<PAGE>
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
For Quarter Ended March 31, 1996 Commission File Number 0-10071
NOBEL INSURANCE LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
ISLANDS OF BERMUDA 98-0076395
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
FALCONER HOUSE NONE
GROUND LEVEL (Zip Code)
108 PITTS BAY ROAD HMDX
HAMILTON, BERMUDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (809)292-7104.
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 the filing
requirements for the past 90 days.
YES /X/ NO / /
Number of Common Shares, $1.00 Par Value, outstanding at May 10, 1996
4,562,206
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
MARCH 31, DECEMBER 31,
1996 1995
- -------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Investments:
Trading portfolio, at fair value:
Fixed maturity securities (amortized cost: $105 March 31,
1996 and $105 at December 31, 1995) $ 190 $ 188
Equity securities (cost: $2,158 at March 31, 1996 and $4,881
at December 31, 1995) 3,348 6,847
Other investments (cost: $731 at March 31, 1996 and $763
at December 31, 1995) 830 925
Fixed maturity securities available for sale, at fair value
(amortized cost: $103,368 at March 31, 1996 and $102,588
at December 31,1995) 103,612 105,601
Short-term investments, at cost, which approximates fair
value 7,885 13,798
-------- --------
Total investments 115,865 127,359
Cash 713 1,507
Funds held by reinsurance companies 3,571 3,341
Premiums and other receivables less allowance for doubtful
accounts ($389 at March 31, 1996 and $398 at December 31,
1995) 24,690 23,897
Accrued interest income 1,523 1,418
Reinsurance recoverable on paid and unpaid claims 26,343 22,588
Prepaid reinsurance premiums 11,400 12,826
Property and equipment less accumulated depreciation ($1,644
at March 31, 1996 and $1,840 at December 31, 1995) 3,826 3,642
Deferred policy acquisition costs 4,290 3,129
Net deferred tax asset 3,019 2,112
Other assets 1,661 1,569
-------- --------
Total assets $196,901 $203,388
-------- --------
-------- --------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
1
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN UNITED STATES DOLLARS)
(CONTINUED)
<TABLE>
MARCH 31, DECEMBER 31,
1996 1995
- ------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
LIABILITIES
Reserve for claims and claims expenses $ 85,500 $ 81,675
Unearned premiums 37,750 38,106
Accounts payable and accrued liabilities 9,880 9,907
Reinsurance premiums payable 7,758 7,138
Other liabilities 3,959 1,654
-------- --------
Total liabilities 144,847 138,480
-------- --------
SHAREHOLDERS' EQUITY
Capital shares (Authorized 20,000,000 shares; $1 par value; issued
7,709,088 shares at March 31, 1996; 7,626,725 shares at December 1995;
outstanding 4,557,136 shares at March 31, 1996 and 5,542,363 shares
at December 31, 1995) 7,709 7,627
Contributed surplus 44,397 44,081
Unrealized gain on investments 178 2,093
Retained earnings 28,018 26,612
Treasury stock, at cost (3,151,952 shares at March 31, 1996 and
2,084,362 shares at December 31, 1995) (28,248) (15,505)
-------- --------
Total shareholders' equity 52,054 64,908
-------- --------
Commitments and Contingencies
Total liabilities and shareholders' equity $196,901 $203,388
-------- --------
-------- --------
</TABLE>
(See Accompanying Notes to Consolidated Financial Statements)
2
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS ENDED
MARCH 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1996 1995
- ------------------------------------------------------------------------------
REVENUES:
Premiums written $18,701 $11,206
Reinsurance purchased (4,314) (3,629)
------- -------
Net premiums written $14,387 $ 7,577
------- -------
------- -------
Premiums earned $19,055 $15,101
Premiums ceded (5,739) (4,818)
------- -------
Net premiums earned 13,316 10,283
Interest income, net of investment expenses
of $177 at March 31, 1996 and $106 at
March 31, 1995, respectively 1,678 1,835
Net investment gains 212 --
Claim adjusting fees earned 3,557 1,994
------- -------
Total revenues 18,763 14,112
