UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended Commission File Number
December 31, 1995 1-8233
USF&G CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-1220567
(State of Incorporation) (IRS Employer Identification No.)
100 Light Street, Baltimore, Maryland 21202
(Address of principal executive offices) (zip code)
Telephone: 410-547-3000
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Securities registered pursuant to Section 12(b) of the Act:
$4.10 Series A Convertible Exchangeable Preferred Stock, Registered-New York Stock Exchange
Par Value $50 Registered-Pacific Stock Exchange
Preferred Share Purchase Rights Registered-New York Stock Exchange
Registered-Pacific Stock Exchange
Common Stock, Par Value $2.50 Registered-New York Stock Exchange
Registered-Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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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 twelve (12) months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 27, 1996, was $1,854,776,795.
Voting stock held by any persons who may be deemed to be affiliates under Rule
405 would be immaterial.
The number of shares outstanding of the issuer's common stock as of March 27,
1996:
Common Stock, Par Value $2.50; 119,663,019 shares outstanding.
Documents Incorporated by Reference:
Portions of the 1995 Annual Report to Shareholders are incorporated by
reference into Parts I and II.
Portions of the definitive proxy statement for the Annual Meeting of
shareholders scheduled for May 15, 1996, are incorporated by reference into
Part III.
Exhibit Index begins on page 15.
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USF&G CORPORATION Index
Part I
Item 1. Description of Business
1.1. General 1
1.2. Business Segments 1
1.3. Distribution Systems 4
1.4. Competition 4
1.5. Investments 5
1.6. Property/Casualty Loss Reserves 5
1.7. Life Benefit Reserves 9
1.8. Geographical Distribution 10
1.9. Executive Officers of the Registrant 11
Item 2. Business Properties 12
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Part II
Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 13
Part III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners
and Management 14
Item 13. Certain Relationships and Related Transactions 14
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 15
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USF&G CORPORATION Part I
In connection with, and because it desires to take advantage of, the new "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995,
USF&G Corporation (the "Corporation") cautions readers regarding certain
forward-looking statements in the following discussion and elsewhere in this
Form 10-K and in any other statements made by, or on the behalf of, the
Corporation, whether or not in future filings with the Securities and Exchange
Commission. Forward-looking statements are statements not based on historical
information and which relate to future operations, strategies, financial
results, or other developments. In particular, statements using verbs such as
"expect", "anticipate", "hope", "believe" or words of similar import generally
involve forward-looking statements.
Forward-looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the Corporation's
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by, or on behalf of, the Corporation.
Whether or not actual results differ materially from forward-looking statements
may depend on numerous foreseeable and unforeseeable events or developments,
some of which may be national in scope, such as general economic conditions and
interest rates, some of which may be related to the insurance industry
generally, such as pricing competition, industry consolidation and regulatory
developments, and others of which may relate to the Corporation specifically,
such as risks with implementing business realignment strategies and related
agency plant or field organization implications, adequacy of reserves, exposure
to catastrophe losses, technological risks inherent in developing its new
technological infrastructure, adequacy of underwriting disciplines, credit and
other risks associated with the Corporation's investment portfolio, and other
factors. The Corporation disclaims any obligation to update forward-looking
information.
Item 1. Description of Business
1.1. General
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USF&G Corporation is a holding corporation organized in 1981 as a Maryland
corporation. United States Fidelity and Guaranty Company ("USF&G Company"),
organized in 1896 under Maryland law, is the predecessor registrant of the
Corporation. The term "Corporation" as used in this Form 10-K refers to the
Corporation and all of its subsidiaries. As of December 31, 1995, the
Corporation had approximately 6,200 employees.
The Corporation, through its subsidiaries, is primarily engaged
in the business of insurance. Property/casualty insurance is its primary
business. USF&G Company, the Corporation's largest subsidiary, is the 25th
largest property/casualty insurer among over 2,400 insurers in the United States
based on 1994 statutory net premiums written. Life insurance and annuity
products are sold by Fidelity and Guaranty Life Insurance Company ("F&G Life").
F&G Life is 176th among over 1,300 life/health insurers in the United States
based on 1994 statutory net premiums written. Noninsurance operations are
composed of the parent company, asset management and management consulting
services.
1.2. Business segments
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Financial information about the Corporation's business segments is set forth in
Note 14 to the Consolidated Financial Statements in the Corporation's 1995
Annual Report to Shareholders and incorporated herein by reference. A
description of the Corporation's principal business segments begins with the
Property/Casualty Insurance Segment on page 2, and continues with the Life
Insurance Segment and Parent and Noninsurance Operations on page 3 of this Form
10-K.
1.2a. Property/Casualty insurance segment
USF&G Company's property/casualty business is grouped into five business
categories: Commercial Lines Middle Market ("Middle Market"), the Family and
Business Insurance Group ("FBIG"), surety, alternative risk transfer ("ART") and
assumed reinsurance.
USF&G Company reinsures portions of its policy risks with other insurance
companies or underwriters and remains contingently liable under these contracts
(ceded reinsurance). In addition, it assumes policy risks from other insurance
companies and through participation in pools and associations (assumed
reinsurance).
Ceded reinsurance allows USF&G Company to obtain indemnification against losses
associated with insurance contracts it has written by entering into a
reinsurance contract with another insurance enterprise (the reinsurer). USF&G
Company pays (cedes) an amount to the reinsurer who agrees to reimburse USF&G
Company for a specified portion of any claims paid on business under the
reinsured contracts. Reinsurance gives USF&G Company the ability to write
certain individually large risks or groups of risks, and control its exposure to
losses by ceding a portion of such large risks either on a proportional or
excess basis. USF&G Company's ceding reinsurance agreements are generally
structured on a treaty basis whereby all risks meeting a certain criteria are
automatically reinsured. USF&G Company may also use supplemental facultative
reinsurance based on an underwriter's evaluation of characteristics of a
specific insured risk.
Excess of loss reinsurance is used to limit USF&G Company's exposure to large
losses or catastrophic events. The following table summarizes USF&G Company's
most significant treaty placements as of December 31, 1995.
USF&G Reinsurance
Treaty Retention Limits
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Property catastrophe (a) $75 million $140 million
Property per risk (b) 3 million 97 million
Surety (c) 5 million 25 million
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(a) Second event coverage purchased lowers retention to $50 million for
second catastrophe.
(b) Retention for FBIG is lowered to $1 million effective September 1, 1995.
(c) The surety excess of loss treaty effective January 1, 1996, provides $45
million limits in excess of USF&G's $5 million retention.
Commercial Lines: Commercial lines products include property, auto, inland
marine, workers' compensation, and general and umbrella liability coverage for
businesses and governmental entities, and fidelity and financial institution
bonds for banks, stockbrokers and credit unions. Commercial coverages provide
protection related to property loss, liability claims and workers' compensation
benefits to businesses and other institutions. Property loss and liability
claims insurance protects against loss from damage to the insured's covered
properties and protects against legal liability for injuries to other persons or
damage to their property arising from the insured's business operations.
Workers' compensation provides benefits to employees, as mandated by state laws,
for employment-related accidents, injuries or illnesses. Fidelity bonds
indemnify employers against the dishonesty or default of persons in their
employ.
Personal Lines: Personal lines products include standard and nonstandard auto,
homeowners, watercraft and personal excess insurance for individuals and
families. Personal coverages for automobile and homeowners insurance include
aspects of property loss and liability risks. Automobile policies cover
liability to third parties for bodily injury and property damage, and cover
physical damage to the insured's own vehicle resulting from collision and
various other perils. Homeowners policies protect against loss of dwellings and
contents arising from a variety of perils, as well as liability arising from
ownership or occupancy.
Surety: The surety segment provides contract and non-contract surety bonds to
construction companies, commercial businesses and individuals. Surety bonds
guarantee the performance of a principal who undertakes contractual or statutory
obligations, and indemnify third-party obligees for loss due to the principal's
failure to perform.
Alternative Risk Transfer: Discover Re Managers, Inc., ("Discover Re") provides
insurance, reinsurance and related services to the ART market, primarily in the
municipalities, transportation, education and retail sectors. Through the ART
market, a company can self-insure the predictable frequency portion of its own
losses and purchase insurance for the less frequent, high severity losses that
could have a major financial impact on the company.
Assumed Reinsurance: USF&G Company operates a separate reinsurance division
which underwrites treaty reinsurance and is composed of various wholly-owned
subsidiaries. The lead company in this group, F&G Re, Inc., a wholly-owned
subsidiary of USF&G Company, acts as the reinsurance underwriting manager and
solicits and services assumed reinsurance for USF&G Company. F&G Re, Inc.,
markets reinsurance products through domestic and international reinsurance
brokers. USF&G's assumed reinsurance business is written in North America and in
specific foreign countries (mainly in Western Europe and Japan). Reinsurance
prices and conditions are not normally subject to the same state regulation
applicable to the primary insurance market because reinsurers contract solely
with other insurance companies.
Financial information and further descriptions of the businesses and products
discussed above are set forth in Section 2, "Property/Casualty Insurance
Operations", of Management's Discussion and Analysis of Financial Condition and
Results of Operations in the Corporation's 1995 Annual Report to Shareholders
incorporated herein by reference.
In 1995, with the goal of continuing the improvement in underwriting results,
USF&G realigned its product segments. The change recognizes the distinctly
different strategies of growth and profitability in middle market commercial
insurance compared with personal and small business insurance. This realignment
resulted in the formation of Middle Market and FBIG. As 1995 was the transition
year for these new business groups, comparable financial data reflecting each
group's results for 1995 and prior years is not available; therefore, the
discussions follow the traditional product lines segmentation.
1.2b. Life insurance segment
F&G Life's principal products are structured settlement annuities, deferred
annuities, including single premium deferred annuities ("SPDAs") and tax
sheltered annuities ("TSAs"), single premium immediate annuities ("SPIAs") and
life insurance products. Structured settlements are immediate annuities
principally sold to the property/casualty company in settlement of insurance
claims. SPDAs offer the owner the option of receiving a lump-sum distribution at
a future date or a series of fixed payments over a specified period. TSAs are
deferred annuities that provide retirement income to the owner. TSAs are sold
primarily to teachers. SPIAs provide for payments that begin within one year
after the sale and continue over a fixed period or an individual's lifetime.
Universal life products represent all the permanent life insurance sales.
Universal life insurance provides a death benefit for the life of the insured
and accumulates cash values to which interest is credited. The interest rates
are applied to premiums for one year from receipt. New rates are declared
quarterly on recurring premium policies and semi-monthly on single premium
policies. Universal life cash values are charged for the cost of life insurance
coverage and for administrative expenses. Term life insurance provides a fixed
death benefit if the insured dies during the contractual period.
Financial information and further descriptions of business and products
discussed above is set forth in Section 3, "Life Insurance Operations" of
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Corporation's 1995 Annual Report to Shareholders incorporated
herein by reference.
1.2c. Parent and noninsurance operations
The parent company performs corporate functions including managing the capital
requirements of the Corporation and its subsidiaries. The noninsurance
operations include management consulting services and asset management services.
During 1994, the Corporation committed to a plan to consolidate its home office
operations in Baltimore, Maryland at its Mount Washington facilities. Further
information about the plan and its progress is set forth in Note 1.2,
"Facilities exit costs/sublease income", to the Consolidated Financial
Statements in the 1995 Annual Report to Shareholders and is incorporated herein
by reference.
In March 1996, the company sold Kepner-Tregoe, Inc., its management consulting
subsidiary, to a holding company formed by Kepner-Tregoe, Inc.'s management. Net
income (loss) of the subsidiary for the years ended December 31, 1995, 1994, and
1993 was $2 million, $1 million, and $(4) million, respectively. Revenue of the
subsidiary was $39 million for the year ended December 31, 1995 and $32 million
for the years ended December 31, 1994 and 1993.
Further financial information about parent and noninsurance operations is set
forth in Section 4, "Parent and Noninsurance Operations", of Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Corporation's 1995 Annual Report to Shareholders and is incorporated herein by
reference.
1.3. Distribution systems
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Property/casualty Insurance: USF&G Company's products have been sold primarily
by independent agents since its founding in 1896. Independent agents generally
represent multiple insurance companies. USF&G Company's products are sold
through approximately 3,700 independent agencies in the United States on a
commission basis.
As of December 31, 1995, USF&G Company maintained 30 branch offices to service
its independent agents and policyholders. The branch offices are located
throughout the United States. These offices support the administration of
underwriting standards, the delivery of policies, and the supervision of USF&G
Company's claim offices. In 1995, USF&G eliminated its former regional structure
and implemented a new regional structure. The new regional structure gives the
branch offices more autonomy by moving increased levels of underwriting
authority to the branches, and dedicates specialized resources to the Middle
Market and FBIG product segments, which should allow the agency plant to place
business with USF&G in an easier and more efficient manner. In 1996, USF&G will
open three "Centers for Agency Services" dedicated to underwriting and policy
processing for FBIG. The Corporation will also open a centralized claims
reception center which will provide 24-hour claim reporting service to customers
and agents throughout the United States.
Life Insurance: SPDAs are sold primarily through independent agents and
insurance brokers. TSAs are sold through a national wholesaler. Structured
settlements are annuities sold predominantly to the property/casualty
company in settlement of certain of its insurance claims.
1.4. Competition
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Property/Casualty Insurance: The property/casualty insurance industry is highly
competitive with about 2,400 companies nationwide. These insurers are not only
stock companies, but also mutual companies and other underwriting organizations.
USF&G Company ranked 25th in the industry based on 1994 statutory net premiums
written, and 23rd based on 1994 statutory policyholders' surplus. USF&G Company
competes with other property/casualty insurance companies whose products are
distributed through national, regional and local independent agencies, direct
sales and brokers. Consumers may also use self-insurance, which includes captive
insurance subsidiaries. Pricing is a primary means of competition in the
property/casualty industry. The industry is currently in a period of
significant price competition, which adversely affects USF&G Company's
profitability. Availability and quality of products, quality and speed of
service (including claims service), financial strength, distribution systems and
technical expertise are also important elements of competition. In personal and
other lines offered by USF&G Company, significant price competition is
experienced from direct-writing companies that do not use independent agents and
generally have lower policy acquisition costs.
Life Insurance: The Corporation's life insurance subsidiaries operate in a
competitive environment, with approximately 1,300 companies in the industry
including stock and mutual companies. F&G Life ranked 89th in the United States
based on 1994 statutory assets, and 106th based on 1994 statutory capital and
surplus.
In the life insurance industry, interest crediting rates, policy features,
financial stability and service quality are important competitive factors. F&G
Life's products compete not only with those offered by other life insurance
companies, but also with other income accumulation-oriented products offered by
other financial institutions. F&G Life has experienced considerable competitive
pressure in recent periods as a result of its relatively lower credit ratings.
Competitive pressures for agency business also have intensified in recent years
because of an increase in the variety of products available in the market and
efforts of competitors to expand their market shares.
Premium Rates: Most states have laws requiring that rate schedules and other
information be filed with a regulatory authority for substantially all property,
casualty, and surety lines. Some states permit insurers to use rates without
prior regulatory approval whereas other states prohibit implementation of new
rates without such approval. The regulatory authority may disapprove a filing if
it finds that the rates are inadequate, excessive or unfairly discriminatory.
Rates are not necessarily uniform for all insurers.
In states that require prior approval of rates, regulators usually require the
submission of historical data to justify rate increases and, accordingly, there
is often a time lag between identifying the need for rate increases and securing
such increases. The effect of this lag is particularly severe in times of rising
claims and inflation. Rates for life insurance are generally not regulated.
1.5. Investments
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Investing the net cash flows from operations is a major aspect of the
property/casualty and life insurance businesses. The components of the
Corporation's investment portfolio and investment performance are discussed in
Section 5, "Investments", of Management's Discussion and Analysis of Financial
Condition and Results of Operations and Note 2, "Investments", to the
Consolidated Financial Statements in the 1995 Annual Report to Shareholders,
which sections are incorporated herein by reference.
1.6. Property/casualty loss reserves
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1.6a. General
The reserve liabilities for property/casualty losses and loss expenses represent
estimates of the ultimate net cost of all unpaid losses and loss adjustment
expenses incurred through December 31 of each year. The reserves are determined
using adjusters' individual case estimates and actuarially based statistical
projections.
USF&G Company's estimates of losses for reported claims are established
judgmentally on an individual case basis. Such estimates are based on a claim
adjuster's particular expertise with the type of risk involved and knowledge of
circumstances surrounding the individual claims. These estimates are reviewed on
a regular basis and updated as additional facts become known.
The reserves derived from statistical projections are subject to the effects of
trends in claim severity and frequency. Statistical projections are employed in
three specific areas: 1) to calculate bulk reserves for incurred but not
reported ("IBNR") losses and provide for development of case basis loss
reserves; 2) to calculate allocated loss expense reserves; and 3) to calculate
unallocated loss expense reserves.
IBNR and Case Development Reserves: USF&G Company's estimates of IBNR and case
development reserves are derived from analyses of historical patterns of
development of paid and reported losses by accident year for each line of
business. The loss projection procedures used in this analysis contain explicit
provisions for quantifying the effect of inflation on loss payments expected to
be made in the future. This process relies on the basic assumption that past
experience adjusted for the effect of current developments and likely trends is
an appropriate basis for predicting future events.
Loss Expense: USF&G Company's estimates of unpaid loss expenses are based on
analyses of the long-term relationship of projected ultimate loss expense to
projected ultimate losses for each line of business. By using incurred losses as
a base, inflation assumptions applicable to loss reserves are applied equally to
allocated expense reserves.
Unallocated Loss Expense: Unallocated loss expense reserves are based on
historical relationships of paid unallocated expenses to paid losses. As with
allocated loss expenses, the inflation assumptions applicable to loss reserves
are presumed to apply equally to unallocated expense reserves.
The process of estimating the liability for unpaid losses and loss expenses is
inherently judgmental. The process is influenced by factors which are subject to
significant variation. Possible sources of variation include changing rates of
inflation (particularly medical cost inflation) as well as changes in other
economic conditions, the legal system and internal claims settlement practices,
among other variables. In many cases, significant periods of time may lapse
between the occurrence of an insured event, the reporting of a claim to USF&G
Company and USF&G Company's final settlement of the claim. More than 48 percent
of USF&G Company's loss and loss expense reserves are provided for claims which
have been incurred but not reported and for future development on reported
claims. While USF&G Company reports a single amount as the estimate for unpaid
loss and loss expenses as of each valuation date, the reported reserves should
be considered the best estimate from a range of possible outcomes. It is
unlikely that future losses and loss expenses will develop exactly as projected
and may in fact vary significantly from projections. These estimates are
continually reviewed and updated as experience develops and new information
becomes known. Any resulting adjustments are reflected in current operating
results.
1.6b. Discounted loss reserves
The reserve for permanent-total disability benefits and long-term medical care
benefits under workers' compensation insurance is discounted at rates of
interest generally ranging up to 4 percent. The carrying amount of such workers'
compensation reserves, net of reinsurance and net of discount, was $1.5 billion,
$1.6 billion and $1.8 billion at December 31, 1995, 1994, and 1993,
respectively. The discount is amortized over the expected life times of
claimants. Discounted reserves come from three primary sources: reserves assumed
from the Workers' Compensation Reinsurance Bureau ("WCRB"), reserves assumed
from residual market pools and reserves for USF&G Company's net retained
business.
The following table reconciles the change in loss reserve discounts for the
years presented:
(in millions) 1995 1994 1993
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Discount, January 1 $441 $508 $680
Additional discount (reduction) accrued (21) (32) (138)
Discount amortized (26) (35) (34)
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Discount, December 31 $394 $441 $508
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The negative discount accrual of $21 million in 1995 results from a reduction in
the estimate of ultimate incurred losses and from an acceleration in the payment
pattern. A number of claim initiatives, including managed medical care and
structured settlements for workers' compensation medical claims, are having a
favorable impact on estimates of ultimate incurred losses. The source of the
negative discount accrual of $32 million in 1994 results from an acceleration in
the payment pattern of workers' compensation claims attributable primarily to
structured settlements. The source of the negative discount accrual of $138
million in 1993 results from a WCRB commutation and the concurrent reduction in
discount rates.
1.6c. Roll-forward of liability for loss and loss expenses
The following table reconciles the changes in loss and loss expense reserves for
the years presented:
(in millions) 1995 1994 1993
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Total reserve at beginning of
year, gross $6,158 $6,370 $5,564
Less reinsurance recoverables 1,016 1,054 N/A
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Net balance at January 1 5,142 5,316 5,564
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Incurred Related To:
Current year 1,856 1,752 1,744
Prior years (54) (8) 61
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Total incurred 1,802 1,744 1,805
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Paid Related To:
Current year 635 634 582
Prior years 1,196 1,284 1,471
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Total paid 1,831 1,918 2,053
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Net balance at December 31 5,113 5,142 5,316
Plus reinsurance recoverables 984 1,016 1,054
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Total reserve at end of year, gross $6,097 $6,158 $6,370
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1.6d. Analysis of loss and loss expense reserve development
Tables on the following page show property/casualty loss reserves including
(net) and excluding (gross) the effects of ceded reinsurance as recorded in the
indicated years, subsequent payments made with respect to such reserves, and
re-estimates of such reserves. Each table has been restated to include Victoria
Financial, Inc., and Discover Re. These companies are small relative to the
Corporation as it existed at December 1994, and had little impact on reserve
development.
The top line shows the estimated liability that was recorded at the end of each
of the indicated years for all current and prior year unpaid losses and loss
expenses. The upper portion of each table shows the cumulative amount
subsequently paid in succeeding years. The lower portion of each table shows
re-estimations of the original recorded reserve as of the end of each successive
year. Such re-estimations result from development of additional facts and
circumstances pertaining to unsettled claims. The bottom line shows the dollar
amount of the cumulative change through 1995 that is attributable to the
original recorded reserve for each prior year. Such change has been reflected in
income of subsequent years.
The Analysis of Gross Loss and Gross Loss Expense Reserve Development was added
in 1994, and provides data gross of ceded reinsurance for the carried reserve at
year-ends 1995, 1994 and 1993 and the development of both the 1994 and 1993
year-end reserves.
Conditions and trends that have affected reserve development in the past have
changed and may not necessarily occur in the future. Therefore, care should be
exercised in extrapolating future reserve redundancies or deficiencies from such
development.
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Analysis of Net Loss and Net Loss Expense Reserve Development*
At December 31
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(in millions) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
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Liability for unpaid losses
and loss expenses $3,510 $4,090 $4,744 $5,208 $5,467 $5,637 $5,716 $5,564 $5,316 $5,142 $5,113
Cumulative paid as of:
One year later 1,251 1,348 1,374 1,539 1,723 1,655 1,575 1,471 1,284 1,196
Two years later 2,040 2,164 2,258 2,614 2,795 2,746 2,534 2,394 2,091 --
Three years later 2,557 2,778 3,033 3,350 3,593 3,418 3,225 3,018 -- --
Four years later 2,971 3,313 3,550 3,939 4,055 3,929 3,692 -- -- --
Five years later 3,362 3,640 3,992 4,265 4,435 4,293 -- -- -- --
Six years later 3,595 3,864 4,240 4,542 4,714 -- -- -- -- --
Seven years later 3,759 4,056 4,456 4,773 -- -- -- -- -- --
Eight years later 3,918 4,234 4,648 -- -- -- -- -- -- --
Nine years later 4,068 4,401 -- -- -- -- -- -- -- --
Ten years later 4,211 -- -- -- -- -- -- -- -- --
Liability re-estimated:
One year later 3,696 4,210 4,884 5,236 5,679 5,767 5,793 5,625 5,308 5,088
Two years later 3,914 4,444 4,943 5,485 5,800 5,907 5,923 5,645 5,264 --
Three years later 4,168 4,586 5,109 5,566 5,960 6,151 5,975 5,620 -- --
Four years later 4,341 4,722 5,287 5,761 6,246 6,216 5,959 -- -- --
Five years later 4,457 4,917 5,442 6,029 6,331 6,209 -- -- -- --
Six years later 4,631 5,049 5,700 6,125 6,319 -- -- -- -- --
Seven years later 4,743 5,279 5,789 6,124 -- -- -- -- -- --
Eight years later 4,954 5,365 5,790 -- -- -- -- -- -- --
Nine years later 5,032 5,385 -- -- -- -- -- -- -- --
Ten years later 5,058 -- -- -- -- -- -- -- -- --
Cumulative (deficiency)
excess (1,548) (1,295) (1,046) (916) (852) (572) (243) (56) 52 54
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Analysis of Gross Loss and Gross Loss Expense Reserve Development*
At December 31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(in millions) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
====================================================================================================================================
Liability for unpaid losses and
loss expenses $-- $-- $-- $-- $-- $-- $-- $-- $6,370 $6,158 $6,097
Cumulative paid as of:
One year later -- -- -- -- -- -- -- -- 1,571 1,431
Two years later -- -- -- -- -- -- -- -- 2,547 --
Liability re-estimated:
One year later -- -- -- -- -- -- -- -- 6,354 6,103
Two years later -- -- -- -- -- -- -- -- 6,328 --
Cumulative (deficiency)
excess -- -- -- -- -- -- -- -- 42 55
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*Certain reserves are recorded on a discounted basis to reflect the value of
timing differences between the recording of reserves and subsequent payment. The
amortization of that discount is included in the reserve deficiencies shown
above.
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Loss and loss expenses recorded in the current period financial
statements are affected by changes in estimates of insured events occurring in
prior periods. Losses incurred in 1995 but related to prior years were a
reduction of $54 million primarily as a result of favorable development on prior
years' experience in the assumed reinsurance business.
There was little change in the estimates of ceded reinsurance on prior years.
The reserve development on prior years' gross reserve of $55 million is
approximately equal to the reserve development net of ceded reinsurance.
<TABLE>
<CAPTION>
Effect of Reserve Re-estimations on Calendar Year Operations
(Increase) Decrease in Reserves
Total by
Accident
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(in millions) 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 Year
====================================================================================================================================
Accident Years:
1985 & Prior $(186) $(218) $(254) $(173) $(116) $(174) $(112) $(211) $(78) $(26) $(1,548)
1986 -- 98 20 31 (20) (21) (20) (19) (8) 6 67
1987 -- -- 94 83 (30) 17 (23) (28) (3) 19 129
1988 -- -- -- 31 (83) 97 (40) (10) (7) 2 (10)
1989 -- -- -- -- 37 (40) 35 (18) 11 11 36
1990 -- -- -- -- -- (9) 20 42 20 (5) 68
1991 -- -- -- -- -- -- 63 114 13 9 199
1992 -- -- -- -- -- -- -- 69 32 9 110
1993 -- -- -- -- -- -- -- -- 28 19 47
1994 -- -- -- -- -- -- -- -- -- 10 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total by calendar year $(186) $(120) $(140) $ (28) $(212) $(130) $ (77) $ (61) $ 8 $54 $ (892)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In the table above, all entries are shown net of ceded reinsurance. Each column
total shows reserve re-estimates made in the indicated calendar year for each
accident year. Adverse development on accident years prior to 1986 is primarily
attributable to workers' compensation discount amortization and the assignment
of bulk reserves to older accident years for environmental and asbestos
liabilities. The favorable development on assumed reinsurance is scattered
throughout the accident years.
1.6e. Loss portfolio transfers
Also included in the loss and loss expense reserve development tables on the
previous page are various loss portfolio transfer transactions. These
transactions are reinsurance contracts that do not involve the same type of risk
as traditional reinsurance. In a loss portfolio reinsurance contract, USF&G
Company assumes another insurer's outstanding loss reserves for a price equal to
their discounted value plus a fee. These contracts generally provide for fixed
loss payments at specified future dates. The financial risk involved is whether
the investment income earned on the cash received will cover the discount
associated with the losses assumed. This financial risk is controlled by the
Corporation's asset/liability management techniques, which involve matching the
maturities of the investment portfolio to expected patterns of future claim and
benefit payments.
Loss portfolio transfers have had no impact on reported reserve deficiencies and
no future loss development, either adverse or favorable, is anticipated. Loss
portfolio transfers included in outstanding reserves were as follows:
(in millions) At December 31
================================================================================
1995 $ 52
1994 86
1993 110
1992 123
1991 279
1990 324
1989 397
1988 394
1987 355
1986 241
- --------------------------------------------------------------------------------
1.6f. Structured settlements
Structured settlements represent the settlement of claims through the purchase
of annuities. While they result in accelerated claim payments, structured
settlements generally reduce the ultimate amount of losses paid. Structured
settlements are used primarily in the third-party liability and workers'
compensation lines of business. These types of settlements were not used
extensively on liability lines until 1985. Their use was extended to workers'
compensation indemnity claims in 1987 and workers' compensation medical claims
in 1994. The number of such settlements has grown steadily and they appear to be
having an impact on claim payment patterns. USF&G Company has developed
procedures to ensure that the impact of structured settlements is given
appropriate recognition in estimating ultimate reserve liabilities.
1.6g. Reconciliation of liability for loss and loss expenses from SAP
to GAAP
The following table presents the differences between property/ casualty
insurance claim reserves reported in accordance with GAAP in the consolidated
financial statements in the 1995 Annual Report to Shareholders, and the combined
annual statement filed with state insurance departments in accordance with
statutory accounting practices ("SAP").
At December 31
(in millions) 1995 1994 1993
================================================================================
SAP basis property/casualty reserves $4,739 $4,875 $5,001
Reserves of foreign subsidiaries
(consolidated for GAAP but not SAP) 374 267 315
- --------------------------------------------------------------------------------
GAAP basis property/casualty
reserves, net 5,113 5,142 5,316
Reinsurance receivable 984 1,016 1,054
- --------------------------------------------------------------------------------
GAAP basis property/casualty
reserves, gross $6,097 $6,158 $6,370
- --------------------------------------------------------------------------------
1.7. Life benefit reserves
- --------------------------------------------------------------------------------
Ordinary life insurance future policy benefit reserves are computed under the
net level premium method using assumptions for future investment yields,
mortality, and withdrawal rates. These assumptions reflect F&G Life's
experience, modified to reflect anticipated trends, and provide for possible
adverse deviation. Reserve interest rate assumptions are graded and range from
2.5 percent to 6.0 percent.
Universal life and annuity reserves are computed on the retrospective deposit
method, which produces reserves equal to the cash value of the contracts. Such
reserves are not reduced for charges that would be deducted from the cash value
of policies surrendered. Reserves on single premium annuities with guaranteed
payments are computed on the prospective deposit method, which produces reserves
equal to the present value of future benefit payments.
The table below shows F&G Life's benefit reserves by policy type.
At December 31
(in millions) 1995 1994 1993
================================================================================
Single Premium Annuities:
Deferred $1,590 $1,860 $2,138
Immediate 943 867 815
Other annuities 542 492 462
Universal/term/group life 640 579 554
- --------------------------------------------------------------------------------
Net balance 3,715 3,798 3,969
Reinsurance receivable 4 6 4
- --------------------------------------------------------------------------------
Total reserve, gross $3,719 $3,804 $3,973
- --------------------------------------------------------------------------------
1.8. Geographical distribution
The risks insured by the Corporation's insurance subsidiaries are geographically
diversified primarily throughout the United States. The Corporation has
established a subsidiary to market surety products in Canada. Reinsurance risks
are incurred throughout North America and specific foreign countries (mainly in
Western Europe and Japan). The products marketed by the Corporation's management
consulting subsidiary, a part of noninsurance operations, were distributed
throughout the world. Total assets and revenues of foreign operations are not
material. The tables below show the composition of statutory voluntary direct
premiums written for the Corporation's property/casualty operations and
statutory premium income of its life insurance operations by region for the year
ended December 31, 1995.
Property/Casualty
Voluntary Direct Premiums Written
================================================================================
Atlanta 13%
Purchase, New York 13
Baltimore 12
Columbus, Ohio 10
Charlotte 9
Chicago 7
Mississippi 7
St. Louis 7
West Coast 7
Rocky Mountain 6
New England 5
Oklahoma 4
- --------------------------------------------------------------------------------
Total 100%
- --------------------------------------------------------------------------------
Life Statutory
Premium Income
================================================================================
Northeast 46%
Northwest 21
Southwest 13
South 11
Midwest 9
- --------------------------------------------------------------------------------
Total 100%
- --------------------------------------------------------------------------------
1.9. Executive officers of the Registrant
- --------------------------------------------------------------------------------
Positions and Office with Registrant or
Name Age Significant Subsidiaries
- --------------------------------------------------------------------------------
Norman P. Blake, Jr. 54 Chairman of the Board, President, and
Chief Executive Officer
Glenn W. Anderson 43 Executive Vice President-Commercial
Lines and Field Operations
John R. Berger 43 President-F&G Re, Inc.
Kenneth E. Cihiy 49 Senior Vice President-Claim
Gary C. Dunton 40 President-Family and Business Insurance
Group, and Executive Vice President -
USF&G Company
Dan L. Hale 51 Executive Vice President-Chief
Financial Officer
Robert J. Lamendola 51 Senior Vice President-Surety
Thomas K. Lewis, Jr. 43 Senior Vice President-Chief Information
Officer
Stephen W. Lilienthal 46 Senior Vice President-Field Operations
John A. MacColl 47 Senior Vice President-General Counsel,
and Senior Vice President-Human
Resources
Andrew A. Stern 38 Senior Vice President-Strategic
Planning/Corporate Marketing
Harry N. Stout 43 President-F&G Life
John C. Sweeney 51 Chairman-Falcon Asset Management, Inc.,
and Senior Vice President-Chief
Investment Officer
- --------------------------------------------------------------------------------
All persons in the preceding table are officers of the Registrant except Glenn
W. Anderson, Gary C. Dunton, Kenneth E. Cihiy, Robert J. Lamendola and Stephen
W. Lilienthal, who are executive officers of USF&G Company; John R. Berger who
is an executive officer of F&G Re, Inc.; and Harry N. Stout who is an executive
officer of F&G Life.
Mr. Blake was Chairman and Chief Executive Officer of Heller International
Corporation, a world-wide commercial financial services organization, and joined
the Corporation in November 1990. Mr. Anderson was Vice President of Strategic
Target Marketing with Fireman's Fund Insurance Company, a domestic insurance
company, and joined the Corporation in December 1992. Mr. Berger was Assistant
Secretary of General Reinsurance Company, an insurance and financial services
company, and joined the Corporation in November 1983. Mr. Cihiy was Resident
Vice President of Sacramento Field Operations with Aetna Life and Casualty
Company, an insurance and financial services company, and joined the Corporation
in May 1993. Mr. Dunton was Vice President and Division Manager of Standard
Lines with Aetna Life and Casualty Company and joined the Corporation in
December 1992. Mr. Hale was President and Chief Executive Officer of Chase
Manhattan Leasing Company, an international leasing company, and joined the
Corporation in February 1991. Mr. Lamendola was Managing Director of Marsh &
McLennan, Inc., and joined the Corporation in June 1992. Mr. Lewis was Vice
President and General Manager for Europe, Middle East, and Africa for Seer
Technologies, Inc., and joined the Corporation in November 1993. Mr. Lilienthal
was Vice President of Travelers Insurance Company, an insurance and financial
services company, and joined the Corporation in June 1993. Mr. MacColl was
previously a partner in the Baltimore office of the law firm of Piper & Marbury,
and joined the Corporation in January 1989. Mr. Stern was Partner and Vice
President of Booz Allen & Hamilton, a national business consulting firm, and
joined the Corporation in May 1993. Mr. Stout was Senior Vice President of
United Pacific Life Insurance Company, and joined the Corporation in May 1993.
Mr. Sweeney was a Principal and Practice Director with Tillinghast/Towers
Perrin, an asset management and consulting company, and joined the Corporation
in November 1992.
Item 2. Business Properties
Real estate owned and used in the regular conduct of business consists of
business properties located in various cities throughout the United States. The
Corporation's Mount Washington Center, located in Baltimore, Maryland, is the
principal owned property. This is the headquarters for the life insurance
operations, and the location of the information systems, administrative
services, and training and development complexes.
In addition, the Corporation leases approximately 120 offices in various cities
in the regular course of business. The principal leased property is a home
office building in Baltimore, Maryland, sold in 1984 and leased back by the
Corporation. During 1994, the Corporation committed to a plan to consolidate its
home office operations in Baltimore, Maryland at its Mount Washington
facilities. (Refer to Note 6 of the Notes to Consolidated Financial Statements
in the Corporation's 1995 Annual Report to Shareholders.)
Item 3. Legal Proceedings
(a) The Corporation's insurance subsidiaries are routinely engaged in litigation
in the normal course of their businesses, including defending claims for
punitive damages. As insurers, they defend third-party claims brought against
their insureds, as well as defend themselves against first-party coverage
claims.
(b) In November 1995, USF&G entered into a settlement agreement with the
California Insurance Department relating to the implementation of Proposition
103 passed by voters in November 1988, which required insurers to rollback
certain property/casualty premium prices. Persuant to this settlement, USF&G
agreed to pay $11 million to certain policy holders of USF&G.
In the opinion of management, such litigation and the litigation described in
Note 13 to the Consolidated Financial Statements of the 1995 Annual Report to
Shareholders, which Note is herein incorporated by reference, is not expected to
have a material adverse effect on USF&G Corporation's consolidated financial
position, although it is possible that the results of operations in a particular
quarter or annual period would be materially affected by an unfavorable outcome.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of 1995.
<PAGE>
USF&G CORPORATION Part II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters
Market and dividend information for the Corporation's common stock on page 76 of
the 1995 Annual Report to Shareholders is incorporated herein by reference.
Item 6. Selected Financial Data
Selected financial data of the Corporation on pages 42 and 43 of the 1995 Annual
Report to Shareholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's Discussion and Analysis on pages 22 through 41 of the
1995 Annual Report to Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements of the Corporation and notes to such
financial statements on pages 44 through 70 of the 1995 Annual Report to
Shareholders are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
<PAGE>
USF&G CORPORATION Part III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the Corporation's executive officers can
be found on pages 11 and 12 of this Form 10-K. Information regarding the
Corporation's directors is incorporated herein by reference to the Election of
Directors section of the Corporation's definitive proxy statement for its Annual
Meeting of Shareholders to be held May 15, 1996.
Item 11. Executive Compensation
See the Compensation of Executive Officers and Directors
section of the Corporation's definitive proxy statement for its Annual Meeting
of Shareholders to be held May 15, 1996, which section is incorporated herein by
reference. To the best of the Corporation's knowledge, there was one late filing
under Section 16(a) of the Securities Exchange Act of 1934. Further detail
regarding this late filing is included in the "Other Information" section of the
Corporation's definitive proxy statement for its Annual Meeting of Shareholders
to be held May 15, 1996, which section is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
See the Stock Ownership of Certain Beneficial Owners, Directors and Management
section of the Corporation's definitive proxy statement for its Annual Meeting
of Shareholders to be held May 15, 1996, which section is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions
See the Other Information-Certain Business Relationships section of the
Corporation's definitive proxy statement for its Annual Meeting of Shareholders
to be held May 15, 1996, which section is incorporated herein by reference.
<PAGE>
USF&G CORPORATION Part IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) (1) Financial Statements
The following consolidated financial statements of USF&G Corporation and its
subsidiaries, included in the Registrant's 1995 Annual Report to
Shareholders, are incorporated by reference in Item 8:
Consolidated Statement of Operations
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Equity
Notes to Consolidated Financial Statements
Report of Independent Auditors
(2) Schedules
The following consolidated financial statement schedules of USF&G Corporation
and its subsidiaries are included in Item 14(d):
Page 20 Schedule I. Summary of Investments--Other than Investments in
Related Parties
21-23 Schedule II. Condensed Financial Information of Registrant
24 Schedule III.Supplementary Insurance Information
25 Schedule IV. Reinsurance
26 Schedule VI. Supplemental Information Concerning Consolidated
Property/Casualty Insurance Operations
All other schedules specified by Article 7 of Regulation S-X are not required
pursuant to the related instructions or are inapplicable and, therefore, have
been omitted.
(3) Exhibits
The following exhibits are included in Item 14:
Page 27 Exhibit 11 Computation of Earnings Per Share
28 Exhibit 12 Computation of Ratio of Consolidated Earnings to Fixed
Charges and Preferred Stock Dividends
A copy of all other exhibits not included with this Form 10-K may be obtained
without charge upon written request to the Corporate Secretary at the address
shown on page 29 of this Form 10-K.
Exhibit 3A
Charter of USF&G Corporation. Incorporated by reference to Exhibit 3 to the
Registrant's Form 10-Q for the quarter ended March 31, 1995, File No. 1-8233.
Exhibit 3B
Amended By-laws of USF&G Corporation. Incorporated by reference to Exhibit 3B to
the Registrant's Form 10-K for the year ended December 31, 1994,
File No. 1-8233.
Exhibit 4A
Rights agreement dated as of September 18, 1987 between USF&G Corporation and
First Chicago Trust Company of New York (successor to Morgan Shareholder's
Service Trust Company) including Form of Rights Certificate. Incorporated by
reference to Exhibits 1 and 2 to the Registrant's Form 8-A filed September 30,
1987, File No. 1-8233.
Exhibit 4B
Bond issuance and payment agreement dated November 16, 1987 for Swiss Franc
Public Issue of 5 1/2% Bonds 1988-1996 of Swiss Francs 120,000,000. Incorporated
by reference to Exhibit 4M to the Registrant's Form 10-K for the year ended
December 31, 1987, File No. 1-8233.
Exhibit 4C
Indenture dated January 28, 1994 between USF&G Corporation and Chemical Bank.
Incorporated by reference to Exhibit 4E to the Registrant's Form 10-K for the
year ended December 31, 1993, File No. 1-8233.
Exhibit 4D
Indenture dated January 28, 1994 between USF&G Corporation and Signet Bank.
Incorporated by reference to Exhibit 4D to the Registrant's Form 10-K for the
year ended December 31, 1994, File No. 1-8233.
Exhibit 4E
Form of Note dated March 3, 1994 for Zero Coupon Convertible Subordinated Notes
due 2009. Incorporated by reference to Exhibit 4 to the Registrant's Form 8-K
dated March 3, 1994, File No. 1-8233.
<PAGE>
Exhibit 4F
Form of Note dated June 30, 1994 for 8 3/8% Senior Notes due 2001. Incorporated
by reference to Exhibit 4 to the Registrant's Form 8-K dated June 30, 1994, File
No. 1-8233.
Exhibit 4G
Credit Agreement dated as of September 30, 1994 among USF&G Corporation and
Morgan Guaranty Trust Company of New York as agent. Incorporated by reference to
Exhibit 10 to the Registrant's Form 10-Q for the quarter ended September 30,
1994, File No. 1-8233.
Exhibit 4H
Credit Agreement dated as of December 1, 1994 among USF&G Corporation and
Deutsche Bank AG, as agent. Incorporated by reference to Exhibit 4H to the
Registrant's Form 10-K for the year ended December 31, 1994, File No. 1-8233.
Exhibit 4I
Letter of Credit Agreement dated as of October 25, 1994, among USF&G Corporation
and The Bank of New York, as agent. Incorporated by reference to Exhibit 4I to
the Registrant's Form 10-K for the year ended December 31, 1994, File No.
1-8233.
Exhibit 4J
Form of 7% Senior Notes due 1998. Incorporated by reference to Exhibit 4A to the
Registrant's Form 10-Q for the quarter ended June 30, 1995, File No. 1-8233.
Exhibit 4K
Form of 7 1/8% Senior Notes due 2005. Incorporated by reference to Exhibit 4B to
the Registrant's Form 10-Q for the quarter ended June 30, 1995, File No. 1-8233.
Exhibit 10A
1994 Stock Plan For Employees of USF&G. Incorporated by reference to Exhibit 10A
to the Registrant's Form 10-K for the year ended December 31, 1994, File No.
1-8233.
Exhibit 10B
Stock Option Plan of 1987. Incorporated by reference to Exhibit 4.1 to the
Registrant's Form S-8 dated July 28, 1987, File No. 33-16111.
<PAGE>
Exhibit 10C
Employment Agreement dated November 20, 1990 between the Registrant and Norman
P. Blake, Jr. Incorporated by reference to Exhibit 10A to the Registrant's Form
10-K for the year ended December 31, 1990, File No. 1-8233.
Exhibit 10D
USF&G Supplemental Executive Retirement Agreement between the Registrant and
Norman P. Blake, Jr., dated November 20, 1990. Incorporated by reference to
Exhibit 10B to the Registrant's Form 10-K for the year ended December 31, 1990,
File No. 1-8233.
Exhibit 10E
Stock Option Plan of 1990. Incorporated by reference to Exhibit 4 to the
Registrant's Form S-8 Registration Statement as filed December 7, 1990, File No.
33-38113. Certified Copy of the Board Resolution adopted on December 6, 1990,
amending the Stock Option Plan of 1990. Incorporated by reference to Exhibit 10G
to the Registrant's Form 10-K for the year ended December 31, 1990, File No.
1-8233.
Exhibit 10F
Description of Management Incentive Plan. Incorporated by reference to Exhibit
10J to the Registrant's Form 10-K for the year ended December 31, 1990, File No.
1-8233.
Exhibit 10G
Description of Long-Term Cash Incentive Compensation Plan. Incorporated by
reference to Exhibit 10K to the Registrant's Form 10-K for the year ended
December 31, 1990, File No. 1-8233.
Exhibit 10H
Stock Incentive Plan of 1991. Incorporated by reference to Exhibit 4(a) to the
Registrant's Form S-8 Registration Statement as filed February 11, 1992, File
No. 33-45664.
Exhibit 10I
Form of Stock Option Agreement used in connection with the Stock Option Plan of
1987, Stock Option Plan of 1990, and Stock Incentive Plan of 1991. Incorporated
by reference to Exhibit 10I to the Registrant's Form 10-K for the year ended
December 31, 1993, File No. 1-8233.
Exhibit 10J
1993 Stock Plan for Non-Employee Directors. Incorporated by reference to Exhibit
10N to the Registrant's Form 10-K for the year ended December 31, 1992, File No.
1-8233.
Exhibit 10K
Employment Agreement dated November 10, 1993 between the Registrant and Norman
P. Blake, Jr. Incorporated by reference to Exhibit 10K to the Registrant's Form
10-K for the year ended December 31, 1993, File No. 1-8233.
Exhibit 10L
Stock Option Agreement dated November 10, 1993 between the Registrant and Norman
P. Blake, Jr. Incorporated by reference to Exhibit 10L to the Registrant's Form
10-K for the year ended December 31, 1993, File No. 1-8233.
Exhibit 10M
Stock Option Agreement dated November 10, 1993 between the Registrant and Norman
P. Blake, Jr. Incorporated by reference to Exhibit 10M to the Registrant's Form
10-K for the year ended December 31, 1993, File No. 1-8233.
Exhibit 10N
Waiver dated November 10, 1993, between the Registrant and Norman P. Blake, Jr.
Incorporated by reference to Exhibit 10N to the Registrant's Form 10-K for the
year ended December 31, 1993, File No. 1-8233.
Exhibit 10O
First Amendment to USF&G Supplemental Executive Retirement Agreement between the
Registrant and Norman P. Blake, Jr. dated November 10, 1993. Incorporated by
reference to Exhibit 10O to the Registrant's Form 10-K for the year ended
December 31, 1993, File No. 1-8233.
Exhibit 10P
Letter dated November 19, 1992, describing Employment Arrangement between the
Registrant and Gary C. Dunton. Incorporated by reference to Exhibit 10K to the
Registrant's Form 10-K for the year ended December 31, 1993, File No. 1-8233.
Exhibit 10Q
USF&G Supplemental Retirement Plan. Incorporated by reference to Exhibit 10Q to
the Registrant's Form 10-K for the year ended December 31, 1993,
File No. 1-8233.
Exhibit 10R
Amended and Restated Stock Incentive Plan of 1991. Incorporated by reference to
Exhibit 10R to the Registrant's Form 10-K for the year ended December 31, 1994,
File No. 1-8233.
Exhibit 10S
Long-Term Incentive Plan. Incorporated by reference to Exhibit 10S to the
Registrant's Form 10-K for the year ended December 31, 1994, File No. 1-8233.
Exhibit 10T
USF&G Executive Deferred Bonus Payment Plan.
Exhibit 10U
Unfunded Deferred Compensation Plan for Non-Employee Directors of USF&G
Corporation.
Exhibit 11
Computation of earnings per share.
Exhibit 12
Computation of ratio of consolidated earnings to fixed charges and preferred
stock dividends.
Exhibit 13
1995 Annual Report to Shareholders.
Exhibit 21
Subsidiaries of the Registrant.
Exhibit 23
Consent of Independent Auditors.
Exhibit 28
Information from reports furnished to state insurance regulatory authorities.
All other exhibits specified by Item 601 of Regulation S-K are not required
pursuant to the related instructions or are inapplicable and, therefore, have
been omitted.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth quarter of 1995.
<PAGE>
USF&G CORPORATION Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
USF&G CORPORATION
/s/ NORMAN P. BLAKE, JR.
Norman P. Blake, Jr.
Chairman of the Board, President,
and Chief Executive Officer
Dated at Baltimore, Maryland
March 29, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Principal Executive Officer:
/s/ NORMAN P. BLAKE, JR.
Norman P. Blake, Jr.
Chairman of the Board, President,
and Chief Executive Officer
Principal Financial and Accounting Officer:
/s/ DAN L. HALE
Dan L. Hale
Executive Vice President and
Chief Financial Officer
Dated at Baltimore, Maryland
March 29, 1996
Directors
/s/ H. FURLONG BALDWIN
- --------------------------------------------------------------------------------
H. Furlong Baldwin
/s/ MICHAEL J. BIRCK
- --------------------------------------------------------------------------------
Michael J. Birck
/s/ GEORGE L. BUNTING, JR.
- --------------------------------------------------------------------------------
George L. Bunting, Jr.
/s/ ROBERT E. DAVIS
- --------------------------------------------------------------------------------
Robert E. Davis
/s/ DALE F. FREY
- --------------------------------------------------------------------------------
Dale F. Frey
/s/ ROBERT E. GREGORY, JR.
- --------------------------------------------------------------------------------
Robert E. Gregory, Jr.
/s/ ROBERT J. HURST
- --------------------------------------------------------------------------------
Robert J. Hurst
/s/ WILBUR G. LEWELLEN
- --------------------------------------------------------------------------------
Wilbur G. Lewellen
/s/ HENRY A. ROSENBERG, JR.
- --------------------------------------------------------------------------------
Henry A. Rosenberg, Jr.
/s/ LARRY P. SCRIGGINS
- --------------------------------------------------------------------------------
Larry P. Scriggins
/s/ ANNE MARIE WHITTEMORE
- --------------------------------------------------------------------------------
Anne Marie Whittemore
/s/ R. JAMES WOOLSEY
- --------------------------------------------------------------------------------
R. James Woolsey
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule I. Summary of Investments -- Other than Investments in Related Parties
At December 31, 1995
Amount at which shown
Market in the Statement of
(in millions) Cost Value Financial Position
<S> <C> <C> <C>
====================================================================================================================================
Fixed Maturities
Available for sale:
United States Government agencies and authorities $ 2,047 $2,115 $ 2,115
States, municipalities, and political subdivisions 179 186 186
Foreign governments 209 212 212
Public utilities 405 420 420
All other corporate bonds 6,278 6,525 6,525
- ------------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities available for sale 9,118 9,458 9,458
- ------------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities $ 9,118 $9,458 $ 9,458
- ------------------------------------------------------------------------------------------------------------------------------------
Equity Securities
Common stocks:
Banks, trust, and insurance companies $ 2 $ 2 $ 2
Industrial, miscellaneous, and all other 40 35 35
- ------------------------------------------------------------------------------------------------------------------------------------
Total common stocks 42 37 37
Nonredeemable preferred stocks 28 28 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total equity securities $ 70 $ 65 $ 65
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term investments 288 288 288
Mortgage loans 254 251 254
Real estate 653 653
Other invested assets 389 389
- ------------------------------------------------------------------------------------------------------------------------------------
Total investments $10,772 $11,107
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule II. Condensed Financial Information of Registrant--
Statement of Financial Position (Parent Company)
At December 31
(in millions) 1995 1994 1993
<S> <C> <C> <C>
====================================================================================================================================
Assets
Cash $ -- $ 1 $ 2
Investment in subsidiaries, at equity 3,130 2,503 2,399
Due from subsidiaries 57 131 127
Other assets 13 24 23
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $3,200 $2,659 $2,551
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Debt (short-term, 1995, $80; 1994, $215; 1993, $395) $ 591 $ 586 $ 574
Dividends payable to shareholders 11 14 16
Due to subsidiaries 243 310 322
Other liabilities 371 308 83
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,216 1,218 995
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity
Preferred stock 213 331 455
Common stock 299 262 228
Paid-in capital 1,188 1,104 986
Net unrealized gains (losses) on investments 271 (147) 191
Minimum pension liability (100) (63) (85)
Retained earnings (deficit) 113 (46) (219)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,984 1,441 1,556
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $3,200 $2,659 $2,551
====================================================================================================================================
See Note to Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule II. Condensed Financial Information of Registrant--
Statement of Operations (Parent Company)
Years Ended December 31
(in millions) 1995 1994 1993
<S> <C> <C> <C>
====================================================================================================================================
Revenues
Net investment income:
Dividends from subsidiaries $114 $ 125 $125
Interest expense on loans from subsidiaries (12) (8) (6)
Other (3) (1) --
Other revenues:
From subsidiaries 7 7 7
From others 1 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues before realized gains/(losses) 107 128 131
Net realized losses on investments (4) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 103 128 131
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Facilities exit costs/(sublease income) (6) 211 --
Interest expense 42 34 37
Lease expense 21 30 21
Other operating expense 15 24 19
Foreign currency losses 1 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 73 299 77
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations before income taxes,
equity in earnings of subsidiaries and cumulative effect of adopting
new accounting standards 30 (171) 54
Provision for income taxes (benefit) (15) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations before equity in earnings of subsidiaries
and cumulative effect of adopting new accounting standards 45 (171) 54
Equity in undistributed earnings of subsidiaries 164 408 76
Income from cumulative effect of adopting new accounting standards -- -- 38
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $209 $ 237 $168
====================================================================================================================================
See Note to Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule II. Condensed Financial Information of Registrant--
Statement of Cash Flows (Parent Company)
Years Ended December 31
(in millions) 1995 1994 1993
<S> <C> <C> <C>
====================================================================================================================================
Net Cash Provided From Operating Activities $ 40 $ 129 $ 58
- ------------------------------------------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities 2 (4) (4)
- ------------------------------------------------------------------------------------------------------------------------------------
Financing Activities
Repayments of short-term borrowings (215) (160) --
Intercompany advances, net 21 (51) (2)
Long-term borrowings 228 270 --
Repayments of long-term borrowings (30) (120) --
Issuances of common stock 6 14 6
Redemption of preferred stock -- (13) --
Cash dividends paid to shareholders (53) (66) (66)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (43) (126) (62)
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in cash (1) (1) (8)
Cash at beginning of year 1 2 10
- ------------------------------------------------------------------------------------------------------------------------------------
Cash at end of year $ -- $ 1 $ 2
====================================================================================================================================
</TABLE>
See Note to Condensed Financial Statements.
Note To Condensed Financial Statements
The accompanying condensed financial statements should be read in conjunction
with the consolidated financial statements and notes thereto of the 1995 Annual
Report to Shareholders incorporated herein by reference. Amounts for 1994 and
1993 have been restated to reflect mergers with Discover Re Managers, Inc., and
Victoria Financial Corporation, which were completed during the second quarter
of 1995. Restatement of prior periods is provided due to the application of the
pooling-of-interests method of accounting. Certain amounts have been
reclassified to conform to the 1995 presentation. The parent company's provision
for income taxes is based on the Corporation's consolidated federal income tax
allocation policy.
