    $ 31,974
Losses and settlement expenses ...........   24,904      23,122
Acquisition and other expenses ...........   12,704      11,230
                                           --------    --------
Underwriting loss ........................     (698)     (2,378) 
Net investment income ....................    4,409       3,763  
Realized investment gains ................       85          45  
                                           --------    --------
Operating income before income taxes ..... $  3,796    $  1,430 
                                           ========    ========
Incurred losses and settlement expenses:
  Insured events of the current year ..... $ 29,069    $ 24,577 
  Decrease in provision for insured 
    events of prior years ................   (4,165)     (1,455) 
                                           --------    --------
      Total losses and settlement expenses $ 24,904    $ 23,122  
                                           ========    ========
Catastrophe and storm losses ............. $    356    $    460  
                                           ========    ========

     As previously noted, the property and casualty insurance
subsidiaries' aggregate participation in the pooling agreement
was increased from 22 percent to 23.5 percent on January 1, 1998
with the addition of Farm and City.  Beginning in 1998,
underwriting results of the nonstandard risk automobile insurance
business written by Farm and City are included in the pool, with
23.5 percent of this business assumed by the property and casualty
subsidiaries. Prior year amounts have not been restated for this
change in structure.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premium income increased 15.4 percent (6.0 percent excluding
the addition of Farm and City to the property and casualty
insurance segment) for the three months ended March 31, 1998 from
the same period in 1997.  Increased production of both personal
and commercial lines of business from the existing
branch structure, supplemented with growth in new geographic
areas, contributed to this increase.  Competitive rates and an
emphasis on building and maintaining strong working relationships
with local agents are given credit for producing growth during
this period of intense market competition.  The workers'
compensation line of business, however, continues to be hampered
by rate reductions. 

     Losses and settlement expenses increased 7.7 percent (1.3
percent decrease excluding the addition of Farm and City to the
property and casualty insurance segment) for the three months
ended March 31, 1998 from the same period in 1997.  Results for
the first three months of 1998 reflect a significant increase in
the amount of favorable development experienced in the actual
settlement of claims and changes in reserves associated with
prior year losses.  Mild winter weather conditions in the Midwest
and a low level of catastrophe and storm losses also contributed
to the favorable loss experience. 

     Acquisition and other expenses increased 13.1 percent (3.4
percent excluding the addition of Farm and City to the property
and casualty insurance segment) for the three months ended March
31, 1998 from the same period in 1997.  This increase reflects
the growth in production achieved during the first quarter of
1998. 

     Net investment income increased 17.2 percent (9.2 percent
excluding the addition of Farm and City to the property and
casualty insurance segment) for the three months ended March 31,
1998 from the same period in 1997.  A higher average invested
balance in fixed maturity securities, coupled with a decrease in
investment expenses, contributed to this increase. 

Reinsurance
      
     Operating results for the three months ended March 31, 1998
and 1997 are as follows:

($ in thousands)                               1998       1997   
                                             --------   --------
Premiums earned ............................ $  8,778   $  8,141
Losses and settlement expenses .............    5,486      5,833 
Acquisition and other expenses .............    3,012      2,681 
                                             --------   --------
Underwriting gain (loss) ...................      280       (373)
Net investment income ......................    1,703      1,581 
Realized investment gains ..................        5          8 
Other income ...............................       47         60 
                                             --------   --------
Operating income before income taxes ....... $  2,035   $  1,276  
                                             ========   ========
Incurred losses and settlement expenses:
  Insured events of the current year ....... $  5,699   $  5,560  
  (Decrease) increase in provision for 
    insured events of prior years ..........     (213)       273
                                             --------   --------
      Total losses and settlement expenses   $  5,486   $  5,833 
                                             ========   ========
Catastrophe losses ......................... $    163   $    503  
                                             ========   ========
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     Premiums earned increased 7.8 percent for the three months
ended March 31, 1998 from the same period in 1997.  The Company
increased production with the addition of several new accounts in
the first quarter of 1998, while maintaining its commitment to
profitability over premium volume in a very competitive
reinsurance market.
 
     Losses and settlement expenses decreased 5.9 percent for the
three months ended March 31, 1998 from the same period in 1997. 
This decrease is primarily due to an increase in the amount of
benefit realized from the actual settlement of claims and changes
in reserves associated with prior year losses and a decline in
catastrophe and storm losses.

     Acquisition and other expenses incurred in 1998 exceeded the
amount reported for 1997 by 12.3 percent.  This increase reflects
the growth in production and an increase in contingent
commissions resulting from the favorable loss experience on the
assumed book of business. 