------- -------
EXPENSES:
Claims and claims expenses 14,776 11,580
Reinsurance recoveries (5,664) (4,463)
------- -------
Net claim and claim expenses 9,112 7,117
Service fees and commissions 3,943 1,824
General and administrative expenses 4,180 4,023
------- -------
Total expenses 17,235 12,964
------- -------
Net income before income taxes 1,528 1,148
Income tax expense (benefit):
Current 175 --
-------
Deferred (53) --
------- -------
Income tax expense 122 --
------- -------
Net income 1,406 1,148
Retained earnings at beginning of period 26,612 21,536
Dividends paid on capital shares -- (296)
------- -------
Retained earnings at end of period $28,018 $22,388
------- -------
------- -------
EARNINGS PER CAPITAL SHARE:
Net income per capital share $ .29 $ .19
------- -------
------- -------
Average number of capital shares 4,830 6,057
------- -------
------- -------
(See Accompanying Notes to Consolidated Financial Statements)
3
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
THREE MONTHS ENDED
MARCH 31
1996 1995
- ---------------------------------------------------------------------------
(IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,406 $ 1,148
Adjustments to reconcile net income to net
cash from operations activity:
Depreciation and amortization 167 328
Change in deferred acquisition costs (1,161) 60
Deferred tax benefit (35) --
Increase in reserve for claims and claims
expenses 3,825 7,628
Decrease in unearned premiums (356) (3,895)
Decrease in accounts payable and accrued
liabilities (27) (706)
(Decrease) in deferred service fee income (65) (78)
(Increase) decrease in premiums receivable (173) 6,589
(Increase) in accrued interest income (105) (108)
(Increase) in reinsurance recoverables (3,755) (4,198)
Decrease in prepaid reinsurance premiums 1,426 1,189
(Increase) decrease in other assets 105 (200)
(Increase) decrease in funds held by
reinsurance companies (230) 1
Net (additions to) dispositions from
trading portfolio investments 3,608 2,895
Net realized investment gains (212) --
Losses on disposal of other assets 9 7
------- -------
Net cash provided from operating
activities 4,427 10,660
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Investments sold or matured:
Fixed maturities, available for sale 13,218 7,700
Purchase of investments:
Fixed maturities, available for sale (13,820) (7,645)
Payments on acquisitions --- (1,206)
Purchase of software, property and equipment (556) (2,253)
------- -------
Net cash (used by) investing activities (1,158) (3,404)
------- -------
(See Accompanying Notes to Consolidated Financial Statements)
4
<PAGE>
NOBEL INSURANCE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
(CONTINUED)
THREE MONTHS ENDED
MARCH 31,
1996 1995
- -------------------------------------------------------------------------
(IN THOUSANDS)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 2,500 1,169
Proceeds from issuance of capital shares 398 58
Repayment of notes payable and capital
lease obligation (131) (127)
Purchase of treasury stock (12,743) (46)
Dividends paid shareholders --- (296)
-------- ---------
Net cash provided (used by) financing
activities (9,976) 758
-------- ---------
Net increase (decrease) in cash and cash
equivalents (6,707) 8,014
Cash and cash equivalents at beginning
of year 15,305 12,476
-------- ---------
Cash and cash equivalents at end of year $ 8,598 $ 20,490
-------- ---------
-------- ---------
(See Accompanying Notes to Consolidated Financial Statements)
5
<PAGE>
NOBEL INSURANCE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Balance Sheets at March 31, 1996, and Consolidated
Statements of Income and Retained Earnings for the Three months ended March
31, 1996 and Consolidated Statements of Cash Flows for the Three months ended
March 31, 1996, have not been examined by independent accountants, but, in
the opinion of Nobel Insurance Limited ("Company"), all adjustments
(consisting only of normal accruals) necessary for a fair presentation of the
financial position and results of operations for the periods indicated have
been included.