Effective June 1, 1995, USF&G Company declared an extraordinary dividend payable
to USF&G Corporation for the amount of its equity in the undistributed earnings
of F&G Life. This dividend is excluded from "Dividends from subsidiaries", in
the condensed statement of operations since the transaction represented a change
in ownership structure rather than a distribution of earnings from a subsidiary.
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule III. Supplementary Insurance Information
At December 31 Years Ended December 31
Deferred Unpaid Other Amortization
policy losses, loss policy- Net Losses, loss of deferred
acquisi- expenses, holders' investment expenses, policy Other
tion & policy Unearned funds Premium income & policy acquisition operating Premiums
(in millions) costs benefits premiums (A) revenue (A) benefits costs expenses written
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================ ===================================================================
1995
Property/casualty insurance:
Commercial $172 $ 3,732 $ 520 $1,223 $ 910 $353 $117 $1,272
Personal 72 479 266 635 484 167 80 623
Surety 30 44 61 119 44 53 9 129
Alternative risk transfer 2 50 36 25 20 4 5 27
Assumed reinsurance 12 808 57 490 344 107 5 512
Reinsurance receivable -- 984 115 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Property/casualty 288 $ 6,097 $1,055 $ 9 $2,492 $438 1,802 684 216 2,563
Life insurance 146 3,719 -- 80 174 306 376 30 41 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total $434 $ 9,816 $1,055 $89 $2,666 $744 $2,178 $714 $257 $2,563
- ------------------------------------------------------------------------------------------------------------------------------------
1994*
Property/casualty insurance:
Commercial $167 $ 3,903 $ 468 $1,206 $ 934 $366 $ 88 $1,220
Personal 77 496 275 626 463 165 64 614
Surety 24 41 52 107 41 48 14 113
Alternative risk transfer 3 34 15 22 17 1 8 27
Assumed reinsurance 9 668 41 395 289 67 27 415
Reinsurance receivable -- 1,016 117 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Property/casualty 280 6,158 968 $ 7 2,356 $429 1,744 647 201 2,389
Life insurance 224 3,804 -- 79 152 317 388 21 45 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total $504 $ 9,962 $ 968 $86 $2,508 $746 $2,132 $668 $246 $2,389
- ------------------------------------------------------------------------------------------------------------------------------------
1993*
Property/casualty insurance:
Commercial $174 $ 4,119 $ 456 $1,240 $1,024 $371 $ 67 $1,266
Personal 75 575 287 730 515 186 55 711
Surety 23 44 45 100 49 47 9 102
Alternative risk transfer 2 19 9 17 13 1 6 20
Assumed reinsurance 6 559 29 305 204 71 28 403
Reinsurance receivable -- 1,054 124 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Property/casualty 280 6,370 950 $ 7 2,392 $437 1,805 676 165 2,502
Life insurance 164 3,973 -- 67 129 321 395 9 50 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total $444 $10,343 $ 950 $74 $2,521 $758 $2,200 $685 $215 $2,502
====================================================================================================================================
</TABLE>
*Amounts have been restated to reflect mergers with Discover Re Managers, Inc.,
and Victoria Financial Corporation.
N/A - Not applicable to life insurance pursuant to Rule 12-16 of Regulation S-X.
(A) Other policyholders' funds and net investment income are not allocated to
property/casualty categories.
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule IV. Reinsurance
Years Ended December 31
Ceded to Assumed Percentage of
Gross other from other Net assumed amount
(dollars in millions) amount companies companies amount assumed to net*
<S> <C> <C> <C> <C> <C>
====================================================================================================================================
1995
Life insurance in force $11,237 $1,305 $154 $10,086 1.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Premiums earned:
Life insurance $ 178 $ 5 $ -- $ 173 .2%
Accident/health insurance -- -- 1 1 98.4
Property/casualty insurance 2,253 398 637 2,492 25.6
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 2,431 $ 403 $638 $ 2,666 23.9%
- ------------------------------------------------------------------------------------------------------------------------------------
1994**
Life insurance in force $11,683 $1,350 $160 $10,493 1.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Premiums earned:
Life insurance $ 155 $ 4 $ -- $ 151 --%
Accident/health insurance -- -- 1 1 98.5
Property/casualty insurance 2,284 516 588 2,356 25.0
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 2,439 $ 520 $589 $ 2,508 23.5%
- ------------------------------------------------------------------------------------------------------------------------------------
1993**
Life insurance in force $11,955 $1,404 $155 $10,706 1.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Premiums earned:
Life insurance $ 133 $ 5 $ -- $ 128 --%
Accident/health insurance -- -- 1 1 99.1
Property/casualty insurance 2,390 521 523 2,392 21.9
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 2,523 $ 526 $524 $ 2,521 20.8%
====================================================================================================================================
*Certain percentages are calculated from amounts in thousands and may not equal
the percentage calculated from amounts reported in millions.
**Amounts have been restated to reflect mergers with Discover Re Managers, Inc.,
and Victoria Financial Corporation.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Schedule VI. Supplemental Information Concerning
Consolidated Property/Casualty Insurance Operations
At December 31
(in millions) 1995 1994* 1993*
<S> <C> <C> <C>
====================================================================================================================================
Deferred policy acquisition costs $ 288 $ 280 $ 280
Reserves for unpaid losses and loss expenses 6,097 6,158 6,370
Discount deducted from reserves (A) 394 441 508
Unearned premiums 1,055 968 950
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Years Ended December 31
(in millions) 1995 1994* 1993*
<S> <C> <C> <C>
====================================================================================================================================
Earned premiums $2,492 $2,356 $2,392
Net investment income 438 429 437
Losses and loss expenses incurred related to:
Current year 1,856 1,752 1,744
Prior years (54) (8) 61
Amortization of deferred policy acquisition costs 684 647 676
Paid losses and loss expenses 1,831 1,918 2,053
Premiums written 2,563 2,389 2,502
- ------------------------------------------------------------------------------------------------------------------------------------
*Amounts have been restated to reflect mergers with Discover Re Managers, Inc.,
and Victoria Financial Corporation.
(A) Certain long-term disability payments for workers' compensation are
discounted at rates of up to 4%.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Exhibit 11 - Computation of Earnings Per Share
Years Ended December 31
(dollars in millions except per share data) 1995 1994* 1993*
<S> <C> <C> <C>
====================================================================================================================================
Net Income Available to Common Stock
Primary:
Income from operations before cumulative effect of adopting
new accounting standards $ 209 $ 237 $ 130
Less preferred stock dividend requirements (28) (46) (48)
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations before cumulative effect of adopting
new accounting standards available to common stock 181 191 82
Cumulative effect of adopting new accounting standards -- 38
- ------------------------------------------------------------------------------------------------------------------------------------
Net income available to common stock $ 181 $ 191 $ 120
- ------------------------------------------------------------------------------------------------------------------------------------
Fully diluted:
Income from operations before cumulative effect of adopting
new accounting standards $ 209 $ 237 $ 130
Less preferred stock dividend requirements (16) (16) (16)
Add interest expense on zero coupon bonds 6 5 --
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations before cumulative effect of adopting
new accounting standards available to common stock 199 226 114
Cumulative effect of adopting new accounting standards -- -- 38
- ------------------------------------------------------------------------------------------------------------------------------------
Net income available to common stock $ 199 $ 226 $ 152
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding
Primary common shares (A) 111,474,129 95,796,671 90,566,398
- ------------------------------------------------------------------------------------------------------------------------------------
Fully diluted (B):
Common shares 111,474,129 95,796,671 90,566,398
Assumed conversion of preferred stock 9,931,329 24,950,202 26,611,211
Assumed exercise of stock options 1,553,773 1,038,214 1,672,482
Assumed conversion of zero coupon bonds 7,227,255 6,022,712 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total fully diluted 130,186,486 127,807,799 118,850,091
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings Per Common Share
Primary (A):
Income from operations before cumulative effect of adopting
new accounting standards $1.63 $2.00 $ .90
Cumulative effect of adopting new accounting standards -- -- .42
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $1.63 $2.00 $1.32
- ------------------------------------------------------------------------------------------------------------------------------------
Fully diluted (B):
Income from operations before cumulative effect of adopting
new accounting standards $1.53 $1.77 $ .96
Cumulative effect of adopting new accounting standards -- -- .32
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $1.53 $1.77 $1.28
====================================================================================================================================
*Amounts have been restated to reflect mergers with Discover Re Managers, Inc.,
and Victoria Financial Corporation.
(A) Shares issuable under stock options (1,295,767 shares in 1995, 1,021,230
shares in 1994, 1,672,482 shares in 1993) have not been used as common stock
equivalents in the computation of primary earnings per common share presented on
the face of the Consolidated Statement of Operations because the dilutive effect
is not material.
(B) Fully diluted earnings per common share amounts are calculated assuming the
conversion of all securities whose contingent issuance would have a dilutive
effect on earnings.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USF&G CORPORATION Exhibit 12 - Computation of Ratio of Consolidated Earnings to
Fixed Charges and Preferred Stock Dividends
Years Ended December 31
(dollars in millions) 1995 1994* 1993*
<S> <C> <C> <C>
====================================================================================================================================
Fixed Charges
Interest expense $ 44 $ 37 $ 41
Portion of rents representative of interest (A) 20 159 27
- ------------------------------------------------------------------------------------------------------------------------------------
Total fixed charges 64 196 68
Preferred stock dividend requirements (B) 28 46 48
- ------------------------------------------------------------------------------------------------------------------------------------
Combined Fixed Charges and Preferred Stock Dividends $ 92 $242 $116
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated Earnings Available for Fixed Charges and
Preferred Stock Dividends
Income (loss) from operations before income taxes and
cumulative effect of adopting new accounting standards $195 $(43) $103
Adjustments:
Fixed charges 64 196 68
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated earnings available for fixed charges
and preferred stock dividends $259 $153 $171
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of Consolidated Earnings to Fixed Charges (C) (D) 4.0 0.8 2.5
Ratio of Consolidated Earnings to Combined Fixed Charges
and Preferred Stock Dividends (C) (D) 2.8 0.6 1.5
====================================================================================================================================
*Amounts have been restated to reflect mergers with Discover Re Managers, Inc.,
and Victoria Financial Corporation.
(A) Includes approximately $130 million net present value of rents
representative of interest included in facilities exit costs in 1994.
(B) Preferred stock dividend requirements of $28 million, $46 million and $48
million in 1995, 1994 and 1993, respectively, divided by 100% less the effective
income tax rate of 0% in 1995, 1994, and 1993.
(C) The ratio of consolidated earnings before facilities exit costs to fixed
charges was 4.0 and 3.1 for 1995 and 1994, respectively. The ratio of
consolidated earnings before facilities exit costs to combined fixed charges and
preferred stock dividends was 2.8 and 1.8 for 1995 and 1994, respectively.
(D) In 1994, earnings were inadequate to cover fixed charges by $43 million and
combined fixed charges and preferred stock dividends by $89 million.
</TABLE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO ANNUAL REPORT ON FORM 10-K
USF&G CORPORATION
For the Fiscal Year Ended Commission File Number
December 31, 1995 1-8233
A copy of all other of the Corporation's Exhibits to the 1995
Form 10-K report not included
herein may be obtained without charge upon
written request to John F. Hoffen, Jr.,
corporate secretary, at the corporate
headquarters:
100 Light Street
Baltimore, Maryland 21202
USF&G EXECUTIVE DEFERRED BONUS PAYMENT PLAN
Effective January 1, 1995
ARTICLE I
Purpose
1.1 This Plan is established to provide deferred compensation
opportunities for certain employees of USF&G Corporation, a Maryland
corporation, and of certain of its affiliates, in order to attract and retain
executives. The Plan is intended to be an unfunded deferred compensation
arrangement for a select group of management or highly compensated employees.
ARTICLE II
Definitions
2.1 "Account" means the book account maintained by the Employer
pursuant to Section 4.1 with respect to each Eligible Employee.
2.2 "Committee" means the Administrative Committee under the
USF&G Corporation Capital Accumulation Plan.
2.3 "Eligible Employee" means any employee of an Employer eligible
for an award under the Incentive Plan and whose annual rate of pay (i.e., base
salary or wages, excluding bonuses, incentive pay and fringe benefits) paid by
an Employer during a calendar year is greater than One Hundred and Fifty
Thousand Dollars ($150,000.00).
2.4 "Employer" means USF&G and any other employer which participates
in the Incentive Plan and which adopts the Plan by action of its Board of
Directors.
2.5 "Incentive Plan" means the USF&G Corporation Management
Incentive Plan.
2.6 "Plan" means this USF&G Executive Deferred Bonus Payment
Plan.
2.7 "USF&G" means USF&G Corporation or any company which is a
successor as a result of merger, consolidation, liquidation, transfer of assets,
or other reorganization.
ARTICLE III
Deferral Election
3.1 Deferral Election.
(a) An Eligible Employee may make an election to defer his or
her anticipated bonus under the Incentive Plan in an amount equal to (1) a whole
percentage of such bonus up to a maximum of One Hundred (100%) percent; (2) One
Hundred (100%) percent of the bonus that exceeds a threshold specified by the
Eligible Employee; or (3) any specified whole dollar amount, not less than Five
Thousand ($5000) Dollars.
(b) Deferral Elections shall be made in writing on such forms,
and shall be subject to such uniform administrative rules, as the Committee
shall establish.
3.2 Annual Election. Each calendar year, Eligible Employees may
make a Deferral Election which shall apply to the bonus under the Incentive
Plan applicable to services rendered in that calendar year. A Deferral
Election with respect to the bonus for a particular calendar year must be
made in accordance with the instructions on the election form established
by the Committee. If an Eligible Employee fails to complete a Deferral
Election, he or she will be unable to defer the bonus for that year.
3.3 Deferral Payment Date. The Deferral Election form shall
specify when the Eligible Employee is to receive amounts attributable to his or
her Account for that year. The Eligible Employee may elect to receive payment or
begin to receive payment either (1) following termination of employment upon
retirement or separation from service from the Employer or (2) on an earlier
designated Deferral Payment Date which shall be on or about February 1 of the
year designated on the Deferral Election.
3.4. Form of Payment. The Eligible Employee shall designate on
the Deferral Election form the form of distribution for amounts attributable
to his or her Account for that year. The Eligible Employee may elect to receive
payment in the form of a cash lump sum or in annual installments over a period
not to exceed fifteen (15) years.
3.5 Irrevocable Election. Once made, a Deferral Election cannot
be changed or revoked. However, the Committee, in its sole and absolute
discretion, may approve an Eligible Employee's request to change to a later date
the date designated as the Deferral Payment Date described in Section 3.3, or to
increase the number of installments elected as the form of payment described in
Section 3.4, provided that the request is made at least twelve (12) months prior
to scheduled receipt of the payment. Such request shall be made in writing on
such forms as may be required by the Committee.
ARTICLE IV
Accounts
4.1 Book Accounts. Deferral Elections and any investment
credits shall be credited to a book account. Eligible Employees
shall be One Hundred percent (100%) vested in their Accounts.
Deferral Elections shall be credited to Accounts at the time
bonuses are paid under the Incentive Plan.
4.2 Investment Credits. Each December 31, Accounts will be
credited with an amount equal to the average of the five-year constant maturity
Treasury index calculated by the Federal Reserve Board, as determined on the
first business day of the preceding four calendar quarters beginning January 1
of the same year, plus one hundred (100) basis points.
ARTICLE V
Payment of Benefits
5.1 Normal Benefit. Benefits under this Plan shall be payable in
accordance with the Eligible Employee's Deferral Election Form in the event of
Retirement, as defined in the Retirement Pension Plan for U.S.A. Employees of
USF&G Corporation or termination of employment from an Employer, or such earlier
time as may be specified as the Deferral Payment Date on the Eligible Employee's
Deferral Election forms.
(a) Commencement and Form of Payment. An Eligible Employee's
benefit under this Plan will commence on or about the February 1 coincident with
or next following Retirement or termination of employment. Payments made in
accordance with a designated Deferral Payment Date election will commence on or
about the February 1 of the year designated on the Eligible Employee's Deferral
Election form. The benefit shall be paid in the form of a lump sum or annual
installments over a period not to exceed fifteen (15) years, as elected by the
Eligible Employee. Payments made in the form of annual installments shall be
paid on the first day of February each year.
5.4 Death Benefit.
(a) Commencement and Form of Payment. Upon the death of an
Eligible Employee prior to the commencement of benefits under the Plan or prior
to the complete distribution of benefits under this Plan, the balance credited
to such Eligible Employee's Account shall be immediately payable to his or her
designated beneficiary or beneficiaries. The benefit shall be paid on the
Deferral Payment Dates designated by the Eligible Employee, as described in
Section 3.3 or shall continue to be paid in the form elected by the Eligible
Employee, as described in Section 3.4. If any designated beneficiary dies after
death benefit payments have begun under the Plan, but prior to the complete
distribution of benefits under the Plan, the remaining payments shall be made to
the estate of the beneficiary.
(b) Beneficiary Designation. Each eligible Employee shall
designate a beneficiary or beneficiaries to receive his or her
benefit in the event of death. Beneficiary designations shall
be made in writing, on such forms as designated by the Committee. Beneficiary
designations shall be made at the time the Eligible Employee elects to
participate in the Plan and may be changed at any time upon written notice to
the Committee. If the Eligible Employee fails to designate a beneficiary or
beneficiaries, payments will be made to the Eligible Employee's estate.
ARTICLE VI
Hardship Distributions
6.1 Determination and Amount. In the event of financial hardship,
as hereinafter defined, an Eligible Employee may apply to the Committee for a
payment from the Plan equal to all or any part of his or her Account. The
Committee shall consider the facts and circumstances of each case, and shall
have the right, in its sole discretion, to make such payment, or, if applicable,
to make a payment to the Eligible Employee of part of the amount requested, or
refuse to make any payment. In no event shall the aggregate amount of the
payment exceed either the full value credited to the Eligible Employee's Account
or the amount determined by the Committee to be necessary to alleviate the
Eligible Employee's financial hardship, and which is not reasonably available
from other resources of the Eligible Employee.
6.2 Financial Hardship. For purposes of this Plan, financial
hardship means (1) a severe financial hardship to the Eligible Employee
resulting from a sudden or unexpected illness or accident of the Eligible
Employee or of a dependent (as defined in Internal Revenue Code Section 152(a))
of the Eligible Employee, (b) loss of Eligible Employee's property due to
casualty, or (c) other similar extraordinary and unforseeable circumstances
arising as a result of events beyond the control of Eligible Employee.
ARTICLE VII
Administration
7.1 The Committee. The Committee shall administer, construe and
interpret this Plan. No member of the Committee shall be liable for any act done
or determination made in good faith. No member of the Committee who is a
participant in this Plan may vote on matters affecting the member's specific
benefits under this Plan, but any such member shall otherwise be fully entitled
to act in matters arising out of or affecting this Plan notwithstanding the
member's participation herein. The Committee may, in its discretion, delegate
its duties to any person, including an officer or employee of any Employer.
7.2 Duties. The Committee shall have the exclusive right to
exercise discretion where necessary or appropriate in the interpretation and
administration of the Plan and to decide any and all matters arising from or in
connection with the administration of the Plan. The construction and
interpretation by the Committee of any provision of this Plan shall be final and
conclusive.
7.3 Indemnification. The Employer shall indemnify and hold
harmless the Committee and any employees to whom administrative duties under
this Plan are delegated, against any and all claims, loss, damage, expense, or
liability arising from any action or failure to act with respect to this Plan,
except in the case of willful misconduct.
7.4 Claims Procedure.
(a) Initial Claim. If an Eligible Employee or an Eligible
Employee's designated beneficiary (hereinafter referred to as a "Claimant") is
denied all or a portion of an expected benefit under this Plan for any reason,
the Eligible Employee or the Eligible Employee's beneficiary may file a claim
with the Committee. The Committee shall review the claim itself or appoint a
person to review the claim. The Claimant shall be notified within sixty (60)
days after the Claimant's claim is filed whether the claim is allowed or denied,
unless the Claimant receives written notice prior to the end of the sixty (60)
day period stating that special circumstances require an extension of the time
for decision. The notice of the decision shall be in writing, sent by mail to
the Claimant's last known address, and, if a denial of the claim, must contain
(i) the specific reasons for the denial, (ii) specific reference to pertinent
provisions of the Plan on which the denial is based, and (iii) if applicable, a
description of any additional information or material necessary to perfect the
claim, an explanation of why such information or material is necessary, and an
explanation of the claims review procedure.
(b) Review Procedure. A Claimant is entitled to request a review
of any denial of the Claimant's claim by the Committee. The request for review
must be submitted to the Committee in writing within sixty (60) days after
notice of the denial is mailed. Absent a request for review within the sixty
(60) day period, the claim will be deemed to be conclusively denied. A review of
any denial of a claim shall be conducted by the Committee or its designee in a
manner which complies with applicable regulations of the Department of Labor.
ARTICLE VIII
Miscellaneous Provisions
8.1 Limitation of Rights. Nothing contained in this Plan shall
be construed to limit in any way the right of an Employer to terminate an
Eligible Employee's employment at any time or shall be evidence of any agreement
or understanding, express or implied, that an Employer will employ an Eligible
Employee in a particular position or at any particular rate of remuneration.
8.2 Nonalienation of Benefits. No amounts payable hereunder may
be assigned, pledged, mortgaged or hypothecated and, to the extent permitted by
law, no such amounts shall be subject to legal process or attachment for the
payment of any claims against any person entitled to receive the same.
8.3 Amendment or Termination of Plan. The Board of Directors of
USF&G may amend this Plan from time to time in any respect, and may at any time
terminate the Plan in its entirety or as it applies to any Employer; provided,
however, that an Eligible Employee's entitlement to benefits under this Plan may
not be terminated or reduced.
8.4 Unfunded Plan. This Plan is unfunded. The obligations of an
Employer with respect to the benefits payable hereunder shall be paid out of the
Employer's general assets and shall not be secured by any form of trust, escrow
or otherwise. The rights of an Eligible Employee, or the Eligible Employee's
designated beneficiary, to benefits under the Plan shall be solely those of an
unsecured creditor of the Employer. Any assets acquired by or held by the
Employer in connection with the liabilities assumed by it pursuant to the Plan
shall not be deemed to be held under any trust for the benefit of an Eligible
Employee, or the Eligible Employee's beneficiary, or to be security for the
performance of the obligations of the Employer but shall be, and remain,
general, unpledged, and unrestricted assets of the Employer. No representation
shall be made to any Eligible Employee which is contrary to this Section 8.4. or
which in any way suggests that any assets which may be maintained by the
Employer in respect of its obligations under this Plan will be used solely for
that purpose.
8.5 Construction of Plan. This plan shall be administered and
construed so as to qualify as an "unfunded" plan providing benefits to a "select
group of management or highly compensated employees," as those terms are used in
the Employee Retirement Income Security Act of 1974 ("ERISA").
8.6 Governing Law. This Plan shall be construed,
administered and governed in all respects under and by the laws
of the State of Maryland, except to the extent Maryland law
shall have been pre-empted by ERISA.
8.7 Employer Obligations. Each Employer shall be obligated
to pay benefits under this Plan to its Eligible Employees and no
Employer shall be obligated to fulfill the obligations of any
other Employer under this Plan.
8.8 FICA Taxes. Any FICA taxes due on deferral Accounts
will be paid by the Eligible Employee to the Employer by means
of payroll deduction.
ARTICLE IX
Effective Date
9.1 The foregoing Plan is effective January 1, 1995. It shall apply
to persons in the employ of an Employer on and after that date. It shall not
apply to former employees of any Employer whose employment terminated before
that date.
IN WITNESS WHEREOF, USF&G has caused this Plan to be executed on its
behalf.
USF&G Corporation
BY: /s/JOHN A. MACCOLL
John A. MacColl
DATED: November 30, 1995
UNFUNDED DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS OF
USF&G CORPORATION
1. Purpose The purpose of the Deferred Compensation Plan for Non-Employee
Directors of USF&G Corporation is to enable such Directors to defer receipt of
fees otherwise payable to them as Directors by so electing in accordance with
the provisions of this Plan.
2. Definitions As used herein, the following terms shall have the meaning
set forth below, unless a different meaning is clearly required by the context
in which the term is used:
(a) "Board of Directors" shall mean the Board of Directors of
the Company.
(b) "Company" shall mean USF&G Corporation, a Maryland
corporation.
(c) "Deferred Compensation" shall mean any compensation or portion thereof
payable to a Participant in his capacity as a Director, whether payable as a
director's fee or as a fee for service on a committee of the Board of Directors,
excluding traveling expenses incident to attendance at meetings.
(d) "Director" shall mean a member of the Board of Directors.
(e) "Participant" shall mean an eligible Director who elects to participate
in the Plan.
(f) "Plan" shall mean the Unfunded Deferred Compensation Plan for Non-
Employee Directors of USF&G Corporation.
2A. Construction As used herein, the masculine pronoun shall include the
feminine and the singular shall include the plural, unless a different meaning
is clearly required by the context.
3. Eligibility for Participation in the Plan
(a) Eligibility for participation in the Plan shall be limited to Directors
of Company who are not also salaried officers or employees of the Company.
(b) Any Director who is eligible to participate in the Plan may become a
Participant by notifying the Secretary of the Company in writing of his election
to participate, and the specified part of his fees to be deferred. Such written
notification shall be substantially in the form attached hereto as Exhibit A,
and shall include notification of the Participant's election as to the timing of
distributions of Deferred Compensation as specified in paragraph (a) of Section
5. An election to participate in the Plan shall be effective upon the effective
date of the Plan if notification of election is received prior to such effective
date, or at the beginning of the calendar year following the election if
notification of election is received after the effective date of the Plan. Any
person elected to fill a vacancy on the Board of Directors and who was not a
Director on the preceding December 31st, may elect, before his term begins, to
defer all or a specified part of his fees for the balance of the calendar year
following such election and for succeeding calendar years.
(c) Participation in the Plan shall continue as to any Participant until
that person ceases to be a Director or becomes a salaried officer or an employee
of the Company. A Participant also may terminate his participation by notifying
the Secretary of the Company in writing, in which event his participation shall
terminate effective at the end of the calendar year in which notification of
termination is received.
(d) Deferred Compensation held for the account of a Participant who
terminates his participation pursuant to paragraph (c) of this Section 3 shall
be paid in accordance with the previous election of the Participant as to the
timing of distributions; provided, however, that notwithstanding anything herein
contained to the contrary, the Board of Directors shall have the right in its
sole discretion to vary the manner and timing of distributions, and may make
such distributions in lump sums or over a shorter or longer period of time than
ten years as it may find appropriate.
(e) An eligible Director who has terminated his participation in the Plan
may again elect to participate in the Plan by following the procedure set forth
in paragraph (b) of this Section 3.
4. Deferred Compensation Accounts Any fee or portion thereof otherwise
payable to a participant in his capacity as a Director, whether payable as
Director's fee or as a fee for service on a committee of the Board of Directors,
excluding traveling expenses incident to attendance at meeting ("Deferred
Compensation") shall, to the extent deferred, be held for the account of the
Participant in the general funds of the Company. Deferred Compensation held for
the account of a Participant shall earn interest at such annual rate as the
Management of the Company shall specify from time to time, from the date the
compensation which is deferred would otherwise have been payable. Interest
earned on Deferred Compensation shall be compounded at the end of each calendar
quarter.
5. Distributions of Deferred Compensation
(a) At the time he elects to participate in the Plan, a Participant shall
also make an election as to the timing of distributions of Deferred Compensation
and interest earned thereon. A Participant may elect to receive distributions in
one payment or in a number of annual installments not to exceed ten. The single
payment or the first installment payment, as the case may be, shall be made on
the first day of the calendar year following the year in which the Participant
ceases to be a Director of the Company. Subsequent installments shall be made on
the first day of each succeeding calendar year until the entire amount of
Deferred Compensation and interest earned thereon due to that Participant has
been paid. Amounts held for installment payments shall continue to earn interest
as specified in Section 4.
(b) If a participant dies before full payment is made of amounts of Deferred
Compensation and interest earned thereon due to that Participant, the unpaid
balance of Deferred Compensation and interest earned thereon shall be paid, in
the manner specified by the Participant, to the beneficiary or beneficiaries
designated in writing by the Participant, or if no designation shall have been
made, to the estate of the Participant. Payment(s) shall be made commencing on
the first day of the calendar year following the year in which the Participant
dies.
6. Assignment No right of any Participant in the Plan to receipt of Deferred
Compensation or interest earned thereon shall be assignable or subject to any
encumbrance, pledge, or any charge of any nature whatsoever except that a
Participant may name a beneficiary or beneficiaries in respect of the rights of
that Participant in the event of his death and except, also, that if such
beneficiary shall be the executor or administrator of the estate of the
Participant, any rights of the Participant under the Plan may be transferred to
the person or persons or entity, (including a trust) entitled thereto under the
will of the Participant or, in the case of intestacy, under the laws relating to
intestacy.
7. Amendment or Discontinuance of the Plan
(a) The Board of Directors may amend the Plan at any time in such respects
as the Board of Directors may deem advisable.
(b) The Board of Directors may, by resolution adopted by a
majority of the entire Board of Directors, discontinue the Plan.
(c) No amendment or discontinuance of the Plan shall affect elections of
Participants made prior to such amendment or discontinuance, without the consent
of the affected Participants.
8. Plan Not Funded This Plan is not funded. The Company shall not reserve,
or otherwise set aside, funds for the payment of its obligations hereunder. The
obligations of the Company with respect to the benefits payable hereunder shall
be paid out of the Company's general assets and shall not be secured by any form
of trust, escrow, or otherwise.
9. Copies of Plan Available Copies of the Plan and any and all amendments
thereto shall be made available to all members of the Board of Directors during
normal business hours at the office of the Secretary of the Company.
10. Effective Date The effective date of this Plan is April 30,
1982.
[APPENDIX TO ELECTRONIC FORMAT DOCUMENT]
(List of graphic and image material in 1995 Annual Report)
Inside Front Cover
USF&G AT 100 YEARS
USF&G Corporation, with assets of $14.7 billion, is composed of
property/casualty and life insurance subsidiaries. Its principal operating
subsidiary, United States Fidelity and Guaranty Company, was founded in 1896 in
Baltimore. This Annual Report describes the company's 100th year of operation.
United States Fidelity and Guaranty Company is one of the nation's largest
insurers and is focused on three areas of property/casualty insurance: Family
and Business Insurance, Commercial Lines Middle Market Insurance, and Specialty
Insurance. Life insurance and annuities are written through Fidelity and
Guaranty Life Insurance Company, founded in 1959. USF&G provides a wide variety
of quality commercial, personal, surety, life and reinsurance products targeted
to meet the diverse insurance needs of its customers. The company operates on
five core values: customer first, integrity, professionalism, innovation, and
teamwork.
Contents
1 Financial Highlights
2 Chairman's Letter
8 Historic Review
18 Business Overview
20 Capitalization
21 Index to Financial Information
71 Directors and Committees of the Board
72 Officers
74 Office Locations
76 Shareholders' Information
Page 1
GRAPH Strong Earnings Growth and Improved Returns
(in millions)
Total Revenues Operating Income*
1991 $ 4,202 $(122)
1992 3,712 (60)
1993 3,323 100
1994 3,310 135
1995 3,459 181
(footnote) *Operating income (loss) is defined as income from operations before
realized gains, facilities exit (costs)/sublease income, certain income tax
benefits, and cumulative effect of accounting changes. The information presented
in this manner is not intended to conform with GAAP.
GRAPH Continued Improvement in Property/Casualty Underwriting Performance
USF&G Industry USF&G Industry
Combined Combined Loss Loss
Ratio ** Ratio ** Ratio Ratio
1991 117.6 108.8 84.0 81.1
1992 116.9 115.8 81.8 88.1
1993 109.1 106.9 75.3 79.5
1994 108.2 108.5 73.1 81.3
1995 106.1 107.2 72.4 80.0
(footnote) **Includes Policyholders' Dividends; 1995 industry ratios are
estimates provided by A.M. Best.
Page 3 PHOTO(caption)
Chairman, President and Chief Executive Officer
NORMAN P. BLAKE, JR.
Page 4 PHOTO(caption)
EXECUTIVE MANAGEMENT COMMITTEE
First row from left: Norm Blake, Dan Hale, Andy Stern, Tom Lewis, Ken Cihiy,
John Berger
Second row from left: Bob Lamendola, Glenn Anderson, John Sweeney, John MacColl,
Steve Lilienthal, Harry Stout, Gary Dunton
Page 5 (highlighted text in margin)
The mettle of our company today was forged in the fires of adversity, in our
struggle to resurrect USF&G from near extinction five years ago to a position of
great promise.
Page 6 (highlighted text in margin)
... we have established the cornerstone on which to build our next century. Any
sound structure that can withstand the ill winds of adversity must be built on
certain underlying principles.
Page 7 (highlighted text in margin)
The management team and the people of our company have accomplished what
industry observers claimed was impossible--the turnaround of a property/casualty
company.
Page 8 OBJECT(caption)
Decoratively rich "Year Book" covers opened to reveal calendars with "thoughts
for the day" along themes of insurance, surety, honesty, and marriage. This was
a gift for agents and customers.
OBJECT(caption)
Replicas of the home office were produced around 1909 and served as attractive
gifts for agents. Each was complete with an inkwell, clock, and hiding place for
cigars or pennies.
Page 9 OBJECT(caption)
Suspended outside an early branch office, this substantial sign spoke of the
stability of the company around the turn of the century.
OBJECT(caption)
USF&G produced a series of beautiful calendars in the early years which
drew much attention.
Page 10 OBJECT(caption)
Nearly two feet tall, this elegant clock provided another interpretation of
USF&G's ship's wheel logo and its early slogan "We will bond you."
OBJECT(caption)
USF&G calendars often provided a pleasant respite in a busy agency.
Page 11 OBJECT(caption)
Casualty Department inspectors wore bright and shining badges adorned with
the company logo.
OBJECT(caption)
This elegant letter opener was an appealing gift for agents from the New
York branch office.
Page 12 OBJECT(caption)
Official USF&G clocks made with neon livened up branch offices in the 1940s
and 1950s
OBJECT(caption)
With the tip of the hat to Uncle Sam, USF&G produced mechanical pencils
while further underscoring the company's support of the nation during World
War II.
Page 13 PHOTO(caption)
Honored by employees and agents, Messrs. Foster and Messick, managers of
the Indianapolis branch office, celebrate their long association with the
company.
OBJECT(caption)
Graphically illustrating the two-company relationship, this meeting badge
had the added bonus of a mirror on the back.
Page 14 OBJECT(caption)
A leader in the revitalization of Baltimore, USF&G was the first company in
the city to construct a skyscraper which became the anchor for Inner Harbor
development.
OBJECT(caption)
Worn proudly by USF&G agents, this pin measures almost three inches in
diameter. This was the precursor of company pins popular today.
Page 15 OBJECT(caption)
The company developed a safe driver program, with rewards such as this tie
clasp, to address the growing number of auto accidents.
OBJECT(caption)
Using many surfaces with advertising potential, the company touted its
latest products, even on potholders.
Page 16 OBJECT(caption)
A gift to employees and agents in the 1980s, USF&G's ship's wheel logo made
a handsome paperweight.
OBJECT(caption)
Begun during Chairman Davis' tenure as a tool to promote healthy
competition between branch offices, the Davis Cup award has recently been
reinstated. Now known as the Founders Cup, it is awarded to USF&G's top
producing branch office.
Page 17 OBJECT(caption)
Given to Norm Blake, this basketball touts the company's core values of
customer first, integrity, professionalism, innovation, and teamwork.
OBJECT(caption)
USF&G created bronze medallions marking its centennial. Emblazoned with
"Legacy and Leadership" and core values, these were gifts for employees at
celebrations held around the country.
Page 20
GRAPH
Total Debt- Debt-plus-Preferred
Shareholders' to- Equity-to-
Equity** Equity** Total-Capitalization**
1991 $ 1,346 51% 59%
1992 1,300 48 60
1993 1,363 46 58
1994 1,592 40 46
1995 1,716 35 36
(footnotes)
**Before effect of SFAS No.115. 1
1 The information presented in this manner is not intended to conform with GAAP.
[END OF APPENDIX TO ELECTRONIC FORMAT DOCUMENT]
<PAGE>
USF&G CORPORATION Financial Highlights
<TABLE>
<S> <C> <C> <C>
Years Ended December 31
(dollars in millions except per share data) 1995 1994 1993
====================================================================================================================================
Consolidated Results
Revenues $ 3,459 $ 3,310 $ 3,323
Premiums earned 2,666 2,508 2,521
Net investment income 733 749 753
Net realized gains on investments 7 5 6
Facilities exit (costs)/sublease income 6 (183) --
Income tax benefit, net 14 280 27
Income from operations before cumulative
effect of adopting new accounting standards 209 237 130
Cumulative effect of adopting new accounting standards -- -- 38
Net income 209 237 168
- ------------------------------------------------------------------------------------------------------------------------------------
Results Per Common Share
Income from operations before cumulative
effect of adopting new accounting standards $ 1.63 $ 2.00 $ .90
Cumulative effect of adopting new accounting standards -- -- .42
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 1.63 $ 2.00 $ 1.32
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends declared $ .20 $ .20 $ .20
- ------------------------------------------------------------------------------------------------------------------------------------
At December 31
1995 1994 1993
====================================================================================================================================
Consolidated Financial Position
Assets $ 14,651 $ 13,980 $ 14,481
Total debt 607 628 627
Shareholders' equity 1,984 1,441 1,556
Debt-to-equity 31% 44% 40%
Book value per share $ 14.68 $ 9.96 $ 11.33
Closing market price per share 16 7/8 13 5/8 14 3/4
Common shares outstanding 119,606,095 104,810,794 91,418,372
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[GRAPH - SEE APPENDIX TO ELECTRONIC FORMAT DOCUMENT]
<PAGE>
CHAIRMAN'S LETTER
Preparing for Our Second Century
AS WE CELEBRATE THE CENTENNIAL OF USF&G'S FOUNDING, it is indeed appropriate
that we enter the year with substantial momentum, generated by our significant
accomplishments in 1995. After five years of herculean efforts, the management
and people of USF&G have firmly established a cornerstone on which to build our
company for its next century. Our team has truly built on USF&G's legacy and is
returning our company to a position of industry leadership. The magnitude of our
achievement is reflected in financial performance, organizational quality, and
strategic positioning.
Financial Performance
IN 1995 WE SUSTAINED EARNINGS GROWTH and further strengthened the quality of our
balance sheet. Despite the highly competitive market conditions, we achieved 34
percent growth in operating income* over 1994 and averaged 35 percent growth in
operating income over the last three years. Net income, however, declined 12
percent from $237 million in 1994 to $209 million in 1995, primarily as a result
of the disproportionately higher level of tax benefits--$280 million--recognized
in 1994 compared with $14 million in 1995. As a matter of fact, after adjusting
for this disparity in tax benefits and the one-time charge of $183 million taken
in 1994 for the anticipated move from one of our current headquarters buildings,
adjusted net income grew 35 percent in 1995 over 1994.
*Operating income is defined as net income excluding realized gains and
losses on investments, facilities exit costs/sublease income, and
certain income tax benefits.
OUR BALANCE SHEET WAS FURTHER STRENGTHENED as overall financial leverage
improved, liquidity increased, and asset quality was enhanced. Moreover, we
continue to maintain a strong loss reserve position, particularly as it pertains
to our environmental and asbestos reserves. It is with these considerations in
mind, coupled with the high quality of our management team and skill base of our
organization, that two major credit rating agencies, A.M. Best and Standard and
Poor's, recently upgraded our ratings. Most significantly, A.M. Best upgraded us
to an A from an A- rating, a move signifying the resurgence of our company.
UNDERLYING OUR IMPRESSIVE 1995 PERFORMANCE is the strong momentum
we have developed in our two main operating segments. F&G Life's
performance was outstanding: 22 percent growth in sales, improved spreads on
annuity products, and a 93 percent growth in pre-tax operating income. It is
noteworthy that 74 percent of 1995 sales can be attributed to new products and
channels of distribution developed since 1992. Our property/casualty segment's
performance was equally impressive: 7 percent growth in net written premium, 19
percent growth in pre-tax operating income, and a 2.1 point decline in statutory
combined ratio to 106.1* percent. This compares favorably with the estimated
industry average of 107.2 percent. Premium growth and improved underwriting
performance can be attributed to the strong performance in
our reinsurance, surety, and commercial lines middle market businesses.
*Includes policyholders' dividends.
Organizational Quality
THE ORGANIZATIONAL QUALITY OF OUR COMPANY has been enhanced and has become a
distinct competitive advantage. We have a strong management team and an
outstanding skill base.
WHAT MOST DISTINGUISHES OUR ORGANIZATION is its unique culture. Commitment to
strong core values, dynamic leadership, organization development, and
competitive compensation plans have all helped to create our high performance
culture. Our people are committed to building a great company. This shared sense
of purpose provides the cohesion and fortitude to undergo dramatic change
quickly. These organizational qualities provide our company with a distinct
competitive ability to take advantage of market disruptions created by the broad
sweeping consolidations underway in our industry. Frankly, having the industry
in this state of flux plays to our strengths. What we may lack in size when
compared with some competitors, we make up in skill, speed, and agility to
swiftly respond to market opportunities.
MAJOR REORGANIZATIONS WE UNDERTOOK IN MID-1995 to better position our businesses
strategically demonstrate our capacity to change without disrupting our market
momentum. These reorganizations involved three related initiatives: (1)
establishing the Family and Business Insurance Group (FBIG) by combining our
personal lines, commercial small business, and nonstandard auto (i.e., Victoria
Financial) businesses; (2) reconstituting the remaining portion of commercial
lines into the Commercial Lines Middle Market organization; and (3) integrating
field operations management into Commercial Lines Middle Market. Reorganizing
allows FBIG to leverage the common customer, distribution, and processing
characteristics of its businesses to achieve significant operational synergy.
Integrating field operations into Commercial Lines Middle Market promotes the
evolution of our branch infrastructure into an essentially dedicated
distribution channel for the middle markets. At the same time, FBIG is
consolidating most of its branch operations into its three regional business and
processing centers, each having its own dedicated marketing, underwriting, and
support teams. Both FBIG and Commercial Lines Middle Market are becoming
vertically integrated organizations with greater market focus and control over
the selling and servicing of their businesses.
Strategic Positioning
THE ENTIRE LANDSCAPE of the insurance industry is undergoing redefinition due to
consolidations. This raises the issue of USF&G's strategic positioning. With
this changing competitive environment, our relative strength in terms of size,
scope, and skill comes into question. These competitive considerations only
become relevant when viewed within the context of the business franchises.
CONCEPTUALLY, OUR COMPANY CAN BE VIEWED as having two distinct
business franchises: one distribution driven and the other product driven.
Distribution-driven businesses characteristically provide a stable and
consistent source of earnings with a relatively lower risk/return profile. In
contrast, product-driven businesses provide a more variable source of earnings
and have a relatively higher risk/return profile. In combination, both represent
an attractive and high-quality source of overall earnings, and it is our
strategy to maximize the mix of these businesses.
FBIG AND F&G LIFE, which comprise 45 percent of earned premium, are our
distribution-driven businesses. To be successful, these businesses must have
very efficient distribution channels, leverage their market positions, and
displace their competitors to penetrate their markets. The products of these
businesses are generally commodity-like, requiring each to be extremely cost and
service-quality competitive. These businesses are also process intensive and
have a relatively high, fixed-cost base that can benefit from scale.
Consequently, process efficiencies are critical to achieving a competitive
advantage. To respond to these economic and competitive requirements, both FBIG
and F&G Life continue to undergo dramatic restructuring and business process
reengineering initiatives. By forming FBIG, we are in a position to better
leverage our independent agency channel and gain processing scale advantage. We
are greatly enhancing our systems capabilities to comprehensively reengineer our
business processes, and dramatically improve cycle time, productivity, and
service quality. FBIG's goal is to achieve an eight to nine point reduction in
expense ratio over the next three years. Similarly, F&G Life is outsourcing all
of its systems and selected administrative functions to achieve cost and quality
of service competitiveness. Within two years, F&G Life will be one of the most
cost competitive players in the game. In addition, these businesses will employ
a variety of other initiatives to improve their distribution effectiveness,
market penetration, and product-line competitiveness.
F&G RE, DISCOVER RE, SURETY, AND COMMERCIAL LINES MIDDLE MARKET, which, in
aggregate, represent 55 percent of earned premium, are our product-driven
businesses. These businesses compete by differentiating themselves with superior
product value, capitalizing on a high level of underwriting and risk management
capability. Each business is sharply focused on its discrete market segments and
employs the most effective distribution channels to reach its targeted markets.
These businesses win with speed, skill, and concentration of force. They are
intensely extending their product and market scopes to sustain growth and
improve returns. These businesses should continue to be the major drivers of
growth and profitability over the next two years.
Preparing for our Next Century
THE METTLE OF OUR COMPANY TODAY WAS FORGED in the fires of adversity, in our
struggle to resurrect USF&G from near extinction five years ago
to a position of great promise. During this time, there has been a massive
infusion of talent, intensive training, and the introduction of a high
performance culture firmly rooted in our core values of customer first,
integrity, professionalism, innovation, and teamwork. The character of the
management and people of our company is a unique alloy of values, talent, and
determination. These qualities will be the driving force of our future success.
In its first 100 years, USF&G faced the potential of meeting its own demise
three other times and each time emerged as a stronger and more viable
organization. Our fourth and most recent experience is no exception.
WE ARE WELL POSITIONED TO CONTINUE OUR MOMENTUM and to gain prominence as an
industry leader in the years ahead. As mentioned at the outset of my letter, we
have established the cornerstone on which to build our next century. Any sound
structure that can withstand the ill winds of adversity must be built on certain
underlying principles. Presented below are the guiding principles the management
and people of USF&G are employing to build the future of our company:
o Create a work environment which fosters strong ethics and drives outstanding
performance.
o Organize for speed, agility, and focus.
o Develop superior ability to manage and process information.
o Possess an "outside-in" mindset of finding better ways to serve the customer.
o Participate only in businesses we understand and in which we have the
capability to win.
o Limit business expansion to extensions which best leverage existing product/
market knowledge.
o Generate complementary sources of earnings from businesses which consistently
earn more than their cost of capital.
ADHERING TO THESE PRINCIPLES should result in each of our major
businesses achieving a sustainable competitive advantage and a normalized
operating rate better than their competition within the next three years. These
results will be manifested in the following actions:
o FBIG will capitalize on having one of the most cost-efficient business
processing platforms and benefit from a revitalized and well-penetrated agency
plant focused on winning in small business commercial lines and personal lines.
o F&G Life will be one of the most cost competitive life insurance
companies with an improved investment portfolio and a well designed and enhanced
product/distribution network capable of generating above-industry returns.
o Commercial Lines Middle Market will continue to expand its scope
of specialty products and target market businesses and drive its product mix to
achieve higher rates of growth and improved underwriting performance.
o Surety will sustain its growth and improve its market penetration in a more
cost effective and focused fashion while continuing to expand its international
presence.
o F&G Re will benefit in terms of growth and sustained profitability as
generated by its international product/market extension initiatives.
o Discover Re will continue to realize significant product/market synergies
with USF&G and accelerate its penetration of the commercial lines middle market.
o New sources of earnings will be generated by selective acquisitions and
business ventures.
o Returns will be enhanced as a result of creating new fee income sources of
earnings and new capital leveraging techniques.
IN CONCLUSION, THE MANAGEMENT TEAM AND THE PEOPLE of our company have
accomplished what industry observers claimed was impossible--the turnaround of a
property/casualty company. In 1995, we went one step further by realizing
superior growth in earnings and improved returns. Early this year, we received a
formal acknowledgment of our achievement with credit ratings upgrades. The
foundation for our future success has been firmly established, and the energy of
our very talented and dedicated people is focused on building a great company of
which you can become increasingly proud. We are truly prepared for our next
century.
ON BEHALF OF ALL THE EMPLOYEES OF USF&G, I wish to thank you for your confidence
and the opportunity to make a difference.
Norman P. Blake, Jr.
Chairman, President and
Chief Executive Officer
February 28, 1996
<PAGE>
AGAINST THE ODDS
1896
ONE HUNDRED YEARS AGO, THE UNITED STATES enjoyed the spoils of the Industrial
Revolution. Booming prosperity had lured almost 40 percent of the growing U.S.
population to the cities, while the list of issues on the New York Stock
Exchange had almost tripled since 1865. It was against this economic landscape
that a Baltimore entrepreneur named John R. Bland launched a new type of
enterprise: the United States Fidelity & Guaranty Company.
FOUR IMPORTANT TRAITS HAVE DISTINGUISHED THIS GREAT COMPANY throughout its
history--leadership, innovation, partnership and character. These principles
have guided USF&G to enter new fields of endeavor, and have buoyed it when all
seemed lost. Four times its future was imperilled. Each time it battled back to
regain, and even surpass, its former stature.
USF&G IS A HARDENED COMPETITOR, A SURVIVOR of the Great Depression, four major
wars, economic and industry calamities, and in 1904, the destruction by fire of
its home office in Baltimore. It is a company founded on innovation and grit.
Indeed, its very first product--the USF&G Attorney's List--was unique, springing
forth from the imagination of John R. Bland, a dignified 45 year-old.
BALTIMORE IN 1896 WAS A MANUFACTURING NEXUS linking raw goods in the south with
distributors in the north and elsewhere. Local businessmen, however, had
difficulties collecting remittances from out-of-state attorneys handling their
commercial transactions. Bland developed the idea for a new type of company, one
that would provide a list of reputable attorneys and guarantee their faithful
payments. He pitched the idea to his colleagues at Baltimore's Merchants and
Manufacturers Association, and they helped him bankroll the new company. On
March 19, 1896, the governor of Maryland signed a charter incorporating the
United States Fidelity and Guaranty Company.
BLAND TIRELESSLY COMBED THE COUNTRY TO APPOINT well- connected businessmen as
the new company's general agents. These individuals did not actually sell the
company's products, but appointed other like-minded businessmen as sub-agents to
sell it for them. The company viewed the agents as its partners.
INNOVATION WAS MUCH IN EVIDENCE in USF&G's early product ventures. Its original
charter permitted it to sell both surety and fidelity bonds, and the company
quickly branched out, selling bonds guaranteeing contractors, fiduciaries and
public officials, among other professions and enterprises. Banks became a major
customer, and Bland sought ways to increase the company's share of this
important market segment. In 1900, he applied for an amendment to USF&G's
charter allowing it to sell burglary insurance to banks. It was the company's
first insurance venture.
OF THE 25 SURETIES OPERATING IN 1896, 19 were bankrupt 25 years later. Many had
charged premiums bearing no relationship to the covered exposure. Although USF&G
evaluated its exposures carefully, an examination of its underwriting criteria
by Colorado regulators in 1908 compelled the state to declare the company
bankrupt.
BLAND TRAVELLED TO DENVER AND REPUDIATED THE CHARGES in court, presenting proof
of the company's solvency. He also produced evidence that the state's
independent examiner was on the payroll of four competing sureties! The claims
against USF&G were promptly dropped and its reputation restored.
USF&G BECAME THE TOP SELLING SURETY IN AMERICA IN 1909. Without so much as a
glance backwards, Bland was already calculating the company's next move. In
1910, he further amended the company's charter to sell casualty insurance, a
field in which few companies prospered, and even fewer survived. New lines
included professional liability insurance, accident and health coverages,
automobile insurance, and, in 1912, workers' compensation.
AUTO INSURANCE QUICKLY BECAME USF&G'S TOP SELLING LINE, due in large part to
Henry Ford's revolutionary assembly line concept in 1910. As prices plummeted,
cars became affordable to many, and Bland's risky venture proved to be a gold
mine.
USF&G'S FIRST 20 YEARS ARE A TESTAMENT TO BLAND'S foresight, tenacity and
caring. "Capital and surplus alone do not make an insurance company strong,"
Bland once wrote. "If behind the company are men of character and
integrity...they can pull the company through, though it may not have great
resources; but if they are unable to see pitfalls until they tumble into them,
they can make capital and surplus melt away like ice in July." These words would
be put to the test in the company's next 20 years.
1915
<PAGE>
LAND'S END
1916
WHEN THE UNITED STATES ENTERED THE "WAR TO END ALL WARS" in 1917, 150 USF&G
employees left the company to fight overseas. John R. Bland met with each man,
shaking hands, patting backs, and promising a job when they returned. His
secretary recalled that when the last man left his office, he broke down and
wept.
TWO YEARS LATER, THE FIRST WORLD WAR DREW TO A CLOSE and the nation entered a
period of profound economic revitalization. USF&G's business skyrocketed, and in
1921 it became the top-selling casualty and surety carrier in the country.
IN 1923, JOHN R. BLAND DIED, AND THE BOARD OF DIRECTORS elected his son, R.
Howard Bland, as the company's new president. R. Howard inherited his father's
shrewdness and timing. When the Chrysler Corporation unveiled a plan to sell
cars with free insurance, he led an industry battle against the scheme. Rather
than lock horns, Bland suggested the auto company be given the green light--if
it licensed its salespeople as insurance agents. It was a clever strategy
compelling Chrysler to abandon its plans.
R. HOWARD BLAND GREATLY EXPANDED THE COMPANY'S product lines. A limited product
liability policy covering bakeries, candy manufacturers and soft drink bottlers
was introduced in 1922. Credit insurance was offered in 1924, and aviation
insurance--through an industry pool--in 1928.
BLAND ALSO GRADUALLY MOVED THE COMPANY into the mortgage guaranty business, a
risky line covering banks against the non-payment of mortgage loans. He also
presided over the company's development, in 1928, of the industry's first
installment premium plan for automobile owners, a revolutionary concept that
stirred sales and inspired other carriers to copy it.
THE COMPANY'S PARTNERSHIP WITH INDEPENDENT agents was strengthened by Bland's
capitalization of the F&G Fire Corporation in 1929. The agents had clamored for
a way to offer customers both property and casualty insurance for their
automobiles. Although carriers were prohibited from selling both coverages,
Bland's establishment of a separate subsidiary allowed the agents access to full
coverage.
USF&G WAS GROWING FAST. EACH YEAR from 1923 to 1929 the company reported a
significantly larger volume of business. And then, on October 28, 1929--"Black
Friday"--the once-booming stock market imploded, and the Roaring Twenties
shuddered to a close. Within 24 hours of the crash, USF&G's investment
portfolio, as did those of most businesses, depreciated $2.4 million.
IN THE GREAT DEPRESSION THAT FOLLOWED, the company's premiums sharply contracted
and its cash flow dried to a trickle. More worrisome was its $50 million
mortgage guaranty liability. As homeowners lost their jobs, many could no longer
pay their mortgage loans. When the homeowners defaulted, the banks turned to
their insurers.
BLAND ESTABLISHED A SEPARATE FACILITY to handle the rapid depletion in the
company's mortgage reserves and oversee the enormous volume of real estate
falling into its hands. The Latin-named subsidiary, Finisterre Inc., had an
optimistic title: "Land's End."
MORTGAGE LOSSES INTENSIFIED. Unable to devise a bail-out strategy, the board of
directors turned to E. Asbury Davis, a nationally respected tobacco
entrepreneur, to lead the troubled company. Davis was a financial wizard with
influential contacts in Washington and other circles. His personal reputation
convinced the Reconstruction Finance Corporation, a federal credit agency, to
lend USF&G nearly $5 million to help pay off its outstanding mortgage debts.
DAVIS ALSO CUT EXPENSES, TRIMMED THE WORK force and lowered salaries. The
company hung by its fingernails, hoping for a turnaround. Then, in the summer of
1934, thanks to Franklin Delano Roosevelt's Public Works Project, USF&G showed
an underwriting profit. FDR's "New Deal" program of building roads, dams and
bridges generated a wealth of new contract bond business, and USF&G finally
reached Land's End.