Nonstandard Risk Automobile Insurance

     Operating results for the three months ended March 31, 1998
and 1997 are as follows:  

($ in thousands)                              1998        1997    
                                            --------    --------
Premiums earned ........................... $      -    $  2,343
Losses and settlement expenses ............        -       2,694
Other underwriting expenses ...............        -         670
                                            --------    --------
Underwriting loss .........................        -      (1,021)
Net investment income .....................        -         269 
Realized investment gains .................        -           4
                                            --------    --------
Operating loss before income taxes ........ $      -    $   (748) 
                                            ========    ========
                                             
Losses and settlement expenses:
  Insured events of the current year ...... $      -    $  2,652  
  Increase in provision for  
    insured events of prior years .........        -          42 
                                            --------    --------
      Total losses and settlement expenses  $      -    $  2,694  
                                            ========    ========

     As previously noted, effective January 1, 1998 the
underwriting results of the nonstandard risk automobile insurance
business are included in the pooling agreement and the operating
results of Farm and City are included in the property and
casualty insurance segment.  Separate operating results for the
nonstandard risk automobile insurance business will no longer be
presented.

     The loss ratio of the nonstandard risk automobile
insurance business improved substantially in 1998 from the
substandard results of 1997.  This improvement was attributable to
better winter driving conditions in the Midwest.

Excess and Surplus Lines Insurance Agency

     Operating income before income taxes increased to $155,000
for the three months ended March 31, 1998 from $83,000 for the
same period in 1997.  The increase for 1998 reflects increased
commission income resulting from a long-haul trucking program
introduced during 1997.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

Parent Company

     Operating income before income taxes declined slightly to
$28,000 for the three months ended March 31, 1998 from $30,000
for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

     The Company maintains a portion of the investment portfolio
in relatively short-term and highly liquid investments to ensure
the availability of funds to meet claims and expenses.  The
remainder of the investment portfolio is invested in securities
with maturities that approximate the anticipated liabilities of
the insurance issued.  Unrealized holding gains on fixed maturity
securities available-for-sale, net of tax, totaled $4,410,000 at
March 31, 1998 compared to $4,577,000 at December 31, 1997. 
Since the Company does not actively trade in the bond market,
such fluctuations in the fair value of these investments are not
expected to have a material impact on the operations of the
Company, as forced liquidations of investments are not
anticipated.  The Company closely monitors the bond market and
makes appropriate adjustments in investment policy as changing
conditions warrant.

     The majority of the Company's assets are invested in fixed
maturities.   These investments provide a substantial amount of
income which supplements underwriting results and contributes to
net earnings.  As these investments mature the proceeds will be
reinvested at current rates, which may be higher or lower than
those now being earned; therefore, more or less investment income
may be available to contribute to net earnings depending on the
interest rate level.

     The major ongoing sources of the Company's liquidity are
insurance premium income, investment income and cash provided
from maturing or liquidated investments.  The principal outflows
of cash are payments of claims, commissions, premium taxes,
operating expenses, income taxes, dividends and investment
purchases.    

During the first quarter of 1998, the Company generated positive
cash flows from operations of $10,179,366 compared to $6,014,190
for the same period of 1997. The amount for the first quarter of
1998 includes $5,569,567 received from Employers Mutual in
connection with the change in the pooling agreement.  The amount
for the first quarter of 1997 includes $8,741,163 received from
Employers Mutual in connection with a change in the pooling
agreement and an increase in the quota share percentage.
 
     As of March 31, 1998, the Company had no material
commitments for capital expenditures.   

NEW ACCOUNTING PRONOUNCEMENTS

     The Company adopted Statement of Financial Accounting
Standards (SFAS) 130, "Reporting Comprehensive Income" in the
first quarter of 1998.  SFAS 130 requires certain disclosures of
comprehensive income.  Adoption of this statement had no impact
on the net income of the Company.
EMC INSURANCE GROUP INC. AND SUBSIDIARIES
                                       
Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations, Continued 

     The Company will adopt the presentation requirements of SFAS
131, "Disclosures about Segments of an Enterprise and Related
Information", in the fourth quarter of 1998.  Management is
currently in the process of evaluating the segment reporting
disclosure requirements.  Adoption of this statement will have no
effect on the income of the Company.  

     The Company will adopt the disclosure requirements of SFAS
132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits", in 1998.  The applicable disclosures
will be included in the footnotes to the financial statements for
the year ended December 31, 1998.  Adoption of this statement
will have no effect on the income of the Company.  

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

     The 1995 Private Securities Litigation Reform Act provides
issuers the opportunity to make cautionary statements regarding
forward-looking statements.  Accordingly, any forward-looking
statement contained herein or in any other oral or written
statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the
Company may differ materially from such statement due to the
following important factors, among other risks and uncertainties
inherent in the Company's business: catastrophic events, state
insurance regulations, rate competition, adverse changes in
interest rates, unforeseen losses with respect to loss and
settlement expense reserves for unreported and reported claims,
including asbestos and environmental claims.  
 

PART II.  OTHER INFORMATION
--------  -----------------
 
Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

    (a)  None.

    (b)  No Form 8-K was filed by the registrant during the 
         quarter ended March 31, 1998.
SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                              EMC INSURANCE GROUP INC.
                              Registrant

                              /s/  Bruce G. Kelley      
                              -----------------------------------
                              Bruce G. Kelley   
                              President & Chief Executive Officer

                              /s/  Mark Reese           
                              -----------------------------------
                              Mark Reese
                              Vice President and
                              Chief Financial Officer

Date:  May 13, 1998