Statement of Financial Accounting Standards ("FAS") 115 "Disclosures
About Fair Value of Financial Instruments" was adopted in 1994 and impacted
the Company's financial statements as follows:
1) Net unrealized gains (losses) of $(838,000) and $82,000 from trading
portfolio investments were included in first quarter earnings for 1996
and 1995 respectively.
2) Net unrealized gains of $178,000 and $2,093,000 from portfolio
investments classified as available for sale were included in
shareholders' equity at March 31, 1996 and December 31, 1995,
respectively.
The Company is a foreign corporation not, in management's opinion,
engaged in a trade or business in any jurisdiction requiring the payment of
taxes on income except for its United States subsidiaries (the "U.S. Group")
who may ultimately pay United States taxes on their income.
The U.S. Group is domiciled in the United States and is subject to United
States taxes on income. At March 31, 1996, the U.S. Group had consolidated
net operating losses of approximately $2,400,000 which may be carried
forward for U.S. Federal income tax purposes. Such loss carryforwards expire
beginning in 2004.
FAS 109, "Accounting for Income Taxes", was adopted by the Company in
1993 on a prospective basis. The effect of income taxes on operations is
presented below:
THREE MONTHS ENDED
MARCH 31
1996 1995
------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Net income before income taxes - consolidated $1,528 $1,148
Foreign - not subject to tax................. 7 67
------ ------
U.S. - subject to tax........................ $1,521 $ 1,081
------ ------
------ ------
Computed "expected" tax expense @ 34% $ 517 $ 368
Amortization of goodwill..................... --- 47
Change in deferred tax valuation allowance... 113 (422)
Other items, net............................. (508) 7
------ ------
Tax expense (benefit)...................... $ 122 $ ---
------ ------
------ ------
6
<PAGE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at March 31,
1996 and December 31, 1995 are presented below:
MARCH 31, DECEMBER 31,
1996 1995
- --------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Deferred tax assets:
Accounts receivable, principally due to
allowance for doubtful accounts.............. $ 81 $ 83
Claims reserves, principally due to discounting
for tax...................................... 2,343 2,243
Unearned premium adjustment.................... 1,791 1,719
Net operating loss carryforwards............... 817 717
Other.......................................... 936 378
------ ------
Total gross deferred tax assets.............. 5,968 5,140
Less valuation allowance..................... (1,020) (907)
------ ------
Net deferred tax assets...................... 4,948 4,233
------ ------
Deferred tax liabilities:
Deferred policy acquisition costs............ (1,461) (1,064)
Unrealized gains bonds available for sale.... (65) (920)
Other........................................ (403) (137)
------ ------
Total gross deferred tax liabilities....... (1,929) (2,121)
------ ------
Net deferred tax balance................. $3,019 $2,112
------ ------
------ ------
The valuation allowance for deferred tax assets as of December 31, 1995
was $907,000. The net change in the total valuation allowance for the period
ended March 31, 1996 was an increase of $113,000 based on a quarterly
calculation of taxes on an annualized basis. The Company has offset the
deferred tax asset with a valuation allowance that it feels establishes the
realizability of the deferred tax asset at this date. Future changes in
estimate of this valuation allowance will be reflected in operations in the
period in which they are determined.
Earnings per share was determined by dividing net income by average
primary shares outstanding which, includes common and common equivalent
shares outstanding attributable to outstanding stock options as follows:
THREE MONTHS ENDED
MARCH 31,
1996 1995
- --------------------------------------------------------------------
(IN THOUSANDS)
Average common shares outstanding...... 4,699 5,921
Shares applicable to common
stock equivalents.................... 131 136
----- -----
Average primary shares outstanding..... 4,830 6,057
----- -----
----- -----
Insurance companies are required to provide reserves for the settlement
and expense of investigation of all reported and unreported claims. Such
provisions are necessarily based on estimates. The estimates, and the
methods used to arrive at them, are periodically reviewed by the Company in
consultation with
7
<PAGE>
professional actuaries and changes are reflected in current operations for
the period in which they are determined.