DAVIS CHARACTERISTICALLY THANKED the company's independent agents and staff for
seeing it through the bleak times. "Looking back over the years of the
Depression, one thing stands out--the loyalty and cooperation [of] every manager
and agent and employee," Davis wrote in 1934.
THAT YEAR, AT THE AGE OF 62, DAVIS TRAVELLED CROSS-COUNTRY to inspect USF&G's 17
branch offices and meet with agents. The trip would solidify the company's
commitment to a decentralized distribution network, and compel Davis in later
years to greatly increase the number of its branch offices.
USF&G ENDED THIS ERA WITH ITS FIRST VENTURE into national advertising. In August
1936, the company unveiled a full-page ad in Time magazine. Not surprisingly, it
celebrated the importance of independent agents.
1935
<PAGE>
BREAKING NEW GROUND
1936
HAVING ACCOMPLISHED THE SEEMINGLY IMPOSSIBLE--hoisting USF&G out of the
quicksand of the Great Depression--E. Asbury Davis earned the unflinching
loyalty and respect of the company's employees, branch office personnel and the
9,000 independent agents representing it.
IN THE LATE 1930S, DAVIS FOCUSED THE COMPANY on steady, stable growth through
sales of existing products. Contests awarding top-selling agents and branches
with cash and other prizes were launched, including the Davis Cup, which pitted
branches against each other in a race to achieve the highest percentage increase
in annual premium volume.
WHEN RISING AUTOMOBILE LOSSES TUGGED AT THE BOTTOM LINE, Davis instituted a
series of regional branch office conferences in the summer of 1943 to discuss
the situation. The company introduced a Safe Driver Reward Plan, an innovative
program guaranteeing a 15 percent premium refund to claims-free drivers.
AFTER THE UNITED STATES ENTERED WORLD WAR II, F&G Fire, the company's property
insurance subsidiary, joined other insurers marketing war damage insurance, a
new policy protecting businesses and homeowners against losses from an enemy
attack. The premium volume was substantial, and losses, thankfully, were nil.
FIVE HUNDRED USF&G EMPLOYEES SERVED THE NATION during the war, ten of whom did
not return. At home, the company enlarged its national advertising program,
printing patriotic ads emblazoned with its new slogan: "Consult your insurance
agent or broker as you would your doctor or lawyer." USF&G's School of
Insurance, instituted by Davis in 1935, was closed for the duration.
IN 1945, DAVIS INSTITUTED THE COMPANY'S FIRST RETIREMENT and pension plans. A
year later, with the war ended, the company celebrated its 50th anniversary.
Each employee was presented with a medallion commemorating the achievement.
USF&G'S BUSINESS SOARED IN THE POSTWAR YEARS. From 1946-1950, the company
reported a doubling of premium volume and a 50 percent increase in asset value.
Its top line was auto insurance, which represented 37 percent of its premium
volume in 1947. Another big market was glass insurance; through much of the
1940s, USF&G was the premier glass underwriter in the nation.
THE BOOMING ECONOMIC PROSPERITY OF THE POSTWAR years trickled down to consumers,
many now with the means to buy a home, start a business or own two cars. A more
customer-responsive insurance industry materialized, and many companies began
blending different coverages into package policies. At the forefront was USF&G.
IN 1948, THE COMPANY INTRODUCED ITS "MAIN STREET" insurance package, a
comprehensive policy for the average retail store. The law barring insurance
companies from selling both property and casualty insurance was lifted in 1950,
and USF&G and F&G Fire merged the following year. The intellectual clout of
executives from both companies in the same building quickened the development of
package policies, culminating in the introduction of USF&G's original homeowners
insurance policy in 1954.
IN THE LAST FIVE YEARS OF HIS PRESIDENCY, Davis increasingly delegated
responsibilities to several senior executives, three of whom--Charles Phillips,
Bill Pullen and Walter Jeffery--would succeed him as president.
PULLEN MANAGED THE COMPANY'S AGENCY AND DEVELOPMENT Department in Baltimore, and
believed USF&G could serve its agents better by strengthening the branch office
system. In a report to Davis, Pullen suggested an increase in the number of
branches, and fuller underwriting authority for each branch. Davis agreed, and
by 1950, more than 50 USF&G branch offices dotted the country.
IN 1955, THE COMPANY HAD BECOME ONE of the country's largest insurance concerns.
Under Davis' 23-year stewardship, USF&G's capital increased from $10 million to
more than $100 million. Its net premiums increased from $30 million to more than
$200 million. The company went from being broke to breaking records.
AS THIS PROSPEROUS ERA IN THE COMPANY'S HISTORY drew to a close in 1955, USF&G's
new president, Charles Phillips, established a Research and Review Department to
scrutinize the company's operational procedures. The new department would play
an important role in the company's evolution, particularly in relation to the
use of computers to simplify the processing of data.
PHILLIPS WAS AN ARDENT DEFENDER OF THE INDEPENDENT agency system, during a
period when this mode of product distribution was first challenged by companies
with captive agent sales forces. In 1956, he devoted USF&G's entire advertising
budget to publicizing the American Agency System, which he called the "safest,
strongest, soundest method yet for safeguarding persons and property through
insurance." In later years, the company's partnership with agents would undergo
similar tests of faith and loyalty.
1955
<PAGE>
UPS AND DOWNS
1956
IN THE LATE-FIFTIES TO EARLY-SIXTIES, USF&G BECAME a modern corporation. The
company increased its reliance on automation to reduce back-office data
processing, focused its products to better fit the needs of the marketplace and
further decentralized its management functions.
WHILE OTHER INSURERS SOUGHT BUSINESS FROM VERY LARGE corporations, USF&G
concentrated on medium and smaller businesses. A comprehensive policy covering
the motel industry, for example, was introduced in early 1961. The building of
the interstate highway system in the 1950s fueled the creation of 20,000 new
motels during the decade, and USF&G targeted this burgeoning market.
BILL PULLEN BECAME THE COMPANY'S PRESIDENT IN 1959, bringing with him a new
style of leadership: more casual and personable with agents and employees,
running the company's affairs over the telephone, and traveling the nation by
jet. Pullen considered agency relations his top priority as president, and his
amiable personality served to strengthen the company's bond with agents.
USF&G BECAME A MULTI-LINE INSURER IN 1959, upon the capitalization of
the Fidelity and Guaranty Life Insurance Company. Pullen stated that the new
subsidiary was an "extension" of USF&G to better service agents, who had
clamored for additional products to cross-market to customers. F&G Life also
promised additional cash flow for investment purposes, at a time when stock
values were booming.
THE DEVELOPMENT OF MARKET-SPECIFIC, customer-oriented package policies
proliferated in the 1960s. The introduction of USF&G's Special Multi-Peril (SMP)
series, a group of package policies addressing diverse middle markets, such as
schools, apartment complexes and office buildings, generated enormous revenue.
Walter Jeffery, USF&G's new president in 1962, attributed the surge in USF&G's
commercial premium volume from 1960 to 1965 to broad acceptance of the SMP
series. Revenue skyrocketed from $55.6 million to more than $500 million over
the period.
WHILE PACKAGE POLICIES REPRESENTED NEW AVENUES OF PREMIUM growth for the
company, auto insurance remained its top line, accounting for roughly 40 percent
of overall premium volume during the sixties. Losses, however, were significant,
and the line was barely profitable for many insurers. In 1969, as accidents and
injuries reached alarming levels, leading insurers, including USF&G, formed the
Insurance Institute for Highway Safety, an auto safety organization. Its
formation marked the industry's leadership role in auto safety promotion, a
position it still holds today.
WHEN WILLIFORD GRAGG TOOK THE HELM of the company in March 1970, inflation and a
soft insurance market darkened USF&G's prospects. In 1973, interest rates
climbed into the double digits for the first time in decades, and the country
confronted its worst recession since the Great Depression.
AS OTHER CARRIERS LOWERED PRICES to compensate for the economic uncertainty,
Gragg held the line. Although concerned at this direction, most agents stuck
with the company through the grim period. Their loyalty stemmed from respect for
Gragg, a former manager in the company's Agency and Development Department. Like
Pullen, Gragg regarded agents as USF&G's "principal asset," he once said.
THE SITUATION WORSENED FOR USF&G. The steady decline of the stock market in 1974
materially weakened USF&G's surplus position, and its capital and surplus sank
an average of $1 million a day. By year end, the company's portfolio of
preferred and common stocks had depreciated more than $260 million, a 34 percent
drop. The entire industry suffered, losing more than $2.5 billion in premium
volume in 1974, an unprecedented decline.
GRAGG RESISTED PLEAS FROM AGENTS AND BRANCH PERSONNEL to lower prices. To stem
the investment losses, he altered the company's traditional investment strategy,
putting all assets in fixed securities. The company also sold $22 million of
preferred and common stock to bolster its rapidly deteriorating cash position.
IN 1976, THE COMPANY'S FORTUNES BRIGHTENED. The soft market hardened, and those
insurers that had lowered prices appreciably lost market share when they again
raised them significantly. Gragg's leadership of the company during the
difficult period was widely recognized and he was named one of the "top ten CEOs
in America" by Financial World magazine. Characteristically, Gragg gave credit
for the company's fortitude during the crisis to its 6,500 independent agents,
calling them "the most professional in our industry."
1975
<PAGE>
A NEW DIRECTION
1976
THE HARDENING OF THE PROPERTY/CASUALTY INSURANCE market in 1976 significantly
improved USF&G's financial condition. In 1977, the company's premium volume
surged 26 percent to $1.6 billion, and every line of business reported a profit.
The next two years, 1978 and 1979, it garnered the highest underwriting profits
in the insurance industry. As the company entered the 1980s, it was widely
regarded as one of the top insurance carriers in the nation.
IN MAY 1978, JACK MOSELEY WAS ELECTED PRESIDENT. The company's partnership with
agents was fortified through its charter membership in the Joint Agency/Company
Marketing program, a multi-million dollar campaign to promote the American
Agency System. Moseley also developed the company's first agency perpetuation
plan, a program providing analysis, planning and financial assistance to agents.
AS A NEW SOFT MARKET EMERGED IN 1979, Moseley resisted the temptation to lower
prices. It was a prudent direction that increased premium volume in nearly all
classes of USF&G's business. The company's record capital and surplus gave
Moseley the leverage to diversify its scope and, over the next five years, USF&G
branched out into a variety of noninsurance fields. It also enlarged its
advertising budget to increase name recognition.
THE NONINSURANCE VENTURES WERE NEVER SUCCESSFUL. The only productive
diversification was the capitalization of a property/ casualty reinsurer, F&G
Re, in 1984. F&G Re continues to be a leader in the reinsurance arena.
NEWS OF THE COMPANY'S DETERIORATING FINANCIAL CONDITION sent its stock price
tumbling, and few industry analysts believed it could survive. In November 1990,
the board of directors--for the second time in the company's history--turned to
someone outside the insurance industry to head the troubled company.
USF&G'S NEW LEADER, NORMAN P. BLAKE, JR., WAS RESPECTED as a builder of
businesses, having successfully revived the prospects of Fuji Bank's Heller
International. Blake's first three months in office were a profound period of
corporate introspection, spent with company managers, outside consultants and
scores of employees in Baltimore and from around the country.
IN FEBRUARY 1991, AS THE DESERT STORM OFFENSIVE was launched in the Persian
Gulf, Blake announced a major organizational "offensive" of his own. The company
abandoned unprofitable states and lines of business. Its investment portfolio
was repositioned and, more importantly, its poorly performing non-insurance
ventures were sold off or terminated.
WITH A NOD TO E. ASBURY DAVIS' corporate belt tightening in the 1930s, Blake
also reduced the company's work force. Overall, employee ranks were halved
through 1994, and several branches were consolidated or closed. Like many
corporations that had expanded in the eighties, USF&G now needed to "rightsize."
THE MANY AGENTS WHO STUCK BY THE COMPANY during the crisis were rewarded with a
renewed pledge of partnership. In 1991, the company introduced USF&G's National
Agency Council, a coalition of agents and company personnel to provide direction
on new products and marketing strategies.
AS EARLY AS 1993, THE RESTRUCTURING BEGAN to have a positive impact on USF&G's
financial situation. The company reported $168 million in net income, compared
with $29 million in 1992. The strategy was clear: USF&G would compete in those
markets in which it could make a profit, guided by specific core values of
customer first, innovation, professionalism, integrity and teamwork.
ITS WIDENING REPUTATION INSPIRED SOME OF THE BEST in the insurance business to
join its ranks. Their cultivation of unique approaches guided USF&G to focus on
four distinct operations: Commercial Lines Middle Market Insurance; Family and
Business Insurance; Specialty Insurance, such as reinsurance and surety; and
Life Insurance.
THE COMPANY'S ACQUISITIONS IN 1995 OF DISCOVER RE, which serves the needs of the
alternative risk transfer market, and Victoria Financial, which broadens the
company's personal auto insurance line to include nonstandard coverages,
exemplify its new direction. New business start-ups, such as its new excess and
surplus property/casualty operation and insurance services operations, are other
avenues of future growth.
THE COMPANY THAT WAS FOUNDED ON AN UNMET NEED to guarantee attorneys enters its
next century with as much, if not more, dedication to innovation and character.
Its partnership with independent agents remains as vital to its future as it has
been to its past. And its mission--as it always has been--resounds clearly: To
be the best.
1995
<PAGE>
BUSINESS OVERVIEW
- --------------------------------------------------------------------------------
Target Markets
Property/Casualty Operations - 85% of total revenues
================================================================================
Family and Business
Insurance Group (FBIG) - 39% NWP*
Small Business oSmall businesses:
Service, retail, wholesale,
contracting, office
Personal Lines oIndividuals/families
insuring\:
Homes and home businesses,
condominiums, automobiles,
personal articles,
watercraft
- --------------------------------------------------------------------------------
Commercial Lines oMid-to-large sized business:
Middle Market Group - 35% NWP* Contractors, manufacturers,
Middle Market Operations technology, financial
institutions,
municipalities, educational
institutions,
transportation/distribution,
large real estate
Excess & Surplus Lines-- oUnique/unusual risks
Property and Casualty oSpecialty markets
- --------------------------------------------------------------------------------
Specialty Businesses - 26% NWP*
F&G Re oBroker markets for
international and domestic
companies
Discover Re oAlternative risk transfer
market:
Self-insureds, captive
insurance companies, risk
retention groups
Surety oContractors
oDomestic and international
commercial businesses
Life Insurance Operations - 14% of total revenues
================================================================================
F&G Life oStructured settlement
candidates
oTeachers (K through 12)
oIndividuals age 45-64,
pre-retirees
oSeniors age 65 to 85
*Percentage of net written premium (NWP) is estimated, based on 1995
property/casualty premium.
<PAGE>
Products
================================================================================
oBusinessowners' policies
oProperty and inland marine
oGeneral, umbrella liability
oCommercial auto
oWorkers' compensation
oStandard and nonstandard auto
oProperty
oPersonal excess
oWatercraft
- --------------------------------------------------------------------------------
oGeneral, umbrella, and
professional liability/E&O
oPrimary, excess and highly
protected risk property,
inland marine and boiler
oCommercial auto
oWorkers' compensation
oFidelity, crime, kidnap and
ransom
oDirectors & officers
liability
oCatastrophe risk
oExcess/umbrella
oDeductible/self insured risk
oSpecialty program business
- --------------------------------------------------------------------------------
oTraditional and finite risk
products specialized to meet
requirements
oInnovative insurance and
reinsurance solutions:
Automobile liability,
general liability, umbrella
liability, workers'
compensation, property
oConstruction bonds
oJudicial, public official,
and miscellaneous bonds
================================================================================
oStructured settlements
oTax-sheltered annuities
oSingle and flexible premium
deferred annuities
oTerm and universal life
oPayout annuities
<PAGE>
1995 Accomplishments
================================================================================
oDeveloped dedicated FBIG
field organization
oStabilized premuims, improved
expense ratio, and reduced
loss ratio
oLaunched state-of-the-art
Business Foundation Series
(BFS) product and information
systems platform
oCompleted "Family Reunion
Tour" to build enthusiasm
with 1,400 key agents
nationwide
oFormulated long-term
organizational vision for
Centers for Agency Services
(CAS)
oAccelerated Personal Lines
insurance to value program
- --------------------------------------------------------------------------------
o9% growth in net written
premium*
oExpanded penetration of
proprietary programs:
"Blueprint" Contractors
Program, "Precision Design
Program" for Manufacturers,
"Visionary" Technology
Program, "Tier One" Financial
Institutions Program,
"Community Link"
Municipalities Program, "A+"
Education Program,
"Extra Mile" Trucking
Program, "Cornerstone" Real
Estate, "Market Link"
Wholesalers Program
oEstablished - E&S Casualty
Operation
oExpanded E&S Property
Operation
- --------------------------------------------------------------------------------
oGrew net written premium by
23%
oIncreased international
business by 33%
oCompleted licensing of
Lloyd's of London syndicate
oBegan distribution of
property and workers'
compensation products
oExpanded geographically/
established branches in
Pittsburgh and San Francisco
o17.7% ROE and combined ratio
of 92.6
oGrew net written premium by
14%
oReduced expense ratio by 5.0
points
oExpanded into international
market
oDeveloped account
segmentation strategy
oIncreased sales by 22% while
keeping expenses flat
oIncreased net income by 60%
oCommitted to outsourcing
information services and
policy administration
oContinued balance sheet
strengthening
<PAGE>
1996 Strategic Initiatives
================================================================================
oGrow premium, attain modest
loss ratio improvement, and
continue to reduce expense
ratio
oFocus resources to better
penetrate top agencies
oExpand BFS platform to other
lines and implement
countrywide
oRoll out new products,
endorsements, and rating
tools
oComplete establishment of
three CAS
oContinue to build a high-
performance culture by
aligning selection, reward
and recognition, training and
development, and
communication initiatives
with business priorities
oIntegrate nonstandard auto
line into agency franchise
- --------------------------------------------------------------------------------
oContinue penetration of high
growth/high profit market
segments
oExpand multi-channel
distribution
Independent agents
Regional and national
brokers Wholesale, surplus
lines, and specialty brokers
oInternational market
extension
oEstablish - F&G Specialty
Insurance Services
- --------------------------------------------------------------------------------
oContinue international
expansion by start up of
world-wide facultative
operation and investment in
new Lloyd's syndicate
oDevelop innovative market
approaches to increase
capacity
oCapitalize on product and
distribution synergy with
USF&G
oFocus on fee income
generation in soft market
oImplement small contractor
program
oExpand large account program
oIncrease international
strategic alliances
==============================================================================
oIntroduce reengineered life
insurance product portfolio
oImplement information
services and policy
administration outsourcing
oReengineer remaining company
functions
<PAGE>
CAPITALIZATION
USF&G continued the dramatic improvement of its capital structure in 1995
through a combination of debt refinancings, repurchases and repayments, and
conversion of preferred equity to common equity. As a result, annual preferred
dividend requirements have been reduced, refinancing risk has been minimized,
and leverage, as measured by the debt-to-equity ratio, has been improved.
Debt
USF&G issued $230 million in fixed rate debt during 1995. The proceeds were used
to repay $215 million outstanding on the short-term credit facility and to
purchase $15 million of other debt. During 1995, USF&G also used excess
corporate cash to purchase another $18 million of debt and repaid a $12 million
credit facility maintained by a subsidiary. USF&G intends to continue to use
excess corporate cash to further reduce its debt balances in the future.
Preferred Equity
During 1994 and 1995, USF&G called for redemption all of its outstanding $5.00
Series C Cumulative Convertible Preferred Stock and 832,650 shares of its
outstanding $10.25 Series B Cumulative Convertible Preferred Stock. Also, in
1995, holders of an additional 189,800 shares of the Series B Preferred Stock
converted their shares into common stock. In total, the preferred shares
converted into 23.2 million shares of common stock. As a result of these
actions, preferred stock outstanding decreased from $520 million at December 31,
1993 to $227 million at December 31, 1995, and the Corporation's annual
preferred dividend requirements, net of an assumed annual common dividend of
$0.20 per share, have been reduced by $25 million over the past two years.
Subject to certain conditions, the remaining 277,550 shares of Series B
Preferred Stock issued and outstanding at December 31, 1995 are eligible for
redemption in mid-1996.
Effective February 20, 1996, USF&G has a shelf registration which permits the
issuance by two subsidiary trusts of up to $210 million of cumulative quarterly
income preferred securities. If, subject to market conditions, these Preferred
Securities are issued, the proceeds will be available for general corporate
purposes, including redemption of outstanding shares of USF&G's $4.10 Series A
Convertible Exchangeable Preferred Stock. This issuance would, in effect,
further reduce USF&G's preferred dividend requirements by replacing the Series A
Preferred Stock dividends, which are not tax-deductible, with the tax-deductible
distributions of the Preferred Securities.
At December 31
(dollars in millions) 1995 1994 1993
================================================================================
Debt:
Current/short-term $ 80 $ 227 $ 413
Long-term 527 401 214
- --------------------------------------------------------------------------------
Total debt 607 628 627
- --------------------------------------------------------------------------------
Shareholders' equity:
Preferred equity 227 396 520
Common equity 1,757 1,045 1,036
- --------------------------------------------------------------------------------
Total shareholders' equity 1,984 1,441 1,556
- --------------------------------------------------------------------------------
Total capitalization $2,591 $2,069 $2,183
- --------------------------------------------------------------------------------
Debt-to-equity 31% 44% 40%
Debt-to-equity before SFAS No. 115* 35 40 46
(Debt-plus-preferred equity)-to-total
capitalization 32 49 53
(Debt-plus-preferred equity)-to-total
capitalization before SFAS No. 115* 36 46 58
- --------------------------------------------------------------------------------
*Debt-to-Equity before effect of SFAS No. 115 and Debt-plus-Preferred Equity-to-
Total Capitalization before effect of SFAS No. 115 are presented for comparison
purposes only.1
[GRAPH - SEE APPENDIX TO ELECTRONIC FORMAT DOCUMENT]
<PAGE>
USF&G CORPORATION Management's Responsibility for Financial Reporting
Financial Statements
Management is responsible for the financial statements and other information
presented in this annual report. The financial statements are prepared in
conformity with generally accepted accounting principles. Informed judgments and
estimates are used to measure transactions not concluded by year-end.
Internal Controls
Management is also responsible for the system of internal control. The system of
internal control encompasses the organizational structure, selection and
training of personnel, communication and enforcement of policies and procedures,
and an ongoing internal audit program. The internal controls are designed to
provide reasonable assurance that financial records are reliable for preparing
financial statements, that transactions are completed as authorized, and that
assets are safeguarded. Management and USF&G's
internal auditors regularly review these controls and assess their adequacy and
effectiveness.
Audit Committee
The Board of Directors maintains an audit committee of directors who are not
employees of USF&G. The Audit Committee meets regularly with management,
internal auditors, and independent auditors to review internal control and
financial reporting matters. Both the internal and independent auditors have
full and free access to the Audit Committee.
Independent Auditors
USF&G engages Ernst & Young LLP to conduct independent audits of the financial
statements in accordance with generally accepted auditing standards. Their
audits include reviews and tests of internal controls, transactions, and other
information they consider necessary to express an opinion on the financial
statements.
/s/ NORMAN P. BLAKE, JR. /s/ DAN L. HALE
Norman P. Blake, Jr. Dan L. Hale
Chairman, President, and Executive Vice President and
Chief Executive Officer Chief Financial Officer
February 23, 1996
Index to Financial Information
Management's Discussion and Analysis of Financial Condition
and Results of Operations 22
Eleven-Year Summary of Selected Financial Data 42
Consolidated Statement of Operations 44
Consolidated Statement of Financial Position 45
Consolidated Statement of Cash Flows 46
Consolidated Statement of Shareholders' Equity 47
Notes to Consolidated Financial Statements 48
Report of Independent Auditors 70
<PAGE>
USF&G CORPORATION Management's Discussion and Analysis of Financial
Condition and Results of Operations
This section provides management's assessment of financial results and material
changes in financial position for USF&G Corporation (consolidated, "USF&G" or
"the Corporation"), its two primary business segments - property/casualty
insurance and life insurance - and its investment portfolio. Property/casualty
insurance is written primarily by United States Fidelity and Guaranty Company
("USF&G Company"); life insurance and annuities are written primarily by
Fidelity and Guaranty Life Insurance Company ("F&G Life"). Amounts for prior
years have been restated for the mergers with Discover Re Managers, Inc.
("Discover Re"), and Victoria Financial Corporation ("Victoria Financial"),
which were consummated in the second quarter of 1995 and were accounted for as
poolings-of-interests. Certain prior year amounts have been reclassified to
conform to the 1995 presentation. (Note: A glossary of certain terms used in
this discussion can be found at the end of this section. The terms are
italicized the first time they appear in the text.)
Index
1. Consolidated Results 22
2. Property/Casualty Insurance Operations 23
3. Life Insurance Operations 29
4. Parent and Noninsurance Operations 31
5. Investments 31
6. Financial Condition 35
7. Liquidity 37
8. Legal Contingencies and Regulation 38
9. Income Taxes 39
10. Glossary of Terms 41
1. Consolidated Results
1.1. Summary of net income
- --------------------------------------------------------------------------------
The table below shows the major components of net income.
(in millions) 1995 1994 1993
================================================================================
Income from operations before
realized gains, facilities exit
(costs)/sublease income, income
taxes and cumulative effect of
adopting new accounting
standards $182 $ 135 $ 97
Net realized gains on investments 7 5 6
Facilities exit (costs)/sublease income 6 (183) --
Income tax benefit 14 280 27
Income from cumulative effect of
adopting new accounting standards -- -- 38
- --------------------------------------------------------------------------------
Net income $209 $ 237 $168
- --------------------------------------------------------------------------------
The following table shows the components, by major business segment, of income
from operations before realized gains, facilities exit (costs)/sublease income,
income taxes and cumulative effect of adopting new accounting standards.
(in millions) 1995 1994 1993
================================================================================
Property/casualty insurance $240 $201 $186
Life insurance 27 14 (6)
Parent and noninsurance (85) (80) (83)
- --------------------------------------------------------------------------------
Income from operations before
realized gains, facilities
exit (costs)/sublease income,
income taxes and cumulative
effect of adopting new
accounting standards $182 $135 $ 97
- --------------------------------------------------------------------------------
Property/casualty insurance segment income from operations before realized
gains, facilities exit (costs)/sublease income, income taxes and cumulative
effect of adopting new accounting standards increased $39 million from 1994 to
1995 due to premium growth and improved underwriting results. The life insurance
segment's $13 million improvement from 1994 to 1995 was due to the combined
effects of higher product sales and improved spreads on annuity products.
Property/casualty insurance segment underwriting results and life insurance
segment sales and spreads were also key factors in the improvement from 1993 to
1994.
Net income in each of the three years includes income tax benefits primarily
related to the recognition of deferred tax assets (refer to Section 9 of this
Analysis).
Other items affecting net income include a $183 million charge in 1994 related
to the planned consolidation of the Corporation's Baltimore headquarters
facilities (refer to Section 1.2 of this Analysis), and, in 1993, $90 million of
income from the cumulative effect of adopting new accounting standards related
to income taxes and a $52 million loss from the cumulative effect of adopting
new accounting standards related to postretirement benefits.
1.2. Facilities exit costs/sublease income
- --------------------------------------------------------------------------------
As a result of USF&G's restructuring activities in the early 1990s and ongoing
efforts to improve the overall cost effectiveness of the Corporation, USF&G's
available headquarters office space significantly exceeds its needs,
particularly at the office building ("the Tower") in downtown Baltimore. USF&G
sold the Tower in 1984 and subsequently leased it back. From 1991 through 1994,
the total headquarters staff decreased by approximately 28 percent, including a
48 percent decrease in the number of employees who are located at the Tower.
During 1994, USF&G developed and committed to a plan to consolidate its
Baltimore headquarters facilities. The plan encompasses relocating all USF&G
personnel currently residing at the Tower to the Mount Washington facilities in
Baltimore which USF&G owns. The lease on the Tower, which expires in September
2009, will not be terminated. Approximately 30 percent of the Tower is currently
sublet and USF&G intends to sublet the remaining space as it is vacated.
Implementation of the plan began in January 1995 and is generally proceeding as
originally planned. During 1995, $3 million of improvements were made to the
Mount Washington facilities. An additional $17 million is expected to be spent
in 1996 in order to ready the Mount Washington facilities for the Tower
personnel. These costs will include the construction of an additional parking
garage, which began in February 1996. The relocation of the majority of Tower
personnel is expected to begin in the third quarter of 1996 and be completed by
the end of the year.
The facilities exit costs of $183 million recorded in 1994 represent the present
value of the rent and other operating expenses estimated to be incurred under
the Tower lease from the time USF&G vacates the Tower through the expiration of
the lease in 2009. These costs did not consider any potential future sublease
income, as such income was neither probable nor reasonably estimable at that
time. During 1995, the liability for facilities exit costs was increased by $16
million due to the amortization of the present value discount and was reduced by
$10 million of rent and other operating expenses which were paid in 1995 but
were recognized in the 1994 charge.
To the extent that additional or extended subleases are subsequently negotiated,
the present value of income to be received over the term of those subleases is
recognizable in the period such income becomes probable and reasonably
estimable. Net income for 1995 includes $6 million of sublease income recognized
as a result of USF&G's renegotiation of a sublease with an existing tenant in
the first quarter of 1995.
2. Property/Casualty Insurance Operations
Property/casualty insurance operations, the principal business segment,
accounted for 85 percent of USF&G's revenues in 1995, 1994 and 1993, and 68
percent of its assets at December 31, 1995 and 1994, compared with 67 percent at
December 31, 1993. Financial highlights for this segment are as follows:
(in millions) 1995 1994 1993
================================================================================
Premiums written* $2,563 $2,389 $2,502
Premiums earned* 2,492 2,356 2,392
Net underwriting losses (156) (202) (229)
Net investment income 438 429 437
Income from operations before
realized gains, facilities exit (costs)/
sublease income, income taxes and
cumulative effect of adopting new
accounting standards 240 201 186
- --------------------------------------------------------------------------------
*See Glossary of Terms
Improved underwriting results were the primary reason for the increase in
property/casualty income in 1995 when compared with 1994 and 1993 (refer to
Section 2.2 of this Analysis). The increase in net investment income is
primarily attributable to the property/casualty segment's share of earnings from
an equity investment in RenaissanceRe Holdings, Ltd. ("RenaissanceRe"), a
property reinsurance company in Bermuda (refer to Section 5.1 of this Analysis).
2.1. Premiums earned
- --------------------------------------------------------------------------------
Premiums earned totaled $2.5 billion in 1995, compared with $2.4 billion in 1994
and 1993. The table below shows the major components of premiums earned and
premiums written.
1995 1994 1993
Premiums Premiums Premiums
(in millions) Earned Written Earned Written Earned Written
================================================================================
Branch Office Voluntary
Production:
Direct $2,003 $2,087 $1,919 $1,968 $1,949 $1,929
Ceded reinsurance (154) (154) (150) (162) (124) (124)
- --------------------------------------------------------------------------------
Net branch office
voluntary 1,849 1,933 1,769 1,806 1,825 1,805
Pools and associations 75 51 124 107 197 179
Nonstandard auto* 52 51 51 50 49 53
Alternative risk
transfer* 25 27 22 27 16 20
Other premium
adjustments 1 (11) (5) (16) -- 42
- --------------------------------------------------------------------------------
Total primary 2,002 2,051 1,961 1,974 2,087 2,099
Assumed reinsurance 490 512 395 415 305 403
- --------------------------------------------------------------------------------
Total segment $2,492 $2,563 $2,356 $2,389 $2,392 $2,502
- --------------------------------------------------------------------------------
*See Glossary of Terms
Direct voluntary premiums written increased six percent in 1995 in response to
management's strategies to grow business in targeted market segments,
particularly commercial lines and surety. Premiums written from involuntary
pools and associations have decreased 57 percent since 1993, as USF&G continues
to reduce exposure in these unprofitable markets. Assumed reinsurance premiums
written continued to grow in 1995, up 23 percent from 1994, as USF&G penetrated
further into international reinsurance markets. In 1995, international business
produced $223 million in assumed reinsurance premiums written, compared with
$167 million in 1994 and $80 million in 1993.
2.2. Underwriting results
- --------------------------------------------------------------------------------
Underwriting results represent premiums earned less incurred losses, loss
expenses and underwriting expenses. It is not unusual for property/casualty
insurance companies to have underwriting losses that are offset by investment
income.
Underwriting gains (losses) by major business category are as follows:
(in millions) 1995 1994 1993
================================================================================
Commercial lines $(139) $(183) $(225)
Personal lines (77) (62) (29)
Surety 16 3 (6)
Alternative risk transfer 1 -- (1)
- --------------------------------------------------------------------------------
Total primary (199) (242) (261)
Assumed reinsurance 43 40 32
- --------------------------------------------------------------------------------
Net underwriting losses $(156) $(202) $(229)
- --------------------------------------------------------------------------------
Voluntary $(143) $(181) $(178)
Involuntary (13) (21) (51)
- --------------------------------------------------------------------------------
Net underwriting losses $(156) $(202) $(229)
- --------------------------------------------------------------------------------
Consolidated property/casualty underwriting ratios, calculated based on
generally accepted accounting principles ("GAAP") and statutory accounting
practices, are as follows:
1995 1994 1993
================================================================================
GAAP Underwriting Ratios:
Loss ratio* 72.3 73.9 75.4
Expense ratio* 34.0 34.6 34.2
Combined ratio 106.3 108.5 109.6
Statutory Underwriting Ratios:
Loss ratio* 72.4 73.1 75.3
Expense ratio* 33.4 34.8 33.5
Combined ratio 105.8 107.9 108.8
- --------------------------------------------------------------------------------
*See Glossary of Terms
Statutory underwriting ratios exclude the effects of policyholder dividends
which, if included, would increase the ratios by 0.3 each year.
Underwriting results improved $46 million from 1994 to 1995 and $27 million from
1993 to 1994. The improvements are attributable to management's actions to
improve product/market mix, apply strict underwriting standards, and control
underwriting and loss adjustment expenses. The statutory combined ratio has
improved 3.0 points since 1993, 2.8 points when catastrophe losses are excluded.
The overall improvement of $38 million in involuntary underwriting results since
1993 reflects management's actions to reduce exposure to involuntary business in
states with substantial involuntary market burdens. While management will remain
focused on controlling involuntary underwriting losses, actual losses tend to be
volatile and opportunities for additional improvement are expected to be fewer
than those realized in previous years.
Management continues to focus on maintaining and improving product pricing,
although intense competitive pressures in the property/casualty insurance
industry, especially in the pricing of commercial lines products, are expected
to limit the extent of improvement in underwriting results. In 1996, management
will also continue to develop strategies to improve underwriting results by
further penetrating target markets, expanding new products and services, and
enhancing underwriting and customer service structures through improved
technology and other process improvements.
Middle Market and FBIG
In 1995, with the goal of continuing the improvement in underwriting results,
USF&G realigned its product segments. The change recognizes the distinctly
different strategies of growth and profitability in middle market commercial
insurance compared with personal and small business insurance. This realignment
resulted in the formation of the Commercial Lines Middle Market Group ("Middle
Market") and the Family and Business Insurance Group ("FBIG"). The groups are
differentiated based on the basic drivers of the respective businesses: product
and distribution.
Product-driven businesses, such as the Commercial Lines Middle Market Group, are
generally characterized by a higher risk/higher return book of business. Middle
Market focuses on providing superior value-added products and highly specialized
underwriting and risk management capabilities to reach discrete market segments.
FBIG is principally a distribution-driven business, generally characterized by a
lower risk/lower return book of business which can generate a stable and
consistent source of earnings. FBIG's products are commodity-like, in that
pricing, cost competitiveness and efficient processing are critical in gaining
and retaining customers and favorable underwriting results. The similarities in
the customer base, types of service and processing functions between personal
lines and small market commercial lines led to the integration of these lines
into one group in order to capitalize on the operational and market synergies.
During 1995, the Corporation initiated plans to upgrade its information
technology systems, including agency interfaces, underwriting workstations, and
policy and claims processing systems. This higher degree of automation is
expected to increase the efficiency of FBIG's distribution-driven business,
while enhancing Middle Market's service capabilities. In January 1996, in
conjunction with these technological initiatives, the Corporation announced
plans to open a national claims reception center. The center, which is expected
to open in September 1996, will provide toll-free, 24-hour claim reporting
service to customers and agents throughout the United States. This centralized
claims processing is expected to improve claims service and benefit loss
adjustment expenses. While these initiatives are expected to result in cost
savings and competitive advantages over the long-run, in the near future,
overall technology costs will increase as systems development continues.
Based on 1995 premiums written, Middle Market and FBIG are estimated to
represent 35 percent and 39 percent, respectively, of total property/casualty
premiums. As 1995 was the transition year for these new business groups,
comparable financial data reflecting each group's results for 1995 and prior
years is not available; therefore, the following discussion and analysis of
underwriting results follows the traditional product lines segmentation.
Commercial Lines
Commercial lines products include property, auto, inland marine, workers'
compensation, and general and umbrella liability coverage for businesses and
governmental entities, and fidelity and financial institution bonds for banks,
stockbrokers and credit unions.
The following table shows premiums written and statutory underwriting ratios for
commercial lines:
(dollars in millions) 1995 1994 1993
================================================================================
Premiums Written:
Branch office voluntary direct $1,338 $1,231 $1,184
Other, net of ceded reinsurance (66) (11) 82
- --------------------------------------------------------------------------------
Net premiums written $1,272 $1,220 $1,266
- --------------------------------------------------------------------------------
Statutory Underwriting Ratios:
Loss ratio 74.7 77.4 82.6
Expense ratio 35.6 36.3 34.7
Combined ratio 110.3 113.7 117.3
- --------------------------------------------------------------------------------
Commercial lines branch office voluntary direct premiums written increased nine
percent in 1995, compared with a four percent increase in 1994. The increase is
the result of new business growth in targeted specialty middle market products,
including excess property, inland marine, municipalities and financial
institutions. Premium from specialty middle market commercial lines represented
21 percent of commercial lines direct premium in 1995, compared with 16 percent
and 11 percent in 1994 and 1993, respectively, and is expected to grow in future
years.
Underwriting results in the commercial lines category improved $44 million over
1994 and $42 million from 1993 to 1994. The statutory combined ratio for
commercial lines improved 3.4 points in 1995 from 1994 and 3.6 points in 1994
from 1993. This improvement is attributable to the implementation of strategies
to improve the mix of business and control expenses while maintaining strict
underwriting standards and pricing discipline.
Personal Lines
Personal lines products include standard and nonstandard auto, homeowners,
watercraft and personal excess insurance for individuals and families.
The following table shows premiums written and statutory underwriting ratios for
personal lines:
(dollars in millions) 1995 1994 1993
================================================================================
Premiums Written:
Branch office voluntary direct $583 $589 $616
Other, net of ceded reinsurance 40 25 95
- --------------------------------------------------------------------------------
Net premiums written $623 $614 $711
- --------------------------------------------------------------------------------
Statutory Underwriting Ratios:
Loss ratio 76.3 73.8 70.7
Expense ratio 35.6 36.4 33.2
Combined ratio 111.9 110.2 103.9
- --------------------------------------------------------------------------------
Personal lines branch office voluntary direct premium has declined only one
percent in 1995, after declining four percent in 1994, as management balanced
growth in certain targeted markets against strategies to selectively exit other
markets and reduce exposure to certain catastrophe-prone geographic areas. In
1994, the net premium decrease resulted from management's plans to improve the
agency force and exit certain involuntary markets, and from increased ceded
reinsurance.
On May 22, 1995, USF&G consummated its merger with Victoria Financial, an
insurance holding company which specializes in nonstandard personal lines auto
coverage. In the second half of 1995, competition in the nonstandard auto market
intensified, adversely affecting the results for the nonstandard auto line,
which produced an underwriting loss of $8 million in 1995, compared to losses of
$2 million in 1994 and $1 million in 1993. Management believes that, in the
future, this merger will allow USF&G to enhance premium retention and grow the
personal lines business through an expanded product portfolio.
Surety
The surety segment provides contract and non-contract surety bonds to
construction companies, commercial businesses and individuals.
The following table shows premiums written and statutory underwriting ratios for
surety:
(dollars in millions) 1995 1994 1993
================================================================================
Premiums Written:
Branch office voluntary direct $166 $148 $129
Other, net of ceded reinsurance (37) (35) (27)
- --------------------------------------------------------------------------------
Net premiums written $129 $113 $102
- --------------------------------------------------------------------------------
Statutory Underwriting Ratios:
Loss ratio 36.5 38.0 49.2
Expense ratio 51.1 56.1 56.6
Combined ratio 87.6 94.1 105.8
- --------------------------------------------------------------------------------
Surety's premiums written increased 14 percent in 1995 on the strength of
international writings in the contract surety product line, whereas penetration
of existing domestic contract surety markets led to the 11 percent increase in
premiums written in 1994. This premium growth resulted in a $13 million increase
in underwriting gains in 1995, and a $9 million improvement in underwriting
results in 1994. Underwriting results in 1995 also benefited from management's
reconfiguration of surety's home office and field structures, which resulted in
lower underwriting expenses.
Alternative Risk Transfer
On April 13, 1995, USF&G consummated its merger with Discover Re, a provider of
insurance, reinsurance and related services to the alternative risk transfer
("ART") market, primarily in the municipalities, transportation, education and
retail sectors. This merger facilitates USF&G's access to the ART market and,
management believes, provides increased growth potential by augmenting certain
of the existing core commercial lines insurance operations.
The following table shows premiums written and statutory underwriting ratios for
the ART business:
(dollars in millions) 1995 1994 1993
================================================================================
Premiums written $27 $27 $20
- --------------------------------------------------------------------------------
Statutory Underwriting Ratios:
Loss ratio 79.7 76.2 76.2
Expense ratio 12.9 22.6 23.9
Combined ratio 92.6 98.8 100.1
- --------------------------------------------------------------------------------
The significant decrease in the expense ratio resulted from a change in the
premium assumption and ceding structure of business written by Discover Re. As a
result of the change, service fees, which were previously recognizable as
non-underwriting income, are now classified as ceding allowances and recognized
as a reduction of underwriting expenses.
With the merger completed, management's focus in 1996 will be on growing the ART
business geographically and expanding its product portfolio.
Assumed Reinsurance
Reinsurance products are managed by F&G Re, Inc., a wholly-owned subsidiary of
USF&G Company, and marketed through domestic and international reinsurance
brokers. USF&G's assumed reinsurance business has historically produced
underwriting gains.
The following table shows premiums written and statutory underwriting ratios for
the assumed reinsurance business:
(dollars in millions) 1995 1994 1993
================================================================================
Premiums Written:
Finite risk* $215 $180 $249
Traditional risk 297 235 154
- --------------------------------------------------------------------------------
Total premiums written $512 $415 $403
- --------------------------------------------------------------------------------
Statutory Underwriting Ratios:
Loss ratio 70.0 67.9 67.3
Expense ratio 21.7 22.7 24.6
Combined ratio 91.7 90.6 91.9
- --------------------------------------------------------------------------------
*See Glossary of Terms
In recent years, large catastrophe losses, such as Hurricane Andrew in 1992 and
the Northridge earthquake in 1994, increased the demand for reinsurance in both
international and domestic markets. As that demand leveled off in 1995, pricing
and market share became increasingly significant factors in the assumed
reinsurance industry, and are expected to be so in future years. As a result, it
is uncertain whether the degree of growth seen in recent years will continue. In
1996, management's emphasis will be on maintaining the quality of the book of
business, while continuing to expand into international markets.
In January 1996, USF&G established a syndicate at Lloyd's of London and a
related managing agency (collectively, "F&G UK") as an extension of USF&G's
assumed reinsurance strategy. F&G UK will focus on expanding USF&G's portfolio
of international reinsurance.
2.3. Loss reserves
- --------------------------------------------------------------------------------
Selected reserves and claims information for the property/casualty segment is as
follows:
(dollars in millions) 1995 1994 1993
================================================================================
At December 31:
Net reserves $5,113 $5,142 $5,316
Number of outstanding claims 76,549 81,024 91,285
- --------------------------------------------------------------------------------
For the year ended December 31:
Losses paid $1,831 $1,918 $2,053
Number of new claims 312,140 342,292 352,194
- --------------------------------------------------------------------------------
Net reserves have decreased four percent since 1993 as claim payments related to
longer-tail exposures from previous years have more than offset new claims
activity over the two-year period. The number of outstanding claims at December
31, 1995 declined by 16 percent compared with December 31, 1993, and the number
of new claims reported declined 11 percent from 1993 to 1995.
USF&G categorizes long-term exposures where multiple claims relate to a similar
cause of loss (excluding catastrophes) as "common circumstance claims". Common
circumstance claim exposures include negligent construction, environmental, and
asbestos claims.
Reserves for losses that have been reported and certain legal expenses are
established on the "case basis". Bulk reserves are established in addition to
the case reserves to reflect unreported claims and future development on
reported claims. Total case and bulk reserves for these common circumstance
claims, net of ceded reinsurance, comprise approximately ten percent of the
total net property/casualty reserves for unpaid losses and loss expenses at
December 31, 1995 and 1994, and eight percent at December 31, 1993.
The following tables set forth selected information for each of the categories
of common circumstance claims, net of ceded reinsurance.
Negligent
(in millions) Construction Environmental Asbestos
================================================================================
Net reserves at
December 31, 1992 $ 70 $187 $126
Losses incurred 14 99 22
Claims paid (10) (37) (23)
- --------------------------------------------------------------------------------
Net reserves at
December 31, 1993 74 249 125
Losses incurred (6) 106 5
Claims paid (13) (26) (5)
- --------------------------------------------------------------------------------
Net reserves at
December 31, 1994 55 329 125
Losses incurred 2 10 16
Claims paid (17) (27) (5)
- --------------------------------------------------------------------------------
Net reserves at
December 31, 1995 $ 40 $312 $136
- --------------------------------------------------------------------------------
Net Reserves at December 31
(in millions) 1995 1994 1993
================================================================================
Negligent Construction:
Case reserves $ 20 $ 18 $ 14
Bulk reserves 20 37 60
- --------------------------------------------------------------------------------
Total $ 40 $ 55 $ 74
- --------------------------------------------------------------------------------
Environmental:
Case reserves $ 57 $ 65 $ 61
Bulk reserves 255 264 188
- --------------------------------------------------------------------------------
Total $312 $329 $249
- --------------------------------------------------------------------------------
Asbestos:
Case reserves $ 36 $ 25 $ 45
Bulk reserves 100 100 80
- --------------------------------------------------------------------------------
Total $136 $125 $125
- --------------------------------------------------------------------------------
The increase in environmental incurred losses in 1994 was primarily due to a
reallocation of bulk reserves from other lines of business based on enhancements
in the actuarial database with respect to such claims. In 1995, modest additions
to the bulk reserves were recorded to reflect possible adverse development in
the estimated ultimate value of these claims. The overall decrease in reserves
for negligent construction and environmental exposures during 1995 reflects
management's concentrated efforts to settle and close claims, while carefully
controlling the related expenses.
Management believes that USF&G's reserve position is adequate relative to its
exposure to environmental and asbestos matters. USF&G's customer base generally
does not include large manufacturing companies, which tend to incur most of the
known environmental and asbestos exposures. Many of USF&G's environmental claims
relate to small industrial or transportation accidents which individually are
unlikely to involve material exposures. In addition, USF&G has traditionally
been a primary coverage carrier, having written relatively little high-level
excess coverage; therefore, liability exposures are generally restricted to
primary coverage limits.
In 1995, approximately 22 percent of paid environmental claims related to
matters under which a USF&G insured was a potentially responsible party ("PRP")
under the Comprehensive Environmental Response, Compensation and Liability Act,
commonly referred to as "Superfund", but many of these PRPs were only
peripherally involved. In 1994 and 1993, respectively, 28 percent and 35 percent
of the environmental claims paid related to Superfund. (Refer to Section 8.5 of
this Analysis.)
The level of loss reserves for both current and prior years' claims is
continually monitored and adjusted for changing economic, social, judicial and
legislative conditions, as well as for changes in historical trends as
information regarding such conditions and actual claims develops. Management
believes that loss reserves are adequate, but establishing appropriate reserves,
particularly with respect to environmental, asbestos and other long-term
exposure claims, is highly judgmental and an inherently uncertain process. It is
possible that, as conditions change and claims experience develops, additional
reserves may be required in the future. There can be no assurance that such
adjustments will not have a material adverse effect on USF&G's results of
operations or financial condition.
2.4. Catastrophe losses
- --------------------------------------------------------------------------------
Gross catastrophe losses totaled $71 million in 1995, compared with $73 million
in 1994 and $81 million in 1993. These losses, net of losses ceded to
reinsurers, were $63 million in 1995, $67 million in 1994 and $68 million in
1993. Net catastrophe losses represented three percent of premiums earned in
each of those years. In 1995, the primary businesses incurred catastrophe losses
of $42 million, mainly from Hurricanes Erin and Opal, as well as various
hailstorms, tornadoes and floods, and the April 1995 bombing of the federal
building in Oklahoma City. The $21 million of net catastrophe losses incurred by
the assumed reinsurance business in 1995 resulted from Hurricanes Luis and
Marilyn. Net catastrophe losses in 1994 included $23 million from the Northridge
earthquake in February 1994, as well as approximately $26 million from winter
storms in the first quarter of that year, while 1993's net catastrophe losses
included $27 million from the East Coast blizzard in March 1993.
2.5. Ceded reinsurance
- --------------------------------------------------------------------------------
USF&G reinsures portions of its policy risks with other insurance companies or
underwriters. Reinsurance allows USF&G to obtain indemnification against losses
associated with insurance contracts it has written by entering into a
reinsurance contract with another insurance enterprise (the reinsurer). USF&G
pays (cedes) an amount to the reinsurer which in turn agrees to reimburse USF&G
for a specified portion of any claims paid under the reinsured contracts.
Reinsurance gives USF&G the ability to write certain individually large risks or
groups of risks, and helps to control its exposure to losses by ceding a portion
of such large risks. USF&G's ceding reinsurance agreements are generally
structured on a treaty basis whereby all risks meeting certain criteria are
automatically reinsured. Property catastrophe reinsurance costs were $29 million
in 1995, compared with $34 million in 1994 and $30 million in 1993. Costs for
1995 and 1994 include assessments from the Florida Hurricane Catastrophe Fund of
$1 million and $5 million, respectively. USF&G's property catastrophe loss
retention level at December 31, 1995 is $75 million, which in the event of a
second loss, is lowered to $50 million. These same levels were in effect at
December 31, 1994. The loss retention level for 1993 was $50 million and did not
include any second event protection.
2.6. Capacity
- --------------------------------------------------------------------------------
A traditional measure of growth capacity for property/casualty insurers is the
ratio of premiums written to statutory policyholders' surplus. At the end of
1995, USF&G's premium-to-surplus ratio was 1.9:1, compared with 1.5:1 at the end
of 1994 and 1.6:1 at the end of 1993. The increase in 1995 is due to the
reduction in the policyholders' surplus as a result of an extraordinary dividend
by which USF&G Company transferred all of the capital stock of F&G Life to USF&G
Corporation (refer to Section 7.3 of this Analysis). Insurance regulators
generally accept a ceiling for this ratio of 3.0:1; therefore, at its current
ratio, USF&G has the capacity to grow by writing new business. USF&G's growth
capacity is also measured in terms of regulatory risk-based capital and certain
ratios established by the National Association of Insurance Commissioners
("NAIC"). (Refer to Sections 6.4 and 8.6 of this Analysis.)
3. Life Insurance Operations
Life insurance operations (F&G Life) represented 14 percent of USF&G's total
revenues in 1995, 1994 and 1993. F&G Life also represented 31 percent of the
assets at December 31, 1995, compared with 33 percent at December 31, 1994 and
1993, respectively.
Financial highlights for F&G Life are as follows:
(in millions) 1995 1994 1993
================================================================================
Sales $348 $286 $205
Premiums 174 152 129
Net investment income 306 317 321
Income (loss) from operations before
realized gains, facilities exit
(costs)/sublease income, income taxes
and cumulative effect of adopting
new accounting standards 27 14 (6)
- --------------------------------------------------------------------------------
Income for the year ended December 31, 1995 improved when compared with 1994 and
1993 as a result of continued positive sales trends, improved spread management,
and lower controllable expenses. Premium increases are resulting from expanded
sales and marketing strategies. The declining trend in net investment income is
primarily due to surrenders of single premium deferred annuities ("SPDAs") which
are reducing the level of invested assets. This trend is likely to continue in
1996.
In November 1995, F&G Life committed to a plan for the outsourcing of its
information services and policy administration. F&G Life entered into an
eight-year contract which results in a financial commitment for F&G Life,
primarily based on fixed per policy fees, of approximately $150 million
(projected on current policies in force and future sales estimates). The
expected benefits of the arrangement include higher customer service levels,
reduced time frames to bring products to market, and access to new technologies,
in addition to substantial reductions in per policy and new issue costs. F&G
Life recognized $4 million of transition related costs, including employee
separation costs, in the fourth quarter of 1995.
3.1. Products
- -------------------------------------------------------------------------------
F&G Life's principal products are structured settlement annuities, deferred
annuities (including tax sheltered annuities), immediate annuities and life
insurance products. Structured settlements are immediate annuities principally
sold to USF&G's property/ casualty operations in settlement of insurance claims.
Deferred annuity products accumulate cash values to which interest is credited.
In 1995, deferred annuities were credited with interest rates that ranged
between 4.0 and 8.6 percent, depending upon the year of issue and interest
guarantee duration. The majority of deferred annuities in force were issued with
initial interest guarantees from one to six years, with most of these written
between 1988 and 1990 with a six-year interest guarantee. The deferred annuities
also include provisions for charges if the annuitant chooses to surrender the
policy (refer to Section 3.3 of this Analysis). After the interest guarantee
expires, the interest crediting rates can be adjusted annually on a policy's
anniversary date.
Deferred annuity products are sold through independent agents, insurance brokers
and national wholesale distributors. F&G Life's tax sheltered annuity products
("TSAs") are deferred annuities that provide retirement income. TSAs are sold
through a national wholesale distribution network primarily to teachers.
Other annuities sold by F&G Life primarily consist of single premium immediate
annuities ("SPIAs"). SPIAs provide a fixed stream of payments over a fixed
period of time or over an individual's lifetime.
F&G Life also markets universal life ("UL") and term life insurance products,
primarily through independent agents. UL insurance provides a death benefit for
the life of the insured and accumulates cash values to which interest is
credited. Term life insurance provides a fixed death benefit if the insured dies
during the contractual period.
3.2. Sales
- --------------------------------------------------------------------------------
The following table shows life insurance and annuity sales (premiums and
deposits) by distribution system and product type:
(in millions) 1995 1994 1993
================================================================================
Distribution System:
Direct-structured settlements $108 $ 88 $ 66
Brokerage 125 94 63
National wholesaler 91 71 39
Other 24 33 37
- --------------------------------------------------------------------------------
Total $348 $286 $205
- --------------------------------------------------------------------------------
Product Type:
Structured settlement annuities $108 $ 88 $ 66
Single premium deferred annuities 112 82 44
Tax sheltered annuities 84 63 35
Other annuities 30 41 54
Life insurance 14 12 6
- --------------------------------------------------------------------------------
Total $348 $286 $205
- --------------------------------------------------------------------------------
Sales in 1995, led by SPDAs, TSAs and structured settlement annuities, have
increased 22 percent over 1994 sales and 70 percent over 1993 sales. In its
effort to continue the positive trends in sales and profitability, F&G Life
continues to concentrate on the expansion of its existing distribution channels
while also developing other marketing networks. F&G Life also continues to
develop and introduce new products in its structured settlement and SPDA lines
as well as modifying current product offerings to meet customer needs. Despite
F&G Life's attention to expanding its distribution channels and to product
development, demand for its products is affected by fluctuating interest rates
and the relative attractiveness of alternative investment, annuity or insurance
products, as well as its credit ratings. As a result, there is no assurance that
the improved sales trend will continue. Total life insurance in force was $11.4
billion at December 31, 1995, compared with $11.8 billion and $12.1 billion at
December 31, 1994 and 1993, respectively.
