SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-13300
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0384680
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 5024, ONE STATE STREET,
HARTFORD, CONNECTICUT 06102-5024
(Address of principal executive offices) (Zip Code)
(860) 722-1866
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if
changed since the last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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
The number of shares outstanding of the registrant's common stock without par
value, as of June 30, 1996: 20,118,489.
<PAGE>
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
INDEX
PART I FINANCIAL INFORMATION PAGE
Consolidated Statements of Operations for the
Quarters and Six Months Ended June 30, 1996
and 1995 (unaudited)..............................................
Consolidated Statements of Financial Position as
of June 30, 1996 (unaudited) and December 31,
1995..............................................................
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1995
(unaudited).......................................................
Notes to Consolidated Financial Statements........................
Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Operations.....................................................
PART II OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders......
Item 6 - Exhibits and Reports on Form 8-K.........................
SIGNATURES..........................................................
<PAGE>
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
Consolidated Statements of Operations
Unaudited
(In millions, except per share data)
<TABLE>
Quarter Six Months
Ended June 30 Ended June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Insurance premiums $ 112.9 $ 98.1 $ 221.3 $ 191.7
Net engineering services 14.1 63.4 26.8 124.4
Net investment income 7.9 7.2 15.9 14.0
Realized investment gains 5.1 1.2 6.0 1.5
---------- ---------- --------- ---------
Total revenues 140.0 169.9 270.0 331.6
---------- ---------- --------- ---------
Expenses:
Claims and adjustment 56.0 39.4 100.9 76.8
Policy acquisition 21.9 19.4 42.5 38.2
Underwriting and inspection 34.4 31.1 68.1 60.8
Net engineering services 12.3 57.4 23.6 112.7
Interest 0.2 0.2 0.9 0.8
---------- ---------- --------- ---------
Total expenses 124.8 147.5 236.0 289.3
---------- ---------- --------- ---------
Equity in Radian International LLC 2.5 - 7.4 -
---------- ---------- --------- ---------
Income before taxes 17.7 22.4 41.4 42.3
Income taxes:
Current 6.1 7.9 13.2 13.1
Deferred (1.8) (1.2) (2.2) (0.5)
---------- ---------- --------- ---------
Total income taxes 4.3 6.7 11.0 12.6
Net income $ 13.4 $ 15.7 $ 30.4 $ 29.7
========== ========== ========= =========
Net income per share: $ 0.66 $ 0.77 $ 1.49 $ 1.45
========== ========== ========= =========
Dividends declared per share $ 0.57 $ 0.55 $ 1.14 $ 1.10
Based on average shares 20.3 20.4 20.3 20.4
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
Consolidated Statements of Financial Position
(In millions, except per share data)
<TABLE>
June 30, December 31,
1996 1995
(Unaudited)
--------- -----------
<S> <C> <C>
Assets:
Cash $ 15.8 $ 9.3
Short-term investments, at cost 73.2 73.8
Fixed maturities, at fair value
(cost - $228.6; $247.6) 227.9 255.3
Equity securities, at fair value
(cost - $170.2; $155.0) 236.2 215.4
---------- -----------
Total cash and invested assets 553.1 553.8
Insurance premiums receivable 116.7 87.2
Engineering services receivable 10.6 68.8
Fixed assets 38.1 62.3
Prepaid acquisition costs 40.3 34.1
Capital lease 16.4 16.8
Equity in Radian International LLC 73.4 -
Reinsurance recoverable 80.6 47.9
Other assets 96.4 100.6
---------- -----------
Total assets $ 1,025.6 $ 971.5
========== ===========
Liabilities:
Unearned insurance premiums $ 260.3 $ 216.2
Claims and adjustment expenses 236.7 190.9
Short-term borrowings 3.1 13.4
Long-term borrowings 25.6 25.6
Capital lease 27.8 27.8
Deferred income taxes 19.1 18.9
Dividends payable 11.5 11.6
Minority Interest 20.0 20.0
Other liabilities 77.8 106.0
---------- -----------
Total liabilities 681.9 630.4
---------- -----------