The Company estimates claims and claims expenses based on historical
experience and payment and reporting patterns for the type of risk involved.
The anticipated effect of inflation is implicitly considered when estimating
claims and claims expenses. The difference between the U.S. insurance
subsidiary's reserves on a statutory basis and on the basis of generally
accepted accounting principles is not material.
Inherent in the estimates of ultimate claims are expected trends in claim
severity, frequency and other factors that may vary as claims are settled.
The amount of uncertainty in the estimates is affected by such factors as the
amount of historical claims experience relative to the development period for
the type of risk, knowledge of the actual facts and circumstances, and the
amount of insurance risk retained.
Since 1989, the Company implemented strategies to reduce the amount of
underwriting risk and refine the claims data available for actuarial analysis
for its casualty coverages, and has strived to maintain a conservative
reserving philosophy to avoid recurrence of the adverse reserve development
experienced prior to 1989. Prior to the third quarter 1995, the Company
experienced favorable reserve development since 1989.
At December 31, 1995, the Company recorded reserves for incurred but not
reported and development of known claims ("IBNR") which represented the
Company's best estimate of the reserve for claims and claims expense. The
Company believes the reserves established at March 31, 1996 continue to
reflect a conservative reserving philosophy.
The outstanding balances for casualty and other coverages reserves for
incurred but not reported and development of known claims, net of reinsurance
recoverable, were (in thousands):
RESERVE BALANCE INCOME EFFECT
PERIOD ENDING GROSS NET GROSS NET
-----------------------------------------------------------------------
At March 31, 1996..................$39,232 $23,283
Three months ended March 31, 1996.......................$3,205 $751
At December 31, 1995...............$36,027 $22,532
At March 31, 1995..................$30,072 $20,200
Three months ended March 31, 1995.........................$570 $(834)
An allowance for doubtful receivables is established when it becomes
evident collection is doubtful. An allowance of $389,000 and $398,000 was
established as of March 31, 1996 and December 31, 1995, respectively.
Net income and shareholder's equity of the U.S. insurance subsidiary, as
filed with regulatory authorities on the basis of statutory accounting
practices, were as follows (in thousands):
STATUTORY STATUTORY
SHAREHOLDERS' NET
PERIOD EQUITY INCOME (LOSS)
-------------------------------------------------------------------------
At March 31, 1996..............................$32,095
Three months ended March 31, 1996...............................$(319)
At December 31, 1995...........................$33,615
At March 31, 1995..............................$32,330
Three months ended March 31, 1995..............................$1,440
8
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The principal cash requirements of the Company consist of claims payments
and operating expenses.
The Nobel U.S. Group's non-insurance operations incur substantially all
of the administrative expenses. The principal sources of cash to pay the
expenses for the non-insurance operations are claim adjusting fees, and
administrative service fees from the Domestic Company and the Parent Company.
The source of liquidity for claims payments consists of net premiums,
after deduction for expenses, plus investment income on the balances of such
premiums prior to their use to pay claims. These invested balances are also
used for collateral to secure certain ceding insurers' reinsurance reserves.
United States insurance regulations require the ceding insurers to maintain
approved collateral for reinsurance balances, including reserves for unearned
premiums and unpaid claims and claims expenses ceded to non-admitted
reinsurers.
The collateral requirements for reinsurance ceded to the Parent Company
by INA is being satisfied by a combination of letters of credit and trust
balances. The settlement of all claims and claims expenses is being withdrawn
from the trust account. The combined amount of letters of credit and market
value of trust assets at March 31, 1996 is $21,210,000.
The terms of the Parent Company's letter of credit facility requires
collateral equal to the amount of letters of credit issued plus a negotiated
market value margin for investments other than short-term investments. At
March 31, 1996, the collateral consisted of short-term bank deposits and
AAA-rated fixed income securities which require a 5% margin. At March 31,
1996, the Company had cash and investments of $116,578,000 of which
$26,598,000 was collateralized or pledged to secure the U.S. insurers that
have ceded reinsurance to the Company, and to maintain security deposits in
the U.S. with various state insurance departments.