3.3. Policy surrenders
- --------------------------------------------------------------------------------
Deferred annuities and universal life products are subject to surrender. Nearly
all of F&G Life's surrenderable annuity policies allow a refund of the cash
value balance less a surrender charge. The surrender charge varies by product.
Single premium deferred annuities, which represent 61 percent of surrenderable
business, have surrender charges that decline from nine percent in the first
policy year to zero percent by the tenth policy year. Such built-in surrender
charges provide protection against premature policy surrender. Policy surrenders
totaled $587 million in 1995, compared with $576 million and $211 million in
1994 and 1993, respectively. Surrender activity has increased as a result of
expiring surrender charges, primarily on the investment broker block of SPDAs,
as policyholders seek other investment alternatives.
During the second half of 1995 and all of 1994, management had in place a policy
conservation program that provided policyholders with a competitive renewal
option within F&G Life once their surrender charge period had expired. Through
December 31, 1995, policyholders representing approximately 19 percent of the
expiring block elected this option. An additional 25 percent of the expiring
block was retained under the terms of the original contract, free of surrender
charges and at short-term interest rates which are adjusted annually.
The total account value of F&G Life's deferred annuities is $2.1 billion, 21
percent of which is surrenderable at current account value (i.e., without
surrender charges). The surrender charge period on $705 million of F&G Life's
single premium deferred annuity products expires by the end of 1996. The
experience thus far for $1.2 billion of SPDAs where the surrender charge period
expired in the fourth quarter of 1993 through the fourth quarter of 1995
indicates that, on average, 56 percent of the expiring block may surrender;
however, the surrender rate could differ in the future, depending on interest
rates and other market influences. Management believes that F&G Life, with
liquid assets to surrender value of 1.46:1 at December 31, 1995, continues to
maintain a high degree of liquidity and has the ability to meet surrender
obligations for the foreseeable future.
3.4. Deferred policy acquisition costs ("DPAC")
- --------------------------------------------------------------------------------
Costs to acquire and issue annuities and life insurance policies are generally
deferred and amortized in future periods in relationship to expected gross
profits. The recoverability of these amounts is regularly reviewed by management
through monitoring of surrender experience, projected spreads between product
liabilities and invested assets, and other criteria.
The following table shows the components of the changes in DPAC:
(in millions) 1995 1994 1993
================================================================================
Balance, January 1 $224 $164 $189
Deferrals 33 26 12
Amortization (30) (21) (10)
Change in DPAC adjustment to
unrealized gains/losses on fixed
maturities available for sale (81) 63 (30)
Other adjustments -- (8) 3
- --------------------------------------------------------------------------------
Balance, December 31 $146 $224 $164
- --------------------------------------------------------------------------------
4. Parent and Noninsurance Operations
Parent company interest and other unallocated expenses and results of
noninsurance operations were as follows:
(in millions) 1995 1994 1993
================================================================================
Parent Company Expenses:
Interest expense $(42) $(34) $(37)
Unallocated expense, net (45) (48) (35)
Noninsurance operations 2 2 (11)
- --------------------------------------------------------------------------------
Loss from operations before realized
gains, facilities exit
(costs)/sublease income, income
taxes and cumulative effect of
adopting new accounting standards $(85) $(80) $(83)
- --------------------------------------------------------------------------------
The results for the parent company and noninsurance operations for 1995 show an
increase in loss from operations of $5 million when compared to 1994. This
increase is primarily due to an $8 million increase in interest expense as a
result of the higher short-term interest rate environment and the refinancing of
corporate debt in 1994 and 1995 from short-term floating to medium-term fixed
rates. Unallocated parent company expenses consist primarily of
facilities-related expenses and other administrative expenses not allocated to
USF&G Corporation's subsidiaries. Unallocated parent company expenses are
expected to decrease in future years once the Corporation has consolidated its
Baltimore headquarters facilities.
5. Investments
USF&G's investment mix continues to reflect a concentration in high quality
fixed-income securities. Long-term fixed maturities comprised 85 percent of
total investments at December 31, 1995, compared with 83 percent and 84 percent
at December 31, 1994 and 1993, respectively. Fixed maturities and total
investments have increased due to unrealized gains in the available for sale
portfolio. On December 4, 1995, USF&G reclassified all of its fixed maturities
previously classified as "held to maturity" to "available for sale", as
permitted by supplemental guidance issued by the Financial Accounting Standards
Board in November 1995. The reclassification was made to allow maximum
flexibility in the management of the investment portfolio without being
restricted by accounting interpretations. The following table shows the
distribution of USF&G's investment portfolio.
At December 31
(dollars in millions) 1995 1994 1993
================================================================================
Total investments $11,107 $10,561 $11,474
- --------------------------------------------------------------------------------
Fixed Maturities:
Held to maturity --% 44% 41%
Available for sale 85 39 43
- --------------------------------------------------------------------------------
Total fixed maturities 85 83 84
Common and preferred stocks 1 1 1
Short-term investments 3 4 3
Mortgage loans and real estate 8 9 9
Other invested assets 3 3 3
- --------------------------------------------------------------------------------
Total 100% 100% 100%
- --------------------------------------------------------------------------------
5.1. Net investment income
- --------------------------------------------------------------------------------
The following table shows the sources of net investment income.
(dollars in millions) 1995 1994 1993
================================================================================
Fixed maturities $664 $674 $725
Common and preferred stocks 4 7 9
Short-term investments 23 14 9
Mortgage loans and real estate 46 58 41
Other investment income, net of
interest expense on funds held 13 9 (13)
- --------------------------------------------------------------------------------
Total investment income 750 762 771
Investment expenses (17) (13) (18)
- --------------------------------------------------------------------------------
Net investment income $733 $749 $753
- --------------------------------------------------------------------------------
Average Annualized Yields:
Total investments 6.9% 6.9% 6.7%
Fixed maturities 7.4% 7.3% 7.7%
- --------------------------------------------------------------------------------
Investment income for the year ended December 31, 1995 decreased $16 million, or
two percent, and $20 million, or three percent, when compared to 1994 and 1993,
respectively. The decrease in investment income from fixed maturities is
primarily due to a lower average investment base in 1995 when compared with 1994
and 1993. Interest on short-term investments has increased due to higher
short-term yields and a higher investment base. Investment income from equity
securities has decreased due to declining equity holdings. Included in
investment income on mortgage loans and real estate for 1994 is $8 million
related to timberland properties which were sold in 1994. Other investment
income in 1995, 1994 and 1993 includes $26 million, $17 million, and $5 million,
respectively, of income related to USF&G's share of earnings from an equity
interest in RenaissanceRe. Future income from the investment in RenaissanceRe is
subject to volatility and exposure to catastrophe losses and other risks
inherent in the property/casualty reinsurance industry. Also included in other
investment income is interest credited to funds held on assumed reinsurance
contracts of $31 million, $25 million and $38 million in 1995, 1994 and 1993,
respectively.
5.2. Net realized gains on investments
- --------------------------------------------------------------------------------
The components of net realized gains include the following:
(in millions) 1995 1994 1993
================================================================================
Net Gains From Sales:
Fixed maturities $ 6 $ 3 $ 79
Common and preferred stocks 4 -- 5
Mortgage loans and real estate 2 7 6
Other 18 5 --
- --------------------------------------------------------------------------------
Total net gains from sales 30 15 90
Impairments (23) (10) (84)
- --------------------------------------------------------------------------------
Net realized gains $ 7 $ 5 $ 6
- --------------------------------------------------------------------------------
Other realized gains in 1995 and 1994 primarily relate to USF&G's equity in
certain limited partnership investments. Realized gains on real estate for 1994
resulted from F&G Life's sale of timberland investments. The $79 million in
realized gains on fixed maturities in 1993 is primarily due to the repositioning
of a portion of the fixed maturity investments to more effectively match the
duration of the life insurance liabilities.
Impairments relate to specific investments and are realized when the decline in
fair value is deemed other than temporary, or when the fair value is
significantly less than book value and it is probable that the investment will
be sold before any recovery in value can occur.
5.3. Unrealized gains (losses)
- --------------------------------------------------------------------------------
The components of the changes in unrealized gains (losses) were as follows:
(in millions) 1995 1994 1993
================================================================================
Fixed maturities available for sale $ 524 $(407) $223
Deferred policy acquisition costs
and policy benefits adjustment (106) 63 (30)
Common and preferred stocks 4 3 23
Foreign currency and other (4) 3 4
- --------------------------------------------------------------------------------
Total $ 418 $(338) $220
- --------------------------------------------------------------------------------
Fixed maturity investments classified as "available for sale" are recorded at
market value, with the corresponding unrealized gains (losses) reported as a
component of shareholders' equity. As noted previously, on December 4, 1995,
USF&G reclassified its entire "held to maturity" fixed maturity portfolio to
"available for sale". This reclassification, coupled with the decreasing
interest rates throughout 1995, resulted in an unrealized gain on fixed
maturities at December 31, 1995 of $340 million compared with an unrealized loss
at December 31, 1994 of $184 million, and an unrealized gain at December 31,
1993 of $223 million. The unrealized loss at December 31, 1994 reflects the
temporary rise in interest rates throughout 1994. Unrealized gains and losses on
fixed maturities are offset by related changes in the DPAC and policy benefits
adjustment, which reflects assumptions about the effect of potential sales of
fixed maturities available for sale on future amortization of the life insurance
segment's DPAC. The DPAC and policy benefits adjustment was a loss of $73
million at December 31, 1995, compared with a gain of $33 million at December
31, 1994, and a loss of $30 million at December 31, 1993.
5.4. Fixed maturity investments
- --------------------------------------------------------------------------------
The table below details the composition of the fixed maturity portfolio.
At December 31
(dollars in millions) 1995 % 1994 % 1993 %
================================================================================
Corporate investment-
grade bonds $5,361 59 $5,037 56 $4,887 52
Mortgage-backed securities 1,739 19 1,921 22 2,418 26
Asset-backed securities 999 11 942 11 1,149 12
U.S. Government bonds 380 4 287 3 313 3
High-yield bonds* 599 7 616 7 562 6
Tax-exempt bonds 40 -- 121 1 96 1
- --------------------------------------------------------------------------------
Total fixed maturities at
amortized cost 9,118 100 8,924 100 9,425 100
Total market value of
fixed maturities 9,458 8,365 9,783
- --------------------------------------------------------------------------------
Net unrealized gains (losses) $ 340 $ (559) $ 358
- --------------------------------------------------------------------------------
Percent market-to-
amortized cost 104 94 104
- --------------------------------------------------------------------------------
* See Glossary of Terms
Fluctuating interest rates, which result in inversely changing bond prices, are
responsible for the volatility of the overall market-to-amortized cost ratio
between years. Interest rates on two- to 30-year maturities rose an average of
259 basis points in 1994 and fell an average of 235 basis points in 1995.
Investments in mortgage-backed and asset-backed securities declined 4 percent
and 23 percent when compared with holdings at December 31, 1994 and 1993,
respectively, due primarily to prepayments of the underlying mortgages for
mortgage-backed securities, and sales and maturities of asset-backed securities.
While subject to prepayment risk, credit risk related to USF&G's mortgage-backed
securities portfolio at December 31, 1995 is believed to be minimal since 99
percent of such securities have AAA ratings or are collateralized by obligations
of the U.S. Government or its agencies. The net proceeds from sales, maturities
and prepayments in 1995 and 1994 were generally reinvested into corporate
investment-grade bonds. Investment-grade bonds, including debt obligations of
the U.S. Government and its agencies, comprised 93 percent of the portfolio at
December 31, 1995 and 1994, compared with 94 percent at December 31, 1993. The
following table shows the credit quality of the long-term fixed maturity
portfolio at December 31, 1995.
Percent
Market-to-
Amortized Market Amortized
(dollars in millions) Cost Percent Value Cost
================================================================================
U.S. Government and
U.S. Government
Agencies $2,047 22% $2,115 103%
AAA 1,428 16 1,472 104
AA 1,479 16 1,542 104
A 2,487 27 2,597 104
BBB 1,078 12 1,136 105
Below BBB 599 7 596 99
- --------------------------------------------------------------------------------
Total $9,118 100% $9,458 104%
- --------------------------------------------------------------------------------
USF&G's holdings in high-yield bonds comprised seven percent of the total fixed
maturity portfolio at December 31, 1995 and 1994, compared with six percent at
December 31, 1993. Of the total high-yield bond portfolio, 68 percent is held by
the life insurance segment, representing ten percent of its total investments.
The table below illustrates the credit quality of USF&G's high-yield bond
portfolio at December 31, 1995.
Percent
Market-to-
Amortized Market Amortized
(dollars in millions) Cost Percent Value Cost
================================================================================
BB $373 62% $371 99%
B 220 37 221 101
CCC and lower 6 1 4 74
- --------------------------------------------------------------------------------
Total $599 100% $596 99%
- --------------------------------------------------------------------------------
The information on credit quality in the preceding two tables is based upon the
higher of the rating assigned to each issue by either Standard & Poor's or
Moody's. Where neither Standard & Poor's nor Moody's has assigned a rating to a
particular fixed maturity issue, classification is based on 1) ratings available
from other recognized rating services; 2) ratings assigned by the NAIC; or 3) an
internal assessment of the characteristics of the individual security, if no
other rating is available.
At December 31, 1995, USF&G's five largest investments in high-yield bonds
totaled $91 million in amortized cost and had a market value of $82 million.
None of these investments individually exceeded $30 million. USF&G's largest
single high-yield bond exposure represented five percent of the high-yield
portfolio and less than one percent of the total fixed maturity portfolio.
Going forward, USF&G's long-term investment strategy will continue to reflect a
concentration of high quality corporate bonds and other fixed maturities, with a
continued emphasis on managing the durations and yields of investments with
respect to the underlying liabilities. Depending on USF&G's future taxable
position, the fixed maturity investment portfolio may be shifted over time to a
higher proportion of tax-exempt securities if relative after-tax yields warrant.
5.5. Real estate
- --------------------------------------------------------------------------------
The table below shows the components of USF&G's real estate portfolio.
At December 31
(in millions) 1995 1994 1993
================================================================================
Mortgage loans $254 $ 349 $302
Equity real estate, net 653 662 685
- --------------------------------------------------------------------------------
Total $907 $ 1,011 $987
- --------------------------------------------------------------------------------
The decrease in real estate from the prior year is due primarily to sales of two
properties in the first quarter of 1995. The decrease in mortgage loans from
1994 is due primarily to the securitization and sale of certain fixed-rate,
multi-family mortgages. This decrease is partially offset by new mortgage loans
made in 1995.
USF&G's real estate investment strategy emphasizes diversification by geographic
region and property type. The diversification of USF&G's mortgage loan and real
estate portfolio is as follows:
At December 31
1995 1994 1993
================================================================================
Geographic Region:
Pacific/Mountain 33% 34% 33%
Midwest 23 20 18
Mid-Atlantic 21 17 19
Southeast 12 16 22
Southwest 6 8 5
Northeast 5 5 3
- --------------------------------------------------------------------------------
Type of Property:
Office 44% 37% 37%
Land 28 26 27
Apartments 15 24 19
Retail/other 7 7 6
Industrial 6 6 9
Timberland/agriculture -- -- 2
- --------------------------------------------------------------------------------
Real estate investments are evaluated on a quarterly basis as part of
management's asset quality review process. This process ensures that the
financial and operating aspects of a property's performance are closely
monitored and analyzed.
At December 31, 1995, USF&G's five largest real estate investments had a book
value of $324 million. The largest single investment was a land development
project located in San Diego, California, with a book value of $95 million, or
nine percent of the total real estate portfolio.
Mortgage loans and real estate investments not performing in accordance with
contractual terms, or performing significantly below expectation, are
categorized as "nonperforming". Nonperforming real estate investments at
December 31, 1995 totaled $142 million, compared with $208 million and $249
million at December 31, 1994 and 1993, respectively. This decline in
nonperforming real estate was a result of sales, write-downs on specific
properties, and reclassifications for improvements in certain properties'
performance.
Valuation allowances are established for impairments of mortgage loans and
equity real estate investments based on quarterly evaluations of the properties'
operating performance and their exposure to declines in value. The allowance
totaled $95 million, or nine percent of the real estate portfolio, at December
31, 1995, compared with $98 million, or nine percent, at December 31, 1994 and
$108 million, or ten percent, at December 31, 1993. The adoption of Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", in the first
quarter of 1996 is not expected to have a material effect on USF&G's financial
statements since existing valuation allowances will be applied against the
related investments, thus reducing the cost basis of those investments. (Refer
to Note 1.2, "New Accounting Standard", to the consolidated financial
statements.)
Although USF&G anticipates that any sales of real estate will be in an orderly
fashion as and when market conditions permit, if USF&G was required to dispose
of a significant portion of its real estate in the near term, it is likely that
it would recover amounts substantially less than the related carrying values.
Prospectively, efforts will continue to reduce risk and increase yields in the
real estate portfolio by selling equity real estate when it is advantageous to
do so and reinvesting the proceeds in medium-term mortgage loans.
6. Financial Condition
6.1. Assets
- --------------------------------------------------------------------------------
USF&G's assets totaled $14.7 billion at December 31, 1995, compared with $14.0
billion and $14.5 billion at the end of 1994 and 1993, respectively. The
fluctuations from year to year are due primarily to changes in the market value
of the fixed maturity investments classified as available for sale. At December
31, 1995, net unrealized gains on those investments, net of the DPAC and policy
benefits adjustment, increased assets by $418 million, whereas such net
unrealized losses reduced assets by $344 million at December 31, 1994.
6.2. Debt
- --------------------------------------------------------------------------------
USF&G's corporate debt totaled $591 million at December 31, 1995, compared with
$586 million at December 31, 1994 and $574 million at December 31, 1993. The
increase in corporate debt is mainly attributable to foreign currency
translation adjustments of $14 million and $13 million in 1995 and 1994,
respectively, from non-U.S. dollar denominated debt. As a result of entering
into forward contracts, there was no effect on net income from the translation
of non-U.S. dollar denominated debt.
In the second quarter of 1995, USF&G issued $150 million of 7% Senior Notes due
1998, and $80 million of 7 1/8% Senior Notes due 2005. Proceeds from these
issuances were used to repay $215 million under the committed credit facility
(refer to Section 7.2 of this Analysis), and to purchase approximately $15
million of Swiss Franc bonds. An additional $10 million of Swiss Franc bonds and
$5 million of 7% Senior Notes were purchased during the fourth quarter of 1995
through the use of excess corporate cash. In January 1996, $75 million was drawn
against the committed credit facility to repay the balance due upon maturity of
the Swiss Franc bonds.
USF&G's real estate and other debt totaled $16 million at December 31, 1995,
compared with $42 million and $53 million at December 31, 1994 and 1993,
respectively. Real estate and other debt decreased in 1995 as a result of
repaying $12 million under a line of credit maintained by a subsidiary of USF&G
Corporation and the prepayment of $3 million of 9.96% Secured Notes. In
addition, $9 million of debt related to a real estate partnership in which USF&G
has a controlling interest was defeased during 1995.
6.3. Shareholders' equity
- --------------------------------------------------------------------------------
USF&G's shareholders' equity totaled $2.0 billion at December 31, 1995, $1.4
billion at December 31, 1994 and $1.6 billion at December 31, 1993. The increase
in 1995 is primarily the result of the $524 million increase in unrealized gains
on fixed maturity investments available for sale, reduced by a $106 million
change in the related life insurance segment's DPAC and policy benefits
adjustment. Net income of $209 million, less common and preferred dividends of
$50 million, also contributed to the increase in equity. In the future,
shareholders' equity is expected to fluctuate as a result of the impact of
changing interest rates on the value of the fixed maturities investment
portfolio.
6.4. Regulatory risk-based capital
- --------------------------------------------------------------------------------
The NAIC has adopted model regulations which establish minimum capitalization
requirements using a "risk-based capital" formula. These regulations, which were
first effective for property/casualty companies for the year ended December 31,
1994 and for life insurance companies for the year ended December 31, 1993,
establish four levels at which corrective action must be taken. These levels
are: (1) the "company action level", at which the company must submit a
comprehensive financial plan with specific proposals to address certain
financial problems; (2) the "regulatory action level", at which the appropriate
regulatory authorities will perform a financial analysis and order certain
corrective actions; (3) the "authorized control level", at which the regulatory
authorities may place the company under regulatory control; and (4) the
"mandatory control level", at which the regulatory authorities must place the
company under regulatory control.
Application of these levels depends upon the insurer's "adjusted risk-based
capital" as a percentage of the "minimum risk-based capital". Risk-based capital
is calculated after adjusting capital for certain asset, credit, market,
underwriting, off-balance sheet and other risks inherent in the assets,
liabilities and business of the insurer. Various levels of corrective actions
are required if the adjusted risk-based capital is less than 200% of the
authorized control level risk-based capital.
USF&G Company had adjusted risk-based capital of $1.2 billion and $1.6 billion
as of December 31, 1995 and 1994, respectively, which represented 334% and 382%,
respectively, of the authorized control level risk-based capital. The 48-point
decline is primarily the result of the extraordinary dividend paid by USF&G
Company to USF&G Corporation in 1995 which consisted of all of the capital stock
of F&G Life (refer to Section 7.3 of this Analysis). F&G Life had adjusted
risk-based capital of $383 million, $430 million and $441 million as of December
31, 1995, 1994 and 1993, respectively, which represented 459%, 425% and 396% of
the authorized control level risk-based capital as of those dates. Accordingly,
as of the dates indicated, both USF&G Company and F&G Life had adjusted
risk-based capital above the levels which would require corrective action.
6.5. Capital transactions
- --------------------------------------------------------------------------------
In January 1994, USF&G filed a shelf registration statement with the Securities
and Exchange Commission. As of the time this registration statement went into
effect, USF&G had available $647 million of unissued debt, preferred stock,
common stock and warrants to purchase debt and stock. In 1994, this registration
statement was reduced by $275 million after the issuance of the Zero Coupon
Convertible Notes and the 8 3/8% Senior Notes. The registration was further
reduced in 1995 by $150 million and $80 million after the issuances of the 7%
Senior Notes and the 7 1/8% Senior Notes, respectively, leaving $142 million of
unissued debt, preferred stock, common stock and warrants available at December
31, 1995.
Effective February 20, 1996, USF&G Corporation, along with two business trusts
in which USF&G has a controlling interest (the "Trusts"), have a shelf
registration statement which permits the issuance by the Trusts of up to $210
million of cumulative quarterly income preferred securities (the "Preferred
Securities"). Payment of periodic dividends and the ultimate payment or
redemption of the Preferred Securities will be guaranteed by USF&G Corporation
on a subordinated basis. If the Preferred Securities are issued by the Trusts,
the proceeds will in turn be invested in subordinated debentures of USF&G
Corporation (the "Debentures"). The Debentures will be subordinate and junior in
right of payment to USF&G's other corporate and real estate debt, including
intercompany indebtedness. Both the Preferred Securities and the Debentures will
contain provisions under which any interest payments can be deferred for up to
five years. If issued, the proceeds will be available for general corporate
purposes, including redemption, in whole or in part, of outstanding shares of
USF&G's $4.10 Series A Convertible Exchangeable Preferred Stock.
During 1994 and 1995, USF&G called for redemption all of its outstanding $5.00
Series C Cumulative Convertible Preferred Stock and 75 percent of its
outstanding $10.25 Series B Cumulative Convertible Preferred Stock ("Series B
Preferred Stock"). These preferred shares were converted into 21.6 million
shares of common stock. Subject to certain conditions, the remaining 277,550
shares of Series B Preferred Stock issued and outstanding at December 31, 1995
are each convertible at the option of the holder to 8.316 shares of USF&G's
common stock. Commencing in mid-1996 and depending on the then market price of
USF&G's common stock, these shares are redeemable for cash at USF&G's option at
$100 per share plus accrued and unpaid dividends.
7. Liquidity
Liquidity is a measure of an entity's ability to secure enough cash to meet its
contractual obligations and operating needs. USF&G requires cash primarily to
pay policyholders' claims and benefits, debt and dividend obligations, and
operating expenses. USF&G's sources of cash include cash flow from operations,
credit facilities, marketable securities and sales of other assets. Management
believes that internal and external sources of cash will continue to exceed
USF&G's short-term and long-term needs.
7.1. Cash flow
- --------------------------------------------------------------------------------
USF&G had cash flow from operating activities of $399 million for the year ended
December 31, 1995 and $140 million and $104 million for the years ended December
31, 1994 and 1993, respectively. The growth of cash flows from operating
activities for 1995 as compared with 1994 is due primarily to a $159 million
decrease in direct losses and policy benefits paid. Also contributing to the
increased cash flows from operating activities in 1995 were a $49 million
increase in direct premiums collected and a $47 million increase in net
reinsurance activity, which resulted from the growth in branch office voluntary
and assumed reinsurance premiums written during 1995. In addition, deposits and
withdrawals of universal life and investment contracts, such as annuities, which
for GAAP reporting purposes are considered financing activities, had net cash
outflows of $349 million in 1995 and $418 million in 1994 as compared to $196
million in 1993. These net cash outflows relate primarily to SPDA surrender
activity (refer to Section 3.3 of this Analysis).
7.2. Credit facilities
- --------------------------------------------------------------------------------
At December 31, 1995, USF&G maintained a $250 million committed credit facility
with a group of foreign and domestic banks. This facility, which expires in
1997, was available for up to $400 million at December 31, 1994, and represents
the renegotiation of a prior credit facility for up to $700 million at December
31, 1993. Management elected to reduce the size of the facility due to the
reduction in borrowings against it and the Corporation's reestablished access to
capital markets. There were no borrowings against the facility at December 31,
1995. Borrowings outstanding under the credit facility totaled $215 million at
December 31, 1994 and $395 million at December 31, 1993. In January 1996, $75
million was drawn against the facility to repay the balance due on the Swiss
Franc bonds. The credit agreement contains restrictive covenants pertaining to
indebtedness, tangible net worth, liens and other matters. USF&G was in
compliance with these covenants at December 31, 1995, 1994 and 1993.
In addition, at December 31, 1995, USF&G maintained a $100 million foreign
currency credit facility and a $50 million letter of credit facility. There were
no borrowings on the foreign currency credit facility at December 31, 1995; the
balance outstanding on the letter of credit facility at that date was $12
million.
7.3. Liquidity restrictions
- --------------------------------------------------------------------------------
There are certain restrictions on payments of dividends by insurance
subsidiaries that may limit USF&G Corporation's ability to receive funds from
its subsidiaries. Under the Maryland Insurance Code, a Maryland insurance
subsidiary, such as USF&G Company and F&G Life, must provide the Maryland
Insurance Commissioner (the "Commissioner") with not less than thirty days'
prior written notice before payment of an "extraordinary dividend" to its
holding company. "Extraordinary dividends" are dividends which, together with
any dividends paid during the immediately preceding twelve-month period, would
be in excess of ten percent of the subsidiary's statutory policyholders' surplus
as of the prior calendar year end. Extraordinary dividends may not be paid until
either such thirty-day period has expired and the Commissioner has not
disapproved the payment or the Commissioner has approved the payment within such
period. In addition, ten days' prior notice of any other dividend must be given
to the Commissioner prior to payment, and the Commissioner has the right to
prevent payment of such dividend if it is determined that such payment could
impair the insurer's surplus or financial condition.
Effective June 1 and December 29, 1995, respectively, USF&G Company and F&G
Life, with the Commissioner's consent, paid extraordinary dividends to USF&G
Corporation. Because any dividends paid during the immediately preceding
twelve-month period are considered when determining whether future dividends
constitute extraordinary dividends, any dividends which USF&G Company or F&G
Life would propose to pay in the twelve-month periods beginning June 1 and
December 29, 1995, respectively, would be deemed extraordinary dividends and
subject to the thirty-day notice period described above. The application of the
thirty-day notice requirement to any dividends of its subsidiaries is not
expected to materially affect the liquidity of USF&G Corporation. Additional
information regarding dividends paid to USF&G Corporation by its insurance
subsidiaries may be found in Note 7.3, "Dividend Restrictions", to the
consolidated financial statements.
8. Legal Contingencies and Regulation
USF&G's insurance subsidiaries are routinely engaged in litigation in the normal
course of their businesses, including defending claims for punitive damages. As
insurers, they defend third-party claims brought against their insureds, as well
as defend themselves against first-party and coverage claims. In addition to
such litigation, USF&G Corporation and its subsidiaries are subject to other
litigation and claims in the ordinary course of their businesses. Additional
information on certain other litigation contingencies may be found in Note 13,
"Legal Contingencies", to the consolidated financial statements.
In the opinion of management, such contingencies are not expected to have a
material effect on USF&G's consolidated financial position, although it is
possible that the results of operations in a particular quarter or annual period
would be materially affected by an unfavorable outcome.
USF&G's insurance subsidiaries are also subject to extensive regulatory
oversight in the jurisdictions where they do business. This regulatory
structure, which generally operates through state insurance departments,
involves the licensing of insurance companies and agents, limitations on the
nature and amount of certain investments, restrictions on the amount of single
insured risks, approval of policy forms and rates, setting of capital
requirements, limitations on dividends, limitations on the ability to withdraw
from certain lines of business such as personal lines and workers' compensation,
and other matters. State insurance departments routinely conduct financial and
market conduct examinations and assess fines for violations of the myriad state
regulations affecting the conduct of the insurance business. From time to time,
the insurance regulatory framework has been the subject of increased scrutiny.
At any one time there may be numerous initiatives within state legislatures or
state insurance departments to alter and, in many cases, increase state
authority to regulate insurance companies and their businesses. It is not
possible to predict the future impact of increasing regulation on USF&G's
operations.
8.1. Involuntary market plans
- --------------------------------------------------------------------------------
Most states require insurers to provide coverage for less desirable risks
through participation in mandatory programs. USF&G's participation in assigned
risk pools and similar plans, mandated now or in the future, creates and is
expected to create downward pressure on earnings. Underwriting losses from
involuntary market plans totaled $13 million in 1995, compared with $21 million
and $51 million in 1994 and 1993, respectively.
8.2. Withdrawal from business lines
- --------------------------------------------------------------------------------
Some states have adopted legislation or regulations restricting or otherwise
limiting an insurer's ability to withdraw from certain lines of business. Such
restrictions are most often found in personal lines and workers' compensation
insurance. They include prohibitions on mid-term cancellations and limiting
reasons based upon which an insurer may non-renew policies, requirements for
amendments to underwriting standards, rates and policy forms to be approved by
state regulators, specifications of a maximum percentage of a book of business
which may be non-renewed within the state within any twelve-month period, and
prohibitions on exiting a single line of business within a state (thus requiring
an insurer to either continue an unprofitable line or give up all lines of
business and withdraw from a state entirely). Such restrictions limit USF&G's
ability to manage its exposure to unprofitable lines and adversely affects
earnings to the extent USF&G is required to continue writing unprofitable
business.
8.3. Guaranty funds
- --------------------------------------------------------------------------------
Insurance guaranty fund laws have been adopted in most states to protect
policyholders in case of an insurer's insolvency. Insurers doing business in
those states can be assessed for certain obligations of insolvent companies to
policyholders and claimants. These assessments, under certain circumstances, can
be credited against future premium taxes. Net of such tax credits, USF&G
incurred $5 million of guaranty fund expense in 1995 and $9 million and $15
million in 1994 and 1993, respectively.
Financial difficulties of certain insurance companies over the past several
years are expected to result in additional assessments that could have a
negative impact on future earnings. State laws limit the amount of annual
assessments which are based on percentages (generally two percent) of assessable
annual premiums in the year of insolvency. The ultimate amount of these
assessments cannot be reasonably estimated, but are not expected to have a
material adverse effect on USF&G's financial position.
8.4. NAIC proposals
- --------------------------------------------------------------------------------
The NAIC has proposed several model laws and regulations which are in varying
stages of discussion, including a Model Investment Law and amendments to the
Model Holding Company System Regulatory Act. These model laws address
investments which are permissible for property/casualty and life insurers to
hold, and investments in subsidiaries and affiliates, respectively. Final
adoption of these model laws is expected to occur in 1996. It is expected that
the final adoption of these regulations by the NAIC will neither significantly
change USF&G's investment strategies nor have any material adverse effect on
USF&G's liquidity or financial
position.
8.5. Superfund
- --------------------------------------------------------------------------------
The Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), more commonly known as "Superfund", is scheduled to be reauthorized
in 1996. Insurance companies, other businesses, environmental groups and
municipalities are advocating a variety of reform proposals to revise the
cleanup and liability provisions of CERCLA. No reliable prediction can be made
as to the ultimate outcome of the legislative deliberations regarding the
reauthorization of CERCLA or the effect such revisions may have on USF&G.
8.6. Insurance regulatory information system
- --------------------------------------------------------------------------------
The NAIC's Insurance Regulatory Information System ("IRIS") ratios are intended
to assist state insurance departments in their review of the financial condition
of insurance companies operating within their respective states. IRIS specifies
eleven industry ratios and establishes a "usual range" for each ratio.
Significant departure from a number of ratios may lead to inquiries from state
insurance regulators. As of December 31, 1995, USF&G was within the "usual
range" for all but one of the IRIS ratios. The deviation from the one ratio is
not significant and is not expected to lead to any regulatory inquiry.
8.7. Taxation of deferred annuities
- --------------------------------------------------------------------------------
From time to time, various proposals have been considered by Congress, the
Office of Management and Budget and the Department of the Treasury to include
within an individual annuitant's current taxable income all or a portion of the
interest payments which accrue on certain deferred annuity products, including
some deferred annuity products sold by F&G Life. Currently, such interest is not
taxed until the time of distribution. All such proposals have focused on
deferred annuities and have not included annuities issued in connection with
structured settlements of claims or on tax sheltered annuities. No reliable
prediction can be made at this time as to the outcome of any such proposals or
the effect such proposals may have on F&G Life.
8.8. Glass-Steagall reform
- --------------------------------------------------------------------------------
Congress and the Administration have considered various proposals to restructure
the U.S. financial services industry through repeal or modification of the
Glass-Steagall Act and the Bank Holding Company Act. The proposals would, to
varying degrees, allow banks to affiliate with other financial services
providers, including insurance companies. It is unclear whether or to what
extent any final legislation would address bank insurance authority, and no
reliable prediction can be made at this time as to the ultimate outcome of the
legislative deliberations regarding restructuring of the financial services
industry or the effect such legislation may have on USF&G.
8.9. Natural disaster protection
- --------------------------------------------------------------------------------
From time to time, various proposals have been considered by Congress and the
Administration to provide a program of natural disaster protection that would
include primary insurance and reinsurance for the perils of hurricane,
earthquake, volcanic eruption and tsunami. During the current session of
Congress, legislative proposals have been introduced to create a private
non-profit corporation that would serve as the primary insurer of residential
property for both the earthquake and hurricane perils. This private non-profit
corporation also would serve as a reinsurer of commercial risks for earthquake
and hurricane perils and as a reinsurer of residential property for natural
catastrophe perils not covered under the primary program (e.g., volcano,
tsunami). No reliable prediction can be made at this time as to the outcome of
any of these proposals or the effect they may have on USF&G.
9. Income Taxes
At December 31, 1993, USF&G recorded a $120 million net deferred tax asset, as
it was the opinion of management that, based on the mix of both positive and
negative evidence, it was more likely than not that there would be sufficient
future taxable income to result in the realization of this benefit. At December
31, 1994, the net deferred tax asset increased to $419 million, primarily based
on the increasing weight of positive evidence. At December 31, 1995, USF&G has
applied methodology and judgment consistent with prior years and increased the
net deferred tax asset to $435 million. This resulted in a $79 million net
decrease in the related valuation allowance, excluding adjustments for items
recorded directly through shareholders' equity.
The realization of deferred tax assets is dependent, in whole or in part, upon
the Corporation's ability to generate sufficient taxable income in future years.
Future levels of net income and taxable income from the core insurance
operations are dependent on several factors, including general economic and
specific insurance industry conditions, such as competitive pressures,
catastrophe losses, adverse involuntary loss experience, etc. Because of these
risk factors, as well as other factors beyond the control of management, no
assurance can be given that sufficient taxable income will be generated to
realize the deferred tax assets. Management has considered various risk factors
in reaching its conclusion that it is more likely than not that there will be
sufficient future taxable income to result in the realization of the recorded
$435 million net deferred tax asset. Based on USF&G's evaluations, approximately
$1.2 billion of future taxable income would need to be generated to realize the
$435 million net deferred tax asset. Income from operations before income taxes,
realized gains and facilities exit costs/sublease income was $182 million in
1995. If this amount is assumed to be an average taxable income for future
years, then USF&G will be able to realize enough income within seven years to
fully recognize the net deferred tax asset. This is well within the availability
period of the Corporation's net operating loss carry-forwards ("NOLs"), from
which a significant portion of the deferred tax asset arises. Further,
management's three- to five-year forecast, which reflects management's
expectations as to earnings growth, indicates sufficient future taxable income
to, more likely than not, realize the recorded asset. Recognition of remaining
unrecognized deferred tax assets will occur only upon the development of
additional positive evidence that indicates there will be sufficient future
taxable income to result in the realization of those assets. The primary
evidence would be actual operating results that are consistent with management's
expectations. If actual results or other factors cause management's expectations
to change, then recognition of the assets would be delayed or accelerated.
The financial statement recognition of tax expense or benefit is not necessarily
an appropriate indicator of income taxes to be paid. The Corporation has income
tax NOLs of $593 million for regular tax purposes and $354 million for
Alternative Minimum Tax purposes. These carryforwards will be used to reduce
taxes payable in years subsequent to their
recognition in the financial statements.
USF&G's tax returns have not been reviewed by the Internal Revenue Service
("IRS") since 1989 and the availability of the NOLs could be challenged by the
IRS upon review of returns through 1994. Management believes, however, that IRS
challenges that would limit the recoverability of $435 million in tax benefits
are unlikely, and adjustments to the tax liability, if any, for years through
1995 will not have a material adverse effect on USF&G's financial position.
10. Glossary of Terms
Account value: Deferred annuity cash value available to policyholders before the
assessment of surrender charges.
Alternative risk transfer: A form of insurance through which a company
self-insures the predictable frequency portion of its own losses and purchases
insurance for the less frequent, high severity losses that could have a major
financial impact on the company.
Catastrophe losses: Property/casualty insurance claim losses resulting from a
sudden calamitous event, such as a severe storm, are categorized as
"catastrophes" when they meet certain severity and other criteria determined by
a national organization.
Expense ratio: The ratio of underwriting expenses to net premiums written, if
determined in accordance with statutory accounting practices ("SAP"), or the
ratio of underwriting expenses (adjusted by deferred policy acquisition costs)
to earned premiums, if determined in accordance with GAAP.
Finite risk reinsurance: Reinsurance arrangements providing coverage at lower
margins than traditional risk reinsurance in return for a lower probability of
loss to the reinsurer.
High-yield bonds: Fixed maturity investments with a credit rating below the
equivalent of Standard & Poor's "BBB". In addition, nonrated fixed maturities
that, in the judgment of USF&G, have credit characteristics similar to those of
a fixed maturity rated below BBB are considered high-yield bonds.
Liquid assets to surrender value: Liquid assets (publicly traded bonds, stocks,
cash and short-term investments) divided by surrenderable policy liabilities,
net of surrender charges. A measure of a life insurance company's ability to
meet liquidity needs in case of annuity surrenders.
Loss ratio: The ratio of incurred losses and loss expenses to earned premiums,
determined in accordance with SAP or GAAP, as applicable. The difference between
SAP and GAAP relates to deposit accounting for GAAP related to certain financial
reinsurance assumed.
Nonstandard auto: Automobile insurance for individuals who are unable to obtain
preferred or standard insurance coverage due to their inability to meet certain
standard underwriting criteria, based on factors such as age, type of
automobile, residence location and driving record.
Policyholders' surplus: The net assets of an insurer as reported to regulatory
agencies based on accounting practices prescribed or permitted by the NAIC and
the state of domicile.
Premiums earned: The portion of premiums written applicable to the expired
period of policies.
Premiums written: Premiums retained by an insurer, after the assumption and
cession of reinsurance.
Reinsurance: For a consideration, an assuming insurer agrees to indemnify a
ceding insurer against all or part of the loss the latter may sustain under the
policy or policies it has issued. The legal rights of the insured are not
affected by the transaction and the ceding insurer remains liable to the insured
for payment of policy benefits.
Underwriting results: Property/casualty pretax operating results excluding
investment results, policyholders' dividends, and noninsurance activities;
generally, premiums earned less losses and loss expenses incurred and
"underwriting" expenses incurred.
<PAGE>
USF&G CORPORATION Eleven-Year Summary of Selected Financial Data
<TABLE>
<S> <C> <C> <C> <C>
(dollars in millions except per share data) 1995 1994 1993 1992
====================================================================================================================================
Consolidated Results
Premiums earned $ 2,666 $ 2,508 $ 2,521 $ 2,683
Total revenues 3,459 3,310 3,323 3,712
Income (loss) from continuing operations before cumulative
effect of adopting new accounting standards 209 237 130 36
Income (loss) from discontinued operations -- -- -- (7)
Cumulative effect of adopting new accounting standards -- -- 38 --
Net income (loss) 209 237 168 29
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Results
Income (loss) from continuing operations before cumulative
effect of adopting new accounting standards $ 1.63 $ 2.00 $ .90 $ (.14)
Income (loss) from discontinued operations -- -- -- (.08)
Cumulative effect of adopting new accounting standards -- -- .42 --
Net income (loss) 1.63 2.00 1.32 (.22)
Book value 14.68 9.96 11.33 8.66
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Results
Net investment income $ 733 $ 749 $ 753 $ 820
Realized gains (losses) 7 5 6 148
Change in unrealized gains (losses) 418 (338) 220 (18)
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Position
Assets $14,651 $13,980 $14,481 $13,242
Investments 11,107 10,561 11,474 11,417
Corporate debt 591 586 574 574
Real estate and other debt 16 42 53 54
Shareholders' equity 1,984 1,441 1,556 1,300
Common Stock
Market high $ 19 1/2 $ 16 1/8 $19 5/8 $ 15
Market low 13 3/8 1111/16 11 1/8 7 1/8
Market close 16 7/8 13 5/8 14 3/4 12 3/8
Cash dividends declared .20 .20 .20 .20
Common shares outstanding 119,606,095 104,810,794 91,418,372 89,985,083
- ------------------------------------------------------------------------------------------------------------------------------------
Property/Casualty Insurance
Premiums earned $ 2,492 $ 2,356 $ 2,392 $ 2,579
Net income (loss) 175 498 285 194
Statutory premiums written 2,563 2,389 2,502 2,475
- ------------------------------------------------------------------------------------------------------------------------------------
Statutory loss ratio 72.4 73.1 75.3 81.8
Statutory expense ratio 33.4 34.8 33.5 34.8
Statutory combined ratio 105.8 107.9 108.8 116.6
- ------------------------------------------------------------------------------------------------------------------------------------
Life Insurance
Sales $348 $ 286 $ 205 $ 155
Premium income 174 152 129 104
Net income (loss) 19 12 10 (5)
- ------------------------------------------------------------------------------------------------------------------------------------
Noninsurance Operations
Revenues $63 $ 90 $ 5 $ 17
Net income (loss) 15 (273) (126) (160)
====================================================================================================================================
Note: Financial statements for years prior to 1995 have been restated to reflect
mergers with Discover Re Managers, Inc., and Victoria Financial Corporation.
These mergers were completed during the second quarter 1995. Restatement of
prior periods is required due to the application of the pooling-of-interests
method of accounting.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1991 1990 1989 1988 1987 1986 1985
====================================================================================================================================
$ 3,213 $ 3,535 $ 3,713 $ 3,801 $ 3,888 $3,622 $ 3,031
4,202 4,191 4,653 4,559 4,500 4,314 3,589
(145) (433) 148 251 263 276 (109)
(32) (136) (31) (20) 2 (2) 1
-- -- -- -- -- -- --
(177) (569) 119 247 279 295 (108)
- ------------------------------------------------------------------------------------------------------------------------------------
$ (2.06) $ (5.10) $ 1.52 $ 2.87 $ 3.36 $ 4.04 $ (1.79)
(.36) (1.55) (.35) (.24) .03 (.03) .02
-- -- -- -- -- -- --
(2.42) (6.65) 1.18 2.82 3.57 4.32 (1.77)
9.30 11.65 20.61 22.29 19.29 19.90 18.62
- ------------------------------------------------------------------------------------------------------------------------------------
$ 880 $ 930 $ 912 $ 796 $ 699 $ 619 $ 392
38 (354) (36) (92) (133) 53 150
37 (30) 32 185 (282) (105) 118
- ------------------------------------------------------------------------------------------------------------------------------------
$14,555 $13,951 $13,576 $12,342 $10,171 $8,943 $7,676
12,216 11,259 10,911 9,787 7,901 6,831 5,692
617 659 543 448 407 348 197
73 129 92 44 24 5 3
1,346 1,227 2,011 2,058 1,727 1,579 1,217
$ 12 1/2 $ 30 3/8 $ 34 $ 34 3/8 $ 48 3/4 $ 46 3/4 $ 41 1/2
5 5/8 7 28 1/4 28 1/2 26 1/4 36 1/4 25 5/8
7 1/4 7 1/2 29 28 1/2 28 3/8 39 3/4 39
.20 2.44 2.80 2.64 2.48 2.32 2.20
88,566,897 88,157,862 87,864,146 83,320,477 79,193,184 69,319,067 65,371,755
- ------------------------------------------------------------------------------------------------------------------------------------
$ 3,044 $ 3,349 $ 3,548 $ 3,623 $ 3,754 $3,542 $ 2,964
(41) (192) 200 318 331 309 (116)
3,064 3,651 3,717 3,903 3,854 3,701 3,152
- ------------------------------------------------------------------------------------------------------------------------------------
84.0 81.8 76.4 73.0 73.2 79.1 90.7
33.1 32.9 32.8 31.2 30.1 29.1 30.0
117.1 114.7 109.2 104.2 103.3 108.2 120.7
- ------------------------------------------------------------------------------------------------------------------------------------
$ 280 $ 1,054 $ 960 $ 1,077 $ 278 $ 83 $ 119
169 186 165 178 133 79 67
31 (16) 31 14 37 20 27
- ------------------------------------------------------------------------------------------------------------------------------------
$ 38 $ 22 $ 84 $ 114 $ 112 $ 8 $ 41
(167) (361) (112) (85) (88) (86) (23)
====================================================================================================================================
</TABLE>
<PAGE>
USF&G CORPORATION Consolidated Statement of Operations
<TABLE>
Years Ended December 31
<S> <C> <C> <C>
(dollars in millions except per share data) 1995 1994* 1993*
====================================================================================================================================
Revenues
Premiums earned $2,666 $2,508 $2,521
Net investment income 733 749 753
Other 53 48 43
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues before net realized gains 3,452 3,305 3,317
Net realized gains on investments 7 5 6
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 3,459 3,310 3,323
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Losses, loss expenses, and policy benefits 2,178 2,132 2,200
Underwriting, acquisition, and operating expenses 1,048 1,001 979
Interest expense 44 37 41
Facilities exit costs/(sublease income) (6) 183 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 3,264 3,353 3,220
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations before income taxes and
cumulative effect of adopting new accounting standards 195 (43) 103
Provision for income taxes (benefit) (14) (280) (27)
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations before cumulative
effect of adopting new accounting standards 209 237 130
Income (loss) from cumulative effect of adopting new accounting standards:
Income taxes -- -- 90
Postretirement benefits -- -- (52)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 209 $ 237 $ 168
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred stock dividend requirements 28 46 48
- ------------------------------------------------------------------------------------------------------------------------------------
Net income available to common stock $ 181 $ 191 $ 120
====================================================================================================================================
Primary Earnings Per Common Share
Income from operations before cumulative
effect of adopting new accounting standards $ 1.63 $ 2.00 $ .90
Cumulative effect of adopting new accounting standards -- -- .42
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 1.63 $ 2.00 $ 1.32
- ------------------------------------------------------------------------------------------------------------------------------------
Fully Diluted Earnings Per Common Share
Income from operations before cumulative
effect of adopting new accounting standards $ 1.53 $ 1.77 $ .96
Cumulative effect of adopting new accounting standards -- -- .32
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 1.53 $ 1.77 $ 1.28
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding (in 000s):
Primary 111,474 95,797 90,566
Fully Diluted 130,186 127,808 118,850
====================================================================================================================================
See Notes to Consolidated Financial Statements.
*Financial statements for 1994 and 1993 have been restated to reflect mergers
with Discover Re Managers, Inc., and Victoria Financial Corporation (refer to
Note 1.11).
</TABLE>
<PAGE>
USF&G CORPORATION Consolidated Statement of Financial Position
<TABLE>
At December 31
<S> <C> <C> <C>
(dollars in millions except per share data) 1995 1994* 1993*
====================================================================================================================================
Assets
Investments:
Fixed maturities:
Held to maturity, at amortized cost (market, 1994, $4,284;
1993, $4,807) $ -- $ 4,659 $ 4,672
Available for sale, at market (cost, 1995, $9,118; 1994, $4,265;
1993, $4,753) 9,458 4,081 4,976
Common and preferred stocks, at market (cost, 1995, $70;
1994, $79; 1993, $103) 65 72 89
Short-term investments 288 450 335
Mortgage loans 254 349 302
Real estate 653 662 685
Other invested assets 389 288 415
- ------------------------------------------------------------------------------------------------------------------------------------
Total investments 11,107 10,561 11,474
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 119 69 18
Accounts, notes, and other receivables 795 741 691
Reinsurance receivables 604 554 573
Servicing carrier receivables 699 706 719
Deferred policy acquisition costs 434 504 444
Other assets 893 845 562
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $14,651 $13,980 $14,481
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Unpaid losses, loss expenses, and policy benefits $ 9,816 $ 9,962 $10,343
Unearned premiums 1,055 968 950
Corporate debt 591 586 574
Real estate and other debt 16 42 53
Other liabilities 1,189 981 1,005
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 12,667 12,539 12,925
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholders' Equity
Preferred stock, par value $50.00 (12,000,000 shares authorized;
shares issued, 1995, 4,277,460; 1994, 6,627,896; 1993, 9,099,910) 213 331 455
Common stock, par value $2.50 (240,000,000 shares authorized;
shares issued, 1995, 119,606,095; 1994, 104,810,794; 1993, 91,418,372) 299 262 228
Paid-in capital 1,188 1,104 986
Net unrealized gains (losses) on investments 271 (147) 191
Minimum pension liability (100) (63) (85)
Retained earnings (deficit) 113 (46) (219)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,984 1,441 1,556
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $14,651 $13,980 $14,481
====================================================================================================================================
See Notes to Consolidated Financial Statements.
*Financial statements for 1994 and 1993 have been restated to reflect mergers
with Discover Re Managers, Inc., and Victoria Financial Corporation (refer to
Note 1.11).
</TABLE>
<PAGE>
USF&G CORPORATION Consolidated Statement of Cash Flows
<TABLE>
Years Ended December 31
<S> <C> <C> <C>
(in millions) 1995 1994* 1993*
====================================================================================================================================
Operating Activities
Direct premiums collected $ 2,078 $ 2,029 $ 2,117
Net investment income collected 743 750 774
Direct losses, loss expenses and policy benefits paid (1,725) (1,884) (1,922)
Net reinsurance activity 69 22 (113)
Underwriting and operating expenses paid (760) (789) (774)
Interest paid (37) (31) (41)
Income taxes paid (5) (12) (5)
Other items, net 36 55 68
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities 399 140 104
- ------------------------------------------------------------------------------------------------------------------------------------
Investing Activities
Net sales and maturities of short-term investments 148 (115) 200
Purchases of fixed maturities held to maturity -- (400) (1,912)
Sales of fixed maturities held to maturity 21 65 462
Maturities/repayments of fixed maturities held to maturity 110 348 942
Purchases of fixed maturities available for sale (1,123) (351) (1,257)
Sales of fixed maturities available for sale 489 345 1,270
Maturities/repayments of fixed maturities available for sale 443 480 316
Purchases of equities and other investments (302) (434) (256)
Sales, maturities and repayments of equities and other investments 332 482 399
Purchases of property and equipment (32) (33) (29)
Sales of property and equipment 2 4 4
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided from investing activities 88 391 139
- ------------------------------------------------------------------------------------------------------------------------------------
Financing Activities
Deposits for universal life and investment contracts 310 246 168
Withdrawals of universal life and investment contracts (659) (664) (364)
Net repayments of short-term borrowings (227) (167) (3)
Long-term borrowings 228 270 --
Repayments of long-term borrowings (42) (124) (3)
Issuances of common stock 6 38 17
Redemptions of preferred stock -- (13) --
Cash dividends paid to shareholders (53) (66) (66)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (437) (480) (251)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash 50 51 (8)
Cash at beginning of year 69 18 26
- ------------------------------------------------------------------------------------------------------------------------------------
Cash at end of year $ 119 $ 69 $ 18
====================================================================================================================================
See supplemental cash flow information at Note 1.12.
See Notes to Consolidated Financial Statements.
*Financial statements for 1994 and 1993 have been restated to reflect mergers
with Discover Re Managers, Inc., and Victoria Financial Corporation (refer to
Note 1.11).
</TABLE>
<PAGE>
USF&G CORPORATION Consolidated Statement of Shareholders' Equity
<TABLE>
<S> <C> <C> <C>
(in millions except per share data) 1995 1994* 1993*
====================================================================================================================================
Preferred Stock
Balance at beginning of year $ 331 $ 455 $ 455
Par value of Series B shares converted to common shares (51) -- --
Par value of Series C shares converted to common shares (66) (111) --
Par value of Series C shares redeemed (1) (13) --
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year 213 331 455
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock
Balance at beginning of year 262 228 225
Par value of shares issued for conversion of Series B shares 21 -- --
Par value of shares issued for conversion of Series C shares 14 23 --
Par value of other shares issued 2 11 3
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year 299 262 228
- ------------------------------------------------------------------------------------------------------------------------------------
Paid-In Capital
Balance at beginning of year 1,104 986 971
Excess of proceeds over par value of Series B shares converted 29 -- --
Excess of proceeds over par value of Series C shares converted 50 86 --
Excess of proceeds over par value of other shares issued 5 32 15
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year 1,188 1,104 986
- ------------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Gains (Losses) on Investments and Foreign Currency
Balance at beginning of year (147) 191 (29)
Change in unrealized gains (losses) 418 (338) 220
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year 271 (147) 191
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum Pension Liability
Balance at beginning of year (63) (85) --
Change in unfunded accumulated benefits (37) 22 (85)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year (100) (63) (85)
- ------------------------------------------------------------------------------------------------------------------------------------
Retained Earnings (Deficit)
Balance at beginning of year (46) (219) (322)
Net income 209 237 168
Common stock dividends declared (per share, 1995, 1994
and 1993, $.20) (22) (18) (17)
Preferred stock dividends declared (per share, 1995, Series A, $4.10,
Series B, $10.25; 1994 and 1993, Series A, $4.10, Series B, $10.25,
Series C, $5.00) (28) (46) (48)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of year 113 (46) (219)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity $1,984 $1,441 $1,556
====================================================================================================================================
See Notes to Consolidated Financial Statements.
*Financial statements for 1994 and 1993 have been restated to reflect mergers
with Discover Re Managers, Inc., and Victoria Financial Corporation (refer to
Note 1.11).