Shareholders' equity:
Common Stock (stated value; shares authorized
50.0; shares issued 21.3; shares
outstanding 20.2; 20.3) 10.0 10.0
Additional paid-in capital 34.1 33.9
Unrealized investment gains, net of tax 41.9 43.9
Retained earnings 312.4 305.1
Treasury stock, at cost; (shares 1.1; 1.0) (50.2) (47.7)
Benefit plans (4.5) (4.1)
---------- -----------
Total shareholders' equity 343.7 341.1
---------- -----------
Total liabilities and shareholders' equity $ 1,025.6 $ 971.5
========== ===========
Shareholders' equity per share $16.98 $16.81
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY
Consolidated Statements of Cash Flows
Unaudited
(In Millions)
<TABLE>
Six Months Ended
June 30,
1996 1995
---------- ----------
<S> <C> <C>
Operating Activities:
Net income $ 30.4 $ 29.7
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 7.0 10.2
Deferred income taxes (2.2) (0.5)
Realized investment gains (6.0) (1.5)
Change in:
Insurance premiums receivable (29.5) (6.6)
Engineering services receivable (1.5) (0.6)
Prepaid acquisition costs (6.2) 2.7
Reinsurance recoverable (32.7) 6.0
Unearned insurance premiums 44.1 5.6
Claims and adjustment expenses 45.8 (14.6)
Equity in Radian International LLC (5.3) -
Other (7.8) 1.9
---------- ----------
Cash provided by operating activities 36.1 32.3
---------- ----------
Investing Activities:
Fixed asset additions (3.9) (6.2)
Investments:
Sale (purchase) of short-term investments,
net 0.5 (14.3)
Purchase of fixed maturities (54.3) (98.9)
Proceeds from sale of fixed maturities 71.6 72.9
Redemption of fixed maturities 3.3 5.7
Purchase of equity securities (66.7) (56.2)
Proceeds from sale of equity securities 57.3 78.8
Cash transferred to equity in Radian
Int'l LLC (0.8) -
---------- ----------
Cash provided by (used in) investment
activities 7.0 (18.2)
---------- ----------
Financing Activities:
Increase (decrease) in short-term borrowings (10.3) (14.7)
Increase in long-term debt - 25.0
Dividends paid to shareholders (23.1) (22.6)
Repayment of employee stock ownership plan debt - (1.0)
Purchase of treasury stock (2.5) (2.0)
---------- ----------
Cash used in financing activities (35.9) (15.3)
---------- ----------
Net increase (decrease) in cash 7.2 (1.2)
Cash at beginning of period 8.6 12.1
---------- ----------
Cash at end of period $ 15.8 $ 10.9
========== ==========
Interest paid $ 1.1 $ 2.6
---------- ----------
Federal income tax paid $ 8.8 $ 6.4
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
The interim financial statements in this report include adjustments based on
management's best estimates and judgments, including estimates of future loss
payments, which are necessary to present a fair statement of the results for
the interim periods reported. These adjustments are of a normal, recurring
nature. The financial statements are prepared on the basis of generally
accepted accounting principles and should be read in conjunction
with the financial statements and related notes in the 1995 Annual Report.
2. Radian International LLC
Effective January 16, 1996, HSB and The Dow Chemical Company (Dow) formed a new
company, Radian International LLC (Limited Liability Company), which provides
environmental, information technology, and strategic chemical management
services to industries and government worldwide. The new company, consisting
of assets contributed by Dow's subsidiary, Dow Environmental Inc. (DEI) and
HSB's subsidiary, Radian Corporation, is headquartered in Austin, TX.
According to the terms of the agreement, the ownership of Radian
International LLC is initially 60 percent Dow and 40 percent HSB, via the
wholly owned subsidiaries of each company. Income to HSB will be subject
to a preference return in the first two years. As is customary in joint
ventures, the agreements between HSB and Dow provide various alternatives for
either party to dissolve the business, distribute assets and liabilities, or
sell their interests subject to certain rights of first refusal. In 1996,
HSB's interest in Radian International LLC is accounted for in the
consolidated financial statements under the equity method of accounting. In
1995, the results of Radian Corporation were fully consolidated.