Effective January 1, 1994, the Company adopted Financial Accounting
Standard 115. The Company carries its investments designated as trading
portfolio investments at market value. Year to date as of March 31, 1996,
the Company sold $2,846,000 of trading portfolio investments with $854,000
gain realized. The Company classified its fixed income security investments,
principally bonds, as available for sale, and accordingly, carries these
investments at market value. The Company's investment guidelines prescribe a
portfolio structure of maturities to provide adequate liquidity to settle
claims liabilities. The portfolio continues to be conservatively invested in
high quality securities.
Net cash provided from operating activities for the first three months of
1996 was $4,427,000 compared to $10,660,000 for first three months of 1995.
Net cash used by investing activities was $1,158,000 for the first three
months of 1996, as opposed to $3,404,000 for the same period of 1995. Cash
used by financing activities included the purchase of 1,067,590 shares of
treasury stock at an
9
<PAGE>
average cost of $11.94, less proceeds from notes payable of $2,500,000 to net
financing cash used of $9,967,000, compared to cash provided of $758,000 for
first three months of 1995.
The insurance operations require capital to support premium writings. The
Company believes that its insurance subsidiary may need additional capital to
support planned business activities. Management is contemplating outside
financing to meet the additional business opportunities planned in 1996.
RESULTS OF OPERATIONS
THREE MONTHS 1996 VERSUS THREE MONTHS 1995
- ------------------------------------------
The composition of the net income for 1996 as compared to the net income
for 1995 by type of operation is as follows:
1996 1995
- ----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Underwriting operations............... $ (457) $ 88
Claim adjusting operations............ 463 (235)
Corporate operations.................. (366) (540)
Investment and other income........... 1,889 1,835
Federal income tax.................... (122) -
------ ------
Net after tax......................... $1,407 $1,148
------ ------
------ ------
There is significant seasonality in the Company's operating results, with
the first quarter generally weakest and the third quarter strongest.
Investment and other income for the three months of 1996 and 1995 was
impacted by reduced yield rates and the acquisition of treasury stock in the
first three months of 1996.
UNDERWRITING OPERATIONS. Premiums written increased $7,495,000, or 66%, over
1995. Reinsurance purchased decreased $688,000, or 19%. Earned premiums for
commercial casualty programs gained 15% while market conditions remained
competitive; earned premiums for specialty lines' programs gained 52% due to
surety bond new business growth; and personal lines low-value dwelling
program earned premiums gained 156% due to geographic expansion. The
comparability of reinsurance purchased is affected by changes in two major
reinsurance programs in 1996 and 1994. Effective January 1,1996, the
low-value dwelling reinsurance program was restructured to provide 50% quota
share and excess of loss reinsurance. The financial effect was decreased
premiums ceded accompanied by decreased claims recoveries and ceding
commissions. Effective July 1, 1994, the commercial casualty reinsurance
program was restructured to achieve lower reinsurance costs while maintaining
a $500,000 retention. The financial effect was decreased premiums ceded
accompanied by decreased claims recoveries and increased ceding commissions.
Both reinsurance program changes applied to the unearned premiums on the
effective date.
The claims ratio to net earned premiums was 68% for the first three
months of 1996 compared to 64% in the same period of 1995. The increase
resulted primarily from increased reserves to recognize
10
<PAGE>
current casualty insurance pricing trends associated with intense competition
and continued soft market conditions. Approximately 607,000 increased claims
reserves were recorded in the first quarter of 1996 to report the current
actuarial indications of the ultimate cost of future claims settlements,
primarily for the specialized hauler's program. All of the increase was
provision for claims occurring in prior accident years. After the adjustment,
the consolidated 1996 accident year loss ratio was 63%.