</TABLE>
<PAGE>
USF&G CORPORATION Notes to Consolidated Financial Statements
Note 1 Summary of Significant Accounting Policies
1.1. Basis of presentation
- --------------------------------------------------------------------------------
The consolidated financial statements are prepared in accordance with generally
accepted accounting principles ("GAAP"). These statements include the accounts
of USF&G Corporation and its subsidiaries ("USF&G" or "the Corporation").
Intercompany transactions are eliminated in consolidation. Certain prior year
amounts have been reclassified to conform to the 1995 presentation. Refer to
Note 1.11 regarding restatements for mergers consummated in the second quarter
of 1995.
The preparation of the consolidated financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results could differ from these estimates.
The Corporation, through its subsidiaries, is primarily engaged in the business
of insurance. Property/casualty insurance, which accounts for 85 percent of
total revenues, is written primarily by United States Fidelity and Guaranty
Company ("USF&G Company") and is sold primarily through independent agents
supported by USF&G Company's underwriting, marketing, administrative and claim
services offices located throughout the United States. Life insurance and
annuities, which account for 14 percent of total revenues, are written primarily
by Fidelity and Guaranty Life Insurance Company ("F&G Life"), and are sold
throughout the United States through independent agents, managing general agents
and regional and national securities brokerage firms. Noninsurance operations
are composed of the parent company, asset management, and management consulting
services. Additional information on the Corporation's business segments is
included in Note 14, "Information on Business Segments".
1.2. New accounting standard
- --------------------------------------------------------------------------------
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of", which requires impairment losses to be recorded on long-lived assets used
in operations when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS No. 121 also addresses the accounting for long-lived
assets that are to be disposed of.
The Corporation will adopt the standard in the first quarter of 1996. The
standard includes a requirement that impairments in the value of real estate
investments be recorded as direct reductions in the carrying value of those
investments. USF&G's prior practice has been to establish valuation allowances
for impairments to specific investments where impairment is deemed other than
temporary. Adoption of this standard is not expected to have a material effect
on USF&G's financial statements since valuation allowances existing at December
31, 1995 will be applied against the related investments, thus reducing the cost
basis of those investments.
1.3. Permitted statutory accounting practices
- --------------------------------------------------------------------------------
Reporting practices for insurance subsidiaries prescribed or
permitted by state regulatory authorities (statutory accounting practices)
differ from GAAP. Statutory amounts for USF&G's insurance operations follow.
Years Ended December 31
(in millions) 1995 1994* 1993*
================================================================================
Statutory Net Income:
Property/casualty insurance** $ -- $ 173 $ 203
Reinsurance subsidiaries and
affiliates 6 3 1
Life insurance 15 30 5
- --------------------------------------------------------------------------------
At December 31
(in millions) 1995 1994* 1993*
================================================================================
Statutory Surplus:
Property/casualty insurance** $1,341 $1,621 $1,577
Reinsurance subsidiaries and
affiliates 333 211 147
Life insurance 300 326 316
- --------------------------------------------------------------------------------
*For comparability, amounts are restated to reflect mergers consummated in the
second quarter of 1995 (refer to Note 1.11). However, restatement of prior
periods for business combinations is not prescribed by statutory accounting
practices.
**At December 31, 1995, this amount includes certain reinsurance subsidiaries
and affiliates. At December 31, 1994 and 1993, it includes the life insurance
subsidiary as well as certain reinsurance subsidiaries and affiliates. Refer to
Note 7.3.
USF&G's primary insurance subsidiaries, USF&G Company and F&G Life, are
domiciled in the State of Maryland and prepare their statutory financial
statements in accordance with statutory accounting practices prescribed or
permitted by the Maryland Insurance Administration. Prescribed statutory
accounting practices include state laws, regulations and general administrative
rules issued by the State of Maryland as well as a variety of publications and
manuals of the National Association of Insurance Commissioners ("NAIC").
Permitted statutory accounting practices encompass all accounting practices not
so prescribed.
Property/Casualty Insurance: In 1994, USF&G Company received written approval
from the Maryland Insurance Administration to extend the required disposal
period for certain real property acquired as security for loans or other
obligations. Under the current Maryland Insurance Code, these assets are
required to be disposed of within five years from the date of acquisition. The
Maryland Insurance Administration extended this time period for certain
properties up to no later than December 31, 1997. As of December 31, 1995 and
1994, this permitted transaction increased statutory surplus by $35 million and
$19 million, respectively, over what it would have been had prescribed
accounting practices been followed.
Life Insurance: In 1994, F&G Life received permission from the Maryland
Insurance Administration to reduce non-admitted assets by the associated asset
valuation reserve subcomponent ending balance. There was no effect on statutory
surplus from electing this option at December 31, 1995. As of December 31, 1994,
this permitted accounting practice had the effect of increasing statutory
surplus by $15 million over what it would have been had prescribed accounting
practices been followed.
Since Maryland does not specifically prescribe by law or regulation reserves for
universal life policies or group annuities, F&G Life follows reserving practices
which are permitted by the State of Maryland. These practices are as follows:
Universal Life: For older generation universal life ("UL") policies, the full
account value is held as a reserve. For newer generation universal life
policies, reserves are held based on a calculation according to the NAIC UL
Model Regulation, which has been adopted by many states. The reserves calculated
according to the NAIC UL Model Regulation equal the account value at the end of
the surrender charge period which varies from 8 to 15 years.
Group Annuities: Many of the group annuities are used to fund qualified pension
and/or profit sharing plans. For these annuities, the funds are not allocated to
individual participants. The full account value is held as the reserve for these
annuities. For the group annuities where the funds and/or benefits are allocated
to the individual certificate holder, reserves are calculated according to the
laws prescribed for individual annuities.
1.4. Investments
- --------------------------------------------------------------------------------
Fixed Maturities: At December 31, 1994 and 1993, USF&G classified fixed
maturities as "held to maturity" if it had both the positive intent and ability
to hold the securities until maturity or near enough to maturity such that
interest rate risk would be substantially eliminated as a pricing factor. Fixed
maturities held to maturity were carried at amortized cost. Changes in the
market values of these investments were generally not recognized in the
financial statements. On December 4, 1995, USF&G reclassified all of its fixed
maturities previously classified as "held to maturity" to "available for sale",
as permitted by supplemental guidance issued by the FASB in November 1995.
Fixed maturities that are bought and held principally for the purpose of selling
them in the near-term are classified as "trading securities". USF&G has no
securities classified as trading securities.
Fixed maturities not classified as either "held to maturity" or "trading
securities" are classified as "available for sale". These securities are held
for an indefinite period of time and may be sold in response to changes in
interest rates and the yield curve, prepayment risk, liquidity needs, or other
factors. Fixed maturities classified as "available for sale" are carried at
market value, with unrealized gains and losses recorded as a separate component
of shareholders' equity. Unrealized gains or losses on fixed maturities
available for sale are offset by an adjustment to life insurance deferred policy
acquisition costs which is made on a proforma basis as if the unrealized gains
or losses on those assets which match certain life insurance liabilities were
realized.
Specific write-downs in the carrying value of fixed maturities are recognized in
income when an impairment is deemed other than temporary.
Common and Preferred Stocks: Investments in common and preferred stocks where
USF&G has significant influence over the investees' operating and financial
policies are accounted for using the equity method and included in other
invested assets. Other investments in common and preferred stocks are carried at
market value with the resulting unrealized gains or losses reported directly in
shareholders' equity.
Securities Lending: USF&G participates in a securities lending program where
certain securities from its portfolio are loaned to other institutions for short
periods of time. A fee is paid to USF&G by the borrower. Collateral that exceeds
the market value of the loaned securities is invested by the lending agent to
represent USF&G's interest. USF&G's interest in securities lending is reported
in other invested assets. USF&G's invested assets and other liabilities include
$113 million, $6 million and $141 million at December 31, 1995, 1994 and 1993,
respectively, related to its interest in the securities lending program.
Mortgage Loans and Real Estate: Mortgage loans are carried at unpaid principal
balances. Real estate investments are reported at cost adjusted for equity
participation. Real estate acquired through foreclosure or deed-in-lieu of
foreclosure is initially recorded at estimated market value. Valuation
allowances are provided for impairments in estimated net realizable value which
are deemed other than temporary, based on quarterly evaluations (refer to Note
1.2).
Interest and Dividend Income: Interest on fixed maturity investments is recorded
as income when earned and is adjusted for any amortization of purchase premium
or discount. Dividends on equity securities are recorded as income on
ex-dividend dates.
Realized Gains and Losses: Realized gains and losses on the sale of investments
are determined based on specific cost. Realized losses are also recorded when an
investment's net realizable value is below cost and the decline is deemed other
than temporary.
1.5. Recognition of premium revenues
- --------------------------------------------------------------------------------
Property/Casualty Insurance: Property/casualty insurance premiums are earned
principally on a pro rata basis over the lives of the policies and include
accruals for ultimate premium revenue anticipated under auditable and
retrospectively rated policies. Unearned premiums represent the portion of
premiums written applicable to the unexpired terms of policies in force.
Unearned premiums also include estimated and unbilled premium adjustments.
Life Insurance: Premiums on life insurance policies with fixed and guaranteed
premiums and benefits, and premiums on annuities with significant life
contingencies are recognized when due. Universal life policies and annuity
contracts are issued on both a single premium and recurring premium basis.
Revenues for these contracts consist of policy charges assessed against benefit
account balances during the period for the cost of insurance, policy
administration and surrenders.
1.6. Unpaid losses, loss expenses and policy benefits
- --------------------------------------------------------------------------------
Property/Casualty Insurance: The liability for unpaid property/casualty
insurance losses and loss expenses is based on an evaluation of reported losses
and on estimates of incurred but unreported losses. The reserve liabilities are
determined using adjusters' individual case estimates and statistical
projections. The liability was reported net of estimated salvage and subrogation
recoverables of $116 million at December 31, 1995 and 1994, and $139 million at
December 31, 1993. Adjustments to the liability based on subsequent developments
or other changes in the estimate are reflected in results of operations in the
period in which such adjustments become known.
Certain liabilities for unpaid losses and loss expenses related to workers'
compensation coverage are discounted to present value. The carrying amount of
such workers' compensation liabilities, net of reinsurance and net of discount,
was $1.5 billion, $1.6 billion and $1.8 billion at December 31, 1995, 1994 and
1993, respectively. Interest rates of up to 4 percent are used to discount these
liabilities.
Life Insurance: Ordinary life insurance reserves are computed under the net
level premium method using assumptions for future investment yields, mortality
and withdrawal rates. These assumptions reflect USF&G's experience, modified to
reflect anticipated trends, and provide for possible adverse deviation. Reserve
interest rate assumptions are graded and range from 2.5 percent to 6.0 percent.
Universal life and deferred annuity reserves are computed on the retrospective
deposit method, which produces reserves equal to the cash value of the
contracts. Such reserves are not reduced for charges that would be deducted from
the cash value of policies surrendered. Reserves on immediate annuities with
guaranteed payments are computed on the prospective deposit method, which
produces reserves equal to the present value of future benefit payments.
1.7. Deferred policy acquisition costs ("DPAC")
- --------------------------------------------------------------------------------
Acquisition costs, consisting of commissions, brokerage, and other expenses
incurred at policy issuance, are generally deferred. Anticipated losses, loss
expenses, policy benefits and remaining costs of servicing the policies are
considered in determining the amount of costs to be deferred. Anticipated
investment income is considered in determining whether a premium deficiency
exists related to short-duration contracts. Amortization of deferred policy
acquisition costs totaled $714 million, $668 million and $685 million for the
years ended December 31, 1995, 1994 and 1993, respectively, and are included in
underwriting, acquisition and operating expenses in the Consolidated Statement
of Operations.
Property/Casualty Insurance: Property/casualty insurance acquisition costs are
amortized over the period that related premiums are earned.
Life Insurance: Life insurance acquisition costs are amortized based on
assumptions consistent with those used for computing policy benefit reserves.
Acquisition costs on ordinary life business are amortized over their assumed
premium paying periods. Universal life and investment annuity acquisition costs
are amortized in proportion to the present value of their estimated gross
profits over the products' assumed durations, which are regularly evaluated and
adjusted as appropriate.
1.8. Foreign currency translation
- --------------------------------------------------------------------------------
The functional currency for USF&G's foreign operations is the applicable local
currency. Foreign currency balance sheet accounts are translated to U.S. dollars
using exchange rates in effect at the balance sheet date. Revenue and expense
accounts are translated using the average exchange rates prevailing during the
year. The unrealized gains or losses, net of applicable deferred income taxes,
resulting from translation are included in shareholders' equity.
Foreign currency gains and losses on transactions denominated in a currency
other than the entity's functional currency are generally recorded in
operations. Such gains and losses may be reduced or effectively eliminated by
certain financial instruments used by USF&G to reduce its foreign exchange
exposure.
1.9. Earnings per common share
- --------------------------------------------------------------------------------
Primary earnings per common share are computed by subtracting dividends on
preferred stock from net income and then dividing by the weighted average common
shares outstanding during the period. The effect of common stock equivalents is
excluded from the calculations because their effect is not material. Fully
diluted earnings per common share assume the conversion of all securities whose
contingent issuance would have a dilutive effect on earnings.
1.10. Facilities exit costs/sublease income
- --------------------------------------------------------------------------------
During 1994, USF&G committed to a plan to consolidate its home office operations
in Baltimore, Maryland at its Mount Washington facility. The facilities exit
costs of $183 million in 1994 represent the present value of the rent and other
operating expenses to be incurred under the lease on the Corporation's principal
office building from the time USF&G vacates the building through the expiration
of the lease in September 2009. Facilities exit costs recorded in 1994 did not
consider any potential future sublease income, as such income was neither
probable nor reasonably estimable at that time. To the extent that additional or
extended subleases are subsequently negotiated, the present value of income to
be received over the term of those subleases is recognizable in the period such
income becomes probable and reasonably estimable. Sublease income of $6 million
was recognized under the facilities exit plan in 1995 as a result of USF&G's
renegotiation of a sublease with an existing tenant.
1.11. Business combinations
- --------------------------------------------------------------------------------
On April 13, and May 22, 1995, USF&G consummated mergers with Discover Re
Managers, Inc. ("Discover Re"), and Victoria Financial Corporation ("Victoria
Financial"), respectively. In the transactions, USF&G exchanged 5.4 million
shares of common stock, worth approximately $79 million, for all of the
outstanding equity of Discover Re, and 3.8 million shares, worth approximately
$59 million, for all of the outstanding equity of Victoria Financial. Discover
Re provides insurance, reinsurance and related services to the alternative risk
transfer market. Victoria Financial is an insurance holding company which
specializes in nonstandard personal lines auto coverage.
Both of these business combinations were accounted for as poolings-of-interests.
Accordingly, the financial statements have been restated to reflect the mergers
with Discover Re and Victoria Financial.
Results for each of the separate enterprises from the beginning of the year to
the respective consummation dates are as follows:
Premiums Total Net
(in millions) Earned Revenues Income
================================================================================
January 1 - March 31, 1995:
USF&G $598 $ 795 $49
Discover Re 6 8 1
- --------------------------------------------------------------------------------
January 1 - April 30, 1995:
USF&G* $769 $1,028 $63
Victoria Financial 13 16 --
- --------------------------------------------------------------------------------
*Excludes Discover Re.
A reconciliation of the previously separate enterprises to the restated
consolidated results of operations and total assets for the years ended December
31, 1994 and 1993 is disclosed in USF&G's 1994 Annual Report to Shareholders
(Restated) as filed with the Securities and Exchange Commission under Form
10-K/A in November 1995.
1.12. Supplemental cash flow information
- --------------------------------------------------------------------------------
The Consolidated Statement of Cash Flows is presented using the "direct method",
which reports major classes of cash receipts and cash payments. A reconciliation
of net income to net cash provided from operating activities is as follows:
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Net income $209 $ 237 $168
Adjustments to reconcile net
income to net cash provided
from operating activities:
Cumulative effect of adopting new
accounting standards -- -- (38)
Facilities exit costs/(sublease income) (6) 183 --
Provision for income taxes (benefit) (14) (280) (27)
Net realized gains on investments (7) (5) (6)
Change in insurance liabilities 294 72 60
Change in DPAC (36) (60) 28
Change in receivables (99) (24) 48
Change in other liabilities 73 (29) (55)
Change in other assets (31) 39 (96)
Change in other items, net 16 7 22
- --------------------------------------------------------------------------------
Net cash provided from operating
activities $399 $ 140 $104
- --------------------------------------------------------------------------------
Note 2 Investments
2.1. Sources of net investment income
- --------------------------------------------------------------------------------
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Fixed maturities $664 $674 $725
Common and preferred stocks 4 7 9
Short-term interest 23 14 9
Mortgage loans and real estate 46 58 41
Other investment income, net of
interest expense on funds held 13 9 (13)
- --------------------------------------------------------------------------------
Total investment income 750 762 771
Investment expenses (17) (13) (18)
- --------------------------------------------------------------------------------
Net investment income $733 $749 $753
- --------------------------------------------------------------------------------
2.2. Net realized gains on investments
- --------------------------------------------------------------------------------
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Net Gains on Sales:
Fixed maturities $ 6 $ 3 $ 79
Common and preferred stocks 4 -- 5
Mortgage loans and real estate 2 7 6
Other 18 5 --
- --------------------------------------------------------------------------------
Net gains on sales 30 15 90
Impairments (23) (10) (84)
- --------------------------------------------------------------------------------
Net realized gains on investments $ 7 $ 5 $ 6
- --------------------------------------------------------------------------------
2.3. Gross unrealized gains (losses)
- --------------------------------------------------------------------------------
At December 31
(in millions) 1995 1994 1993
================================================================================
Unrealized Gains:
Fixed maturities available for sale $ 375 $ 9 $225
DPAC and policy benefits adjustment -- 33 --
Common and preferred stocks 3 2 14
Foreign currency and other 6 16 10
- --------------------------------------------------------------------------------
Gross unrealized gains 384 60 249
- --------------------------------------------------------------------------------
Unrealized Losses:
Fixed maturities available for sale (35) (193) (2)
DPAC and policy benefits adjustment (73) -- (30)
Common and preferred stocks (5) (8) (23)
Foreign currency and other -- (6) (3)
- --------------------------------------------------------------------------------
Gross unrealized losses (113) (207) (58)
- --------------------------------------------------------------------------------
Net unrealized gains (losses) $ 271 $(147) $191
- --------------------------------------------------------------------------------
2.4. Change in net unrealized gains (losses)
- --------------------------------------------------------------------------------
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Fixed maturities available for sale $524 $(407) $223
DPAC and policy benefits adjustment (106) 63 (30)
Common and preferred stocks 4 3 23
Foreign currency and other (4) 3 4
- --------------------------------------------------------------------------------
Net change $418 $(338) $220
- --------------------------------------------------------------------------------
2.5. Estimated market values of fixed maturity investments
- --------------------------------------------------------------------------------
On December 4, 1995, USF&G reclassified all of its fixed maturities previously
classified as "held to maturity" to "available for sale" (refer to Note 2.6).
The cost and market value of total fixed maturities are as follows:
<TABLE>
At December 31
1995 1994 1993
Gross Unrecognized/ Gross Unrecognized/ Gross Unrecognized/
Unrealized Market Unrealized Market Unrealized Market
(in millions) Cost Gains Losses Value Cost Gains Losses Value Cost Gains Losses Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Fixed maturities held to maturity $ -- $ -- $ -- $ -- $4,659 $32 $(407) $4,284 $4,672 $191 $(56) $4,807
Fixed maturities available for sale 9,118 375 (35) 9,458 4,265 9 (193) 4,081 4,753 225 (2) 4,976
- ------------------------------------------------------------------------------------------------------------------------------------
Total $9,118 $375 $(35) $9,458 $8,924 $41 $(600) $8,365 $9,425 $416 $(58) $9,783
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The cost and market value of fixed maturities held to maturity are as follows:
<TABLE>
At December 31
1995 1994 1993
Gross Gross Gross
Unrecognized Market Unrecognized Market Unrecognized Market
(in millions) Cost Gains Losses Value Cost Gains Losses Value Cost Gains Losses Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
U.S. Government bonds $-- $-- $-- $-- $ 14 $-- $ (2)$ 12 $ 5 $ -- $ (1)$ 4
Mortgage-backed securities -- -- -- -- 1,360 19 (97) 1,282 1,541 69 (18) 1,592
Asset-backed securities -- -- -- -- 136 -- (8) 128 128 1 (1) 128
Corporate bonds -- -- -- -- 3,027 12 (293) 2,746 2,927 114 (36) 3,005
State and political
subdivision bonds -- -- -- -- 107 1 (6) 102 36 4 -- 40
Foreign government bonds -- -- -- -- 15 -- (1) 14 35 3 -- 38
- ------------------------------------------------------------------------------------------------------------------------------------
Total $-- $-- $-- $-- $4,659 $32 $(407)$4,284 $4,672 $191 $(56)$4,807
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The cost and market value of fixed maturities available for sale are as follows:
<TABLE>
At December 31
1995 1994 1993
Gross Gross Gross
Unrealized Market Unrealized Market Unrealized Market
(in millions) Cost Gains Losses Value Cost Gains Losses Value Cost Gains Losses Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
U.S. Government bonds $ 380 $ 21 $ -- $ 401 $ 273 $-- $ (12)$ 261 $ 308 $ 20 $-- $ 328
Mortgage-backed securities 1,739 49 (1) 1,787 561 2 (28) 535 877 38 -- 915
Asset-backed securities 999 28 (2) 1,025 806 1 (29) 778 1,021 35 -- 1,056
Corporate bonds 5,608 260 (25) 5,843 2,262 4 (104) 2,162 2,334 118 (2) 2,450
State and political
subdivision bonds 183 7 -- 190 255 2 (4) 253 122 8 -- 130
Foreign government bonds 209 10 (7) 212 108 -- (16) 92 91 6 -- 97
- ------------------------------------------------------------------------------------------------------------------------------------
Total $9,118 $375 $(35)$9,458 $4,265 $ 9 $(193)$4,081 $4,753 $225 $(2)$4,976
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2.6. Stated due dates of fixed maturities
- --------------------------------------------------------------------------------
The table below shows the stated due dates of fixed maturities available for
sale.
At December 31, 1995
Market
(in millions) Cost Value
================================================================================
In 1996 $ 385 $ 385
1997 through 2000 1,776 1,826
2001 through 2005 2,581 2,701
After 2005 1,638 1,734
- --------------------------------------------------------------------------------
Subtotal 6,380 6,646
Mortgage/asset-backed securities 2,738 2,812
- --------------------------------------------------------------------------------
Fixed maturities available for sale $9,118 $9,458
- --------------------------------------------------------------------------------
Expected maturities may differ from stated due dates as borrowers may have the
right to call or prepay obligations. During 1995, USF&G received proceeds from
sales or repayments of fixed maturities of $1.1 billion. The table below
illustrates the source of 1995 proceeds.
Gross Gross
(in millions) CostProceeds Gains Losses
================================================================================
Proceeds From Sales of Fixed Maturities:
Held to maturity $ 24 $ 21 $-- $ (3)
Available for sale 486 489 16 (13)
- --------------------------------------------------------------------------------
Subtotal 510 510 16 (16)
- --------------------------------------------------------------------------------
Proceeds from Maturities/Repayments:
Held to maturity 108 110 2 --
Available for sale 439 443 4 --
- --------------------------------------------------------------------------------
Subtotal 547 553 6 --
- --------------------------------------------------------------------------------
Total proceeds $1,057 $1,063 $22 $(16)
- --------------------------------------------------------------------------------
Sales in 1995 of fixed maturities classified as held to maturity involved 5
different issuers and were based on evidence of significant deterioration of the
issuers' creditworthiness. The determination of significant credit deterioration
was based upon current developments related specifically to the issuers. USF&G
performed a detailed analysis of the issuers' operating trends, cash flows and
ability to meet debt service. USF&G's analysts continually monitor news events,
published financial results, rating agency reports and other related financial
information. Sales of fixed maturities under such circumstances were not
inconsistent with their original classifications as held to maturity. Sales in
1994 of fixed maturities classified as held to maturity totaled $65 million and
involved 21 different issuers. Gross gains and gross losses of $1 million were
realized on those sales, which were also based on evidence of significant
deterioration of the issuers' creditworthiness. Proceeds from sales of fixed
maturities classified as available for sale were $345 million in 1994 with gross
gains of $2 million and gross losses of $4 million. Prior to the adoption of
SFAS No. 115 in 1993, proceeds from sales of fixed maturities held to maturity
totaled $462 million with gross gains of $20 million and gross losses of $12
million and occurred primarily due to repositioning a portion of the portfolio
to more effectively match the duration of life insurance liabilities. Proceeds
from sales of fixed maturities available for sale were $1.3 billion in 1993 with
gross gains of $73 million and gross losses of $2 million.
From January 1, 1995 through December 3, 1995, reclassifications from held to
maturity to available for sale totaled $31 million of amortized cost. These
reclassifications were based on evidence of significant deterioration of the
issuers' creditworthiness. Gross unrealized losses on these securities totaled
$9 million at the time of the reclassifications. On December 4, 1995, all
remaining securities classified as held to maturity were reclassified to
available for sale as permitted by supplemental guidance to SFAS No. 115 issued
by the FASB in November 1995. This reclassification was made to allow maximum
flexibility in the management of the investment portfolio without being
restricted by accounting interpretations. The securities had a total amortized
cost of $4.5 billion, with gross unrealized gains of $117 million, at the time
of the reclassifications.
2.7. Investment commitments
- --------------------------------------------------------------------------------
USF&G has outstanding commitments to provide permanent financing for various
real estate investments. The funded amounts of these commitments are
collateralized by the real estate projects. At December 31, 1995, unfunded
commitments totaled approximately $20 million, with approximately $17 million of
this expected to be funded in 1996.
2.8. Nonincome-producing investments
- --------------------------------------------------------------------------------
Fixed maturities held at December 31, 1995, for which no income was recorded
during 1995, totaled $5 million. In addition, nonperforming real estate, defined
as mortgage loans and real estate investments that are not performing in
accordance with their contractual terms or are performing significantly below
expectations, totaled $142 million at December 31, 1995.
Note 3 Insurance Liabilities
3.1. Property/casualty insurance reserves - unpaid losses and loss expenses
- --------------------------------------------------------------------------------
Activity in the unpaid losses and loss expenses for the property/ casualty
segment is summarized as follows:
(in millions) 1995 1994 1993
================================================================================
Total reserve at beginning of year,
gross $6,158 $6,370 $5,564
Less reinsurance recoverables 1,016 1,054 N/A
- --------------------------------------------------------------------------------
Net balance at January 1 5,142 5,316 5,564
- --------------------------------------------------------------------------------
Incurred Related To:
Current year 1,856 1,752 1,744
Prior years (54) (8) 61
- --------------------------------------------------------------------------------
Total incurred 1,802 1,744 1,805
- --------------------------------------------------------------------------------
Paid Related To:
Current year 635 634 582
Prior years 1,196 1,284 1,471
- --------------------------------------------------------------------------------
Total paid 1,831 1,918 2,053
- --------------------------------------------------------------------------------
Net balance at December 31 5,113 5,142 5,316
Plus reinsurance recoverables 984 1,016 1,054
- --------------------------------------------------------------------------------
Total reserve at end of year, gross $6,097 $6,158 $6,370
- --------------------------------------------------------------------------------
Loss and loss expenses recorded in the current period financial statements are
affected by changes in estimates of insured events occurring in prior periods.
Losses incurred in 1995 but related to prior years were a reduction of $54
million primarily as a result of favorable development on prior years'
experience in the assumed reinsurance business. Losses incurred but related to
prior years were $61 million in 1993, primarily as a result of the strengthening
of the unallocated loss expense reserve for voluntary and servicing carrier
business.
Reserves for asbestos-related illnesses and environmental claims cannot be
estimated with traditional loss reserving techniques. Liabilities are
established for known claims (including the cost of litigation) when sufficient
information has been developed to indicate the involvement of a specific
insurance policy, and management can reasonably estimate its liability. In
addition, liabilities have been established to cover additional exposures on
both known and unasserted claims. Estimates of the liabilities are reviewed and
updated continually. Developed case law and adequate claim history do not exist
for such claims, especially because significant uncertainty exists about the
outcome of coverage litigation and whether past claim experience will be
representative of future loss experience.
3.2. Life benefit reserves
- --------------------------------------------------------------------------------
The table below shows F&G Life's benefit reserves by policy type.
At December 31
(in millions) 1995 1994 1993
================================================================================
Single Premium Annuities:
Deferred $1,590 $1,860 $2,138
Immediate 943 867 815
Other annuities 542 492 462
Universal/term/group life 640 579 554
- --------------------------------------------------------------------------------
Net balance 3,715 3,798 3,969
Reinsurance receivable 4 6 4
- --------------------------------------------------------------------------------
Total reserve at end of year, gross $3,719 $3,804 $3,973
- --------------------------------------------------------------------------------
Note 4 Debt and Credit Arrangements
4.1. Debt outstanding
- --------------------------------------------------------------------------------
At December 31
(in millions) 1995 1994 1993
================================================================================
Corporate:
Short-term:
Credit facility $ -- $215 $395
5 1/2% Swiss Franc Bonds due 1996 80 -- --
Long-term:
8 7/8% Notes due 1996 -- -- 99
5 1/2% Swiss Franc Bonds due 1996 -- 92 80
Zero Coupon Convertible Notes
due 2009 136 130 --
8 3/8% Senior Notes due 2001 150 149 --
7% Senior Notes due 1998 145 -- --
7 1/8% Senior Notes due 2005 80 -- --
- --------------------------------------------------------------------------------
Total corporate debt 591 586 574
- --------------------------------------------------------------------------------
Real Estate and Other:
Short-term -- 12 18
Long-term:
8% Secured Note due 1995 -- -- 11
9.96% Secured Notes due
through 1999 11 14 14
Other 5 16 10
- --------------------------------------------------------------------------------
Total real estate and other debt 16 42 53
- --------------------------------------------------------------------------------
Total debt outstanding $607 $628 $627
- --------------------------------------------------------------------------------
4.2. Short-term debt
- --------------------------------------------------------------------------------
For general corporate purposes, USF&G maintained a committed, standby credit
facility with a group of foreign and domestic banks totaling $250 million at
December 31, 1995. This facility, which expires in 1997, was available for up to
$400 million at December 31, 1994, and represents the renegotiation of a prior
credit facility for up to $700 million at December 31, 1993. USF&G pays facility
fees on the total amount of the commitments which are based on its long-term
debt credit ratings. In order to minimize facility fees, and due to the reduced
borrowings against it, the Corporation elected to reduce the size of the
facility to its current level. There were no borrowings against the facility at
December 31, 1995. Such borrowings totaled $215 million at December 31, 1994 and
$395 million at December 31, 1993. Interest rates are based on current market
rates. USF&G was in compliance with the covenants contained in these agreements
at December 31, 1995, 1994, and 1993. The most restrictive covenants require
USF&G to maintain a tangible net worth of at least $1.1 billion plus 50 percent
of the net income earned during the commitment period and an indebtedness-to-
capital ratio below 55 percent.
In addition, at December 31, 1995, USF&G maintained a $100 million foreign
currency credit facility and a $50 million letter of credit facility. USF&G pays
facility fees on the total amount of each commitment. At December 31, 1995,
there were no borrowings against the foreign currency credit facility; the
balance outstanding on the letter of credit facility was $12 million. At
December 31, 1994, there were no borrowings against either facility, both of
which were established during 1994.
4.3. Debt extinguishments
- --------------------------------------------------------------------------------
Proceeds from the issuance of the 7% Senior Notes in May 1995 and the 7 1/8%
Senior Notes in June 1995 were used to repay $215 million under the short-term
credit facility and to purchase approximately $15 million of the 5 1/2% Swiss
Franc Bonds. Another $10 million of the 5 1/2% Swiss Franc Bonds were purchased
in November 1995. In addition, during October 1995, USF&G purchased
approximately $5 million of the outstanding 7% Senior Notes. Both fourth quarter
1995 purchases were accomplished through the use of excess corporate cash. In
1994, with proceeds from the issuance of the Zero Coupon Convertible Notes,
USF&G extinguished $99 million principal of the Corporation's 8 7/8% Notes and
$20 million principal of Medium-Term Notes. Proceeds from the issuance of the 8
3/8% Senior Notes in 1994 were used to reduce the short-term credit facility
borrowings by $147 million.
On January 5, 1996, the remaining balance of the 5 1/2% Swiss Franc Bonds
matured and was repaid. The repayment was accomplished through the draw-down of
$75 million on the committed credit facility, with the remainder of the balance
paid from excess corporate cash.
At December 31, 1994, real estate and other debt included $12 million under a
line of credit maintained by a subsidiary of USF&G Corporation. The balance
under this credit facility was repaid during 1995. Prepayment of $3 million of
the 9.96% Secured Notes due through 1999 further reduced real estate and other
debt in 1995. Real estate and other debt increased in 1994 by $63 million as a
result of the restructuring of a real estate partnership whereby USF&G became a
controlling general partner. Shortly thereafter, $54 million of this partnership
debt was defeased, reducing the amount that would otherwise have been
consolidated as a result of this restructuring to $9 million at December 31,
1994. The remaining balance was subsequently defeased during the third quarter
of 1995. Real estate and other debt was reduced in 1994 by $11 million as the
result of prepaying notes due in 1995 and further reduced $11 million as a
result of a deed-in-lieu of foreclosure whereby property in which USF&G had a
partnership interest was conveyed back to the lender.
4.4. Shelf registrations
- --------------------------------------------------------------------------------
Effective February 20, 1996, USF&G Corporation, along with two business trusts
in which USF&G has a controlling interest (the "Trusts"), have a shelf
registration statement which permits the issuance by the Trusts of up to $210
million of cumulative quarterly income preferred securities (the "Preferred
Securities"). Payment of periodic dividends and the ultimate payment or
redemption of the Preferred Securities will be guaranteed by USF&G Corporation
on a subordinated basis. If the Preferred Securities are issued by the Trusts,
the proceeds will in turn be invested in subordinated debentures of USF&G
Corporation (the "Debentures"). The Debentures will be subordinate and junior in
right of payment to USF&G's other corporate and real estate debt, including
intercompany indebtedness. Both the Preferred Securities and the Debentures will
contain provisions under which any interest payments can be deferred for up to
five years. If issued, the proceeds will be available for general corporate
purposes, including redemption, in whole or in part, of outstanding shares of
USF&G's $4.10 Series A Convertible Exchangeable Preferred Stock. In addition,
USF&G has available $142 million of unissued debt, preferred stock, common stock
and warrants to purchase debt and stock under a 1994 shelf registration.
4.5. Redeemable debt
- --------------------------------------------------------------------------------
The Zero Coupon Convertible Notes are redeemable beginning in 1999 for an amount
equal to the original issue price plus amortized original issue discount.
4.6. Currency swaps
- --------------------------------------------------------------------------------
USF&G entered into currency swap agreements in 1989 to hedge its foreign
currency exposure on the SF120 million 5 1/2% Swiss Franc Bonds. This hedge was
canceled in September 1994 and USF&G received a payment of approximately $19
million. At the same time, USF&G rehedged the repayment of the SF120 million
Swiss Franc debt and interest payments with forward contracts. In conjunction
with the purchase of $25 million of the 5 1/2% Swiss Franc Bonds during 1995,
and in order to offset the unhedged currency position, USF&G effectively reduced
the forward position by issuing Swiss Franc call options and purchasing Swiss
Franc put options at strike prices equivalent to the forward obligations. The
forward contracts and options were exercised in January 1996 upon repayment of
the balance of the 5 1/2% Swiss Franc Bonds.
4.7. Interest rate swaps
- --------------------------------------------------------------------------------
In conjunction with the 8 3/8% Senior Notes, USF&G has outstanding two interest
rate swaps with a total notional amount of $150 million which convert the fixed
interest payments from this debt to floating rate debt for the first three years
of the seven-year term of the debt. These agreements involve, to varying
degrees, interest rate and credit risk. The notional amount represents the
amount of the underlying debt to which the swap applies, not future cash
requirements. The maximum credit risk related to the swap agreements is the
amount related to periodic settlements, which is not material at December 31,
1995. USF&G seeks to manage the credit risk through monitoring procedures and
investigation of counterparties to the transactions.
4.8. Maturities of long-term debt
- --------------------------------------------------------------------------------
Real Estate
(in millions) Corporate and Other
================================================================================
1996 $ 80 $--
1997 -- --
1998 145 --
1999 -- 11
2000 -- --
- --------------------------------------------------------------------------------
Note 5 Financial Instruments and Derivatives
Fair value information is based on quoted market prices where available. In
cases where quoted market prices are not available, fair values are based on
internal estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, such as
applicable discount rate and estimated future cash flows. Therefore, the derived
fair value estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in immediate settlement of the
instrument. Fair value disclosure requirements exclude certain financial
instruments and all nonfinancial instruments. The fair value of many insurance
related liabilities do not require disclosure. However, in its strategy of
asset/liability matching, USF&G takes into consideration the future cash
requirements of its insurance related liabilities. Had a presentation of these
liabilities been made, due to their long-term nature, the fair value of
insurance related liabilities would have been significantly less than their
carrying value.
5.1. Financial instruments
- --------------------------------------------------------------------------------
Cash and Short-Term Investments: The carrying amounts reported in the
Consolidated Statement of Financial Position for these instruments approximate
their fair values.
Fixed Maturity Investments: Fair values for publicly traded fixed maturity
investments are based on quoted market prices. For privately placed fixed
maturities, estimated fair values are derived by discounting expected future
cash flows using a current market rate applicable to the yield, credit quality
and maturity of the investment. At December 31, 1995, the amortized costs and
market values of fixed maturity investments were as follows:
Amortized Market
(in millions) Cost Value
================================================================================
Publicly traded $8,871 $9,202
Private placements 247 256
- --------------------------------------------------------------------------------
Total fixed maturity investments $9,118 $9,458
- --------------------------------------------------------------------------------
All fixed maturities are classified as available for sale and are reported in
the Consolidated Statement of Financial Position at market value.
Common and Preferred Stocks: The carrying values of common and preferred stocks
as reported in the Consolidated Statement of Financial Position are based on
quoted market prices and reflect their fair values.
Mortgage Loans and Policy Loans: The fair values for mortgage loans and policy
loans are estimated based on discounted cash flow analyses, using interest rates
currently being offered for loans with similar credit risk. Loans with similar
characteristics are aggregated for purposes of the calculations. At December 31,
1995, the carrying amounts and fair values of investments in mortgage loans and
policy loans were as follows:
Carrying Fair
(in millions) Amount Value
================================================================================
Mortgage loans $254 $251
Policy loans 67 75
- --------------------------------------------------------------------------------
Other Assets and Other Liabilities: Other invested assets considered financial
instruments include equity interests in minority ownership investments,
interests in limited partnerships and related notes receivable. It is not
practicable to estimate their fair value due to the closely-held nature of these
investments.
Other assets and liabilities considered financial instruments include agents'
balances receivable, prepaid and accrued expenses and other receivables
generally of a short-term nature. It is assumed the carrying value of these
financial instruments approximates their fair value.
Short and Long-Term Debt: The carrying amount of USF&G's short-term borrowings
approximates its fair value. The fair value of long-term debt is based on market
quotes or estimated discounted cash flow analyses, based on USF&G's current
incremental borrowing rates for similar types of borrowing arrangements. The
carrying amounts and estimated fair value of debt instruments at December 31,
1995 were as follows:
Carrying Fair
(in millions) Amount Value
================================================================================
Corporate:
Short-term $ 80 $ 80
Long-term 511 535
Real estate and other 16 17
- --------------------------------------------------------------------------------
Total $ 607 $632
- --------------------------------------------------------------------------------
Investment Contracts: Fair values for F&G Life's single premium deferred
annuities, other deferred annuities, single premium immediate annuities and
supplementary contracts are primarily derived by estimating the cost to
extinguish its liabilities under an assumption reinsurance transaction. The
estimated statutory profits the assuming company would realize from the
transaction are discounted at a typical internal rate of return objective. If
such a transaction were to occur, GAAP would require the unamortized balance of
deferred acquisition costs associated with these liabilities to be immediately
expensed. The amount of the related unamortized deferred acquisition costs was
approximately $109 million at December 31, 1995. The fair values of the
remaining liabilities under investment contracts are estimated using discounted
cash flow calculations, based on interest rates currently being offered for like
contracts with similar maturities. The carrying amounts and estimated fair
values of F&G Life's liabilities for investment contracts at December 31, 1995
are as follows:
Carrying Fair
(in millions) Amount Value
================================================================================
Single premium deferred annuities $1,590 $1,520
Other deferred annuities 432 413
Single premium immediate annuities
and supplementary contracts 105 100
Group annuities 109 106
- --------------------------------------------------------------------------------
Total $2,236 $2,139
- --------------------------------------------------------------------------------
Off-Balance Sheet Financial Instruments: The fair values of USF&G's unfunded
real estate commitments and its financial commitment on investments are
estimated using discounted cash flow analyses, based on USF&G's current
incremental borrowing rate for similar types of borrowing arrangements. The
estimates of the fair value of USF&G's interest rate swaps were obtained from
the counterparties to the agreement or were derived by discounting the expected
future cash flows. The estimated fair values of USF&G's off-balance sheet
financial instruments at December 31, 1995 are as follows:
Fair
(in millions) Value
================================================================================
Liabilities:
Unfunded real estate commitments $18
Debt-related Derivatives:
Interest rate swaps 1
Currency forwards 6
- --------------------------------------------------------------------------------
5.2. Derivatives
- --------------------------------------------------------------------------------
USF&G uses derivative instruments to manage foreign exchange and interest rate
risk, reduce borrowing costs and minimize the impact of rate fluctuations on the
settlement of debt and other financial instruments. USF&G is subject to the risk
that the counterparties will fail to perform. However, these risks are mitigated
by the credit quality of the counterparties and the gains and losses of the
underlying instruments. USF&G does not use derivative instruments for trading
purposes.
Foreign Exchange Rate Instruments: The Corporation relies predominantly on
natural hedges to manage foreign exchange rate risk by maintaining offsetting
foreign asset and foreign liability positions wherever possible, without
sacrificing other financing objectives. Foreign exchange derivative instruments
in use as of December 31, 1995 were a currency forward contract to purchase
Swiss Francs for the principal and interest payment associated with USF&G's 5
1/2% Swiss Franc Bonds due in January 1996, and foreign currency options to
offset the excess forward contract position. The difference between the spot
rate at the initiation of the forward contract and the forward rate was
amortized over the life of the forward contract as foreign currency expense.
These foreign exchange instruments were exercised in January 1996 upon repayment
of the balance of the 5 1/2% Swiss Franc Bonds.
Interest Rate Instruments: The Corporation uses interest rate derivatives
selectively to enable it to maintain a certain fixed/floating rate exposure
given the current and projected interest rate environment. The interest rate
environment in 1995 was one in which changes in short-term and long-term rates
provided the opportunity to obtain fixed rate financing at favorable rates. At
the outset of 1995, USF&G had approximately 60 percent floating rate debt ($376
million) and 40 percent fixed rate debt ($252 million). In the second quarter of
1995, USF&G issued $150 million of 7% Senior Notes due 1998 and $80 million of 7
1/8% Senior Notes due 2005, proceeds of which were used to repay floating rate
debt of $215 million under the committed credit facility and to purchase fixed
rate debt of $15 million of 5 1/2% Swiss Franc Bonds. At December 31, 1995,
USF&G had approximately 75 percent fixed rate debt ($457 million), and 25
percent floating rate debt ($150 million) which resulted from two interest rate
swaps (refer to Note 4.7).
Note 6 Leases
USF&G occupies office facilities under lease agreements that expire at various
dates through 2009. In addition, data processing, office and transportation
equipment is leased under agreements that expire at various dates through 2001.
Most leases contain renewal options that may provide for rent increases based on
prevailing market conditions. Some leases also may contain purchase options
based on fair market values or contractual values, if greater. All leases are
accounted for as operating leases. Rent expense for the years ended December 31,
1995, 1994 and 1993 was $44 million, $63 million and $55 million, respectively.
Rent expense in 1994 included a $9 million loss on long-term subleases.
The table below shows the future minimum payments to be made under noncancelable
leases at December 31, 1995.
Home Other
Office Office
(in millions) Building Space Equipment Total
================================================================================
1996 $ 16 $20 $ 9 $ 45
1997 16 16 8 40
1998 16 13 4 33
1999 19 11 2 32
2000 25 6 2 33
After 2000 224 4 1 229
- --------------------------------------------------------------------------------
Total $ 316 $70 $ 26 $412
- --------------------------------------------------------------------------------
USF&G is also the lessor under various subleases on its office facilities. The
minimum rentals to be received in the future under noncancelable subleases is
$38 million at December 31, 1995.
USF&G's principal office lease involves an office building ("the Tower") which
the Corporation sold in 1984 and subsequently leased back. The facilities exit
costs of $183 million recorded in the fourth quarter of 1994 represent the
present value of the acceleration of net expenses, including rent and operating
expenses, to be incurred under the Tower lease from the time USF&G vacates the
Tower through the expiration of the lease in 2009. The lease on the Tower, which
provides for rent increases every five years through its expiration in September
2009, will not be terminated. USF&G will continue to make rental payments under
the lease.
Note 7 Shareholders' Equity
7.1. Classes of stock
- --------------------------------------------------------------------------------
USF&G is authorized to issue 12 million shares of $50 par value preferred stock
and 240 million shares of $2.50 par value common stock.
7.2. Preferred stock
- --------------------------------------------------------------------------------
USF&G has 4 million shares of $4.10 Series A Convertible Exchangeable Preferred
Stock ("Series A Preferred Stock"), and 277,550 shares of $10.25 Series B
Cumulative Convertible Preferred Stock ("Series B Preferred Stock") issued and
outstanding at December 31, 1995. USF&G had 4 million shares of Series A
Preferred Stock, and 1.3 million shares of Series B Preferred Stock issued and
outstanding at December 31, 1994 and 1993. Additionally, at December 31, 1994
and 1993, USF&G had 1.3 million shares and 3.8 million shares, respectively, of
$5.00 Series C Cumulative Convertible Preferred Stock ("Series C Preferred
Stock") issued and outstanding.
Each share of the Series A Preferred Stock entitles the holder to an annual
cumulative dividend of $4.10 and a liquidation preference of $50 plus accrued
and unpaid dividends. At December 31, 1995, at the option of the holder, subject
to adjustment under certain conditions, each share of Series A Preferred Stock
is convertible to 1.206 shares of USF&G's common stock. The Series A Preferred
Stock is exchangeable in whole at USF&G's option on any dividend payment date
for 8.2% Convertible Subordinated Debentures due 2011 at a rate of $50 principal
amount per share. Shares of the Series A Preferred Stock are redeemable for
cash, in whole or in part, at USF&G's option at $50.41 per share plus accrued
and unpaid dividends to the redemption date. The redemption price declines to
$50 per share in 1996.
During 1995, USF&G called for redemption 832,650 shares of its Series B
Preferred Stock. These shares were converted into 6.9 million shares of common
stock in accordance with the terms of the Series B Preferred Stock. Holders of
an additional 189,800 shares of Series B Preferred Stock voluntarily converted
their shares into 1.6 million shares of common stock during 1995.
Each remaining share of Series B Preferred Stock entitles the holder to an
annual cumulative dividend of $10.25 and a liquidation preference of $100 plus
accrued and unpaid dividends. At December 31, 1995, at the option of the holder,
subject to adjustment under certain conditions, each share of Series B Preferred
Stock is convertible to 8.316 shares of USF&G's common stock. The remaining
shares of Series B Preferred Stock are also redeemable for cash, in part, at
USF&G's option commencing in mid-1996 at $100 per share plus accrued and unpaid
dividends. No redemption may be made prior to 1997 unless the closing price of
the common stock exceeds 150 percent of the Series B Preferred Stock conversion
price and subject to certain other conditions. In addition, if a change in
control event should occur, then at the election of each holder of Series B
Preferred Stock, USF&G will issue and sell additional nonredeemable equity
securities and apply the net proceeds thereof to redeem these shares, but only
if and to the extent any such proceeds are raised.
During 1994, USF&G called for redemption 2.4 million shares of its Series C
Preferred Stock. The remaining shares were called for redemption in 1995. As a
result of these calls, over 93 percent of the Series C Preferred Stock converted
into 14.7 million shares of common stock in accordance with the terms of the
Series C Preferred Stock.
Holders of the preferred stock are not entitled to vote, except that they may
vote separately with respect to certain matters including the authorizations of
any additional classes of capital stock that would rank senior to the preferred
stock. In the event that six quarterly dividends for Series A Preferred Stock or
two quarterly dividends for Series B Preferred Stock are unpaid, USF&G's Board
of Directors will be increased by two members, and holders of preferred stock
may elect two directors until all such dividends in arrears have been paid.
7.3. Dividend restrictions
- --------------------------------------------------------------------------------
There are certain restrictions on payments of dividends by insurance
subsidiaries that may limit USF&G Corporation's ability to receive funds from
its subsidiaries. Under the Maryland Insurance Code, a Maryland insurance
subsidiary, such as USF&G Company and F&G Life, must provide the Maryland
Insurance Commissioner (the "Commissioner") with not less than thirty days'
prior written notice before payment of an "extraordinary dividend" to its
holding company. (Refer to Section 7.3, "Liquidity Restrictions", of
Management's Discussion and Analysis of Financial Conditions and Results of
Operations.) In addition, ten days' prior notice of any other dividend must be
given to the Maryland Insurance Commissioner prior to payment, and the
Commissioner has the right to prevent payment of such dividend if it is
determined that such payment could impair the insurer's surplus or financial
condition.
Effective June 1, 1995 and with the Commissioner's consent, USF&G Company
declared an extraordinary dividend payable to USF&G Corporation for $323
million, which consisted of all of the issued and outstanding capital stock of
F&G Life. Prior to payment of such dividend, F&G Life was a wholly-owned
subsidiary of USF&G Company. As a result of such dividend payment, F&G Life is
now a direct, wholly-owned subsidiary of USF&G Corporation. In addition, because
any dividends paid during the immediately preceding twelve-month period are
considered when determining whether future dividends constitute extraordinary
dividends, any dividends which USF&G Company would propose to pay in the
twelve-month period beginning June 1, 1995 would be deemed extraordinary
dividends and subject to the thirty-day notice period.
In addition to the extraordinary dividend paid on June 1, dividends of $83
million have been paid during 1995 to USF&G Corporation by USF&G Company. At
December 31, 1993, $154 million in dividends were available for payment to USF&G
Corporation from USF&G Company without being subject to the requirements for
extraordinary dividends, of which $125 million of dividends were paid during
1994.
During 1995, approximately $33 million in dividends were available for payment
to USF&G Corporation from F&G Life without providing the notice required for
extraordinary dividends. As of December 31, 1995, cash dividends of
approximately $31 million have been paid to USF&G Corporation by F&G Life. In
addition, effective December 29, 1995 and with the Commissioner's consent, F&G
Life declared an extraordinary dividend payable to USF&G Corporation consisting
of investments in three real estate properties, totaling $28 million. As a
result, any dividends which F&G Life would propose to pay in the twelve-month
period beginning December 29, 1995 would be deemed extraordinary dividends and
subject to the thirty-day notice period.
7.4. Changes in common stock shares
- --------------------------------------------------------------------------------
1995 1994 1993
================================================================================
Outstanding,
January 1 104,810,794 91,418,372 89,985,083
Shares issued 14,795,301 13,392,422 1,433,289
- --------------------------------------------------------------------------------
Outstanding,
December 31 119,606,095 104,810,794 91,418,372
- --------------------------------------------------------------------------------
USF&G issued 5.5 million shares of common stock during 1995 for the conversion
of the Series C Preferred Stock, and 8.5 million shares of common stock for the
conversion of the Series B Preferred Stock. Another 9.9 million common stock
shares were issued in 1994 related to the conversion of the Series C Preferred
Stock.
7.5. Shareholder rights plan
- --------------------------------------------------------------------------------
USF&G has a shareholder rights plan ("the plan") to deter coercive or unfair
takeover tactics and to prevent a potential purchaser from gaining control of
USF&G without offering a fair price to all of the Corporation's shareholders.
Under the plan, each outstanding share of USF&G's common stock has one preferred
share purchase right (a "right") expiring in 1997. Each right entitles the
registered holder to purchase 1/100 of a share of a new class of junior
preferred stock for $140. The rights cannot be exercised unless certain events
occur that might lead to a concentration in ownership of common shares. At that
time, the rights may be exercised for common stock having a value of twice the
exercise price. Under certain conditions, the rights also become exercisable
into shares of common stock of a purchaser having a value of twice the exercise
price. USF&G will generally be entitled to redeem the rights, at $.05 per right,
any time before the tenth day after a 20 percent position is acquired.
Note 8 Stock Ownership Plans
8.1. Stock option plans
- --------------------------------------------------------------------------------
Stock options have been granted to full-time officers and key employees under
four incentive plans: Long-Term Incentive Plan, Stock Option Plan of 1987, Stock
Option Plan of 1990, and Stock Incentive Plan of 1991. In addition, the Employee
Stock Option Plan of 1992 and the 1994 Stock Plan For Employees of USF&G granted
eligible employees, other than officers and key employees participating in other
stock incentive plans, options to purchase shares based on market quotations at
the time of grant. Activity under the stock option plans is as follows:
1995 1994 1993
================================================================================
Outstanding, January 1 5,908,451 4,824,136 5,135,484
Granted 2,714,806 2,245,500 1,143,282
Exercised (733,603) (483,590) (338,940)
Surrendered or cancelled (599,447) (677,595) (1,115,690)
- --------------------------------------------------------------------------------
Outstanding,
December 31 7,290,207 5,908,451 4,824,136
- --------------------------------------------------------------------------------
Expiration dates 12/97-12/2005 1/95-12/2004 1/94-12/2003
Exercise and surrender
prices $6.25-30.82 $6.25-30.82 $6.25-30.82
Shares reserved and
available for grant 3,111,099 8,106,029 2,324,047
- --------------------------------------------------------------------------------
The Corporation applies Accounting Principals Board Opinion No. 25, "Accounting
for Stock Issued to Employees", ("APB No. 25") and related interpretations in
accounting for its employee stock options. Under APB No. 25, no compensation
expense is recognized since the exercise price of the options is equal to the
market price of the underlying stock on the date of the grant.
8.2. Directors stock plan
- --------------------------------------------------------------------------------
The Corporation adopted the 1993 Stock Plan for Non-Employee Directors (the
"Directors Stock Plan") on May 12, 1993. Only the Corporation's outside
directors are eligible to participate, and participation is mandatory. The
Directors Stock Plan has two components: (1) annual retainer awards, and (2)
retirement awards. The Directors Stock Plan authorizes the issuance of up to
300,000 shares of the Corporation's common stock, par value $2.50 per share.
Activity under the Directors Stock Plan is as follows:
1995 1994 1993
================================================================================
Outstanding, January 1 96,502 113,585 --
Stock units awarded 21,903 17,115 135,885
Stock issued (3,000) (34,198) (22,300)
- --------------------------------------------------------------------------------
Outstanding, December 31 115,405 96,502 113,585
- --------------------------------------------------------------------------------
USF&G records compensation expense equal to the market value at grant date of
the vested stock or stock units awarded under the Directors Stock Plan. In 1993,
$2 million of compensation expense was recognized relating to this plan. The
1995 and 1994 compensation expense related to these plans was minimal.