3. Industrial Risk Insurers
Effective December 1, 1995 the Company increased its participation in Industrial
Risk Insurers (IRI) from approximately 0.5 percent to 14 percent. IRI is a
voluntary joint underwriting association providing property insurance for the
class of business known as Highly Protected Risks - larger manufacturing,
processing, and industrial businesses which have invested in protection
against loss through the use of sprinklers and other means. IRI has a fiscal
year ending November 30 and provides quarterly reports to member companies of
the organization. As a result HSB's increased participation is reflected in
the 1996 results. The additional participation increased revenue and expenses
for 1996 as well as several balance sheet accounts.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
JUNE 30, 1996
<TABLE>
RESULTS OF OPERATIONS
(dollar amounts in millions)
Consolidated Overview
Quarter Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Insurance premium $ 112.9 $ 98.1 $ 221.3 $ 191.7
Net engineering services revenues 14.1 63.4 26.8 124.4
Net investment income 7.9 7.2 15.9 14.0
Realized investment gains 5.1 1.2 6.0 1.5
------ ------ ------ ------
Total revenues $ 140.0 $169.9 $ 270.0 $ 331.6
====== ====== ====== ======
Equity in Radian International LLC $ 2.5 $ - $ 7.4 $ -
====== ====== ====== ======
Net income $ 13.4 $ 15.7 $ 30.4 $ 29.7
====== ====== ====== ======
Net income per share $ 0.66 $ 0.77 $ 1.49 $ 1.45
====== ====== ====== ======
</TABLE>
Net income for the second quarter of 1996 decreased 15 percent from the second
quarter of 1995 and increased 2 percent for the first six months of 1996
compared to 1995. Second quarter results were negatively impacted by
adverse loss experience from unusually severe winter weather
and lower earnings from HSB's Radian International LLC joint venture.
Insurance premiums grew 15 percent for both the second quarter and the first
six months of 1996, with the increased participation in IRI the largest
contributing factor. The second quarter combined ratio increased from 91.2
percent in 1995 to 99.0 percent in 1996; while the first six
months combined ratio increased from 91.2 percent in 1995 to 95.1 percent.
Engineering services profit, including the equity in Radian International LLC,
decreased 28 percent for the second quarter and 9 percent for the first six
months. Exclusive of the Radian impact, engineering services revenue
increased 6 percent from the second quarter last year and 8 percent over the
first six months last year.
Consolidated revenues in the second quarter of 1995 include $50.1 million
of revenue from Radian Corporation; Radian International LLC is reported
using the equity method of accounting. Under this method, the detailed
revenues and expenses and assets and liabilities of Radian International LLC
are not presented in the 1996 financial statements. The first six months of
1995 include $99.7 million of revenue from Radian Corporation. Exclusive of
Radian Corporation, consolidated revenues increased 17 percent and 16 percent
for the second quarter and first six months of 1996, respectively, from
comparable periods in 1995.
The effective tax rate for the second quarter and first six months was 24
percent and 27 percent, respectively, compared to 30 percent for the
comparable prior year periods. Tax rate fluctuations occur as underwriting
results change the mix of pretax income between fully taxable earnings and
tax preferred investment income. The Company continues to manage its use of
tax advantageous investments to maximize after tax earnings.
The additional participation in IRI increased revenue for the quarter by $10.0
million and year to date $19.7 million. The additional participation also
impacted the balance sheet at June 30,1996. The major balance sheet
increases from December 31, 1995 related to IRI included insurance premiums
receivable ($14.8 million), unearned insurance premiums ($35.1 million),
claims and adjustment expenses ($30.1 million) and reinsurance recoverable
($19.6 million).