Expenses, which consist of net service fees and commissions and general
and administrative expenses, excluding the claim adjusting and corporate
operations, were 38% and 41% of net written premiums for the first three
months of 1996 and 1995, respectively. The following table shows the
components of net service fees and commissions:
1996 1995
- ------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Commissions, fronting, and taxes expense...... $4,214 $2,036
Ceding commission income...................... (1,090) (1,250)
Service fee income............................ (0) (78)
Change in deferred acquisition costs.......... (1,161) 60
------- -------
1,964 768
Claim adjusting commission paid............... 1,980 1,056
------- -------
$3,943 $1,824
------- -------
------- -------
Commissions, fronting, and taxes expense was 23% of premiums written in
1995 compared to 18% in 1994. Ceding commission income was 25% of reinsurance
purchased for the first three months of 1996 compared to 34% for the same
period of 1995.
General and administrative expenses charged to operations increased by
$157,000 or 4% and were 29% of premiums written for the first three months of
1996 compared to 53% in the same period of 1995. The slight increase is
related to the January 1995 acquisition of the Atlanta, Georgia based
underwriting facility from the general agent to establish NIC's surety
division.
CLAIM ADJUSTING OPERATIONS. Increased claim adjusting fees of $1,563,000 and
claim adjusting commissions of $924,000 resulted primarily from increased
catastrophe business activity.
INVESTMENT INCOME. Net interest income decreased by 157,000 or 9%, due to
lower yields on reduced investment balances due to the acquisition of
treasury stock during the first three months of 1996. Net realized
investment gains increased by $212,000 during the first three months of 1996
versus 1995.
The effect of inflation on net income was not significant to the Company's
results during this period.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
-----------------
Not applicable.
Item 2. CHANGES IN SECURITIES
---------------------
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
1. At the Company's Annual Meeting of Shareholders held on May 10,
1996, the proposal to fix the number of directors at six was passed
and the following individuals were elected to the Board of Directors:
VOTES FOR VOTES WITHHELD
--------- --------------
Jeffry K. Amsbaugh 3,893,781 400
Robert C. Duvall 3,893,681 500
Gregory E. Leonard 3,893,881 300
Thomas J. O'Shane 3,893,881 300
Roger T. Rankin 3,893,881 300
Robert B. Sanborn 3,893,881 300
AFFIRMATIVE NEGATIVE VOTES
VOTES VOTES WITHHELD
----- ----- --------
2. Approval of the employment of KPMG 3,892,344 1,437 400
Peat Marwick as independent auditors for
the fiscal year ended December 31, 1996.
12
<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
NOBEL INSURANCE LIMITED
/s/ Jeffry K. Amsbaugh /s/ Thomas D. Nimmo
--------------------------------- ---------------------------------
Jeffry K. Amsbaugh Thomas D. Nimmo
Chief Executive Officer Senior Vice President and Treasurer
May 14, 1996
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 103,802
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 3,348
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 115,865
<CASH> 8,598
<RECOVER-REINSURE> 24,690
<DEFERRED-ACQUISITION> 4,290
<TOTAL-ASSETS> 196,901
<POLICY-LOSSES> 85,500
<UNEARNED-PREMIUMS> 37,750
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 3,738
0
0
<COMMON> 7,709
<OTHER-SE> 44,345
<TOTAL-LIABILITY-AND-EQUITY> 196,901
13,316
<INVESTMENT-INCOME> 1,678
<INVESTMENT-GAINS> 212
<OTHER-INCOME> 3,557
<BENEFITS> 9,112
<UNDERWRITING-AMORTIZATION> 3,943
<UNDERWRITING-OTHER> 4,180
<INCOME-PRETAX> 1,528
<INCOME-TAX> 122
<INCOME-CONTINUING> 1,406
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,406
<EPS-PRIMARY> .29
<EPS-DILUTED> 0
<RESERVE-OPEN> 81,675
<PROVISION-CURRENT> 7,576
<PROVISION-PRIOR> (6,717)
<PAYMENTS-CURRENT> 1,298
<PAYMENTS-PRIOR> 7,343
<RESERVE-CLOSE> 85,500
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