Note 9 Retirement Benefits
9.1. Retirement plans
- --------------------------------------------------------------------------------
USF&G has noncontributory retirement plans covering most regular full-time
employees of the Corporation and its affiliates. An employee's pension benefit
is based on salary, years of service and Social Security benefits. USF&G makes
contributions to the retirement plans based on amounts required to be funded
under provisions of the Employee Retirement Income Security Act of 1974, as
amended. The plans' funded status and amounts recognized in the consolidated
financial statements are as follows:
At December 31
(dollars in millions) 1995 1994 1993
================================================================================
Actuarial Present Value of:
Accumulated benefit obligation $ 388 $303 $338
Vested benefits 372 291 322
- --------------------------------------------------------------------------------
Plan assets at fair value $ 348 $289 $297
Projected benefit obligation 403 313 351
- --------------------------------------------------------------------------------
Funded status (55) (24) (54)
Unrecognized net loss 134 98 123
Unrecognized prior service
cost (benefit) (19) (22) (25)
Adjustment for minimum
pension liability (100) (63) (85)
- --------------------------------------------------------------------------------
Net accrued pension cost $ (40) $(11) $(41)
- --------------------------------------------------------------------------------
Actuarial Assumptions:
Weighted average discount rate 7.00% 8.75% 7.50%
Average rate of increase in future
compensation levels 5.0 5.0 5.0
Expected long-term rate of return
on assets 8.5 8.5 8.5
- --------------------------------------------------------------------------------
As a result of the lower interest rate environment, USF&G decreased the discount
rate assumption as of December 31, 1995, which caused the accumulated benefit
obligation to increase. In accordance with SFAS No. 87, USF&G recorded a minimum
pension liability for the underfunded amount, representing the accumulated
benefit obligation in excess of the fair value of the plans' assets, plus the
amount of prepaid pension costs. The minimum pension liability is reported as a
separate reduction to shareholders' equity.
The assets held by the plan consist primarily of fixed-income and equity
securities. USF&G classifies prepaid pension cost with other assets and accrued
pension cost with other liabilities in the Consolidated Statement of Financial
Position.
The components of net pension expense are as follows:
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Service cost $ 5 $ 6 $ 4
Interest cost 27 26 25
Actual return on plan assets (63) 10 (19)
Net amortization and deferral 43 (29) --
- --------------------------------------------------------------------------------
Net periodic pension expense $ 12 $ 13 $ 10
- --------------------------------------------------------------------------------
9.2. Postretirement benefits
- --------------------------------------------------------------------------------
USF&G sponsors a defined dollar postretirement health care plan (medical and
dental) and noncontributory life insurance plan covering most regular full-time
employees of the Corporation and its affiliates. USF&G's contributions and costs
are determined based on the annual salary and the type of coverage elected by
covered employees. USF&G's contributions to the plan are a percentage of plan
costs based on age and service of employees at retirement. Additionally, the
plan costs are capped at projected 1996 cost levels, and retiree contributions
are increased for the total medical costs over the projected levels.
Effective January 1, 1993, USF&G adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions". This statement requires USF&G
to accrue a liability for the cost of health care, life insurance and other
retiree benefits when the employees' services are rendered. As permitted under
the standard, the transition obligation of $52 million at January 1, 1993 was
recognized as an immediate charge to net income by including the cumulative
effect of adopting this accounting standard. USF&G funds the health care and
life insurance benefit costs principally on a pay-as-you-go basis. The amounts
funded for postretirement benefits were $5 million in 1995, 1994 and 1993.
The plans' combined funded status and amounts recognized in the consolidated
financial statements are as follows:
At December 31
(in millions) 1995 1994 1993
================================================================================
Accumulated Postretirement
Benefit Obligation:
Retirees $(48) $(45) $(46)
Fully eligible active plan
participants (1) (1) (4)
Other active plan participants (8) (6) (8)
- --------------------------------------------------------------------------------
(57) (52) (58)
Plan assets at fair value -- -- --
- --------------------------------------------------------------------------------
Funded status (57) (52) (58)
Unrecognized net loss (gain) 4 (1) 6
- --------------------------------------------------------------------------------
Accrued postretirement benefit cost $(53) $(53) $(52)
- --------------------------------------------------------------------------------
USF&G classifies accrued postretirement benefit cost with other liabilities in
the Consolidated Statement of Financial Position.
Net periodic postretirement benefit costs consisted of $1 million of service
cost and $4 million of interest cost for each of the years ended December 31,
1995, 1994 and 1993. The weighted average annual assumed rate of increase in per
capita cost of covered benefits (i.e., medical trend rate) for the plans is 7.75
percent for 1996 (9.0 percent and 10.5 percent for 1995 and 1994, respectively)
and is assumed to decrease to 5.25 percent in 2002 for participants age 65 or
younger, and 7.4 percent for 1996 (7.75 percent and 8.0 percent for 1995 and
1994, respectively), decreasing to 5.25 percent for participants over age 65,
and remain at that level thereafter. Increasing the assumed medical trend rate
by one percentage point in each year would increase the accumulated
postretirement benefit obligation by approximately $4 million and the aggregate
of the service and interest cost components of net periodic postretirement
benefit cost for the year by less than $1 million. The weighted average discount
rate used in determining the accumulated postretirement benefit obligation was
7.00 percent, 8.75 percent, and 7.50 percent at December 31, 1995, 1994 and
1993, respectively.
Note 10 Income Taxes
USF&G Corporation and its subsidiaries file a consolidated federal income tax
return. Deferred tax liabilities or assets are recognized for the estimated
future tax effects attributable to net operating loss carry-forwards ("NOLs")
and to temporary differences between the tax basis and GAAP basis of an asset or
a liability. A valuation allowance is required if, based on the weight of
available evidence, it is more likely than not that some or all of the deferred
tax asset will not be realized.
At December 31, 1995, the net deferred tax asset of $435 million recorded by
USF&G is supported by a combination of forecasted taxable income and a tax
strategy that USF&G would implement to prevent NOLs from expiring.
10.1. Significant components of deferred tax assets and liabilities
- --------------------------------------------------------------------------------
At December 31
(in millions) 1995 1994 1993
================================================================================
Deferred Tax Liabilities:
Deferred policy acquisition costs $139 $165 $143
Other invested assets 12 7 44
Net unrealized gains 95 -- 67
Other 53 4 --
- --------------------------------------------------------------------------------
Total deferred tax liabilities 299 176 254
- --------------------------------------------------------------------------------
Deferred Tax Assets:
Facilities exit costs 75 74 --
Unpaid losses and loss expenses 236 249 306
Unearned premiums 54 45 47
Foreign reinsurance 56 50 49
Real estate 5 25 30
Future policy benefits 66 54 50
Net unrealized losses -- 52 --
Minimum pension liability 35 22 30
Postretirement benefits 19 19 18
Other 47 21 67
Net operating loss carry-forwards 207 263 222
- --------------------------------------------------------------------------------
Total deferred tax assets 800 874 819
Valuation allowance for deferred
tax assets 66 279 445
- --------------------------------------------------------------------------------
Deferred tax assets, net of
valuation allowance 734 595 374
- --------------------------------------------------------------------------------
Net deferred tax assets $435 $419 $120
- --------------------------------------------------------------------------------
The components of the changes in the valuation allowance were recorded through
shareholders' equity and operations, as follows:
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Changes Recognized in Shareholders' Equity:
Change related to net unrealized
(gains) losses $(147) $ 119 $(67)
Change related to minimum
pension liability 13 (8) 30
- --------------------------------------------------------------------------------
Total changes recognized in
shareholders' equity (134) 111 (37)
- --------------------------------------------------------------------------------
Changes Recognized in Statement of Operations:
Reduction for increased likelihood
of realization (81) (267) (56)
Tax rate changes enacted -- -- 15
Other adjustments 2 (10) 6
- --------------------------------------------------------------------------------
Total changes recognized in
statement of operations (79) (277) (35)
- --------------------------------------------------------------------------------
Total change in valuation allowance $(213) $(166) $(72)
- --------------------------------------------------------------------------------
Changes to the valuation allowance recognized as a benefit in the statement of
operations were primarily a result of the continued development of positive
earnings trends, supporting the likelihood of realization of the deferred tax
assets.
10.2. Components of provision for income taxes (benefits)
- --------------------------------------------------------------------------------
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Current tax $ 43 $ 32 $ 40
NOL utilization (38) (22) (31)
- --------------------------------------------------------------------------------
Current tax, net of NOL utilization 5 10 9
Deferred tax (benefit) 62 (23) 23
Adjustment for enacted change
in tax rates -- -- (3)
Adjustment of the beginning of the
year valuation allowance (81) (267) (56)
- --------------------------------------------------------------------------------
Provision for income taxes (benefit) $(14) $(280) $(27)
- --------------------------------------------------------------------------------
Income taxes paid $ 5 $ 12 $ 5
- --------------------------------------------------------------------------------
10.3. Reconciliation of taxes at federal rates to provision for income taxes
(benefit)
- --------------------------------------------------------------------------------
Years Ended December 31
(in millions) 1995 1994 1993
================================================================================
Tax at federal rates $ 68 $ (16) $ 36
Tax Effect (Benefit):
Adjustment of the beginning of the
year valuation allowance (81) (267) (56)
Effect of change in tax rates -- -- (3)
Tax-exempt interest income (2) (3) (2)
Adjustment of property/casualty salvage
and subrogation accruals
(fresh start) -- 6 --
Other 1 -- (2)
- --------------------------------------------------------------------------------
Provision for income taxes (benefit) $(14) $(280) $(27)
- --------------------------------------------------------------------------------
10.4. Net operating loss carry-forwards
- --------------------------------------------------------------------------------
At December 31, 1995, USF&G had NOLs remaining for tax return purposes expiring
in 2006. The amount and timing of recognizing the benefit of these NOLs depends
on future taxable income and limitations imposed by tax laws. The approximate
amounts of USF&G's NOLs on a regular tax basis and an alternative minimum tax
("AMT") basis at December 31, 1995 were as follows:
(in millions) Tax Return
================================================================================
Regular tax basis $593
AMT basis 354
- --------------------------------------------------------------------------------
Note 11 Reinsurance
USF&G reinsures portions of its policy risks with other insurance companies or
underwriters, and assumes policy risks from other insurance companies and
through participation in pools and associations. Reinsurance gives USF&G the
ability to write larger risks and control its exposure to losses from
catastrophes or other events that cause unfavorable underwriting results.
USF&G's ceding reinsurance agreements are generally structured on a treaty basis
whereby all risks meeting certain criteria are automatically reinsured. Amounts
recoverable from reinsurers are estimated in a manner consistent with the claim
liability associated with the reinsured policy. Reinsurance contracts do not
relieve USF&G from its obligation to policyholders. Failure of reinsurers to
honor their obligation could result in losses to USF&G. USF&G evaluates the
financial condition of its reinsurers and monitors concentrations of credit
risks arising from similar economic characteristics of the reinsurers to
minimize its exposure to significant losses from reinsurer insolvencies. At
December 31, 1995, 1994 and 1993, reinsurance receivables totaled $604 million,
$554 million and $573 million, respectively. Of these amounts, approximately
$100 million, $122 million and $150 million, respectively, were associated with
the Workers' Compensation Reinsurance Bureau ("WCRB"), a single voluntary
reinsurance association of primary workers' compensation insurers formed for the
purpose of providing excess of loss reinsurance to its members. USF&G is a
member of this pool. Each member is required to hold collateral, for the benefit
of all member companies, in the form of investment-grade securities equaling 115
percent of the member's share of outstanding receivables of the WCRB. This
collateral requirement mitigates the risk of the WCRB becoming insolvent. Risk
of loss is minimal for the remainder of receivables due to similar pool
arrangements with collateral requirements, other contracts where funds are
withheld, or letters of credit maintained. Credit risk is also diversified among
numerous reinsurers. Additionally, USF&G has been active in the involuntary
market as a servicing carrier whereby USF&G processes business for a pool but
takes no direct underwriting risk because it is directly reimbursed for the cost
of processing policies and settling any related claims. Servicing carrier
receivables of $699 million, $706 million and $719 million associated with this
business are separately disclosed in the Consolidated Statement of Financial
Position at December 31, 1995, 1994 and 1993, respectively.
The effect of reinsurance on USF&G's premiums and losses is as follows:
1995
Premiums Losses Unpaid Unearned
(in millions) Written Earned Incurred Losses Premiums
================================================================================
Property/Casualty:
Direct $2,318 $2,253 $1,607 $4,675 $ 945
Assumed 634 637 436 1,422 110
- --------------------------------------------------------------------------------
Gross 2,952 2,890 2,043 6,097 1,055
Ceded (389) (398) (241) (984) (136)
- --------------------------------------------------------------------------------
Net 2,563 2,492 1,802 5,113 919
Life N/A 174 376 3,719 N/A
- --------------------------------------------------------------------------------
Total $2,563 $2,666 $2,178 $8,832 $ 919
- --------------------------------------------------------------------------------
1994
Premiums Losses Unpaid Unearned
(in millions) Written Earned Incurred Losses Premiums
================================================================================
Property/Casualty:
Direct $2,303 $2,284 $1,660 $ 4,826 $ 855
Assumed 594 588 407 1,332 113
- --------------------------------------------------------------------------------
Gross 2,897 2,872 2,067 6,158 968
Ceded (508) (516) (323) (1,016) (116)
- --------------------------------------------------------------------------------
Net 2,389 2,356 1,744 5,142 852
Life N/A 152 388 3,804 N/A
- --------------------------------------------------------------------------------
Total $2,389 $2,508 $2,132 $ 8,946 $ 852
- --------------------------------------------------------------------------------
1993
Premiums Losses Unpaid Unearned
(in millions) Written Earned Incurred Losses Premiums
================================================================================
Property/Casualty:
Direct $2,400 $2,390 $1,508 $ 5,100 $ 836
Assumed 613 523 96 1,270 114
- --------------------------------------------------------------------------------
Gross 3,013 2,913 1,604 6,370 950
Ceded (511) (521) 201 (1,054) (124)
- --------------------------------------------------------------------------------
Net 2,502 2,392 1,805 5,316 826
Life N/A 129 395 3,973 N/A
- --------------------------------------------------------------------------------
Total $2,502 $2,521 $2,200 $ 9,289 $ 826
- --------------------------------------------------------------------------------
Included in assumed unpaid losses in the above tables are $52 million, $86
million and $110 million related to loss portfolio transfer agreements at
December 31, 1995, 1994, and 1993, respectively. USF&G has not entered into any
such agreements to cede its unpaid losses.
Note 12 Financial Guarantees
As of December 31, 1995, USF&G was contingently liable for par value amounts
totaling less than $150 million on financial guarantee exposures ceded through
reinsurance agreements with a monoline insurance company in which USF&G formerly
had a minority ownership interest.
In addition, USF&G has other financial guarantee obligations where the par value
guaranteed totaled $10 million at December 31, 1995, maturing at various dates
through 1999. USF&G has also committed to assumption of the first $15 million in
losses, if any, that would arise as a result of default on multi-family
mortgages securitized as mortgage-backed securities.
Note 13 Legal Contingencies
USF&G's insurance subsidiaries are routinely engaged in litigation in the normal
course of their businesses, including defending claims for punitive damages. As
insurers, they defend third-party claims brought against their insureds, as well
as defend themselves against first-party and coverage claims. Additionally,
contingencies may arise from insurance regulatory matters and regulatory
litigation matters (refer to Note 13.5).
In the opinion of management, such contingencies and the contingencies described
below are not expected to have a material adverse effect on USF&G's consolidated
financial position, although it is possible that the results of operations in a
particular quarter or annual period would be materially affected by an
unfavorable outcome.
13.1. North Carolina workers' compensation litigation
- --------------------------------------------------------------------------------
On November 24, 1993, N.C. Steel, Inc., and six other North Carolina employers
filed a class action in the General Court of Justice, Superior Court Division,
Wake County, North Carolina against the National Council on Compensation
Insurance ("NCCI"), North Carolina Rate Bureau, USF&G and eleven other insurance
companies which served as servicing carriers for the North Carolina involuntary
workers' compensation market. On January 20, 1994, the plaintiffs filed an
amended complaint seeking to certify a class of all employers who purchased
workers' compensation insurance in the State of North Carolina after November
24, 1989. The amended complaint, which is captioned N.C. Steel, Inc., et al., v.
National Council on Compensation Insurance, et al., alleges that the defendants
conspired to suppress competition with respect to the North Carolina voluntary
and involuntary workers' compensation business, thereby artificially inflating
the rates in such markets and the fees payable to the insurers. The complaint
also alleges that the carriers agreed to improperly deny qualified companies
from acting as servicing carriers, improperly encourage agents to place
employers in the assigned risk pool, and improperly promote inefficient claims
handling. USF&G acted as a servicing carrier in North Carolina between 1990 and
1995. The plaintiffs are pursuing their claims under various legal theories,
including violations of the North Carolina antitrust laws, unlawful conspiracy,
breach of fiduciary duty, breach of implied covenant of good faith and fair
dealing, unfair competition, constructive fraud, and unfair and deceptive trade
practices. The plaintiffs seek unspecified compensatory damages, punitive
damages for the alleged constructive fraud and treble damages under the North
Carolina antitrust laws. On February 14, 1995, the trial court granted the
defendants' motion to dismiss the complaint. The plaintiffs have appealed the
trial court's dismissal of the case. USF&G believes that it has meritorious
defenses and has determined to defend the action vigorously.
13.2. South Carolina workers' compensation litigation
- --------------------------------------------------------------------------------
On August 22, 1994, the Attorney General of the State of South Carolina filed
suit in the County of Greenville, South Carolina on behalf of South Carolina
employers that have allegedly been damaged as a result of alleged unfair and
deceptive trade practices. Specifically, the Attorney General alleges that the
NCCI, the National Workers' Compensation Reinsurance Pool, USF&G and seven other
insurance companies which served as servicing carriers for the South Carolina
involuntary workers' compensation market, conspired to fix servicing carrier
fees at unreasonably high and noncompetitive levels in violation of the South
Carolina Uniform Trade Practices Act, allegedly causing inflated deficits in the
involuntary market and an excessive expansion of the residual market. The
Attorney General alleges that the conspiracy occurred for an unspecified period
of time prior to January 1994. The Attorney General has indicated that he
intends to pursue recovery on behalf of all South Carolina employers who have
suffered an ascertainable loss as a result of such alleged conduct, civil
penalties of $5,000 for each willful violation, and temporary and permanent
injunctive relief. USF&G believes that it has meritorious defenses and has
determined to defend the action vigorously.
13.3. Alabama workers' compensation litigation
- --------------------------------------------------------------------------------
On September 14, 1994, three Alabama employers filed a class action captioned
Four Way Plant Farm, Inc., et al., v. National Council on Compensation
Insurance, et al., in the Circuit Court of Bullock County, Alabama on behalf of
all Alabama employers that have allegedly been damaged as a result of an alleged
conspiracy by the NCCI, the National Workers' Compensation Reinsurance Pool,
USF&G and numerous other insurance companies which served as servicing carriers
for the Alabama involuntary workers' compensation market, to fix servicing
carrier fees at unreasonably high and noncompetitive levels in violation of
Alabama law. The plaintiffs allege that the conspiracy occurred during the
period January 1, 1985 to January 1, 1994, and caused inflated deficits in the
involuntary market and an alleged excessive expansion of the workers'
compensation residual market. The plaintiffs seek unspecified damages on behalf
of each member of the proposed class action. USF&G believes that it has
meritorious defenses and has determined to defend the action vigorously.
13.4. Proposition 103
- --------------------------------------------------------------------------------
In November 1988, voters in the State of California passed Proposition 103,
which required insurers doing business in California to rollback most
property/casualty premium prices in effect between November 1988 and November
1989 to November 1987 levels, less an additional 20 percent discount unless an
insurer could establish that such rate levels threatened its solvency. The
California Supreme Court subsequently ruled that an insurer does not have to
face insolvency in order to qualify for an exemption from the rollback
requirements and is entitled to a "fair and reasonable return".
The California Insurance Department adopted various regulations implementing
Proposition 103, which were the subject of various lawsuits, and it was not
clear how these regulations would apply to USF&G. However, in November 1995,
USF&G entered into an agreement with the California Insurance Department to
settle any rollback liability by refunding $11 million to certain policyholders
who were USF&G insureds between November 1988 and November 1989. This final
settlement approximated amounts previously accrued.
13.5. Regulation
- --------------------------------------------------------------------------------
USF&G's insurance subsidiaries are subject to extensive regulatory oversight in
the jurisdictions where they do business. From time to time, the insurance
regulatory framework has been the subject of increased scrutiny. At any one time
there may be numerous initiatives within state legislatures or state insurance
departments to alter and, in many cases, increase state authority to regulate
insurance companies and their businesses. It is not possible to predict the
future impact of increasing regulation on USF&G's operations. (Additional
information regarding regulatory matters may be found in Section 8, "Legal
Contingencies and Regulation", of Management's Discussion and Analysis of
Financial Condition and Results of Operations.)
Note 14 Information on Business Segments
USF&G's principal business segments are property/casualty insurance and life
insurance.
14.1. Assets
- --------------------------------------------------------------------------------
The assets of the insurance operations are primarily investments. Foreign assets
are not material. Assets of the business segments are as follows:
At December 31
(in millions) 1995 1994 1993
================================================================================
Property/casualty insurance $ 9,967 $ 9,487 $ 9,711
Life insurance 4,591 4,575 4,848
Noninsurance operations
and eliminations 93 (82) (78)
- --------------------------------------------------------------------------------
Consolidated total $14,651 $13,980 $14,481
- --------------------------------------------------------------------------------
14.2. Operations
- --------------------------------------------------------------------------------
The insurance business is geographically diversified throughout the United
States and Canada. Reinsurance and noninsurance operations are located in the
United States, Europe and various foreign countries. Foreign operations, in
total, are not material. Summarized financial information for the business
segments is as follows:
<TABLE>
<CAPTION>
Years Ended December 31
Income (Loss)
from Operations
Revenues Before Income Taxes
(in millions) 1995 1994 1993 1995 1994** 1993
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Property/Casualty Insurance:
Commercial lines $1,223 $1,206 $1,241 $(139) $(183) $(225)
Personal lines 635 626 730 (77) (62) (29)
Assumed reinsurance 490 395 305 43 40 32
Surety 119 107 100 16 3 (6)
Alternative risk transfer 25 22 16 1 -- (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Property/casualty
categories 2,492 2,356 2,392 (156) (202) (229)
Net investment income* 438 429 437 438 429 437
Net realized gains (losses)
on investments* 14 (9) 31 14 (9) 31
Other 12 10 5 (42) 1 (22)
- ------------------------------------------------------------------------------------------------------------------------------------
Total property/casualty
insurance 2,956 2,786 2,865 254 219 217
- ------------------------------------------------------------------------------------------------------------------------------------
Life Insurance:
Premium income 174 152 129
Net investment income 306 317 321
Net realized gains
on investments 1 -- 20
Other 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total life insurance 482 470 471 28 14 14
- ------------------------------------------------------------------------------------------------------------------------------------
Noninsurance operations
and eliminations 21 54 (13) (87) (276) (128)
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated total $3,459 $3,310 $3,323 $ 195 $ (43) $ 103
- ------------------------------------------------------------------------------------------------------------------------------------
*Net investment income and net realized gains (losses) on investments are not
allocated to property/casualty categories.
**Income (loss) from operations before income taxes for 1994 includes facilities
exit costs by segment as follows: Property/casualty, $28 million; and
Noninsurance operations, $(211) million.
</TABLE>
<TABLE>
<CAPTION>
Note 15 Interim Financial Data (Unaudited)
Quarter
<S> <C> <C> <C> <C> <C> <C>
(in millions except per share data) First Second Third Fourth*
====================================================================================================================================
Summary Quarterly Results:
Revenues 1995 $818 $856 $885 $900
1994 786 812 835 877
1993 891 837 775 820
Income from operations before cumulative effect of adopting 1995 49 46 49 65
new accounting standards 1994 23 74 76 64
1993 23 26 21 60
Income from cumulative effect of adopting new accounting standards 1995 -- -- -- --
1994 -- -- -- --
1993 38 -- -- --
Net income 1995 49 46 49 65
1994 23 74 76 64
1993 61 26 21 60
Primary Earnings per Common Share:**
Income from operations before cumulative effect of adopting 1995 $.39 $.35 $.37 $.52
new accounting standards 1994 .11 .66 .67 .54
1993 .12 .15 .10 .52
Income from cumulative effect of adopting new accounting standards 1995 -- -- -- --
1994 -- -- -- --
1993 .42 -- -- --
Net income 1995 .39 .35 .37 .52
1994 .11 .66 .67 .54
1993 .54 .15 .10 .52
Fully Diluted Earnings per Common Share:**
Income from operations before cumulative effect of adopting 1995 $.36 $.33 $.35 $.48
new accounting standards 1994 .11 .56 .58 .47
1993 .16 .15 .10 .47
Income from cumulative effect of adopting new accounting standards 1995 -- -- -- --
1994 -- -- -- --
1993 .32 -- -- --
Net income 1995 .36 .33 .35 .48
1994 .11 .56 .58 .47
1993 .48 .15 .10 .47
*The fourth quarter 1995, 1994 and 1993 results reflect tax benefits of $15
million, $210 million and $27 million, respectively, as discussed in Note 10.
The fourth quarter 1994 results also reflect $183 million in facilities exit
costs as discussed in Note 1.10.
** The sum of quarterly income per share amounts may not equal the full year's
amount due to stock issuances during presented periods.
</TABLE>
<PAGE>
USF&G CORPORATION Report of Independent Auditors
Board of Directors
USF&G Corporation
We have audited the accompanying consolidated statement of financial position of
USF&G Corporation as of December 31, 1995, 1994, and 1993, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of USF&G Corporation
at December 31, 1995, 1994, and 1993 and the consolidated results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
In 1993, as a result of adopting new accounting standards and as discussed in
Notes 2, 9, and 10 to the consolidated financial statements, the Corporation
changed its methods of accounting for certain investments in debt and equity
securities, postretirement benefits other than pensions, and income taxes.
/s/ ERNST & YOUNG LLP
Baltimore, Maryland
February 23, 1996
<PAGE>
USF&G CORPORATION Directors and Committees of the Board
Directors
H. Furlong Baldwin (64)
Chairman of the Board and
Chief Executive Officer
Mercantile Bankshares Corporation
1981*
Michael J. Birck (58)
President and Chief Executive Officer
Tellabs, Inc.
1993*
Norman P. Blake, Jr. (54)
Chairman of the Board, President,
and Chief Executive Officer
USF&G Corporation
1990*
George L. Bunting, Jr. (55)
President and Chief Executive Officer
Bunting Management Group
1981*
Robert E. Davis (64)
Managing Director
Axess Corporation
1990*
Dale F. Frey (63)
Chairman of the Board and President
General Electric Investment Corporation
1991*
Robert E. Gregory, Jr. (53)
Chairman of the Board and Chief Executive Officer
London Fog Corporation
1988*
Robert J. Hurst (50)
Partner
Goldman, Sachs & Co.
1988*
Dr. Wilbur G. Lewellen (58)
Herman C. Krannert Distinguished
Professor of Management
Graduate School of Management
Purdue University
1992*
Henry A. Rosenberg, Jr. (66)
Chairman of the Board and
Chief Executive Officer
Crown Central Petroleum Corporation
1981*
Larry P. Scriggins (59)
Partner
Piper & Marbury
1981*
Anne Marie Whittemore (49)
Partner
McGuire Woods Battle & Boothe
1993*
R. James Woolsey (54)
Partner
Shea & Gardner
1995*
Advisory Member of the Board
Randolph Screen (39)
Chairman
USF&G National Agency Council
Senior Vice President
Beall, Garner, Screen and Geare, Inc.
1995*
*Year of original election
Committees of the Board
Executive Committee
Norman P. Blake, Jr.
Chairman
H. Furlong Baldwin
George L. Bunting, Jr.
Dale F. Frey
Robert E. Gregory, Jr.
Robert J. Hurst
Finance Committee
H. Furlong Baldwin
Chairman
Dale F. Frey
Wilbur G. Lewellen
Larry P. Scriggins
Anne Marie Whittemore
R. James Woolsey
Audit Committee
Robert E. Gregory, Jr.
Chairman
Michael J. Birck
Robert E. Davis
Dale F. Frey
Henry A. Rosenberg, Jr.
R. James Woolsey
Compensation Committee
George L. Bunting, Jr.
Chairman
Michael J. Birck
Robert E. Davis
Robert E. Gregory, Jr.
Wilbur G. Lewellen
Henry A. Rosenberg, Jr.
Nominating Committee
Robert J. Hurst
Chairman
H. Furlong Baldwin
George L. Bunting, Jr.
Robert E. Davis
Larry P. Scriggins
Anne Marie Whittemore
<PAGE>
USF&G CORPORATION Officers
Executive Management Committee
Norman P. Blake, Jr. (54)
Chairman, president, and chief executive officer since 1990
Previously chairman and chief executive officer, Heller International; executive
vice president-Financing Operations, General Electric Credit Corporation
B.S., M.A.-Purdue University
Glenn W. Anderson (43)
Executive vice president-Commercial Lines and Field Operations since 1995
Previously executive vice president-USF&G Commercial Lines; vice
president-Commercial Lines, Fireman's Fund
B.A.-Stanford University
John R. Berger (43)
President-F&G Re since January 1996
Previously executive vice president-F&G Re since 1983
A.B.-Princeton University, M.B.A.-Rutgers University
Kenneth E. Cihiy (49)
Senior vice president-Claim since 1993
Previously resident vice president, Aetna Life & Casualty
B.S.-Wilkes University
Gary C. Dunton (40)
President-Family and Business Insurance Group since 1995 and executive vice
president-USF&G since 1992
Previously executive vice president-USF&G Field Operations; vice president-
Standard Commercial Accounts, Aetna Life & Casualty
B.S.-Northeastern University, M.B.A.-Harvard University
Dan L. Hale (51)
Executive vice president-chief financial officer since 1993
Previously executive vice president-USF&G Diversified Insurance and Investment
Operations; president, Chase Manhattan Leasing Company
B.A.-Yale University
Robert J. Lamendola (51)
Senior vice president-Surety since 1995
Previously senior vice president Fidelity/Surety;
managing director, Marsh & McLennan, Inc.
B.A.-State University College at Buffalo, New York
Thomas K. Lewis (43)
Senior vice president-chief information officer since 1993
Previously vice president-general manager for Europe, Middle East, and Africa,
Seer Technologies, Inc.
B.S., M.S.-University of New Haven
Stephen W. Lilienthal (46)
Senior vice president-Field Operations since 1995
Previously senior vice president-USF&G Underwriting Services; vice president-
Commercial Lines, Travelers Insurance Company
B.A.-College of The Holy Cross
John A. MacColl (47)
Senior vice president-general counsel since 1989 and senior vice president-Human
Resources since 1994
Previously partner, Piper & Marbury
B.A.-Princeton University, LL.B.-Georgetown University
Andrew A. Stern (38)
Senior vice president-Strategic Planning/Corporate Marketing since 1993
Previously partner and vice president, Booz Allen & Hamilton, Inc.
B.S.S.C.-Massachusetts Institute of Technology, M.B.A.-University of Chicago
Harry N. Stout (43)
President-F&G Life since 1994
Previously senior vice president-Business and Product Development-F&G Life;
senior vice president- United Pacific Life Insurance Company
B.S.-Drexel University
John C. Sweeney (51)
Chairman-Falcon Asset Management since 1994 and senior vice president-chief
investment officer-USF&G since 1992
Previously principal and practice director, Tillinghast Towers Perrin
B.S.-St. Joseph's University, M.S.-The College of William and Mary
USF&G Insurance
President
Norman P. Blake, Jr.
Claim
Senior Vice President
Kenneth E. Cihiy
Vice President
Robert E. Burnham
Robert S. Kines
Thomas W. Salinsky
Catherine E. Smith
Charles M. Stapleton
Thomas M. Trezise
Commercial Lines
Executive Vice President
Glenn W. Anderson
Senior Vice President
Anita Devan
Vice President
Robert A. Bernatchez
Alan K. Crater
Gregor Doman
Jeff J. Gans
Joseph J. George
Ronald L. Goldberg
Paul C. Martin
Kevin M. Nish
Kenneth R. Solomon
Family and Business
Insurance Group
President
Gary C. Dunton
Senior Vice President
Frank J. Kotarba
James R. Lewis
Vice President
Mehran Assadi
Timothy F. Daniels
Earnest E. Hines
Roy G. Shrum
Field Operations
Senior Vice President
Stephen W. Lilienthal
Vice President
Charles C. Baldwin, Jr.
Steven A. LaShier
Marilyn G. Norman
Regional Vice President
Paul H. Beil - Columbus
William R. Cossari - Purchase
Anthony D. Everett - Mississippi
Larry W. Fitch - Oklahoma City
Janet D. Frank - Rocky Mountain
Hernando Madronero - Chicago
M. Lee Patkus - Baltimore
Kim B. Rich - West Coast
L. Bud Roberts - St. Louis
Louis R. Snage, Jr. - Charlotte
Terrence J. Welsh - New England
Marita Zuraitis - Atlanta
Branch Vice President
Joseph Brossard - Nashville
R. Paul Feemster - Louisville
Charles E. Foura - Kansas City
Derrick D. Iseler - Detroit
John H. Jennings, Jr. - Richmond
Charles W. Kincaid, Jr. - Charleston
John Murphy - Syracuse
Brian F. Quinn - Walnut Creek
Richard W. Ramell - Harrisburg
Robert R. Southard - Tampa
John A. Umberger - Delaware Valley
Melvin R. Workman - Salt Lake City
Charles D. Wright - Des Moines
Finance
Executive Vice President-
Chief Financial Officer
Dan L. Hale
Vice President
Francis X. Bossle
Thomas A. Bradley
Richard P. Campagna
Duane M. Danielsen
G. Jay Erbe, Jr.
Jon B. Savage
Patricia J. Scarff
James E. Stangroom
Charles R. Werhane
Joseph A. Wesolowski
Barbara L. Yewell
Human Resources
Senior Vice President
John A. MacColl
Vice President
Charles Conley
David James Dowling
Franco Moscardi
Shalom Saar
Information Services
Senior Vice President
Thomas K. Lewis, Jr.
Vice President
James M. Ditmore
James C.R. Graham
James Hughes
Albert E. Mazei
Legal
Senior Vice President/
General Counsel
John A. MacColl
Vice President
John A. Andryszak
John D.Corse
Vance C. Gudmundsen
J. Kendall Huber
Rosemary Quinn
Strategic Planning/
Corporate Marketing
Senior Vice President
Andrew A. Stern
Vice President
Kerrie Burch-DeLuca
William Glenn Kenney
John M. Lummis
Walter A. Wdowiak
Surety
Senior Vice President
Robert J. Lamendola
Vice President
Peter W. Carman
Frederick J. Gurba
Scott A. Williams
Gary A. Wilson
F&G Life
President
Harry N. Stout
Vice President
James G. Calhoun
Gene F. Gaines
Gary F. Haynes
Michel Perreault
Bruce H. Saul
F&G Re
Chairman
Paul B. Ingrey
President
John R. Berger
Executive Vice President
Dwight R. Evans
Timothy J. Olson
Wayne C. Paglieri
Senior Vice President
Thomas G. Devine, Sr.
Peter A. Dodge
Roland W. Jackson
Charles B. Penruddocke
John F. Rathgerber
Gregory J. Richardson
David Skurnick
Vice President/Counsel
Andrew Nosal
Discover Reinsurance Companies
Chairman and Chief
Executive Officer
George L. Estes III
President and Chief
Operating Officer
Scott P. Doyle
Executive Vice President
Albert F. Collings
Senior Vice President
Robert D. Byler
Richard E. Cartland
Vice President
John J. Bennett
William Taylor Budde
Kenneth A. Cormier
Nancy B. Foster
Hale Holden III
Rhonda K. Miller
Bill Pomfret
Robert D. Schultz
Victoria Financial
President
Robert W. Mueller
Executive Vice President
Marc Zeitlin
Vice President
Cynthia Cardwell
Michael W. Dietry
Barry LaRue
Joseph Metz
Katherine Nolan
Robert Shoenfelt
Mark VanDam
Stuart Willner
Falcon Asset Management
Chairman
John C. Sweeney
President
Geoffrey C. Getman
Executive Vice President
Salvatore Correnti
Senior Vice President
John C. Barber
Amy P. Williams
<PAGE>
USF&G CORPORATION Office Locations
USF&G Insurance
Home Office
100 Light Street
Baltimore, MD 21202
(410) 547-3000
5801 Smith Avenue
Baltimore, MD 21209
(410) 547-3000
Regional and Branch Offices
Atlanta Region
Marita Zuraitis*
9000 Central Park West
Suite 600
Atlanta, GA 30348
(770) 390-5500
Marita Zuraitis
1200 Corporate Drive
Suite 300
Birmingham, AL 35242
(205) 995-9606
Robert R. Southard
600 North Westshore Blvd.
Suite 400
Tampa, FL 33609
(813) 289-4589
Baltimore Region
M. Lee Patkus*
5801 Smith Avenue
Baltimore, MD 21209
(410) 578-2000
Richard W. Ramell
2605 Interstate Drive
Harrisburg, PA 17110
(717) 671-8001
Charles W. Kincaid, Jr.
1409 Greenbrier Street
Charleston, WV 25311
(304) 344-1692
Gregory Barth
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15219
(412) 261-2550
Charlotte Region
Louis R. Snage, Jr.*
7415 Pineville-Matthews Rd.
Charlotte, NC 28226
(704) 544-0400
Louis R. Snage, Jr.
3117 Poplarwood Court
Suite 3000
Raleigh, NC 27604
(919) 872-1313
John H. Jennings, Jr.
2819 Parham Road
Richmond, VA 23294
(804) 747-0300
Joseph Brossard
100 Westwood Place
Suite 200
Brentwood, TN 37027
(615) 370-8400
Chicago Region
Hernando Madronero*
1515 West 22nd Street
Oak Brook, IL 60521
(708) 472-9030
Barry L. Seago
15800 W. Bluemound Rd.
Suite 200
Brookfield, WI 53005
(414) 860-0479
Michael J. Thoma
7300 Metro Boulevard
Suite 645
Edina, MN 55439
(612) 831-6504
Columbus Region
Paul H. Beil*
4936 Blazer Parkway
Dublin, OH 43017
(614) 793-1500
Derrick D. Iseler
1900 West Big Beaver Road
Troy, MI 48084
(810) 643-6433
Douglas H. McDonough
135 North Pennsylvania Street
Suite 1000
Indianapolis, IN 46204
(317) 267-2700
R. Paul Feemster
9911 Shelbyville Road
Suite 200
Louisville, KY 40223
(502) 429-7000
Mississippi Region
Anthony D. Everett*
143 LeFleurs Square
Jackson, MS 39211
(601) 982-5555
Jack E. Christopher
2500 North Hills Street
Meridian, MS 39303
(601) 693-1731
New England Region
Terence J. Welsh*
175 Capital Boulevard
Rocky Hill, CT 06067
(203) 563-8011
Theresa O'Sullivan
300 Crown Colony Drive
Quincy, MA 02169
(617) 786-0087
Oklahoma Region
Larry W. Fitch*
2601 NW Expressway
Suite 500E
Oklahoma City, OK 73112
(405) 843-7300
Larry W. Fitch
#1 Shackleford Drive
Suite 300
Little Rock, AR 72211
(501) 224-5200
Purchase Region
William R. Cossari*
2500 Westchester Avenue
Purchase, NY 10577
(914) 251-2300
John A. Umberger
930 Harvest Drive
Suite 400
Blue Bell, PA 19422
(215) 540-2700
John Murphy
5786 Widewaters Parkway
DeWitt, NY 13214
(315) 449-5100
Rocky Mountain Region
Janet D. Frank*
1670 Broadway
Suite 2330
Denver, CO 80202
(303) 812-9000
David Gross
1625 Eleventh Avenue
Helena, MT 59601
(406) 442-2270
Karen Mildenhall
2228 West Northern Avenue
Suite B-110
Phoenix, AZ 85069
(602) 864-2525
St. Louis Region
L. Bud Roberts*
910 North Eleventh Street
St. Louis, MO 63101
(314) 241-9190
Charles E. Foura
7500 College Boulevard
Overland Park, KS 66210
(913) 661-9700
Charles D. Wright
4200 Corporate Drive
West Des Moines, IA 50166
(515) 223-5700
West Coast Region
Kim B. Rich*
6650 SW Redwood Lane
Suite 250
Portland, OR 97224
(503) 684-0880
Melvin R. Workman
1100 East 6600 South
Salt Lake City, UT 84121
(801) 269-5656
Marvin F. King
100 West Harrison Plaza
Suite 300
Seattle, WA 98119
(206) 285-3636
Brian F. Quinn
1990 North California Blvd.
Suite 400
Walnut Creek, CA 94596
(510) 942-0363
Surety Regional Offices
Northern Division
6225 Smith Avenue
Baltimore, MD 21209
(410) 205-0315
Southern Division
9000 Central Park West
Suite 600
Atlanta, GA 30348
(770) 390-5561
Western Division
1670 Broadway
Suite 2330
Denver, CO 80202
(303) 812-9840
F&G Life
6225 Smith Avenue
Baltimore, MD 21209
(800) 638-2255
F&G Re
55 Madison Avenue
Morristown, NJ 07960
(201) 898-9393
Discover Reinsurance Companies
31 Waterside Drive
Farmington, CT 06032
(203) 674-2660
Victoria Financial
5915 Landerbrook Drive
Cleveland, OH 44124
(800) 888-8424
Falcon Asset Management
100 Light Street
Baltimore, MD 21202
(410) 547-3660
*Regional Vice President
<PAGE>
USF&G CORPORATION Shareholders' Information
Corporate Headquarters
100 Light Street
Baltimore, Maryland 21202
(410) 547-3000
Annual Meeting
The Annual Meeting of Shareholders will be held Wednesday, May 15, 1996, at
9:00 a.m. at the Sheraton Baltimore North, 903 Dulaney Valley Road, Towson,
Maryland.
Reports Filed with the Securities and Exchange Commission
A copy of USF&G Corporation's Annual Report on Form 10-K or Quarterly Reports on
Form 10-Q, as filed with the Securities and Exchange Commission, may be obtained
without charge upon request to John F. Hoffen, Jr., corporate secretary, at the
corporate headquarters.
Stock Exchange Listing
Common Stock: USF&G Corporation's common stock (ticker: FG) is listed on the New
York Stock Exchange. The common stock appears in the NYSE Composite Listing as
USFG. The common stock is also listed on the Pacific Stock Exchange, the London
Stock Exchange, and the Stock Exchanges of Basle, Geneva, and Zurich,
Switzerland.
Preferred Stock: USF&G Corporation's $4.10 Series A Convertible Exchangeable
Preferred Stock (ticker: FGpA) is listed on the New York Stock Exchange. The
preferred stock appears in the NYSE Composite Listing as USFGpf, and is also
listed on the Pacific Stock Exchange.
Transfer Agent/Registrar
The Bank of New York is transfer agent, registrar, and dividend disbursing agent
for USF&G Corporation's common and preferred stock. Inquiries regarding stock
transfer requirements, dividend payments, the Dividend Reinvestment and Stock
Purchase Plan, or address changes should be addressed to:
The Bank of New York
P.O. Box 11258
Church Street Station
New York, NY 10286
Attention: Shareholders' Relations Department
1-800-524-4458
Stock and Dividend Information
The following table presents 1995 and 1994 data on the sale prices of USF&G
Corporation's common stock on the New York Stock Exchange Composite Listing by
quarter, and the dividends paid per share of common stock. At February 26, 1996,
there were 31,360 shareholders of record and the closing price was $16 1/8 per
share.
Sale Price
High Low Dividends Paid
- --------------------------------------------------------------------------------
1995
First quarter $15 1/2 $ 13 3/8 $.05
Second quarter 17 1/4 13 3/4 .05
Third quarter 19 1/2 15 .05
Fourth quarter 19 1/2 16 .05
- --------------------------------------------------------------------------------
1994
First quarter $16 1/8 $ 13 $.05
Second quarter 14 11 11/16 .05
Third quarter 14 12 1/8 .05
Fourth quarter 14 5/8 12 5/8 .05
- --------------------------------------------------------------------------------
USF&G Shareholder Direct 1-800-545-USFG (8734)
USF&G now provides 24-hour toll free access to the latest information about the
Corporation at 1-800-545-USFG (8734). You can immediately listen to USF&G
Corporation's financial information or request a copy to be sent to you by fax
or mail. This new service replaces our traditional printed quarterly report,
providing you faster, more convenient access to the latest news about USF&G. A
site on the internet is also available with the same information at
http://www.shareholder.com/usfg.
For Additional Information
Any investors and analysts requesting additional information regarding USF&G
Corporation may dial our toll-free number, 1-800-335-USFG (8734) or call
directly:
Investor Relations Department
(410) 547-3939
Independent Auditors
Ernst & Young LLP
One North Charles Street
Baltimore, Maryland 21201
The financial section is printed on recycled paper.
Design: Nebel Design Inc.
Cover photography: Steven Bivers
Executive photography: Robert Burke
Archival photography: Timothy Connolly
Printing: S&S Graphics, Inc.
USF&G CORPORATION Exhibit 21 - Subsidiaries of the Registrant
Name of Subsidiary State of Incorporation
United State Fidelity and Guaranty Company Maryland
Fidelity & Guaranty Life Insurance Company Maryland
The names of other subsidiaries have been omitted because, when considered in
the aggregate as a single subsidiary, they would not constitute a significant
subsidiary as defined by Regulation S-X.
USF&G CORPORATION Exhibit 23 - Consent of Independent Auditors
USF&G Corporation
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of USF&G Corporation of our report dated February 23, 1996, included in the 1995
Annual Report to Shareholders of USF&G Corporation.
Our audit also included the financial statement schedules of USF&G Corporation
listed in Item 14(a). These schedules are the responsibility of the
Corporation's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
Number 33-20449, 33-9405, 33-33271, 33-21132, 33-51859, 33-63333 and 33-65471 on
Form S-3, and Number 2-72026, 2-61626, 2-98232, 33-16111, 33-38113, 33-35095,
33-43132, 33-45664, 33-45665, 33-61965, 33-55667, 33-55669, 33-55671 and
33-59535 on Form S-8, of USF&G Corporation, of our report dated February 23,
1996, with respect to the consolidated financial statements incorporated herein
by reference, and our report included in the preceding paragraph with respect to
the financial statement schedules included in this Annual Report (Form 10-K) of
USF&G Corporation.
/s/ ERNST & YOUNG LLP
Baltimore, Maryland
March 29, 1996
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<DEBT-HELD-FOR-SALE> 9458
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 65
<MORTGAGE> 254
<REAL-ESTATE> 653
<TOTAL-INVEST> 11107
<CASH> 119
<RECOVER-REINSURE> 604
<DEFERRED-ACQUISITION> 434
<TOTAL-ASSETS> 14651
<POLICY-LOSSES> 9805
<UNEARNED-PREMIUMS> 1055
<POLICY-OTHER> 11
<POLICY-HOLDER-FUNDS> 89
<NOTES-PAYABLE> 607
0
213
<COMMON> 299
<OTHER-SE> 1472
<TOTAL-LIABILITY-AND-EQUITY> 14651
2666
<INVESTMENT-INCOME> 733
<INVESTMENT-GAINS> 7
<OTHER-INCOME> 53
<BENEFITS> 2178
<UNDERWRITING-AMORTIZATION> 714
<UNDERWRITING-OTHER> 334
<INCOME-PRETAX> 195
<INCOME-TAX> (14)
<INCOME-CONTINUING> 209
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 209
<EPS-PRIMARY> $1.63
<EPS-DILUTED> $1.53
<RESERVE-OPEN> 5142
<PROVISION-CURRENT> 1856
<PROVISION-PRIOR> (54)
<PAYMENTS-CURRENT> 635
<PAYMENTS-PRIOR> 1196
<RESERVE-CLOSE> 5113
<CUMULATIVE-DEFICIENCY> (54)
</TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - ANALYSIS OF LOSSES AND LOSS EXPENSES
Notes to Schedule P
(1) The Parts of Schedule P:
Part 1 - detailed information on losses and loss expenses.
Part 2 - history of incurred losses and allocated expenses.
Part 3 - history of loss and allocated expense payments.
Part 4 - history of bulk and incurred-but-not reported reserves.
Part 5 - history of claims.
Part 6 - history of premiums earned.
Part 7 - history of loss sensitive contracts.
Schedule P Interrogatories
(2) Lines of business A through M, R, and S are groupings of the lines of
business used on the state page.