With Radian International LLC being accounted for on the equity basis of
accounting in 1996, certain balance sheet accounts at June 30, 1996 have
been reduced. The major changes from December 31,1995 included reductions
to engineering services receivable ($59.7 million), fixed assets
($22.6 million), other assets ($23.0 million) and other liabilities
($22.0 million).
Recent Accounting Developments
In October 1995, the Financial Accounting Standards Board (the Board) issued
Statement of Financial Accounting Standards No. 123 (SFAS 123) "Accounting
for Stock-Based Compensation" effective for fiscal years beginning after
December 15, 1995. SFAS 123 allows entities to adopt the fair value based
method of accounting for stock compensation or continue under the current
accounting practice. Entities electing to remain with the current accounting
practice must make pro forma disclosures of net income and earnings per share
as if the fair value based method of accounting in this Statement had been
applied. The Company expects to make pro forma disclosure of awards granted
in 1995 and future years and has not yet settled on a method of valuation.
Insurance Operations
Insurance operations include the insurance results of The Hartford Steam Boiler
Inspection and Insurance Company and EIG, Co., and its wholly owned
subsidiaries, HSB Engineering Insurance Limited, and The Boiler Inspection
and Insurance Company of Canada (BI&I).
<TABLE>
Quarter Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Gross earned premium $ 137.7 $ 114.3 $ 271.4 $ 223.9
Ceded premium 24.8 16.2 50.1 32.2
------ ------ ------ ------
Insurance premium 112.9 98.1 221.3 191.7
Claims and adjustment expenses 56.0 39.4 100.9 76.8
Underwriting, acquisition
and other expenses 56.3 50.5 110.6 99.0
------ ------ ------ ------
Underwriting gain $ 0.6 $ 8.2 $ 9.8 $ 15.9
====== ====== ====== ======
</TABLE>
Gross earned premiums in the second quarter and year to date 1996 increased
21 percent from comparable periods in 1995. This increase was primarily
attributable to the increased participation in IRI ($18.8 million for the
second quarter and $37.9 million year to date) and to growth in the global
markets. Gross earned premiums representing coverage outside the U.S.
increased 4 percent in the second quarter and 8 percent year to date 1996
compared to prior year periods.
Increases in reinsurance ceded costs of 53 percent in the current quarter and
56 percent year to date were primarily due to the additional participation
in IRI.
The loss ratio increased from 40.2 percent in the second quarter of 1995 to
49.5 percent in the current quarter, and from 40.1 percent for the first six
months of 1995 to 45.6 percent for 1996 year to date primarily due to higher
frequency of claims and unusually severe winter weather. Claims and
adjustment expenses increased 42 percent in the current quarter and 31 percent
year to date compared to the same periods in 1995 with the increased share in
IRI accounting for the majority of the additional expense. Gross claims and
adjustment expenses for the second quarter 1996 and 1995 were $76.4 million and
$40.6 million, respectively. This compares to 1996 and 1995 six month gross
claims and adjustment expenses of $135.3 million and $85.9 million,
respectively. IRI accounted for gross claims and adjustment expenses of
$14.4 million for the second quarter of 1996 and $31.7 million year to date
1996.
Underwriting, acquisition and other expenses increased approximately 11 percent
in the current quarter and 12 percent year to date compared to the same 1995
periods. The increase was primarily due to increased participation in IRI
and additional expenses related to growth in the global sector.
The components of the combined ratio, were as follows:
<TABLE>
Quarter Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Loss ratio 49.5% 40.2% 45.6% 40.1%
Expense ratio 49.5% 51.0% 49.5% 51.1%
----- ----- ----- -----
Combined ratio 99.0% 91.2% 95.1% 91.2%
===== ===== ===== =====
</TABLE>
<TABLE>
Engineering Services Operations
Quarter Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net engineering services revenue $ 14.1 $ 63.4 $ 26.8 $ 124.4
Net engineering services expenses 12.3 57.4 23.6 112.7
----- ----- ----- -----
Operating gain $ 1.8 $ 6.0 $ 3.2 $ 11.7
===== ===== ===== =====
Net margin 12.6% 9.5% 12.0% 9.4%
</TABLE>
Engineering services operations include the results of HSB's and BI&I's
engineering services, HSB Reliability Technologies (HSBRT) and the Company's
other engineering services subsidiaries. The 1995 results include Radian on
a fully consolidated basis. The 1996 engineering services results do not
include Radian as HSB's share of the newly formed joint venture results
were recorded as Equity in Radian International LLC rather than in net
engineering services revenue and other income statement accounts.