(3) Reinsurance A, B, C, and D (lines N to Q) are:
Reinsurance A = nonproportional property (1988 and subsequent)
Reinsurance B = nonproportional liability (1988 and subsequent)
Reinsurance C = financial lines (1988 and subsequent)
Reinsurance D = old Schedule O line 30 (1987 and prior)
<TABLE>
<CAPTION>
SCHEDULE P - PART 1 - SUMMARY
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| | Premiums Earned | Loss and Loss Expense Payments
| 1 |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`1.`Prior` | X X X | X X X | X X X | 118,397 | 36,092 | 19,155 | 2,967 | 16,574
`|`2.`1986` | 3,845,866 | 469,276 | 3,376,590 | 2,323,905 | 308,555 | 191,757 | 13,018 | 111,042
`|`3.`1987` | 4,136,153 | 563,428 | 3,572,725 | 2,329,800 | 402,049 | 179,883 | 17,303 | 104,231
`|`4.`1988` | 4,339,663 | 758,916 | 3,580,747 | 2,437,460 | 528,005 | 180,617 | 16,011 | 105,786
`|`5.`1989` | 4,339,042 | 987,129 | 3,351,913 | 2,661,044 | 658,635 | 176,465 | 15,916 | 104,341
`|`6.`1990` | 4,275,033 | 927,767 | 3,347,266 | 2,430,333 | 609,352 | 193,890 | 19,058 | 118,866
`|`7.`1991` | 3,703,274 | 700,231 | 3,003,043 | 1,950,795 | 381,084 | 151,107 | 11,386 | 73,843
`|`8.`1992` | 3,196,582 | 699,100 | 2,497,482 | 1,836,579 | 569,831 | 112,564 | 14,151 | 52,680
`|`9.`1993` | 3,015,949 | 886,184 | 2,129,765 | 1,226,814 | 305,850 | 71,159 | 6,635 | 37,461
`|10.`1994` | 2,852,152 | 580,919 | 2,271,233 | 1,036,528 | 143,185 | 36,336 | 2,701 | 34,134
`|11.`1995` | 2,903,715 | 610,020 | 2,293,695 | 595,137 | 67,033 | 11,212 | 339 | 16,162
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 18,946,792 | 4,009,671 | 1,324,145 | 119,485 | 775,120
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| 12 |
| 10 | 11 | |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| 6,321 | 104,814 | X X X |
| 121,074 | 2,315,163 | X X X |
| 115,994 | 2,206,325 | X X X |
| 121,551 | 2,195,612 | X X X |
| 131,455 | 2,294,413 | X X X |
| 141,020 | 2,136,833 | X X X |
| 146,578 | 1,856,010 | X X X |
| 132,359 | 1,497,520 | X X X |
| 101,658 | 1,087,146 | X X X |
| 86,723 | 1,013,701 | X X X |
| 75,671 | 614,648 | X X X |
|--------------|--------------|--------------|
| 1,180,404 | 17,322,185 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`1.`Prior` | 573,551 | 142,222 | 297,513 | 14,149 | 0 | 0 | 135,946 | 4,137
`|`2.`1986` | 79,901 | 14,856 | 62,943 | 6,501 | 0 | 0 | 24,942 | 621
`|`3.`1987` | 77,254 | 16,149 | 90,851 | 12,457 | 0 | 0 | 28,363 | 739
`|`4.`1988` | 152,767 | 60,392 | 118,325 | 24,312 | 0 | 0 | 35,073 | 1,787
`|`5.`1989` | 186,044 | 84,474 | 148,720 | 23,894 | 0 | 0 | 39,941 | 1,363
`|`6.`1990` | 213,929 | 90,190 | 185,387 | 38,696 | 3 | 0 | 57,379 | 1,928
`|`7.`1991` | 176,084 | 32,640 | 202,544 | 58,743 | 33 | 0 | 67,792 | 2,032
`|`8.`1992` | 216,578 | 53,601 | 209,885 | 91,529 | 236 | 7 | 76,709 | 2,963
`|`9.`1993` | 233,935 | 56,686 | 255,138 | 121,363 | 811 | 16 | 94,802 | 3,447
`|10.`1994` | 342,636 | 65,347 | 387,549 | 119,721 | 1,448 | 7 | 118,051 | 4,385
`|11.`1995` | 496,393 | 70,391 | 707,772 | 246,504 | 1,795 | 6 | 137,341 | 6,563
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 2,749,072 | 686,948 | 2,666,627 | 757,869 | 4,326 | 36 | 816,339 | 29,965
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct |
| Anticipated | Unpaid | Unpaid | and Assumed |
|--------------|--------------|--------------|-------------|
| 10,910 | 27,179 | 873,681 | X X X |
| 3,285 | 5,359 | 151,167 | X X X |
| 3,809 | 6,127 | 173,250 | X X X |
| 5,525 | 8,317 | 227,991 | X X X |
| 7,413 | 10,095 | 275,069 | X X X |
| 9,261 | 13,165 | 339,049 | X X X |
| 9,648 | 15,293 | 368,331 | X X X |
| 12,743 | 17,833 | 373,141 | X X X |
| 9,887 | 22,265 | 425,439 | X X X |
| 17,371 | 30,867 | 691,091 | X X X |
| 27,091 | 59,166 | 1,079,003 | X X X |
|--------------|--------------|--------------|-------------|
| 116,943 | 215,666 | 4,977,212 | X X X |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 88,756 | 8,228
`|`2.`1986` | 2,809,881 | 343,551 | 2,466,330 | 73.1 | 73.2 | 73.0 | 13,684 | 2,260
`|`3.`1987` | 2,828,272 | 448,697 | 2,379,575 | 68.4 | 79.6 | 66.6 | 13,001 | 2,512
`|`4.`1988` | 3,054,110 | 630,507 | 2,423,603 | 70.4 | 83.1 | 67.7 | 15,770 | 3,017
`|`5.`1989` | 3,353,764 | 784,282 | 2,569,482 | 77.3 | 79.5 | 76.7 | 17,977 | 3,631
`|`6.`1990` | 3,235,106 | 759,224 | 2,475,882 | 75.7 | 81.8 | 74.0 | 17,542 | 3,926
`|`7.`1991` | 2,710,226 | 485,885 | 2,224,341 | 73.2 | 69.4 | 74.1 | 14,333 | 3,692
`|`8.`1992` | 2,602,743 | 732,082 | 1,870,661 | 81.4 | 104.7 | 74.9 | 8,527 | 3,747
`|`9.`1993` | 2,006,582 | 493,997 | 1,512,585 | 66.5 | 55.7 | 71.0 | 5,520 | 3,217
`|10.`1994` | 2,040,138 | 335,346 | 1,704,792 | 71.5 | 57.7 | 75.1 | 5,953 | 2,659
`|11.`1995` | 2,084,487 | 390,836 | 1,693,651 | 71.8 | 64.1 | 73.8 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 201,063 | 36,889
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
|Inter-Company |--------------#--------------|
| Pooling | 34 | 35 |
|Participation | Losses |Loss Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| X X X | 625,937 | 150,760 |
| 0.0 | 107,803 | 27,420 |
| 0.0 | 126,498 | 31,239 |
| 0.0 | 170,618 | 38,586 |
| 0.0 | 208,419 | 45,042 |
| 0.0 | 252,888 | 64,693 |
| 0.0 | 272,912 | 77,394 |
| 0.0 | 272,806 | 88,061 |
| 0.0 | 305,504 | 111,198 |
| 0.0 | 539,164 | 143,315 |
| 0.0 | 887,270 | 191,733 |
|--------------|--------------|--------------|
| X X X | 3,769,819 | 969,441 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2 - SUMMARY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | Incurred Losses and Allocated Expenses Reported At Year End ($000 omitted)
| Years in Which |---------------------------#-------------#-------------#-------------#-------------#-------------#-------------
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| | | | | | | | |
| "1. "`Prior` | 2,248,659 | 2,431,021 | 2,682,910 | 2,885,214 | 3,125,194 | 3,268,670 | 3,367,880 | 3,487,661
| "2. "`1986` | 2,412,621 | 2,342,730 | 2,319,717 | 2,280,741 | 2,332,180 | 2,351,328 | 2,368,906 | 2,362,813
| "3. "`1987` | X X X | 2,443,362 | 2,321,867 | 2,235,275 | 2,289,411 | 2,265,771 | 2,290,481 | 2,295,282
| "4. "`1988` | X X X | X X X | 2,337,495 | 2,278,162 | 2,398,771 | 2,300,326 | 2,332,719 | 2,314,366
| "5. "`1989` | X X X | X X X | X X X | 2,495,094 | 2,473,262 | 2,523,655 | 2,479,795 | 2,478,079
| "6. "`1990` | X X X | X X X | X X X | X X X | 2,447,110 | 2,438,560 | 2,415,342 | 2,353,796
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 2,302,136 | 2,229,647 | 2,105,898
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 1,868,197 | 1,771,125
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 1,453,142
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|------------------->--------------------------->------------->------------->------------->------------->------------->-------------
|`12.""Totals
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
|-------------|-------------|--------------|--------------|
| | | | |
| 3,515,174 | 3,510,672 | (4,502)| 23,011 |
| 2,361,240 | 2,352,197 | (9,043)| (10,616)|
| 2,291,267 | 2,269,358 | (21,909)| (25,924)|
| 2,313,708 | 2,307,385 | (6,323)| (6,981)|
| 2,459,572 | 2,443,377 | (16,195)| (34,702)|
| 2,334,848 | 2,336,079 | 1,231 | (17,717)|
| 2,084,630 | 2,072,305 | (12,325)| (33,593)|
| 1,721,041 | 1,726,587 | 5,546 | (44,538)|
| 1,413,922 | 1,391,665 | (22,257)| (61,477)|
| 1,605,215 | 1,589,979 | (15,236)| X X X |
| X X X | 1,559,165 | X X X | X X X |
>------------->-------------|--------------|--------------|
| (101,013)| (212,537)|
- ---------------------------->-------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3 - SUMMARY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| |
| 1 | Cumulative Paid Losses and Allocated Expenses At Year End ($000 omitted)
| Years in Which |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. "`Prior` | 000 | 744,663 | 1,247,364 | 1,634,809 | 1,916,411 | 2,107,731 | 2,243,674 | 2,379,820
| "2. "`1986` | 824,275 | 1,343,266 | 1,634,495 | 1,830,871 | 1,966,330 | 2,055,140 | 2,111,955 | 2,143,870
| "3. "`1987` | X X X | 625,687 | 1,091,489 | 1,531,766 | 1,729,926 | 1,896,736 | 1,975,924 | 2,029,617
| "4. "`1988` | X X X | X X X | 733,068 | 1,265,507 | 1,548,698 | 1,761,747 | 1,901,785 | 1,977,419
| "5. "`1989` | X X X | X X X | X X X | 776,775 | 1,370,738 | 1,697,232 | 1,896,073 | 2,026,575
| "6. "`1990` | X X X | X X X | X X X | X X X | 757,672 | 1,310,696 | 1,588,607 | 1,787,224
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 733,298 | 1,187,454 | 1,441,285
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 624,810 | 1,017,399
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 507,258
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
<C> <C> <C> <C>
- ----------------------------#--------------#--------------#
| 12 | 13 |
| Number of | Number of |
#-------------#-------------| Claims | Claims |
| 10 | 11 | Closed With | Closed |
| 1994 | 1995 | Loss | Without Loss |
| | | Payment | Payment |
|-------------|-------------|--------------|--------------|
| 2,499,397 | 2,597,891 | X X X | X X X |
| 2,171,367 | 2,194,090 | X X X | X X X |
| 2,066,069 | 2,090,331 | X X X | X X X |
| 2,036,170 | 2,074,061 | X X X | X X X |
| 2,117,065 | 2,162,957 | X X X | X X X |
| 1,912,926 | 1,995,814 | X X X | X X X |
| 1,610,865 | 1,709,431 | X X X | X X X |
| 1,215,793 | 1,365,159 | X X X | X X X |
| 809,923 | 985,485 | X X X | X X X |
| 555,361 | 926,978 | X X X | X X X |
| X X X | 538,977 | X X X | X X X |
>------------->------------->-------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4 - SUMMARY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | Bulk and Incurred But Not Reported Reserves on Losses and Allocated Expenses at Year End ($000 omitted)
| Years in Which |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Losses | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. " "`Prior` | 779,294 | 463,047 | 362,338 | 328,745 | 405,191 | 421,497 | 485,699 | 569,206
| "2. " "`1986` | 1,047,703 | 608,205 | 377,668 | 212,457 | 178,951 | 132,433 | 125,429 | 132,241
| "3. " "`1987` | X X X | 1,144,161 | 651,530 | 386,103 | 315,656 | 175,577 | 168,827 | 164,297
| "4. " "`1988` | X X X | X X X | 1,043,788 | 588,604 | 504,738 | 257,562 | 223,953 | 183,152
| "5. " "`1989` | X X X | X X X | X X X | 1,092,870 | 644,817 | 460,846 | 312,733 | 250,602
| "6. " "`1990` | X X X | X X X | X X X | X X X | 1,070,678 | 665,617 | 477,407 | 320,209
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 956,428 | 642,639 | 374,385
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 731,477 | 422,910
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 568,310
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->-------------------------->
<C> <C>
- -----------------------------#
|
#-------------#--------------|
| 10 | 11 |
| 1994 | 1995 |
|-------------|--------------|
| 468,667 | 424,289 |
| 101,637 | 84,050 |
| 129,230 | 111,419 |
| 150,266 | 129,181 |
| 195,553 | 169,140 |
| 227,926 | 208,111 |
| 259,342 | 214,859 |
| 251,411 | 194,118 |
| 347,563 | 227,142 |
| 627,304 | 382,906 |
| X X X | 592,048 |
- ->------------->------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1A - HOMEOWNERS/FARMOWNERS
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 85 | 4 | 42 | 0 | 6
`|`2.`1986` | 246,297 | 15,410 | 230,887 | 140,168 | 4,911 | 4,075 | (103)| 2,185
`|`3.`1987` | 244,766 | 5,446 | 239,320 | 121,620 | 445 | 3,844 | 62 | 1,520
`|`4.`1988` | 228,323 | 4,737 | 223,586 | 120,768 | 12 | 4,110 | 66 | 2,364
`|`5.`1989` | 221,373 | 4,005 | 217,368 | 154,877 | 8,745 | 4,593 | 274 | 2,251
`|`6.`1990` | 221,970 | 6,038 | 215,932 | 133,342 | (49)| 5,907 | 51 | 1,607
`|`7.`1991` | 223,033 | 5,059 | 217,974 | 158,118 | 351 | 5,015 | 103 | 1,958
`|`8.`1992` | 205,577 | 9,150 | 196,427 | 249,688 | 72,891 | 4,931 | 2,692 | 1,246
`|`9.`1993` | 174,684 | 19,201 | 155,483 | 106,006 | 7,988 | 2,065 | 79 | 675
`|10.`1994` | 165,494 | 31,054 | 134,440 | 124,930 | 9,748 | 1,190 | 63 | 621
`|11.`1995` | 164,830 | 15,154 | 149,676 | 67,595 | 3,678 | 564 | 34 | 215
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 1,377,197 | 108,724 | 36,336 | 3,321 | 14,648
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 6 | 129 | X X X |
| 15,287 | 154,722 | 67,407 |
| 13,890 | 138,847 | 62,509 |
| 12,655 | 137,455 | 59,160 |
| 15,962 | 166,413 | 75,061 |
| 16,819 | 156,066 | 66,778 |
| 18,315 | 180,994 | 74,367 |
| 18,849 | 197,885 | 65,340 |
| 15,801 | 115,805 | 55,079 |
| 15,081 | 131,390 | 59,065 |
| 9,793 | 74,240 | 39,517 |
|--------------|--------------|--------------|
| 152,458 | 1,453,946 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 91 | 5 | (9)| 0 | 0 | 0 | 274 | 3
`|`2.`1986` | 134 | 0 | 260 | 0 | 0 | 0 | 65 | 1
`|`3.`1987` | 662 | 0 | 976 | 0 | 0 | 0 | 173 | 0
`|`4.`1988` | 372 | 0 | 515 | 0 | 0 | 0 | 181 | 1
`|`5.`1989` | 1,121 | 0 | 543 | 55 | 0 | 0 | 308 | 0
`|`6.`1990` | 1,756 | 0 | 410 | 1 | 0 | 0 | 662 | 2
`|`7.`1991` | 1,946 | 0 | 665 | 0 | 0 | 0 | 838 | 0
`|`8.`1992` | 3,524 | 118 | 705 | 1 | 0 | 0 | 1,254 | 1
`|`9.`1993` | 2,849 | 122 | 715 | 3 | 0 | 0 | 1,800 | 6
`|10.`1994` | 7,390 | 587 | 1,534 | 9 | 0 | 0 | 2,530 | 24
`|11.`1995` | 26,091 | 4 | 9,491 | 61 | 0 | 0 | 3,196 | 40
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 45,936 | 836 | 15,805 | 130 | 0 | 0 | 11,281 | 78
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 9 | 4 | 352 | 6 |
| 2 | 4 | 462 | 0 |
| 5 | 18 | 1,829 | 6 |
| 23 | 12 | 1,079 | 9 |
| 39 | 46 | 1,963 | 22 |
| 113 | 80 | 2,905 | 42 |
| 226 | 96 | 3,545 | 61 |
| 305 | 192 | 5,555 | 160 |
| 394 | 189 | 5,422 | 181 |
| 867 | 448 | 11,282 | 439 |
| 657 | 2,290 | 40,963 | 4,079 |
|--------------|--------------|--------------|-------------|
| 2,640 | 3,379 | 75,357 | 5,005 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 159,993 | 4,809 | 155,184 | 65.0 | 31.2 | 67.2 | 0 | 0
`|`3.`1987` | 141,183 | 507 | 140,676 | 57.7 | 9.3 | 58.8 | 0 | 0
`|`4.`1988` | 138,613 | 79 | 138,534 | 60.7 | 1.7 | 62.0 | 0 | 0
`|`5.`1989` | 177,450 | 9,074 | 168,376 | 80.2 | 226.6 | 77.5 | 0 | 0
`|`6.`1990` | 158,976 | 5 | 158,971 | 71.6 | 0.1 | 73.6 | 0 | 0
`|`7.`1991` | 184,993 | 454 | 184,539 | 82.9 | 9.0 | 84.7 | 0 | 0
`|`8.`1992` | 279,143 | 75,703 | 203,440 | 135.8 | 827.4 | 103.6 | 0 | 0
`|`9.`1993` | 129,425 | 8,198 | 121,227 | 74.1 | 42.7 | 78.0 | 0 | 0
`|10.`1994` | 153,103 | 10,431 | 142,672 | 92.5 | 33.6 | 106.1 | 0 | 0
`|11.`1995` | 119,020 | 3,817 | 115,203 | 72.2 | 25.2 | 77.0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 77 | 275 |
| 0.0 | 394 | 68 |
| 0.0 | 1,638 | 191 |
| 0.0 | 887 | 192 |
| 0.0 | 1,609 | 354 |
| 0.0 | 2,165 | 740 |
| 0.0 | 2,611 | 934 |
| 0.0 | 4,110 | 1,445 |
| 0.0 | 3,439 | 1,983 |
| 0.0 | 8,328 | 2,954 |
| 0.0 | 35,517 | 5,446 |
|--------------|--------------|--------------|
| X X X | 60,775 | 14,582 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 3,200 | 741 | 231 | 1 | 285
`|`2.`1986` | 376,977 | 28,503 | 348,474 | 332,356 | 28,155 | 17,419 | 909 | 6,318
`|`3.`1987` | 389,845 | 37,384 | 352,461 | 331,551 | 38,081 | 15,848 | 1,141 | 5,867
`|`4.`1988` | 405,014 | 56,013 | 349,001 | 334,695 | 48,445 | 17,038 | 1,599 | 6,570
`|`5.`1989` | 428,138 | 61,598 | 366,540 | 354,238 | 51,300 | 17,632 | 2,134 | 7,342
`|`6.`1990` | 453,815 | 58,201 | 395,614 | 338,526 | 45,065 | 18,831 | 2,038 | 9,029
`|`7.`1991` | 469,417 | 27,612 | 441,805 | 317,960 | 16,720 | 21,609 | 911 | 7,710
`|`8.`1992` | 398,904 | 11,344 | 387,560 | 228,799 | 5,787 | 13,779 | 177 | 7,008
`|`9.`1993` | 376,998 | 8,869 | 368,129 | 198,350 | 4,913 | 10,360 | 78 | 4,737
`|10.`1994` | 314,647 | 5,153 | 309,494 | 147,059 | 1,886 | 5,095 | 40 | 3,358
`|11.`1995` | 301,998 | 3,878 | 298,120 | 78,309 | 786 | 1,964 | 6 | 1,174
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 2,665,043 | 241,879 | 139,806 | 9,034 | 59,398
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 72 | 2,761 | X X X |
| 17,500 | 338,211 | 148,127 |
| 15,706 | 323,883 | 135,771 |
| 13,216 | 314,905 | 129,116 |
| 15,454 | 333,890 | 128,599 |
| 19,193 | 329,447 | 120,893 |
| 24,836 | 346,774 | 111,270 |
| 29,028 | 265,642 | 94,097 |
| 24,558 | 228,277 | 79,981 |
| 19,363 | 169,591 | 74,657 |
| 15,284 | 94,765 | 66,478 |
|--------------|--------------|--------------|
| 194,210 | 2,748,146 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 28,793 | 14,088 | 4,192 | 23 | 0 | 0 | 3,013 | 439
`|`2.`1986` | 611 | 315 | 1,645 | 14 | 0 | 0 | 313 | 5
`|`3.`1987` | 766 | 33 | 1,063 | 67 | 0 | 0 | 337 | 14
`|`4.`1988` | 1,020 | 90 | 1,268 | 105 | 0 | 0 | 392 | 31
`|`5.`1989` | 2,705 | 439 | 1,682 | 151 | 0 | 0 | 790 | 89
`|`6.`1990` | 5,915 | 437 | 3,406 | 209 | 3 | 0 | 1,900 | 97
`|`7.`1991` | 12,082 | 518 | 4,205 | 133 | 33 | 0 | 3,346 | 142
`|`8.`1992` | 20,359 | 646 | 3,351 | 65 | 232 | 7 | 4,158 | 82
`|`9.`1993` | 35,447 | 408 | 7,019 | 119 | 711 | 16 | 6,119 | 85
`|10.`1994` | 57,334 | 913 | 24,799 | 306 | 1,279 | 7 | 9,113 | 98
`|11.`1995` | 82,780 | 1,181 | 53,748 | 409 | 1,558 | 5 | 10,874 | 183
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 247,812 | 19,068 | 106,378 | 1,601 | 3,816 | 35 | 40,355 | 1,265
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 89 | 1,026 | 22,474 | 184 |
| (22)| 127 | 2,362 | 18 |
| (124)| 135 | 2,187 | 26 |
| (140)| 154 | 2,608 | 53 |
| (65)| 265 | 4,763 | 111 |
| 98 | 579 | 11,060 | 226 |
| 297 | 1,029 | 19,902 | 544 |
| 583 | 1,425 | 28,725 | 984 |
| 855 | 2,466 | 51,134 | 1,731 |
| 2,237 | 4,626 | 95,827 | 3,484 |
| 2,256 | 6,861 | 154,043 | 13,420 |
|--------------|--------------|--------------|-------------|
| 6,064 | 18,693 | 395,085 | 20,781 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 369,971 | 29,398 | 340,573 | 98.1 | 103.1 | 97.7 | 0 | 0
`|`3.`1987` | 365,406 | 39,336 | 326,070 | 93.7 | 105.2 | 92.5 | 0 | 0
`|`4.`1988` | 367,783 | 50,270 | 317,513 | 90.8 | 89.7 | 91.0 | 0 | 0
`|`5.`1989` | 392,766 | 54,113 | 338,653 | 91.7 | 87.8 | 92.4 | 0 | 0
`|`6.`1990` | 388,353 | 47,846 | 340,507 | 85.6 | 82.2 | 86.1 | 0 | 0
`|`7.`1991` | 385,100 | 18,424 | 366,676 | 82.0 | 66.7 | 83.0 | 0 | 0
`|`8.`1992` | 301,131 | 6,764 | 294,367 | 75.5 | 59.6 | 76.0 | 0 | 0
`|`9.`1993` | 285,030 | 5,619 | 279,411 | 75.6 | 63.4 | 75.9 | 0 | 0
`|10.`1994` | 268,668 | 3,250 | 265,418 | 85.4 | 63.1 | 85.8 | 0 | 0
`|11.`1995` | 251,378 | 2,570 | 248,808 | 83.2 | 66.3 | 83.5 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 18,874 | 3,600 |
| 100.0 | 1,927 | 435 |
| 100.0 | 1,729 | 458 |
| 100.0 | 2,093 | 515 |
| 100.0 | 3,797 | 966 |
| 100.0 | 8,675 | 2,385 |
| 100.0 | 15,636 | 4,266 |
| 100.0 | 22,999 | 5,726 |
| 100.0 | 41,939 | 9,195 |
| 100.0 | 80,914 | 14,913 |
| 100.0 | 134,938 | 19,105 |
|--------------|--------------|--------------|
| X X X | 333,521 | 61,564 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 1,944 | 3,443 | 1,696 | 0 | (26)
`|`2.`1986` | 451,376 | 29,279 | 422,097 | 305,520 | 21,694 | 23,020 | 360 | 3,986
`|`3.`1987` | 504,537 | 27,137 | 477,400 | 299,942 | 26,297 | 25,976 | 1,697 | 3,495
`|`4.`1988` | 461,137 | 39,793 | 421,344 | 293,344 | 35,155 | 24,392 | 2,675 | 4,775
`|`5.`1989` | 424,658 | 43,290 | 381,368 | 283,389 | 38,648 | 23,470 | 3,752 | 3,028
`|`6.`1990` | 419,676 | 42,802 | 376,874 | 258,241 | 36,693 | 23,271 | 3,228 | 3,815
`|`7.`1991` | 385,326 | 39,874 | 345,452 | 204,101 | 20,224 | 18,900 | 2,333 | 2,831
`|`8.`1992` | 323,014 | 39,044 | 283,970 | 166,816 | 21,420 | 15,126 | 1,927 | 2,506
`|`9.`1993` | 266,252 | 30,643 | 235,609 | 108,592 | 15,143 | 8,421 | 947 | 2,208
`|10.`1994` | 241,837 | 29,388 | 212,449 | 71,389 | 10,181 | 4,293 | 423 | 1,413
`|11.`1995` | 229,609 | 33,129 | 196,480 | 30,560 | 4,027 | 1,710 | 49 | 786
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 2,023,838 | 232,925 | 170,275 | 17,391 | 28,817
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 30 | 227 | X X X |
| 13,387 | 319,873 | 79,784 |
| 12,779 | 310,703 | 73,868 |
| 13,382 | 293,288 | 66,862 |
| 12,874 | 277,333 | 61,505 |
| 13,731 | 255,322 | 56,600 |
| 13,489 | 213,933 | 46,971 |
| 14,912 | 173,507 | 40,917 |
| 12,675 | 113,598 | 33,891 |
| 9,572 | 74,650 | 30,973 |
| 5,890 | 34,084 | 23,582 |
|--------------|--------------|--------------|
| 122,721 | 2,066,518 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 7,363 | 4,605 | 244 | 4 | 0 | 0 | 1,028 | 32
`|`2.`1986` | 1,812 | 631 | 456 | 5 | 0 | 0 | 211 | 14
`|`3.`1987` | 1,907 | 0 | 2,153 | 26 | 0 | 0 | 520 | 0
`|`4.`1988` | 4,335 | 431 | 1,490 | 38 | 0 | 0 | 618 | 111
`|`5.`1989` | 6,521 | 1,405 | 2,117 | 70 | 0 | 0 | 1,161 | 267
`|`6.`1990` | 12,563 | 3,079 | 2,713 | 139 | 0 | 0 | 2,344 | 475
`|`7.`1991` | 14,442 | 2,213 | 3,514 | 250 | 0 | 0 | 3,516 | 515
`|`8.`1992` | 26,653 | 3,923 | 6,077 | 486 | 0 | 0 | 5,651 | 858
`|`9.`1993` | 34,579 | 4,708 | 14,270 | 759 | 58 | 0 | 7,341 | 917
`|10.`1994` | 51,337 | 5,610 | 30,905 | 1,904 | 113 | 0 | 9,799 | 1,014
`|11.`1995` | 50,487 | 4,456 | 61,105 | 8,641 | 125 | 0 | 10,206 | 711
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 211,999 | 31,061 | 125,044 | 12,322 | 296 | 0 | 42,395 | 4,914
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 12 | 163 | 4,157 | 47 |
| 6 | 56 | 1,885 | 19 |
| 19 | 70 | 4,624 | 44 |
| 63 | 171 | 6,034 | 83 |
| 100 | 303 | 8,360 | 98 |
| 169 | 651 | 14,578 | 212 |
| 157 | 894 | 19,388 | 366 |
| 274 | 1,455 | 34,569 | 726 |
| 269 | 2,351 | 52,215 | 980 |
| 617 | 4,181 | 87,807 | 1,876 |
| 593 | 2,382 | 110,497 | 5,101 |
|--------------|--------------|--------------|-------------|
| 2,279 | 12,677 | 344,114 | 9,552 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 344,462 | 22,704 | 321,758 | 76.3 | 77.5 | 76.2 | 0 | 0
`|`3.`1987` | 343,347 | 28,020 | 315,327 | 68.1 | 103.3 | 66.1 | 0 | 0
`|`4.`1988` | 337,732 | 38,410 | 299,322 | 73.2 | 96.5 | 71.0 | 0 | 0
`|`5.`1989` | 329,835 | 44,142 | 285,693 | 77.7 | 102.0 | 74.9 | 0 | 0
`|`6.`1990` | 313,514 | 43,614 | 269,900 | 74.7 | 101.9 | 71.6 | 0 | 0
`|`7.`1991` | 258,856 | 25,535 | 233,321 | 67.2 | 64.0 | 67.5 | 0 | 0
`|`8.`1992` | 236,690 | 28,614 | 208,076 | 73.3 | 73.3 | 73.3 | 0 | 0
`|`9.`1993` | 188,287 | 22,474 | 165,813 | 70.7 | 73.3 | 70.4 | 0 | 0
`|10.`1994` | 181,589 | 19,132 | 162,457 | 75.1 | 65.1 | 76.5 | 0 | 0
`|11.`1995` | 162,465 | 17,884 | 144,581 | 70.8 | 54.0 | 73.6 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 2,998 | 1,159 |
| 0.0 | 1,632 | 253 |
| 0.0 | 4,034 | 590 |
| 0.0 | 5,356 | 678 |
| 0.0 | 7,163 | 1,197 |
| 0.0 | 12,058 | 2,520 |
| 0.0 | 15,493 | 3,895 |
| 0.0 | 28,321 | 6,248 |
| 0.0 | 43,382 | 8,833 |
| 0.0 | 74,728 | 13,079 |
| 0.0 | 98,495 | 12,002 |
|--------------|--------------|--------------|
| X X X | 293,660 | 50,454 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1D - WORKERS' COMPENSATION
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 80,051 | 25,141 | 2,197 | (2)| 12,068
`|`2.`1986` | 618,623 | 67,684 | 550,939 | 547,763 | 75,245 | 24,112 | 328 | 21,323
`|`3.`1987` | 622,801 | 81,301 | 541,500 | 581,446 | 126,786 | 23,244 | 387 | 19,034
`|`4.`1988` | 747,889 | 111,269 | 636,620 | 615,964 | 128,346 | 26,459 | 256 | 19,164
`|`5.`1989` | 791,969 | 158,717 | 633,252 | 669,213 | 147,357 | 29,366 | 312 | 19,080
`|`6.`1990` | 883,078 | 188,951 | 694,127 | 607,693 | 172,192 | 29,058 | 413 | 16,246
`|`7.`1991` | 754,958 | 251,311 | 503,647 | 479,961 | 176,978 | 24,575 | 401 | 9,620
`|`8.`1992` | 625,431 | 305,456 | 319,975 | 351,842 | 171,520 | 17,555 | 184 | 3,832
`|`9.`1993` | 457,088 | 306,269 | 150,819 | 196,504 | 128,584 | 10,515 | 144 | 1,209
`|10.`1994` | 352,311 | 224,832 | 127,479 | 117,422 | 69,512 | 5,914 | 48 | 991
`|11.`1995` | 310,550 | 136,719 | 173,831 | 43,117 | 19,910 | 1,972 | 0 | 248
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 4,290,976 | 1,241,571 | 194,967 | 2,471 | 122,815
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 3,147 | 60,256 | X X X |
| 11,098 | 507,400 | 47,377 |
| 9,642 | 487,159 | 44,004 |
| 13,327 | 527,148 | 47,308 |
| 13,252 | 564,162 | 49,878 |
| 13,353 | 477,499 | 46,723 |
| 14,320 | 341,477 | 41,113 |
| (7,822)| 189,871 | 32,614 |
| (15,305)| 62,986 | 21,933 |
| (7,275)| 46,501 | 17,085 |
| (394)| 24,785 | 11,579 |
|--------------|--------------|--------------|
| 47,343 | 3,289,244 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 442,168 | 112,946 | 207,815 | 13,580 | 0 | 0 | 17,961 | 403
`|`2.`1986` | 61,485 | 13,214 | 47,720 | 6,356 | 0 | 0 | 4,262 | 73
`|`3.`1987` | 59,231 | 15,360 | 60,714 | 12,242 | 0 | 0 | 4,726 | 85
`|`4.`1988` | 69,284 | 4,678 | 78,428 | 23,921 | 0 | 0 | 5,881 | 46
`|`5.`1989` | 88,903 | 21,934 | 99,894 | 22,801 | 0 | 0 | 7,806 | 101
`|`6.`1990` | 86,944 | 19,476 | 117,221 | 37,115 | 0 | 0 | 9,262 | 114
`|`7.`1991` | 80,753 | 21,943 | 122,734 | 54,898 | 0 | 0 | 9,039 | 62
`|`8.`1992` | 87,015 | 42,323 | 136,155 | 86,783 | 0 | 0 | 10,821 | 56
`|`9.`1993` | 68,447 | 41,934 | 140,282 | 111,511 | 0 | 0 | 10,152 | 55
`|10.`1994` | 74,643 | 41,172 | 126,073 | 96,296 | 0 | 0 | 9,576 | 21
`|11.`1995` | 90,782 | 42,749 | 125,440 | 69,464 | 0 | 0 | 11,073 | 77
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 1,209,655 | 377,729 | 1,262,476 | 534,967 | 0 | 0 | 100,559 | 1,093
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 7,999 | 14,462 | 555,477 | 3,014 |
| 2,380 | 3,740 | 97,564 | 365 |
| 2,719 | 3,966 | 100,950 | 367 |
| 3,583 | 4,770 | 129,718 | 494 |
| 4,808 | 5,783 | 157,550 | 645 |
| 5,275 | 6,300 | 163,022 | 842 |
| 4,503 | 5,882 | 141,505 | 1,140 |
| 3,188 | 6,163 | 110,992 | 1,409 |
| 1,829 | 5,750 | 71,131 | 1,533 |
| 2,150 | 5,676 | 78,479 | 2,333 |
| 1,713 | 23,654 | 138,659 | 5,366 |
|--------------|--------------|--------------|-------------|
| 40,147 | 86,146 | 1,745,047 | 17,508 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 88,756 | 8,228
`|`2.`1986` | 700,180 | 95,216 | 604,964 | 113.2 | 140.7 | 109.8 | 13,684 | 2,260
`|`3.`1987` | 742,969 | 154,860 | 588,109 | 119.3 | 190.5 | 108.6 | 13,001 | 2,512
`|`4.`1988` | 814,113 | 157,247 | 656,866 | 108.9 | 141.3 | 103.2 | 15,770 | 3,017
`|`5.`1989` | 914,217 | 192,505 | 721,712 | 115.4 | 121.3 | 114.0 | 17,977 | 3,631
`|`6.`1990` | 869,831 | 229,310 | 640,521 | 98.5 | 121.4 | 92.3 | 17,542 | 3,926
`|`7.`1991` | 737,264 | 254,282 | 482,982 | 97.7 | 101.2 | 95.9 | 14,333 | 3,692
`|`8.`1992` | 601,729 | 300,866 | 300,863 | 96.2 | 98.5 | 94.0 | 8,527 | 3,747
`|`9.`1993` | 416,345 | 282,228 | 134,117 | 91.1 | 92.2 | 88.9 | 5,520 | 3,217
`|10.`1994` | 332,029 | 207,049 | 124,980 | 94.2 | 92.1 | 98.0 | 5,953 | 2,659
`|11.`1995` | 295,644 | 132,200 | 163,444 | 95.2 | 96.7 | 94.0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 201,063 | 36,889
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 434,701 | 23,792 |
| 0.0 | 75,951 | 5,669 |
| 0.0 | 79,342 | 6,095 |
| 0.0 | 103,343 | 7,588 |
| 0.0 | 126,085 | 9,857 |
| 0.0 | 130,032 | 11,522 |
| 0.0 | 112,313 | 11,167 |
| 0.0 | 85,537 | 13,181 |
| 0.0 | 49,764 | 12,630 |
| 0.0 | 57,295 | 12,572 |
| 0.0 | 104,009 | 34,650 |
|--------------|--------------|--------------|
| X X X | 1,358,372 | 148,723 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1E - COMMERCIAL MULTIPLE PERIL
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 3,892 | 9 | 1,681 | 0 | 92
`|`2.`1986` | 387,822 | 37,262 | 350,560 | 159,736 | 11,053 | 33,340 | 352 | 6,180
`|`3.`1987` | 387,310 | 18,374 | 368,936 | 158,378 | 591 | 25,628 | 102 | 5,545
`|`4.`1988` | 650,932 | 26,143 | 624,789 | 250,334 | 6,281 | 44,449 | 129 | 11,972
`|`5.`1989` | 738,672 | 18,418 | 720,254 | 334,688 | 20,850 | 50,368 | 372 | 10,755
`|`6.`1990` | 731,950 | 13,795 | 718,155 | 317,064 | 5,532 | 64,152 | 350 | 9,654
`|`7.`1991` | 674,236 | 4,649 | 669,587 | 266,182 | 7,328 | 44,345 | 492 | 7,855
`|`8.`1992` | 608,782 | 4,166 | 604,616 | 269,107 | 44,684 | 37,959 | 3,441 | 6,704
`|`9.`1993` | 601,390 | 5,796 | 595,594 | 213,387 | 10,042 | 20,153 | 243 | 5,238
`|10.`1994` | 636,937 | 5,964 | 630,973 | 209,591 | 6,851 | 10,354 | 361 | 7,021
`|11.`1995` | 658,826 | 6,298 | 652,528 | 127,254 | 2,974 | 2,503 | 99 | 2,846
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 2,309,613 | 116,195 | 334,932 | 5,941 | 73,862
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 372 | 5,936 | X X X |
| 11,629 | 193,300 | 37,071 |
| 13,545 | 196,858 | 33,851 |
| 28,404 | 316,777 | 59,721 |
| 35,991 | 399,825 | 79,781 |
| 36,831 | 412,165 | 78,798 |
| 33,365 | 336,072 | 74,934 |
| 37,121 | 296,062 | 69,183 |
| 36,640 | 259,895 | 73,856 |
| 29,867 | 242,600 | 81,224 |
| 25,886 | 152,570 | 68,732 |
|--------------|--------------|--------------|
| 289,651 | 2,812,060 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 6,360 | 8 | 3,154 | 3 | 0 | 0 | 9,018 | 3
`|`2.`1986` | 3,667 | 0 | 879 | 1 | 0 | 0 | 2,308 | 1
`|`3.`1987` | 3,355 | 0 | 1,626 | 0 | 0 | 0 | 4,496 | 0
`|`4.`1988` | 8,137 | 0 | 10,110 | 1 | 0 | 0 | 11,901 | 1
`|`5.`1989` | 14,278 | 5 | 15,232 | 16 | 0 | 0 | 17,509 | 1
`|`6.`1990` | 22,732 | 41 | 26,314 | 2 | 0 | 0 | 26,660 | 2
`|`7.`1991` | 35,199 | 153 | 29,019 | 2 | 0 | 0 | 33,746 | 2
`|`8.`1992` | 50,119 | 301 | 30,217 | 4 | 0 | 0 | 37,887 | 20
`|`9.`1993` | 58,526 | 35 | 44,193 | 11 | 0 | 0 | 48,574 | 15
`|10.`1994` | 73,931 | 515 | 67,842 | 16 | 0 | 0 | 62,925 | 13
`|11.`1995` | 119,179 | 10,809 | 118,456 | 46 | 0 | 0 | 69,461 | 10
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 395,483 | 11,867 | 347,042 | 102 | 0 | 0 | 324,485 | 68
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 272 | 372 | 18,890 | 193 |
| 102 | 172 | 7,024 | 70 |
| 274 | 175 | 9,652 | 68 |
| 758 | 1,492 | 31,638 | 201 |
| 1,219 | 2,395 | 49,392 | 303 |
| 1,394 | 3,743 | 79,404 | 576 |
| 1,790 | 4,974 | 102,781 | 821 |
| 2,523 | 6,609 | 124,507 | 1,351 |
| 3,032 | 9,118 | 160,350 | 2,166 |
| 4,293 | 12,875 | 217,029 | 3,990 |
| 7,654 | 17,301 | 313,532 | 13,016 |
|--------------|--------------|--------------|-------------|
| 23,311 | 59,226 | 1,114,199 | 22,755 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 211,731 | 11,407 | 200,324 | 54.6 | 30.6 | 57.1 | 0 | 0
`|`3.`1987` | 207,203 | 693 | 206,510 | 53.5 | 3.8 | 56.0 | 0 | 0
`|`4.`1988` | 354,827 | 6,412 | 348,415 | 54.5 | 24.5 | 55.8 | 0 | 0
`|`5.`1989` | 470,461 | 21,244 | 449,217 | 63.7 | 115.3 | 62.4 | 0 | 0
`|`6.`1990` | 497,496 | 5,927 | 491,569 | 68.0 | 43.0 | 68.4 | 0 | 0
`|`7.`1991` | 446,830 | 7,977 | 438,853 | 66.3 | 171.6 | 65.5 | 0 | 0
`|`8.`1992` | 469,019 | 48,450 | 420,569 | 77.0 | 1,163.0 | 69.6 | 0 | 0
`|`9.`1993` | 430,591 | 10,346 | 420,245 | 71.6 | 178.5 | 70.6 | 0 | 0
`|10.`1994` | 467,385 | 7,756 | 459,629 | 73.4 | 130.0 | 72.8 | 0 | 0
`|11.`1995` | 480,040 | 13,938 | 466,102 | 72.9 | 221.3 | 71.4 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 9,503 | 9,387 |
| 0.0 | 4,545 | 2,479 |
| 0.0 | 4,981 | 4,671 |
| 0.0 | 18,246 | 13,392 |
| 0.0 | 29,489 | 19,903 |
| 0.0 | 49,003 | 30,401 |
| 0.0 | 64,063 | 38,718 |
| 0.0 | 80,031 | 44,476 |
| 0.0 | 102,673 | 57,677 |
| 0.0 | 141,242 | 75,787 |
| 0.0 | 226,780 | 86,752 |
|--------------|--------------|--------------|
| X X X | 730,556 | 383,643 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 3,393 | 0 | 1,302 | 0 | 647
`|`2.`1986` | 97 | 38 | 59 | 1 | 0 | 3 | 0 | 8
`|`3.`1987` | 660 | 0 | 660 | 9 | 0 | 8 | 0 | 0
`|`4.`1988` | 548 | 0 | 548 | 143 | 0 | 33 | 0 | 0
`|`5.`1989` | 88 | 0 | 88 | 140 | 0 | 27 | 0 | 0
`|`6.`1990` | 84 | 0 | 84 | 377 | 0 | 51 | 0 | 0
`|`7.`1991` | 56 | 0 | 56 | 113 | 0 | 20 | 0 | 0
`|`8.`1992` | 60 | 0 | 60 | 1 | 0 | 14 | 0 | 0
`|`9.`1993` | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0
`|10.`1994` | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0
`|11.`1995` | 17 | 11 | 6 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 4,177 | 0 | 1,458 | 0 | 655
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 45 | 4,740 | X X X |
| 6 | 10 | 2 |
| 78 | 95 | 5 |
| 15 | 191 | 4 |
| 8 | 175 | 4 |
| 10 | 438 | 4 |
| 10 | 143 | 1 |
| 8 | 23 | 0 |
| 0 | 0 | 1 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
|--------------|--------------|--------------|
| 180 | 5,815 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 3,522 | 0 | 1,019 | 0 | 0 | 0 | 1,537 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`5.`1989` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`6.`1990` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`7.`1991` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`8.`1992` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`9.`1993` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|10.`1994` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|11.`1995` | 0 | 0 | 13 | 9 | 0 | 0 | 1 | 1
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 3,522 | 0 | 1,032 | 9 | 0 | 0 | 1,538 | 1
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 414 | 6,492 | 90 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 4 | 0 |
|--------------|--------------|--------------|-------------|
| 0 | 414 | 6,496 | 90 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 10 | 0 | 10 | 10.3 | 0.0 | 16.9 | 0 | 0
`|`3.`1987` | 95 | 0 | 95 | 14.4 | 0.0 | 14.4 | 0 | 0
`|`4.`1988` | 191 | 0 | 191 | 34.9 | 0.0 | 34.9 | 0 | 0
`|`5.`1989` | 175 | 0 | 175 | 198.9 | 0.0 | 198.9 | 0 | 0
`|`6.`1990` | 438 | 0 | 438 | 521.4 | 0.0 | 521.4 | 0 | 0
`|`7.`1991` | 143 | 0 | 143 | 255.4 | 0.0 | 255.4 | 0 | 0
`|`8.`1992` | 23 | 0 | 23 | 38.3 | 0.0 | 38.3 | 0 | 0
`|`9.`1993` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|10.`1994` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|11.`1995` | 14 | 10 | 4 | 82.4 | 90.9 | 66.7 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 4,541 | 1,951 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 4 | 0 |
|--------------|--------------|--------------|
| X X X | 4,545 | 1,951 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 7 | 0 | 25 | 0 | 0
`|`3.`1987` | 117 | 0 | 117 | 19 | 0 | 5 | 0 | 0
`|`4.`1988` | 219 | 0 | 219 | 174 | 0 | 45 | 0 | 0
`|`5.`1989` | 228 | 0 | 228 | 203 | 0 | 54 | 0 | 0
`|`6.`1990` | 256 | 0 | 256 | 230 | 0 | 35 | 0 | 0
`|`7.`1991` | 299 | 0 | 299 | 1 | 0 | 14 | 0 | 0
`|`8.`1992` | 255 | 0 | 255 | 16 | 0 | 22 | 0 | 0
`|`9.`1993` | 66 | 0 | 66 | 0 | 0 | 0 | 0 | 0
`|10.`1994` | (2)| 0 | (2)| 0 | 0 | 0 | 0 | 0
`|11.`1995` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 650 | 0 | 200 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- -----------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 0 | X X X |
| 0 | 32 | 8 |
| 0 | 24 | 0 |
| 0 | 219 | 0 |
| 0 | 257 | 2 |
| 0 | 265 | 0 |
| 0 | 15 | 0 |
| 0 | 38 | 0 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
|--------------|--------------|--------------|
| 0 | 850 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 0 | 0 | 64 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 162 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`5.`1989` | 50 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`6.`1990` | 36 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`7.`1991` | 2 | 0 | 122 | 0 | 0 | 0 | 0 | 0
`|`8.`1992` | 72 | 0 | 65 | 0 | 0 | 0 | 0 | 0
`|`9.`1993` | 1 | 0 | 48 | 0 | 0 | 0 | 0 | 0
`|10.`1994` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|11.`1995` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 323 | 0 | 299 | 0 | 0 | 0 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 64 | 0 |
| 0 | 0 | 162 | 0 |
| 0 | 0 | 50 | 0 |
| 0 | 0 | 36 | 0 |
| 0 | 0 | 124 | 0 |
| 0 | 0 | 137 | 0 |
| 0 | 0 | 49 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
|--------------|--------------|--------------|-------------|
| 0 | 0 | 622 | 0 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 32 | 0 | 32 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`3.`1987` | 88 | 0 | 88 | 75.2 | 0.0 | 75.2 | 0 | 0
`|`4.`1988` | 381 | 0 | 381 | 174.0 | 0.0 | 174.0 | 0 | 0
`|`5.`1989` | 307 | 0 | 307 | 134.6 | 0.0 | 134.6 | 0 | 0
`|`6.`1990` | 301 | 0 | 301 | 117.6 | 0.0 | 117.6 | 0 | 0
`|`7.`1991` | 139 | 0 | 139 | 46.5 | 0.0 | 46.5 | 0 | 0
`|`8.`1992` | 175 | 0 | 175 | 68.6 | 0.0 | 68.6 | 0 | 0
`|`9.`1993` | 49 | 0 | 49 | 74.2 | 0.0 | 74.2 | 0 | 0
`|10.`1994` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|11.`1995` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 64 | 0 |
| 0.0 | 162 | 0 |
| 0.0 | 50 | 0 |
| 0.0 | 36 | 0 |
| 0.0 | 124 | 0 |
| 0.0 | 137 | 0 |
| 0.0 | 49 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
|--------------|--------------|--------------|
| X X X | 622 | 0 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1G - SPECIAL LIABILITY (OCEAN MARINE,
AIRCRAFT (ALL PERILS), BOILER AND MACHINERY)
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 3,268 | 3,266 | 120 | 281 | 0
`|`2.`1986` | 105,320 | 55,944 | 49,376 | 59,626 | 31,590 | 4,715 | 2,773 | 403
`|`3.`1987` | 123,309 | 70,752 | 52,557 | 67,444 | 40,035 | 6,312 | 4,073 | 1,102
`|`4.`1988` | 103,314 | 60,212 | 43,102 | 70,630 | 47,738 | 5,683 | 4,432 | 242
`|`5.`1989` | 69,557 | 42,615 | 26,942 | 52,201 | 30,832 | 4,398 | 2,689 | 866
`|`6.`1990` | 63,446 | 36,143 | 27,303 | 50,044 | 31,974 | 4,605 | 3,241 | 147
`|`7.`1991` | 42,600 | 31,190 | 11,410 | 50,463 | 33,826 | 4,210 | 3,017 | 214
`|`8.`1992` | 41,705 | 26,430 | 15,275 | 25,383 | 15,828 | 2,347 | 1,460 | 74
`|`9.`1993` | 49,332 | 34,173 | 15,159 | 20,752 | 11,590 | 1,887 | 1,136 | 81
`|10.`1994` | 55,171 | 32,328 | 22,843 | 23,861 | 9,552 | 1,248 | 897 | 26
`|11.`1995` | 37,114 | 16,287 | 20,827 | 3,583 | 182 | 164 | 79 | 8
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 427,255 | 256,413 | 35,689 | 24,078 | 3,163
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | (159)| X X X |
| 102 | 30,080 | X X X |
| 89 | 29,737 | X X X |
| 72 | 24,215 | X X X |
| 72 | 23,150 | X X X |
| 92 | 19,526 | X X X |
| 77 | 17,907 | X X X |
| 96 | 10,538 | X X X |
| 233 | 10,146 | X X X |
| 29 | 14,689 | X X X |
| 6 | 3,492 | X X X |
|--------------|--------------|--------------|
| 868 | 183,321 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 1,950 | 1,401 | 4 | 4 | 0 | 0 | 251 | 218
`|`2.`1986` | 549 | 203 | 224 | 2 | 0 | 0 | 49 | 54
`|`3.`1987` | 692 | 230 | 524 | 7 | 0 | 0 | 167 | 55
`|`4.`1988` | 3,811 | 3,127 | 625 | 13 | 0 | 0 | 1,007 | 1,001
`|`5.`1989` | 1,284 | 608 | 549 | 22 | 0 | 0 | 166 | 111
`|`6.`1990` | 1,414 | 865 | 246 | 30 | 0 | 0 | 294 | 191
`|`7.`1991` | 1,664 | 1,112 | 114 | 42 | 0 | 0 | 384 | 228
`|`8.`1992` | 1,405 | 887 | 82 | 38 | 0 | 0 | 342 | 179
`|`9.`1993` | 4,219 | 2,547 | 443 | 122 | 0 | 0 | 772 | 465
`|10.`1994` | 6,596 | 3,601 | 1,653 | 160 | 0 | 0 | 769 | 536
`|11.`1995` | 8,398 | 1,409 | 4,912 | 64 | 0 | 0 | 394 | 253
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 31,982 | 15,990 | 9,376 | 504 | 0 | 0 | 4,595 | 3,291
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 582 | 0 |
| 0 | 0 | 563 | 0 |
| 0 | 1 | 1,092 | 1 |
| 0 | 0 | 1,302 | 0 |
| 0 | 3 | 1,261 | 1 |
| 0 | 1 | 869 | 2 |
| 0 | 0 | 780 | 0 |
| 0 | 4 | 729 | 2 |
| 0 | 31 | 2,331 | 9 |
| 0 | 5 | 4,726 | 5 |
| 0 | 4 | 11,982 | 6 |
|--------------|--------------|--------------|-------------|
| 0 | 49 | 26,217 | 26 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 65,265 | 34,622 | 30,643 | 62.0 | 61.9 | 62.1 | 0 | 0
`|`3.`1987` | 75,229 | 44,400 | 30,829 | 61.0 | 62.8 | 58.7 | 0 | 0
`|`4.`1988` | 81,828 | 56,311 | 25,517 | 79.2 | 93.5 | 59.2 | 0 | 0
`|`5.`1989` | 58,673 | 34,262 | 24,411 | 84.4 | 80.4 | 90.6 | 0 | 0
`|`6.`1990` | 56,696 | 36,301 | 20,395 | 89.4 | 100.4 | 74.7 | 0 | 0
`|`7.`1991` | 56,912 | 38,225 | 18,687 | 133.6 | 122.6 | 163.8 | 0 | 0
`|`8.`1992` | 29,659 | 18,392 | 11,267 | 71.1 | 69.6 | 73.8 | 0 | 0
`|`9.`1993` | 28,337 | 15,860 | 12,477 | 57.4 | 46.4 | 82.3 | 0 | 0
`|10.`1994` | 34,161 | 14,746 | 19,415 | 61.9 | 45.6 | 85.0 | 0 | 0
`|11.`1995` | 17,461 | 1,987 | 15,474 | 47.0 | 12.2 | 74.3 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 549 | 33 |
| 0.0 | 568 | (5)|
| 0.0 | 979 | 113 |
| 0.0 | 1,296 | 6 |
| 0.0 | 1,203 | 58 |
| 0.0 | 765 | 104 |
| 0.0 | 624 | 156 |
| 0.0 | 562 | 167 |
| 0.0 | 1,993 | 338 |
| 0.0 | 4,488 | 238 |
| 0.0 | 11,837 | 145 |
|--------------|--------------|--------------|
| X X X | 24,864 | 1,353 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 18,612 | 1,193 | 5,643 | 1,813 | 422
`|`2.`1986` | 435,955 | 15,114 | 420,841 | 171,163 | 9,160 | 43,617 | 843 | 5,018
`|`3.`1987` | 624,510 | 133,070 | 491,440 | 244,211 | 80,993 | 41,536 | 1,724 | 5,070
`|`4.`1988` | 526,042 | 132,411 | 393,631 | 162,682 | 63,687 | 30,839 | 1,155 | 3,702
`|`5.`1989` | 290,820 | 66,258 | 224,562 | 113,024 | 45,068 | 20,605 | 793 | 2,811
`|`6.`1990` | 261,224 | 55,253 | 205,971 | 111,486 | 42,561 | 19,598 | 1,715 | 1,084
`|`7.`1991` | 178,427 | 27,429 | 150,998 | 45,523 | 8,216 | 13,955 | 532 | 1,754
`|`8.`1992` | 120,315 | 28,885 | 91,430 | 18,790 | 923 | 6,020 | 269 | 264
`|`9.`1993` | 105,805 | (1,216)| 107,021 | 17,462 | 2,440 | 3,089 | 161 | 96
`|10.`1994` | 110,481 | 17,926 | 92,555 | 9,161 | 404 | 1,067 | 84 | 208
`|11.`1995` | 126,721 | 29,665 | 97,056 | 4,251 | 27 | 196 | 12 | 177
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 916,365 | 254,672 | 186,165 | 9,101 | 20,606
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 457 | 21,706 | X X X |
| 11,921 | 216,698 | 32,236 |
| 11,601 | 214,631 | 28,513 |
| 8,357 | 137,036 | 21,271 |
| 5,826 | 93,594 | 14,651 |
| 6,058 | 92,866 | 15,510 |
| 4,993 | 55,723 | 11,012 |
| 4,183 | 27,801 | 6,531 |
| 2,550 | 20,500 | 4,681 |
| 1,896 | 11,636 | 4,265 |
| 1,845 | 6,253 | 3,517 |
|--------------|--------------|--------------|
| 59,687 | 898,444 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 60,051 | 7,923 | 69,067 | 564 | 0 | 0 | 82,027 | 1,852
`|`2.`1986` | 5,868 | 283 | 8,289 | 120 | 0 | 0 | 14,638 | 21
`|`3.`1987` | 5,941 | 378 | 13,943 | 113 | 0 | 0 | 14,174 | 188
`|`4.`1988` | 6,292 | 303 | 16,122 | 149 | 0 | 0 | 10,648 | 138
`|`5.`1989` | 6,665 | 892 | 18,764 | 310 | 0 | 0 | 9,336 | 357
`|`6.`1990` | 12,640 | 560 | 28,418 | 884 | 0 | 0 | 12,240 | 335
`|`7.`1991` | 16,480 | 439 | 28,497 | 2,064 | 0 | 0 | 12,307 | 385
`|`8.`1992` | 14,361 | 1,276 | 21,632 | 1,741 | 3 | 0 | 10,085 | 451
`|`9.`1993` | 8,949 | 426 | 25,470 | 2,107 | 9 | 0 | 11,087 | 423
`|10.`1994` | 8,203 | 312 | 35,331 | 3,829 | 19 | 0 | 12,370 | 589
`|11.`1995` | 9,685 | 571 | 51,268 | 10,832 | 25 | 0 | 12,434 | 661
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 155,135 | 13,363 | 316,801 | 22,713 | 56 | 0 | 201,346 | 5,400
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 1,178 | 7,511 | 208,317 | 1,002 |
| 415 | 739 | 29,110 | 111 |
| 432 | 1,205 | 34,584 | 133 |
| 456 | 1,139 | 33,611 | 124 |
| 436 | 1,077 | 34,283 | 150 |
| 476 | 1,517 | 53,036 | 245 |
| 435 | 1,871 | 56,267 | 296 |
| 416 | 1,414 | 44,027 | 294 |
| 328 | 1,521 | 44,080 | 335 |
| 374 | 2,019 | 53,212 | 383 |
| 542 | 3,127 | 64,475 | 905 |
|--------------|--------------|--------------|-------------|
| 5,488 | 23,140 | 655,002 | 3,978 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------#
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time |
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money |
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 |
| | | | | | | | | |
| | Direct | | | Direct | | | | Loss |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
| | | | | | | | | |
|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0 |
|`2.`1986` | 256,235 | 10,427 | 245,808 | 58.8 | 69.0 | 58.4 | 0 | 0 |
|`3.`1987` | 332,611 | 83,396 | 249,215 | 53.3 | 62.7 | 50.7 | 0 | 0 |
|`4.`1988` | 236,079 | 65,432 | 170,647 | 44.9 | 49.4 | 43.4 | 0 | 0 |
|`5.`1989` | 175,297 | 47,420 | 127,877 | 60.3 | 71.6 | 56.9 | 0 | 0 |
|`6.`1990` | 191,957 | 46,055 | 145,902 | 73.5 | 83.4 | 70.8 | 0 | 0 |
|`7.`1991` | 123,626 | 11,636 | 111,990 | 69.3 | 42.4 | 74.2 | 0 | 0 |
|`8.`1992` | 76,488 | 4,660 | 71,828 | 63.6 | 16.1 | 78.6 | 0 | 0 |
|`9.`1993` | 70,137 | 5,557 | 64,580 | 66.3 | (457.0)| 60.3 | 0 | 0 |
|10.`1994` | 70,066 | 5,218 | 64,848 | 63.4 | 29.1 | 70.1 | 0 | 0 |
|11.`1995` | 82,831 | 12,103 | 70,728 | 65.4 | 40.8 | 72.9 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0 |
- -------------->------------->------------->------------->-------------->-------------->-------------->-------------->-------------->
<C> <C> <C>
- --------------#-----------------------------#
| Net Balance Sheet Reserves |
33 | After Discount |
|--------------#--------------|
Inter-Company | 34 | 35 |
Pooling | | Loss |
Participation | Losses | Expenses |
Percentage | Unpaid | Unpaid |
- --------------|--------------|--------------|
| | |
X X X | 120,631 | 87,686 |
0.0 | 13,754 | 15,356 |
0.0 | 19,393 | 15,191 |
0.0 | 21,962 | 11,649 |
0.0 | 24,227 | 10,056 |
0.0 | 39,614 | 13,422 |
0.0 | 42,474 | 13,793 |
0.0 | 32,976 | 11,051 |
0.0 | 31,886 | 12,194 |
0.0 | 39,393 | 13,819 |
0.0 | 49,550 | 14,925 |
- --------------|--------------|--------------|
X X X | 435,860 | 219,142 |
- -------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 25 | 10 | 2 | 1 | 0
`|`2.`1986` | 0 | 0 | 0 | 926 | 535 | 62 | (1)| 5
`|`3.`1987` | 68 | 0 | 68 | 0 | 0 | (6)| 0 | 0
`|`4.`1988` | 1,993 | 0 | 1,993 | 609 | 28 | 52 | 6 | 13
`|`5.`1989` | 2,406 | 0 | 2,406 | 652 | 0 | 141 | 0 | 18
`|`6.`1990` | 2,190 | 286 | 1,904 | 872 | 0 | 112 | 0 | 11
`|`7.`1991` | 3,185 | 42 | 3,143 | 448 | 0 | 196 | 0 | 17
`|`8.`1992` | 2,299 | 270 | 2,029 | 756 | 0 | 180 | 0 | 7
`|`9.`1993` | 1,936 | 517 | 1,419 | 149 | 0 | 86 | 0 | 17
`|10.`1994` | 2,756 | 480 | 2,276 | 352 | 0 | 345 | 0 | 8
`|11.`1995` | 3,997 | 372 | 3,625 | 76 | 0 | 47 | 0 | 13
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 4,865 | 573 | 1,217 | 6 | 109
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 7 | 23 | X X X |
| 84 | 538 | 8 |
| 11 | 5 | 3 |
| 96 | 723 | 119 |
| 116 | 909 | 194 |
| 68 | 1,052 | 157 |
| 83 | 727 | 162 |
| 95 | 1,031 | 142 |
| 41 | 276 | 107 |
| 24 | 721 | 69 |
| 138 | 261 | 287 |
|--------------|--------------|--------------|
| 763 | 6,266 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 86 | 53 | 11 | 0 | 0 | 0 | 170 | 38