Net engineering services revenues decreased $49.3 million in the second quarter
and $97.6 million year to date compared to the same periods in 1995 due to
the change in presentation of Radian International LLC in 1996. Exclusive of
Radian, engineering services revenue increased approximately 6 percent in the
current quarter over the second quarter 1995 and 8 percent for the
first six months of 1996 over the same period for 1995. The growth in revenues
was primarily due to increases generated by HSBRT as their revenues were
22 percent higher in the second quarter of 1996 and 27 percent year to
date over the same periods in 1995.
The consolidated engineering services operating gain decreased $4.2 million in
the current quarter from the second quarter of 1995 and $8.5 million for the
first six months of 1996 from the same period in 1995. Again, this was
caused by the Radian International LLC transaction which resulted in a
separate presentation of Radian's results in 1996. Radian International LLC
results for the second quarter of 1996 decreased $1.3 million from the second
quarter of 1995 and for the first six months of 1996 decreased $0.9 million
from the same period in 1995. Radian's results suffered in the second
quarter during the pendency of the sale of its EPA business. That sale was
completed in June.
<TABLE>
Investment Operations
Quarter Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net investment income $ 7.9 $ 7.2 $ 15.9 $ 14.0
Realized investment gains 5.1 1.2 6.0 1.5
----- ----- ----- -----
Pretax income from
investment operations $ 13.0 $ 8.4 $ 21.9 $ 15.5
===== ===== ===== =====
</TABLE>
Net investment income increased 10 percent for the second quarter and 14 percent
year to date compared to the same periods in 1995. The increase was
primarily due to an increased level of investable assets. Invested assets
growth was due to significant cash flow from operations during 1995 and
earnings on the receivable generated from the portfolio transfer of IRI.
Investment income in the global market also increased in the current
quarter over the second quarter of 1995 as these operations have shown
significant growth over the past year.
The Company's investment strategy continues to be to maximize total return
on the investment portfolio through investment income and capital
appreciation. The investment portfolio includes a wide variety of high
quality equity securities and both domestic and foreign fixed maturities. The
Company continues to manage its use of tax advantageous investments to maximize
after tax investment earnings. Realized investment gains changed
significantly over the prior year as the Company managed its portfolio to
respond to changing market conditions and tax planning opportunities.
<TABLE>
Liquidity and Capital Resources
Balances at
June 30 December 31
1996 1995
------- -------
<S> <C> <C>
Total assets $1025.6 $ 971.5
Short-term investments 73.2 73.8
Cash 15.8 9.3
Short-term borrowings 3.1 13.4
Shareholder's equity 343.7 341.1
Liquidity refers to the Company's ability to generate sufficient funds to meet
the cash requirements of its business operations. The Company receives a
regular inflow of cash from maturing investments and engineering services and
insurance operations. The mix of the investment portfolio is managed to
respond to expected claim pay-out patterns. The Company also maintains a
highly liquid short-term portfolio to provide for immediate cash needs.
Cash provided from operations was $36.1 million in the first six months of 1996
compared to $32.3 million in the first six months of 1995. The increase from
1995 was due to increased cash flow from insurance operations offset by
higher taxes paid. Insurance operations cash flow increased as premiums
collected were up 6 percent year to date compared to the same period in
1995 and claims paid increased 12 percent. The additional participation in
IRI impacted components of the Consolidated statement of cash flows for 1996,
including a year to date impact of $14.4 million to cash provided from
operations. The Radian International LLC transaction had
minimal impact on cash flow from operations in the first half of 1996.
Capital resources consist of shareholders' equity and debt outstanding and
represent those funds deployed or available to be deployed to support
business operations. Shareholders' equity of $343.7 million at June 30,
1996 increased by $2.6 million since December 31, 1995. The increase
reflects net income of $30.4 million for the first six months, offset by
a decrease in unrealized gains, net of tax, of $2.0 million, dividends of
$23.1 million and treasury stock purchase of $2.5 million.
At June 30, 1996, the Company had significant short-term and long-term borrowing
capacity. The Company is currently authorized to issue up to $75 million of
commercial paper. Commercial paper outstanding at June 30, 1996 and
December 31, 1995 was $3 million.
The Company is involved in certain arbitration or litigation proceedings
regarding significant loss events that occurred in the late 1980's and early
1990's. Although the Company has denied coverage and believes it has no
liability under the policy terms, ultimate responsibility for these
losses will be determined through the arbitration or legal system. While the
timing of the resolution of these cases is unclear, management is of the
opinion that the outcome will not have a material effect on the results of
operations or the financial position of the Company due to reinsurance
contracts in place for those years.
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders.
(a) The Registrant's 1996 Annual Meeting of Stockholders was held on April 16,
1996.
(b) Proxies were solicited by Registrant's management pursuant to Regulation
14A under the Securities Exchange Act of 1934; there was no solicitation in
opposition to management's nominees as listed in the proxy statement; and
all of such nominees were elected for a three-year term.
(c) The following matters were voted upon at the Annual Meeting with the
voting results indicated.
1. Election of Directors.
Nominee Votes For Withheld
-------------------------------------------------------
Joel B. Alvord 17,606,656 392,762
Richard G. Dooley 17,847,327 152,091
Gordon W. Kreh 17,870,253 129,165
Lois Dickson Rice 17,834,129 165,289
2. Appointment of Coopers & Lybrand as Independent Public Accountants
Votes for Against Abstain
------------------------------------------
17,825,830 95,950 77,638
3. Stockholder Proposal to Eliminate Classified Board
Votes for Against Abstain No Vote
--------------------------------------------------------------
6,128,413 9,325,973 388,987 2,156,045
The total number of shares of the Registrant's Common Stock outstanding on
February 6, 1996, the record date, was 20,288,661.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27, Financial Data Schedule.
(b) Reports on Form 8-K--Form 8-K filed on May 6, 1996 to announce the
resignation of Donald M. Carlton as executive vice president and a
director of the Registrant; Form 8-K filed on July 22, 1996 to announce
the election of Richard H. Booth as a director of the Registrant.
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.
THE HARTFORD STEAM BOILER
INSPECTION AND INSURANCE COMPANY
Date: August 13, 1996 By: /s/ Saul L. Basch
Saul L. Basch
Senior Vice President, Treasurer
and Chief Financial Officer
Date: August 13, 1996 By: /s/ Robert C. Walker
Robert C. Walker
Senior Vice President and
General Counsel
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements filed herewith and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 217
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 236
<MORTGAGE> 11
<REAL-ESTATE> 0
<TOTAL-INVEST> 537
<CASH> 16
<RECOVER-REINSURE> 81
<DEFERRED-ACQUISITION> 40
<TOTAL-ASSETS> 1026
<POLICY-LOSSES> 237
<UNEARNED-PREMIUMS> 260
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 29
0
0
<COMMON> 10
<OTHER-SE> 334
<TOTAL-LIABILITY-AND-EQUITY> 1026
113
<INVESTMENT-INCOME> 8
<INVESTMENT-GAINS> 5
<OTHER-INCOME> 14
<BENEFITS> 56
<UNDERWRITING-AMORTIZATION> 22
<UNDERWRITING-OTHER> 47
<INCOME-PRETAX> 18
<INCOME-TAX> 4
<INCOME-CONTINUING> 14
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14
<EPS-PRIMARY> .66
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