`|`2.`1986` | 166 | 174 | 3 | 0 | 0 | 0 | 216 | 126
`|`3.`1987` | 200 | 0 | 154 | 0 | 0 | 0 | 566 | 0
`|`4.`1988` | 1,610 | 0 | 201 | 0 | 0 | 0 | 1,180 | 0
`|`5.`1989` | 95 | 0 | 352 | 0 | 0 | 0 | 316 | 0
`|`6.`1990` | 0 | 0 | 561 | 0 | 0 | 0 | 192 | 0
`|`7.`1991` | 131 | 0 | 310 | 0 | 0 | 0 | 295 | 0
`|`8.`1992` | 85 | 0 | 132 | 0 | 0 | 0 | 117 | 0
`|`9.`1993` | 276 | 0 | 134 | 0 | 0 | 0 | 248 | 0
`|10.`1994` | 315 | 0 | 271 | 0 | 0 | 0 | 103 | 0
`|11.`1995` | 1,150 | 0 | 1,124 | 132 | 0 | 0 | 822 | 27
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 4,114 | 227 | 3,253 | 132 | 0 | 0 | 4,225 | 191
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 39 | 215 | 3 |
| 0 | 10 | 95 | 2 |
| 0 | 30 | 950 | 1 |
| 0 | 109 | 3,100 | 2 |
| 0 | 31 | 794 | 2 |
| 0 | 43 | 796 | 0 |
| 0 | 24 | 760 | 2 |
| 0 | 36 | 370 | 4 |
| 0 | 22 | 680 | 24 |
| 0 | 14 | 703 | 10 |
| 0 | 85 | 3,022 | 133 |
|--------------|--------------|--------------|-------------|
| 0 | 443 | 11,485 | 183 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 1,467 | 834 | 633 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`3.`1987` | 955 | 0 | 955 | 1,404.4 | 0.0 | 1,404.4 | 0 | 0
`|`4.`1988` | 3,857 | 34 | 3,823 | 193.5 | 0.0 | 191.8 | 0 | 0
`|`5.`1989` | 1,703 | 0 | 1,703 | 70.8 | 0.0 | 70.8 | 0 | 0
`|`6.`1990` | 1,848 | 0 | 1,848 | 84.4 | 0.0 | 97.1 | 0 | 0
`|`7.`1991` | 1,487 | 0 | 1,487 | 46.7 | 0.0 | 47.3 | 0 | 0
`|`8.`1992` | 1,401 | 0 | 1,401 | 60.9 | 0.0 | 69.0 | 0 | 0
`|`9.`1993` | 956 | 0 | 956 | 49.4 | 0.0 | 67.4 | 0 | 0
`|10.`1994` | 1,424 | 0 | 1,424 | 51.7 | 0.0 | 62.6 | 0 | 0
`|11.`1995` | 3,442 | 159 | 3,283 | 86.1 | 42.7 | 90.6 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 44 | 171 |
| 0.0 | (5)| 100 |
| 0.0 | 354 | 596 |
| 0.0 | 1,811 | 1,289 |
| 0.0 | 447 | 347 |
| 0.0 | 561 | 235 |
| 0.0 | 441 | 319 |
| 0.0 | 217 | 153 |
| 0.0 | 410 | 270 |
| 0.0 | 586 | 117 |
| 0.0 | 2,142 | 880 |
|--------------|--------------|--------------|
| X X X | 7,008 | 4,477 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 11,825 | 4,078 | 1,093 | 326 | 1,459
`|`2.`1994` | 188,550 | 50,672 | 137,878 | 82,641 | 8,591 | 1,933 | 179 | 986
`|`3.`1995` | 189,095 | 71,801 | 117,294 | 43,367 | 5,386 | 417 | 20 | 621
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | 137,833 | 18,055 | 3,443 | 525 | 3,066
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 45 | 8,559 | X X X |
| 3,211 | 79,015 | X X X |
| 2,671 | 41,049 | X X X |
|--------------|--------------|--------------|
| 5,927 | 128,623 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 12,059 | 1,508 | 10,527 | 52 | 0 | 0 | 1,701 | 109
`|`2.`1994` | 14,856 | 4,180 | 1,545 | 134 | 0 | 0 | 1,084 | 291
`|`3.`1995` | 28,251 | 4,415 | 9,722 | 1,651 | 1 | 1 | 2,357 | 1,251
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 55,166 | 10,103 | 21,794 | 1,837 | 1 | 1 | 5,142 | 1,651
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 1,094 | 94 | 22,712 | 70 |
| 464 | 275 | 13,155 | 105 |
| 1,211 | 822 | 33,835 | 1,074 |
|--------------|--------------|--------------|-------------|
| 2,769 | 1,191 | 69,702 | 1,249 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1994` | 105,545 | 13,375 | 92,170 | 56.0 | 26.4 | 66.8 | 0 | 0
`|`3.`1995` | 87,608 | 12,724 | 74,884 | 46.3 | 17.7 | 63.8 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 21,026 | 1,686 |
| 0.0 | 12,087 | 1,068 |
| 0.0 | 31,907 | 1,928 |
|--------------|--------------|--------------|
| X X X | 65,020 | 4,682 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1J - AUTO PHYSICAL DAMAGE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 1,756 | (53)| 790 | 45 | 48,689
`|`2.`1994` | 244,548 | 26,029 | 218,519 | 129,713 | 6,863 | 2,202 | 119 | 18,919
`|`3.`1995` | 236,853 | 10,232 | 226,621 | 115,042 | 3,200 | 1,233 | 8 | 9,825
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | 246,511 | 10,010 | 4,225 | 172 | 77,433
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 37 | 2,591 | X X X |
| 12,940 | 137,873 | 106,923 |
| 13,214 | 126,281 | 93,869 |
|--------------|--------------|--------------|
| 26,191 | 266,745 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 4,308 | 245 | 6,417 | 10 | 35 | 0 | 1,245 | 60
`|`2.`1994` | 1,432 | 12 | 466 | 5 | 37 | 0 | 789 | 13
`|`3.`1995` | 19,059 | 192 | 1,256 | 193 | 86 | 0 | 1,479 | 19
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 24,799 | 449 | 8,139 | 208 | 158 | 0 | 3,513 | 92
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 2,752 | 212 | 11,902 | 60 |
| 2,655 | 237 | 2,931 | 128 |
| 8,495 | 977 | 22,453 | 4,351 |
|--------------|--------------|--------------|-------------|
| 13,902 | 1,426 | 37,286 | 4,539 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1994` | 147,816 | 7,012 | 140,804 | 60.4 | 26.9 | 64.4 | 0 | 0
`|`3.`1995` | 152,346 | 3,612 | 148,734 | 64.3 | 35.3 | 65.6 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 10,470 | 1,432 |
| 100.0 | 1,881 | 1,050 |
| 100.0 | 19,930 | 2,523 |
|--------------|--------------|--------------|
| X X X | 32,281 | 5,005 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1K - FIDELITY/SURETY
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 20,277 | 8,384 | 10,175 | 3,884 | 7,637
`|`2.`1994` | 156,346 | 32,641 | 123,705 | 32,257 | 5,717 | 2,196 | 359 | 577
`|`3.`1995` | 173,201 | 37,627 | 135,574 | 12,046 | 599 | 271 | 15 | 248
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | 64,580 | 14,700 | 12,642 | 4,258 | 8,462
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 1,816 | 20,000 | X X X |
| 1,838 | 30,215 | X X X |
| 1,115 | 12,818 | X X X |
|--------------|--------------|--------------|
| 4,769 | 63,033 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 13,317 | 3,368 | (12,080)| (1,785)| 0 | 0 | 18,952 | 4,780
`|`2.`1994` | 7,685 | 1,305 | (1,288)| 0 | 0 | 0 | 7,434 | 1,619
`|`3.`1995` | 2,804 | 191 | 14,089 | 1,442 | 0 | 0 | 13,736 | 3,195
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 23,806 | 4,864 | 721 | (343)| 0 | 0 | 40,122 | 9,594
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 12,098 | 698 | 14,524 | 1,429 |
| 3,688 | 294 | 11,201 | 852 |
| 3,919 | 1,222 | 27,023 | 690 |
|--------------|--------------|--------------|-------------|
| 19,705 | 2,214 | 52,748 | 2,971 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1994` | 50,416 | 9,000 | 41,416 | 32.2 | 27.6 | 33.5 | 0 | 0
`|`3.`1995` | 45,283 | 5,442 | 39,841 | 26.1 | 14.5 | 29.4 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | (346)| 14,870 |
| 0.0 | 5,092 | 6,109 |
| 0.0 | 15,260 | 11,763 |
|--------------|--------------|--------------|
| X X X | 20,006 | 32,742 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 19 | 0 | 0 | 0 | 0
`|`2.`1994` | 338 | 11 | 327 | 39 | 0 | 0 | 0 | 0
`|`3.`1995` | (967)| 1 | (968)| 8 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | 66 | 0 | 0 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 19 | X X X |
| 6 | 45 | X X X |
| 1 | 9 | X X X |
|--------------|--------------|--------------|
| 7 | 73 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 210 | 133 | 0 | 0 | 0 | 0 | 15 | 13
`|`2.`1994` | 2 | 0 | 1 | 0 | 0 | 0 | 0 | 0
`|`3.`1995` | 9 | 0 | 2 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 221 | 133 | 3 | 0 | 0 | 0 | 15 | 13
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 21 | 100 | 4 |
| 0 | 0 | 3 | 2 |
| 0 | 1 | 12 | 6 |
|--------------|--------------|--------------|-------------|
| 0 | 22 | 115 | 12 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1994` | 48 | 0 | 48 | 14.2 | 0.0 | 14.7 | 0 | 0
`|`3.`1995` | 21 | 0 | 21 | (2.2)| 0.0 | (2.2)| 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 77 | 23 |
| 100.0 | 3 | 0 |
| 100.0 | 11 | 1 |
|--------------|--------------|--------------|
| X X X | 91 | 24 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1M - INTERNATIONAL
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 19,649 | 337 | 19,312 | 13,806 | 90 | 390 | 1 | 0
`|`5.`1989` | 14,651 | 122 | 14,529 | 10,311 | 24 | 329 | 0 | 0
`|`6.`1990` | 12,386 | 63 | 12,323 | 10,517 | 212 | 339 | 0 | 0
`|`7.`1991` | 9,982 | 69 | 9,913 | 7,420 | 46 | 223 | (2)| 0
`|`8.`1992` | 4,683 | 39 | 4,644 | 3,313 | 11 | 45 | (8)| 0
`|`9.`1993` | 12,988 | 0 | 12,988 | 5,734 | 1 | 4 | 0 | 0
`|10.`1994` | 77,224 | 0 | 77,224 | 32,189 | 1 | 28 | (1)| 0
`|11.`1995` | 132,147 | 0 | 132,147 | 29,650 | 3 | 33 | (3)| 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 112,940 | 388 | 1,391 | (13)| 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 14,105 | X X X |
| 0 | 10,616 | X X X |
| 0 | 10,644 | X X X |
| 0 | 7,599 | X X X |
| 0 | 3,355 | X X X |
| 0 | 5,737 | X X X |
| 0 | 32,217 | X X X |
| 0 | 29,683 | X X X |
|--------------|--------------|--------------|
| 0 | 113,956 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 419 | 0 | 1,289 | 0 | 0 | 0 | 0 | 0
`|`5.`1989` | 657 | 0 | 1,365 | 0 | 0 | 0 | 0 | 0
`|`6.`1990` | 271 | 0 | 875 | 0 | 0 | 0 | 0 | 0
`|`7.`1991` | 386 | 0 | 1,593 | 0 | 0 | 0 | 0 | 0
`|`8.`1992` | 101 | 0 | 409 | 0 | 0 | 0 | 0 | 0
`|`9.`1993` | 1,397 | 0 | 1,673 | 0 | 0 | 0 | 0 | 0
`|10.`1994` | 14,496 | 0 | 12,458 | 0 | 0 | 0 | 0 | 0
`|11.`1995` | 40,985 | 0 | 37,856 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 58,712 | 0 | 57,518 | 0 | 0 | 0 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 1,708 | 0 |
| 0 | 0 | 2,022 | 0 |
| 0 | 0 | 1,146 | 0 |
| 0 | 0 | 1,979 | 0 |
| 0 | 0 | 510 | 0 |
| 0 | 0 | 3,070 | 0 |
| 0 | 0 | 26,954 | 0 |
| 0 | 0 | 78,841 | 0 |
|--------------|--------------|--------------|-------------|
| 0 | 0 | 116,230 | 0 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------#
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time |
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money |
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 |
| | | | | | | | | |
| | Direct | | | Direct | | | | Loss |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
| | | | | | | | | |
|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0 |
|`2.`1986` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0 |
|`3.`1987` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0 |
|`4.`1988` | 15,904 | 91 | 15,813 | 80.9 | 27.0 | 81.9 | 0 | 0 |
|`5.`1989` | 12,662 | 24 | 12,638 | 86.4 | 19.7 | 87.0 | 0 | 0 |
|`6.`1990` | 12,002 | 212 | 11,790 | 96.9 | 336.5 | 95.7 | 0 | 0 |
|`7.`1991` | 9,622 | 44 | 9,578 | 96.4 | 63.8 | 96.6 | 0 | 0 |
|`8.`1992` | 3,868 | 3 | 3,865 | 82.6 | 7.7 | 83.2 | 0 | 0 |
|`9.`1993` | 8,808 | 1 | 8,807 | 67.8 | 0.0 | 67.8 | 0 | 0 |
|10.`1994` | 59,171 | 0 | 59,171 | 76.6 | 0.0 | 76.6 | 0 | 0 |
|11.`1995` | 108,524 | 0 | 108,524 | 82.1 | 0.0 | 82.1 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0 |
- -------------->------------->------------->------------->-------------->-------------->-------------->-------------->-------------->
<C> <C> <C>
- --------------#-----------------------------#
| Net Balance Sheet Reserves |
33 | After Discount |
|--------------#--------------|
Inter-Company | 34 | 35 |
Pooling | | Loss |
Participation | Losses | Expenses |
Percentage | Unpaid | Unpaid |
- --------------|--------------|--------------|
| | |
X X X | 0 | 0 |
0.0 | 0 | 0 |
0.0 | 0 | 0 |
0.0 | 1,708 | 0 |
0.0 | 2,022 | 0 |
0.0 | 1,146 | 0 |
0.0 | 1,979 | 0 |
0.0 | 510 | 0 |
0.0 | 3,070 | 0 |
0.0 | 26,954 | 0 |
0.0 | 78,841 | 0 |
- --------------|--------------|--------------|
X X X | 116,230 | 0 |
- -------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1N - REINSURANCE A
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 34,707 | 1,738 | 32,969 | 12,358 | 956 | 403 | 86 | 0
`|`2.`1989` | 25,922 | 2,056 | 23,866 | 14,586 | 1,859 | 460 | (188)| 0
`|`3.`1990` | 79,740 | 60,145 | 19,595 | 51,868 | 42,054 | 951 | 85 | 0
`|`4.`1991` | 60,073 | 34,454 | 25,619 | 25,064 | 18,665 | 386 | (67)| 0
`|`5.`1992` | 56,589 | 10,089 | 46,500 | 22,815 | 18,104 | 307 | 140 | 0
`|`6.`1993` | 61,844 | 10,382 | 51,462 | 6,165 | 2,481 | 132 | 19 | 0
`|`7.`1994` | 54,527 | 18,639 | 35,888 | 7,761 | 2,896 | 188 | 32 | 0
`|`8.`1995` | 76,202 | 29,867 | 46,335 | 7,578 | 3,193 | 55 | 12 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | X X X | X X X | X X X | 148,195 | 90,208 | 2,882 | 119 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 11,719 | X X X |
| 0 | 13,375 | X X X |
| 0 | 10,680 | X X X |
| 0 | 6,852 | X X X |
| 0 | 4,878 | X X X |
| 0 | 3,797 | X X X |
| 0 | 5,021 | X X X |
| 0 | 4,428 | X X X |
|--------------|--------------|--------------|
| 0 | 60,750 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 651 | 7 | 3,098 | 9 | 0 | 0 | 21 | 0
`|`2.`1989` | 1,288 | 6 | 3,300 | 21 | 0 | 0 | 56 | 0
`|`3.`1990` | 1,059 | 41 | 2,413 | 19 | 0 | 0 | 4 | 0
`|`4.`1991` | 1,294 | 297 | 4,265 | 84 | 0 | 0 | 27 | 0
`|`5.`1992` | 1,669 | 384 | 6,191 | 152 | 0 | 0 | 37 | 0
`|`6.`1993` | 2,903 | 1,018 | 8,484 | 134 | 0 | 0 | 52 | 1
`|`7.`1994` | 4,420 | 1,650 | 32,876 | 6,803 | 0 | 0 | 56 | 3
`|`8.`1995` | 7,748 | 2,533 | 44,641 | 12,472 | 0 | 0 | 73 | 8
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | 21,032 | 5,936 | 105,268 | 19,694 | 0 | 0 | 326 | 12
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 3,754 | X X X |
| 0 | 0 | 4,617 | X X X |
| 0 | 0 | 3,416 | X X X |
| 0 | 0 | 5,205 | X X X |
| 0 | 0 | 7,361 | X X X |
| 0 | 0 | 10,286 | X X X |
| 0 | 0 | 28,896 | X X X |
| 0 | 0 | 37,449 | X X X |
|--------------|--------------|--------------|-------------|
| 0 | 0 | 100,984 | X X X |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------#
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time |
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money |
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------|
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 |
| | | | | | | | | |
| | Direct | | | Direct | | | | Loss |
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
| | | | | | | | | |
|`1.`1988` | 16,531 | 1,058 | 15,473 | 47.6 | 60.9 | 46.9 | 0 | 0 |
|`2.`1989` | 19,690 | 1,698 | 17,992 | 76.0 | 82.6 | 75.4 | 0 | 0 |
|`3.`1990` | 56,295 | 42,199 | 14,096 | 70.6 | 70.2 | 71.9 | 0 | 0 |
|`4.`1991` | 31,036 | 18,979 | 12,057 | 51.7 | 55.1 | 47.1 | 0 | 0 |
|`5.`1992` | 31,019 | 18,780 | 12,239 | 54.8 | 186.1 | 26.3 | 0 | 0 |
|`6.`1993` | 17,736 | 3,653 | 14,083 | 28.7 | 35.2 | 27.4 | 0 | 0 |
|`7.`1994` | 45,301 | 11,384 | 33,917 | 83.1 | 61.1 | 94.5 | 0 | 0 |
|`8.`1995` | 60,095 | 18,218 | 41,877 | 78.9 | 61.0 | 90.4 | 0 | 0 |
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------|
|`9.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0 |
- -------------->------------->------------->------------->-------------->-------------->-------------->-------------->-------------->
<C> <C> <C>
- --------------#-----------------------------#
| Net Balance Sheet Reserves |
33 | After Discount |
|--------------#--------------|
Inter-Company | 34 | 35 |
Pooling | | Loss |
Participation | Losses | Expenses |
Percentage | Unpaid | Unpaid |
- --------------|--------------|--------------|
| | |
0.0 | 3,733 | 21 |
0.0 | 4,561 | 56 |
0.0 | 3,412 | 4 |
0.0 | 5,178 | 27 |
0.0 | 7,324 | 37 |
0.0 | 10,235 | 51 |
0.0 | 28,843 | 53 |
0.0 | 37,384 | 65 |
- --------------|--------------|--------------|
X X X | 100,670 | 314 |
- -------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1O - REINSURANCE B
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 155,207 | 139,405 | 15,802 | 115,923 | 109,688 | 1,105 | 170 | 0
`|`2.`1989` | 443,293 | 419,913 | 23,380 | 247,955 | 235,985 | 2,543 | 85 | 0
`|`3.`1990` | 321,700 | 308,404 | 13,296 | 186,761 | 180,772 | 1,968 | 339 | 0
`|`4.`1991` | 150,194 | 142,532 | 7,662 | 71,096 | 69,308 | 929 | 193 | 0
`|`5.`1992` | 193,234 | 175,005 | 18,229 | 189,594 | 178,362 | 235 | 88 | 0
`|`6.`1993` | 334,768 | 372,114 | (37,346)| 85,897 | 82,976 | 234 | (147)| 0
`|`7.`1994` | 241,254 | 101,075 | 140,179 | 47,814 | 10,939 | 194 | 23 | 0
`|`8.`1995` | 257,202 | 216,242 | 40,960 | 32,299 | 22,917 | 55 | 6 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | X X X | X X X | X X X | 977,339 | 890,947 | 7,263 | 757 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 7,170 | X X X |
| 0 | 14,428 | X X X |
| 0 | 7,618 | X X X |
| 0 | 2,524 | X X X |
| 0 | 11,379 | X X X |
| 0 | 3,302 | X X X |
| 0 | 37,046 | X X X |
| 0 | 9,431 | X X X |
|--------------|--------------|--------------|
| 0 | 92,898 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 51,857 | 51,541 | 1,685 | 178 | 0 | 0 | 18 | 0
`|`2.`1989` | 59,428 | 58,471 | 2,345 | 0 | 0 | 0 | 54 | 0
`|`3.`1990` | 65,531 | 65,289 | 1,190 | 353 | 0 | 0 | 3 | 0
`|`4.`1991` | 5,886 | 5,380 | 4,359 | 1,595 | 0 | 0 | 25 | 0
`|`5.`1992` | 2,992 | 2,325 | 5,621 | 2,228 | 0 | 0 | 46 | 1
`|`6.`1993` | 4,316 | 2,448 | 12,823 | 7,506 | 0 | 0 | 193 | 3
`|`7.`1994` | 18,410 | 5,210 | 51,649 | 10,209 | 0 | 0 | 245 | 4
`|`8.`1995` | 8,313 | 1,759 | 170,257 | 139,631 | 0 | 0 | 70 | 1
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | 216,733 | 192,423 | 249,929 | 161,700 | 0 | 0 | 654 | 9
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 1,841 | X X X |
| 0 | 0 | 3,356 | X X X |
| 0 | 0 | 1,082 | X X X |
| 0 | 0 | 3,295 | X X X |
| 0 | 2 | 4,107 | X X X |
| 0 | 27 | 7,402 | X X X |
| 0 | 31 | 54,912 | X X X |
| 0 | 3 | 37,252 | X X X |
|--------------|--------------|--------------|-------------|
| 0 | 63 | 113,247 | X X X |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 170,588 | 161,577 | 9,011 | 109.9 | 115.9 | 57.0 | 0 | 0
`|`2.`1989` | 312,325 | 294,541 | 17,784 | 70.5 | 70.1 | 76.1 | 0 | 0
`|`3.`1990` | 255,453 | 246,753 | 8,700 | 79.4 | 80.0 | 65.4 | 0 | 0
`|`4.`1991` | 82,295 | 76,476 | 5,819 | 54.8 | 53.7 | 75.9 | 0 | 0
`|`5.`1992` | 198,490 | 183,004 | 15,486 | 102.7 | 104.6 | 85.0 | 0 | 0
`|`6.`1993` | 103,490 | 92,786 | 10,704 | 30.9 | 24.9 | (28.7)| 0 | 0
`|`7.`1994` | 118,343 | 26,385 | 91,958 | 49.1 | 26.1 | 65.6 | 0 | 0
`|`8.`1995` | 210,997 | 164,314 | 46,683 | 82.0 | 76.0 | 114.0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| 0.0 | 1,823 | 18 |
| 0.0 | 3,302 | 54 |
| 0.0 | 1,079 | 3 |
| 0.0 | 3,270 | 25 |
| 0.0 | 4,060 | 47 |
| 0.0 | 7,185 | 217 |
| 0.0 | 54,640 | 272 |
| 0.0 | 37,180 | 72 |
|--------------|--------------|--------------|
| X X X | 112,539 | 708 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1P - REINSURANCE C
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 1,548 | (3)| 1,551 | 387 | 0 | 7 | 0 | 0
`|`2.`1989` | 1,673 | 0 | 1,673 | 0 | 0 | 0 | 0 | 0
`|`3.`1990` | 365 | 330 | 35 | 0 | 0 | 0 | 0 | 0
`|`4.`1991` | 1,068 | 1,068 | 0 | 0 | 0 | 0 | 0 | 0
`|`5.`1992` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`6.`1993` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`7.`1994` | 16 | 0 | 16 | 0 | 0 | 0 | 0 | 0
`|`8.`1995` | (33)| 595 | (628)| 364 | 151 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | X X X | X X X | X X X | 751 | 151 | 7 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 394 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 0 | X X X |
| 0 | 213 | X X X |
|--------------|--------------|--------------|
| 0 | 607 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`2.`1989` | 0 | 0 | 0 | 405 | 0 | 0 | 0 | 0
`|`3.`1990` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`4.`1991` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`5.`1992` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`6.`1993` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`7.`1994` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`8.`1995` | 353 | 123 | 1,161 | 118 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | 353 | 123 | 1,161 | 523 | 0 | 0 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 0 | X X X |
| 0 | 0 | (405)| X X X |
| 0 | 0 | 0 | X X X |
| 0 | 0 | 0 | X X X |
| 0 | 0 | 0 | X X X |
| 0 | 0 | 0 | X X X |
| 0 | 0 | 0 | X X X |
| 0 | 0 | 1,273 | X X X |
|--------------|--------------|--------------|-------------|
| 0 | 0 | 868 | X X X |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`1988` | 394 | 0 | 394 | 25.5 | 0.0 | 25.4 | 0 | 0
`|`2.`1989` | 0 | 405 | (405)| 0.0 | 0.0 | (24.2)| 0 | 0
`|`3.`1990` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`4.`1991` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`5.`1992` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`6.`1993` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`7.`1994` | 0 | 0 | 0 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`8.`1995` | 1,878 | 392 | 1,486 | (5,690.9)| 65.9 | (236.6)| 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`9.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| 0.0 | 0 | 0 |
| 0.0 | (405)| 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 1,273 | 0 |
|--------------|--------------|--------------|
| X X X | 868 | 0 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY AND
ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1Q - REINSURANCE D
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 65 | 0 | 0 | 0 | 0
`|`2.`1986` | 101,003 | 61,408 | 39,595 | 54,169 | 25,703 | 681 | 221 | 0
`|`3.`1987` | 49,262 | 5,704 | 43,558 | 33,643 | 4,128 | 851 | (169)| 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | 87,877 | 29,831 | 1,532 | 52 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | 65 | X X X |
| 0 | 28,926 | X X X |
| 0 | 30,535 | X X X |
|--------------|--------------|--------------|
| 0 | 59,526 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 24 | 0 | 18 | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 495 | 0 | 384 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 1,061 | 6 | 2,023 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 1,580 | 6 | 2,425 | 0 | 0 | 0 | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 42 | X X X |
| 0 | 0 | 879 | X X X |
| 0 | 0 | 3,078 | X X X |
|--------------|--------------|--------------|-------------|
| 0 | 0 | 3,999 | X X X |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 55,729 | 25,924 | 29,805 | 55.2 | 42.2 | 75.3 | 0 | 0
`|`3.`1987` | 37,578 | 3,965 | 33,613 | 76.3 | 69.5 | 77.2 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 42 | 0 |
| 0.0 | 879 | 0 |
| 0.0 | 3,078 | 0 |
|--------------|--------------|--------------|
| X X X | 3,999 | 0 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 1,496 | 207 | 5,276 | 308 | 164
`|`2.`1986` | 58,624 | 17,080 | 41,544 | 19,066 | 2,325 | 10,296 | 908 | 383
`|`3.`1987` | 69,307 | 20,533 | 48,774 | 23,987 | 7,043 | 12,881 | 2,522 | 1,005
`|`4.`1988` | 45,670 | 15,513 | 30,157 | 13,049 | 2,176 | 7,422 | 663 | 439
`|`5.`1989` | 29,430 | 10,438 | 18,992 | 13,169 | 4,060 | 6,190 | 1,760 | 336
`|`6.`1990` | 24,423 | 8,559 | 15,864 | 7,702 | 2,133 | 3,123 | 776 | 43
`|`7.`1991` | 17,168 | 5,206 | 11,962 | 8,713 | 2,706 | 4,738 | 1,008 | 85
`|`8.`1992` | 12,044 | 3,459 | 8,585 | 2,786 | 641 | 1,393 | 262 | 127
`|`9.`1993` | 11,626 | 5,243 | 6,383 | 2,608 | 612 | 585 | 153 | 5
`|10.`1994` | 8,042 | 3,169 | 4,873 | 241 | 77 | 76 | 52 | 6
`|11.`1995` | 4,812 | 726 | 4,086 | 36 | 1 | 28 | 0 | 1
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 92,853 | 21,981 | 52,008 | 8,412 | 2,594
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 2,125 | 8,382 | X X X |
| 1,474 | 27,603 | 1,460 |
| 1,693 | 28,996 | 1,269 |
| 1,045 | 18,677 | 912 |
| 707 | 14,246 | 983 |
| 728 | 8,644 | 955 |
| 859 | 10,596 | 641 |
| 873 | 4,149 | 481 |
| 372 | 2,800 | 242 |
| 162 | 350 | 111 |
| 194 | 257 | 63 |
|--------------|--------------|--------------|
| 10,232 | 124,700 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 19,526 | 208 | 12,283 | 231 | 0 | 0 | 19,393 | 877
`|`2.`1986` | 3,667 | 27 | 1,901 | 3 | 0 | 0 | 1,963 | 8
`|`3.`1987` | 1,503 | 51 | 3,126 | 2 | 0 | 0 | 2,092 | 13
`|`4.`1988` | 3,685 | 132 | 2,126 | 7 | 0 | 0 | 1,965 | 33
`|`5.`1989` | 1,034 | 163 | 1,040 | 8 | 0 | 0 | 1,156 | 37
`|`6.`1990` | 1,228 | 284 | 1,403 | 13 | 0 | 0 | 1,265 | 77
`|`7.`1991` | 2,896 | 407 | 1,958 | 24 | 0 | 0 | 1,719 | 109
`|`8.`1992` | 2,074 | 443 | 1,474 | 31 | 0 | 0 | 1,392 | 123
`|`9.`1993` | 1,808 | 777 | 1,823 | 68 | 0 | 0 | 1,220 | 217
`|10.`1994` | 1,237 | 279 | 1,424 | 49 | 0 | 0 | 977 | 81
`|11.`1995` | 149 | 0 | 1,906 | 64 | 0 | 0 | 970 | 3
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 38,807 | 2,771 | 30,464 | 500 | 0 | 0 | 34,112 | 1,578
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 125 | 3,130 | 53,016 | 547 |
| 41 | 506 | 7,999 | 55 |
| 66 | 509 | 7,164 | 58 |
| 56 | 447 | 8,051 | 35 |
| 58 | 151 | 3,173 | 17 |
| 55 | 175 | 3,697 | 27 |
| 71 | 382 | 6,415 | 42 |
| 64 | 265 | 4,608 | 29 |
| 30 | 249 | 4,038 | 17 |
| 28 | 184 | 3,413 | 9 |
| 51 | 270 | 3,228 | 15 |
|--------------|--------------|--------------|-------------|
| 645 | 6,268 | 104,802 | 851 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 38,873 | 3,271 | 35,602 | 66.3 | 19.2 | 85.7 | 0 | 0
`|`3.`1987` | 45,791 | 9,631 | 36,160 | 66.1 | 46.9 | 74.1 | 0 | 0
`|`4.`1988` | 29,739 | 3,011 | 26,728 | 65.1 | 19.4 | 88.6 | 0 | 0
`|`5.`1989` | 23,447 | 6,028 | 17,419 | 79.7 | 57.8 | 91.7 | 0 | 0
`|`6.`1990` | 15,624 | 3,283 | 12,341 | 64.0 | 38.4 | 77.8 | 0 | 0
`|`7.`1991` | 21,265 | 4,254 | 17,011 | 123.9 | 81.7 | 142.2 | 0 | 0
`|`8.`1992` | 10,257 | 1,500 | 8,757 | 85.2 | 43.4 | 102.0 | 0 | 0
`|`9.`1993` | 8,665 | 1,827 | 6,838 | 74.5 | 34.8 | 107.1 | 0 | 0
`|10.`1994` | 4,301 | 538 | 3,763 | 53.5 | 17.0 | 77.2 | 0 | 0
`|11.`1995` | 3,553 | 68 | 3,485 | 73.8 | 9.4 | 85.3 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 31,370 | 21,646 |
| 0.0 | 5,538 | 2,461 |
| 0.0 | 4,576 | 2,588 |
| 0.0 | 5,672 | 2,379 |
| 0.0 | 1,903 | 1,270 |
| 0.0 | 2,334 | 1,363 |
| 0.0 | 4,423 | 1,992 |
| 0.0 | 3,074 | 1,534 |
| 0.0 | 2,786 | 1,252 |
| 0.0 | 2,333 | 1,080 |
| 0.0 | 1,991 | 1,237 |
|--------------|--------------|--------------|
| X X X | 66,000 | 38,802 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 14 | 0 | 14 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 234 | 0 | 234 | 4 | 0 | 17 | 0 | 3
`|`5.`1989` | 310 | 0 | 310 | 27 | 0 | 10 | 0 | 0
`|`6.`1990` | 294 | 0 | 294 | 82 | 0 | 348 | 0 | 0
`|`7.`1991` | 285 | 0 | 285 | 102 | 0 | 74 | 0 | 9
`|`8.`1992` | 104 | 0 | 104 | 8 | 0 | 24 | 0 | 1
`|`9.`1993` | 118 | 0 | 118 | 342 | 0 | 871 | 0 | 0
`|10.`1994` | 62 | 0 | 62 | 111 | 0 | 12 | 0 | 0
`|11.`1995` | 78 | 0 | 78 | 1 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | 677 | 0 | 1,356 | 0 | 13
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 1 | 1 | X X X |
| 1 | 1 | 0 |
| 7 | 7 | 0 |
| 15 | 36 | 8 |
| 15 | 52 | 3 |
| 40 | 470 | 9 |
| 61 | 237 | 13 |
| 633 | 665 | 6 |
| 319 | 1,532 | 82 |
| 8 | 131 | 64 |
| 28 | 29 | 12 |
|--------------|--------------|--------------|
| 1,128 | 3,161 | X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`2.`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`3.`1987` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
`|`4.`1988` | 0 | 0 | 3 | 0 | 0 | 0 | 1 | 0
`|`5.`1989` | 0 | 0 | 5 | 0 | 0 | 0 | 3 | 0
`|`6.`1990` | 20 | 0 | 4 | 0 | 0 | 0 | 18 | 0
`|`7.`1991` | 0 | 0 | 19 | 0 | 0 | 0 | 4 | 0
`|`8.`1992` | 0 | 0 | 12 | 0 | 0 | 0 | 3 | 0
`|`9.`1993` | 1,360 | 0 | 29 | 0 | 0 | 0 | 437 | 0
`|10.`1994` | 350 | 0 | 11 | 0 | 0 | 0 | 213 | 0
`|11.`1995` | 167 | 0 | 7 | 0 | 0 | 0 | 84 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | 1,897 | 0 | 90 | 0 | 0 | 0 | 763 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 8 | 8 | 0 |
| 0 | 3 | 7 | 0 |
| 0 | 0 | 8 | 0 |
| 0 | 0 | 42 | 1 |
| 0 | 23 | 46 | 0 |
| 0 | 52 | 67 | 0 |
| 0 | 58 | 1,884 | 30 |
| 0 | 1 | 575 | 22 |
| 0 | 1 | 259 | 9 |
|--------------|--------------|--------------|-------------|
| 0 | 146 | 2,896 | 62 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1986` | 1 | 0 | 1 | 0.0 | 0.0 | 0.0 | 0 | 0
`|`3.`1987` | 15 | 0 | 15 | 107.1 | 0.0 | 107.1 | 0 | 0
`|`4.`1988` | 43 | 0 | 43 | 18.4 | 0.0 | 18.4 | 0 | 0
`|`5.`1989` | 60 | 0 | 60 | 19.4 | 0.0 | 19.4 | 0 | 0
`|`6.`1990` | 512 | 0 | 512 | 174.1 | 0.0 | 174.1 | 0 | 0
`|`7.`1991` | 283 | 0 | 283 | 99.3 | 0.0 | 99.3 | 0 | 0
`|`8.`1992` | 732 | 0 | 732 | 703.8 | 0.0 | 703.8 | 0 | 0
`|`9.`1993` | 3,416 | 0 | 3,416 | 2,894.9 | 0.0 | 2,894.9 | 0 | 0
`|10.`1994` | 706 | 0 | 706 | 1,138.7 | 0.0 | 1,138.7 | 0 | 0
`|11.`1995` | 288 | 0 | 288 | 369.2 | 0.0 | 369.2 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|12.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 0 | 0 |
| 0.0 | 0 | 0 |
| 0.0 | 0 | 8 |
| 0.0 | 3 | 4 |
| 0.0 | 5 | 3 |
| 0.0 | 24 | 18 |
| 0.0 | 19 | 27 |
| 0.0 | 12 | 55 |
| 0.0 | 1,389 | 495 |
| 0.0 | 361 | 214 |
| 0.0 | 174 | 85 |
|--------------|--------------|--------------|
| X X X | 1,987 | 909 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 1S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
($000 omitted)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------------------------------------
| 1 | Premiums Earned | Loss and Loss Expense Payments
| |-------------#-------------#-------------|-----------------------------#-----------------------------#--------------
| Years | 2 | 3 | 4 | Loss Payments | Allocated Loss | 9
| in Which | | | | | Expense Payments |
|Premiums Were| | | |--------------#--------------|--------------#--------------| Salvage
| Earned and | Direct | | Net | 5 | 6 | 7 | 8 | and
| Losses Were | and | Ceded | (2 - 3) | Direct | | Direct | | Subrogation
| Incurred | Assumed | | | and Assumed | Ceded | and Assumed | Ceded | Received
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | (821)| (547)| 216 | 149 | 795
`|`2.`1994` | 1,611 | 1,558 | 53 | 0 | (33)| 0 | 24 | 0
`|`3.`1995` | 1,468 | 1,416 | 52 | 0 | 0 | 0 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | (821)| (580)| 216 | 173 | 795
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
- ------------------------------#--------------#
| |
#--------------#--------------| |
| 10 | 11 | 12 |
| | | Number of |
| Unallocated | Total | Claims |
| Loss | Net Paid | Reported - |
| Expense | (5 - 6 + 7 | Direct and |
| Payments | - 8 + 10) | Assumed |
|--------------|--------------|--------------|
| | | |
| 0 | (207)| X X X |
| 0 | 9 | X X X |
| 0 | 0 | X X X |
|--------------|--------------|--------------|
| 0 | (198)| X X X |
>-------------->-------------->-------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#--------------------------------------------------------#-----------------------------------------------------------
| | Losses Unpaid | Allocated Loss Expenses Unpaid
| |---------------------------#----------------------------|-----------------------------#-----------------------------
| | Case Basis | Bulk + IBNR | Case Basis | Bulk + IBNR
| |-------------#-------------|-------------#--------------|--------------#--------------|--------------#--------------
| | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20
| | Direct | | Direct | | Direct | | Direct |
| | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded | and Assumed | Ceded
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | 0 | 4 | 294 | 0 | 0 | 0 | 732 | 513
`|`2.`1994` | 0 | 0 | 0 | 0 | 0 | 0 | 68 | 78
`|`3.`1995` | 0 | 0 | 1,317 | 1,276 | 0 | 0 | 111 | 123
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | 0 | 4 | 1,611 | 1,276 | 0 | 0 | 911 | 714
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C> <C>
#--------------#--------------#--------------#-------------#
| | | | |
| 21 | 22 | 23 | 24 |
| | | | Number of |
| Salvage | Unallocated | Total | Claims |
| and | Loss | Net Losses |Outstanding -|
| Subrogation | Expenses | and Expenses | Direct and |
| Anticipated | Unpaid | Unpaid | Assumed |
|--------------|--------------|--------------|-------------|
| | | | |
| 0 | 0 | 509 | 0 |
| 0 | 0 | (10)| 0 |
| 0 | 167 | 196 | 0 |
|--------------|--------------|--------------|-------------|
| 0 | 167 | 695 | 0 |
>-------------->-------------->-------------->------------->
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------#-----------------------------------------#--------------------------------------------#-----------------------------
| | Total Losses and | Loss and Loss Expense Percentage | Discount for Time
| | Loss Expenses Incurred | (Incurred/Premiums Earned) | Value of Money
| |-------------#-------------#-------------|--------------#--------------#--------------|--------------#--------------
| | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32
| | | | | | | | |
| | Direct | | | Direct | | | | Loss
| | and Assumed | Ceded | Net | and Assumed | Ceded | Net | Loss | Expense
|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
| | | | | | | | |
`|`1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
`|`2.`1994` | 68 | 69 | (1)| 4.2 | 4.4 | (1.9)| 0 | 0
`|`3.`1995` | 1,595 | 1,399 | 196 | 108.7 | 98.8 | 376.9 | 0 | 0
`|-------------|-------------|-------------|-------------|--------------|--------------|--------------|--------------|--------------
`|`4.`Totals` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
-------------->------------->------------->------------->-------------->-------------->-------------->-------------->--------------
<C> <C> <C>
#--------------#-----------------------------#
| | Net Balance Sheet Reserves |
| 33 | After Discount |
| |--------------#--------------|
|Inter-Company | 34 | 35 |
| Pooling | | Loss |
|Participation | Losses | Expenses |
| Percentage | Unpaid | Unpaid |
|--------------|--------------|--------------|
| | | |
| X X X | 290 | 219 |
| 0.0 | 0 | (10)|
| 0.0 | 41 | 155 |
|--------------|--------------|--------------|
| X X X | 331 | 364 |
>-------------->-------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2A - HOMEOWNERS/FARMOWNERS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. "`Prior` | 22,364 | 25,110 | 25,838 | 25,610 | 26,023 | 26,121 | 26,157 | 26,533
| "2. "`1986` | 150,891 | 140,466 | 141,188 | 141,094 | 140,779 | 140,166 | 140,140 | 140,049
| "3. "`1987` | X X X | 145,362 | 133,500 | 131,436 | 129,910 | 126,780 | 126,913 | 126,790
| "4. "`1988` | X X X | X X X | 136,735 | 127,851 | 127,629 | 126,023 | 125,826 | 125,748
| "5. "`1989` | X X X | X X X | X X X | 161,136 | 152,034 | 150,820 | 151,861 | 151,951
| "6. "`1990` | X X X | X X X | X X X | X X X | 148,750 | 139,518 | 140,024 | 140,055
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 177,601 | 165,548 | 165,009
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 193,601 | 181,168
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 110,806
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
| | | | |
|-------------|-------------|--------------|--------------|
| 26,945 | 27,027 | 82 | 494 |
| 140,071 | 139,895 | (176)| (154)|
| 126,794 | 126,768 | (26)| (22)|
| 126,015 | 125,869 | (146)| 121 |
| 152,018 | 152,366 | 348 | 415 |
| 141,695 | 142,073 | 378 | 2,018 |
| 166,717 | 166,127 | (590)| 1,118 |
| 183,515 | 184,399 | 884 | 3,231 |
| 104,587 | 105,237 | 650 | (5,569)|
| 124,849 | 127,143 | 2,294 | X X X |
| X X X | 103,121 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 3,698 | 1,652 |
>----------------------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 194,251 | 208,970 | 223,215 | 232,323 | 233,087 | 240,756 | 247,657 | 251,570
| "2. "`1986` | 311,184 | 314,497 | 322,420 | 318,943 | 321,946 | 321,718 | 326,462 | 324,958
| "3. "`1987` | X X X | 304,791 | 309,797 | 311,423 | 311,998 | 307,810 | 311,615 | 313,035
| "4. "`1988` | X X X | X X X | 290,352 | 306,371 | 307,939 | 303,789 | 309,816 | 308,953
| "5. "`1989` | X X X | X X X | X X X | 316,824 | 329,170 | 319,809 | 323,141 | 322,897
| "6. "`1990` | X X X | X X X | X X X | X X X | 347,460 | 335,626 | 316,671 | 321,866
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 385,248 | 360,209 | 349,892
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 292,169 | 284,470
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 261,413
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 246,345 | 248,389 | 2,044 | (3,181)|
| 322,996 | 322,945 | (51)| (2,013)|
| 310,356 | 310,226 | (130)| (2,809)|
| 304,613 | 304,145 | (468)| (4,808)|
| 323,560 | 322,934 | (626)| 37 |
| 321,294 | 320,736 | (558)| (1,130)|
| 343,261 | 340,812 | (2,449)| (9,080)|
| 264,871 | 263,913 | (958)| (20,557)|
| 254,678 | 252,423 | (2,255)| (8,990)|
| 237,688 | 241,491 | 3,803 | X X X |
| X X X | 226,608 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (1,648)| (52,531)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 264,948 | 268,557 | 287,037 | 303,486 | 309,792 | 316,388 | 320,640 | 321,127
| "2. "`1986` | 344,128 | 333,515 | 315,451 | 302,275 | 320,045 | 308,836 | 310,490 | 309,908
| "3. "`1987` | X X X | 391,334 | 355,821 | 314,506 | 308,358 | 303,308 | 302,538 | 305,408
| "4. "`1988` | X X X | X X X | 283,122 | 291,544 | 301,662 | 286,355 | 285,382 | 284,706
| "5. "`1989` | X X X | X X X | X X X | 302,863 | 269,923 | 282,409 | 279,507 | 274,040
| "6. "`1990` | X X X | X X X | X X X | X X X | 272,448 | 282,049 | 267,172 | 259,560
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 264,859 | 249,102 | 229,267
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 208,350 | 188,223
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 160,600
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 318,944 | 318,034 | (910)| (3,093)|
| 308,753 | 308,316 | (437)| (1,592)|
| 305,149 | 302,479 | (2,670)| (2,929)|
| 287,019 | 285,769 | (1,250)| 1,063 |
| 272,961 | 272,516 | (445)| (1,524)|
| 253,921 | 255,517 | 1,596 | (4,043)|
| 221,433 | 218,939 | (2,494)| (10,328)|
| 183,570 | 191,709 | 8,139 | 3,486 |
| 153,203 | 150,786 | (2,417)| (9,814)|
| 140,667 | 148,705 | 8,038 | X X X |
| X X X | 136,308 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 7,150 | (28,774)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2D - WORKERS' COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 926,429 | 1,014,762 | 1,135,866 | 1,247,207 | 1,421,148 | 1,479,336 | 1,518,952 | 1,537,461
| "2. "`1986` | 557,300 | 549,438 | 542,840 | 557,319 | 590,557 | 613,819 | 615,083 | 609,692
| "3. "`1987` | X X X | 528,390 | 535,709 | 533,025 | 582,277 | 591,055 | 593,104 | 600,640
| "4. "`1988` | X X X | X X X | 547,255 | 566,395 | 649,353 | 662,294 | 665,861 | 659,412
| "5. "`1989` | X X X | X X X | X X X | 610,914 | 666,961 | 748,530 | 730,721 | 741,083
| "6. "`1990` | X X X | X X X | X X X | X X X | 657,094 | 646,861 | 664,560 | 654,378
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 516,236 | 523,835 | 479,995
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 323,139 | 314,115
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 155,557
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 1,512,470 | 1,505,403 | (7,067)| (32,058)|
| 610,259 | 602,428 | (7,831)| (7,264)|
| 601,945 | 586,403 | (15,542)| (14,237)|
| 655,142 | 652,419 | (2,723)| (6,993)|
| 729,070 | 718,122 | (10,948)| (22,961)|
| 643,773 | 635,251 | (8,522)| (19,127)|
| 477,928 | 472,616 | (5,312)| (7,379)|
| 306,960 | 308,640 | 1,680 | (5,475)|
| 148,923 | 146,679 | (2,244)| (8,878)|
| 124,711 | 129,356 | 4,645 | X X X |
| X X X | 140,535 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (53,864)| (124,372)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2E - COMMERCIAL MULTIPLE PERIL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 154,555 | 167,632 | 189,471 | 199,309 | 211,914 | 223,204 | 220,096 | 224,688
| "2. "`1986` | 170,445 | 155,001 | 161,660 | 172,818 | 174,757 | 179,701 | 183,294 | 184,509
| "3. "`1987` | X X X | 169,796 | 146,449 | 152,706 | 182,449 | 183,979 | 192,505 | 193,336
| "4. "`1988` | X X X | X X X | 328,658 | 307,656 | 304,487 | 303,271 | 312,866 | 312,959
| "5. "`1989` | X X X | X X X | X X X | 458,116 | 435,566 | 420,114 | 404,101 | 414,981
| "6. "`1990` | X X X | X X X | X X X | X X X | 444,097 | 466,286 | 456,981 | 446,101
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 432,035 | 417,797 | 413,224
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 417,018 | 383,326
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 376,986
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 232,378 | 233,417 | 1,039 | 8,729 |
| 186,960 | 188,522 | 1,562 | 4,013 |
| 191,978 | 192,790 | 812 | (546)|
| 315,982 | 318,517 | 2,535 | 5,558 |
| 412,365 | 410,828 | (1,537)| (4,153)|
| 446,810 | 450,995 | 4,185 | 4,894 |
| 406,445 | 400,514 | (5,931)| (12,710)|
| 377,610 | 376,841 | (769)| (6,485)|
| 371,140 | 374,486 | 3,346 | (2,500)|
| 418,555 | 416,887 | (1,668)| X X X |
| X X X | 422,917 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 3,574 | (3,200)|
--------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. "`Prior` | 49,016 | 55,814 | 62,017 | 62,815 | 61,679 | 54,592 | 52,387 | 57,017
| "2. "`1986` | 120 | 2 | 8 | 13 | 4 | 4 | 4 | 4
| "3. "`1987` | X X X | 7 | 123 | 15 | 17 | 17 | 17 | 17
| "4. "`1988` | X X X | X X X | 164 | 13 | 37 | 38 | 43 | 43
| "5. "`1989` | X X X | X X X | X X X | 10 | 20 | 24 | 24 | 24
| "6. "`1990` | X X X | X X X | X X X | X X X | 10 | 0 | 356 | 358
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 3 | 0 | 35
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 0
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
| | | | |
|-------------|-------------|--------------|--------------|
| 59,614 | 57,777 | (1,837)| 760 |
| 4 | 4 | 0 | 0 |
| 17 | 17 | 0 | 0 |
| 176 | 176 | 0 | 133 |
| 168 | 168 | 0 | 144 |
| 429 | 429 | 0 | 71 |
| 132 | 133 | 1 | 98 |
| 16 | 16 | 0 | 16 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | X X X |
| X X X | 4 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (1,836)| 1,222 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 0 | 1,178 | 1,020 | 1,037 | 1,037 | 945 | 945 | 945
| "2. "`1986` | 0 | 23 | 30 | 32 | 32 | 32 | 32 | 32
| "3. "`1987` | X X X | 0 | 0 | 95 | 112 | 88 | 88 | 48
| "4. "`1988` | X X X | X X X | 0 | 198 | 409 | 236 | 231 | 295
| "5. "`1989` | X X X | X X X | X X X | 176 | 197 | 210 | 378 | 424
| "6. "`1990` | X X X | X X X | X X X | X X X | 80 | 191 | 333 | 304
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 224 | 224 | 224
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 191 | 191
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 40
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 945 | 945 | 0 | 0 |
| 32 | 32 | 0 | 0 |
| 88 | 88 | 0 | 40 |
| 241 | 381 | 140 | 86 |
| 290 | 308 | 18 | (116)|
| 277 | 302 | 25 | (2)|
| 139 | 139 | 0 | (85)|
| 175 | 175 | 0 | (16)|
| 48 | 49 | 1 | 9 |
| 0 | 0 | 0 | X X X |
| X X X | 0 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 184 | (84)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 9,719 | 9,726 | 10,903 | 11,344 | 10,682 | 10,485 | 10,278 | 10,276
| "2. "`1986` | 32,710 | 31,068 | 31,472 | 31,574 | 31,264 | 30,183 | 30,036 | 29,880
| "3. "`1987` | X X X | 34,199 | 33,346 | 33,152 | 31,094 | 30,500 | 31,021 | 31,097
| "4. "`1988` | X X X | X X X | 33,994 | 27,941 | 26,529 | 25,407 | 25,698 | 25,583
| "5. "`1989` | X X X | X X X | X X X | 28,336 | 25,561 | 24,421 | 24,419 | 24,753
| "6. "`1990` | X X X | X X X | X X X | X X X | 24,440 | 21,880 | 21,355 | 20,838
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 21,188 | 20,078 | 19,310
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 14,494 | 11,410
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 13,251
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 10,412 | 10,119 | (293)| (157)|
| 29,804 | 30,541 | 737 | 661 |
| 31,072 | 30,740 | (332)| (357)|
| 26,038 | 25,447 | (591)| (136)|
| 24,449 | 24,336 | (113)| (417)|
| 20,508 | 20,303 | (205)| (535)|
| 18,720 | 18,609 | (111)| (701)|
| 10,709 | 11,168 | 459 | (242)|
| 12,223 | 12,214 | (9)| (1,037)|
| 23,396 | 19,380 | (4,016)| X X X |
| X X X | 15,466 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (4,474)| (2,921)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 473,152 | 508,939 | 559,011 | 616,664 | 647,213 | 707,601 | 761,338 | 834,799
| "2. "`1986` | 257,917 | 270,026 | 260,207 | 226,968 | 224,648 | 236,206 | 241,842 | 239,809
| "3. "`1987` | X X X | 304,479 | 290,562 | 251,419 | 237,160 | 243,973 | 257,103 | 244,529
| "4. "`1988` | X X X | X X X | 221,807 | 186,050 | 223,022 | 170,605 | 182,232 | 166,662
| "5. "`1989` | X X X | X X X | X X X | 148,722 | 146,744 | 144,171 | 131,353 | 123,285
| "6. "`1990` | X X X | X X X | X X X | X X X | 158,238 | 162,112 | 159,602 | 135,630
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 117,691 | 119,176 | 100,542
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 79,111 | 70,653
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 62,750
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 878,680 | 880,437 | 1,757 | 45,638 |
| 234,174 | 233,147 | (1,027)| (6,662)|
| 239,423 | 236,409 | (3,014)| (8,120)|
| 167,931 | 161,151 | (6,780)| (5,511)|
| 122,390 | 120,974 | (1,416)| (2,311)|
| 134,170 | 138,329 | 4,159 | 2,699 |
| 102,021 | 105,125 | 3,104 | 4,583 |
| 67,306 | 66,230 | (1,076)| (4,423)|
| 64,680 | 60,506 | (4,174)| (2,244)|
| 62,989 | 60,933 | (2,056)| X X X |
| X X X | 65,756 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (10,523)| 23,649 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 0 | (62)| (73)| (28)| (77)| 58 | (113)| 14
| "2. "`1986` | 0 | 325 | 268 | 207 | (380)| 64 | 435 | 456
| "3. "`1987` | X X X | 8 | 0 | 0 | (6)| (6)| (6)| (3)
| "4. "`1988` | X X X | X X X | 205 | 216 | 295 | 813 | 626 | 629
| "5. "`1989` | X X X | X X X | X X X | 652 | 729 | 754 | 756 | 742
| "6. "`1990` | X X X | X X X | X X X | X X X | 481 | 433 | 443 | 1,068
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 982 | 613 | 789
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 1,467 | 1,274
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 602
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 307 | 335 | 28 | 321 |
| 699 | 539 | (160)| 83 |
| 182 | 914 | 732 | 917 |
| 656 | 3,619 | 2,963 | 2,990 |
| 887 | 1,556 | 669 | 814 |
| 984 | 1,737 | 753 | 669 |
| 699 | 1,380 | 681 | 591 |
| 1,159 | 1,269 | 110 | (5)|
| 388 | 893 | 505 | 291 |
| 1,696 | 1,386 | (310)| X X X |
| X X X | 3,060 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 5,971 | 6,671 |
--------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 65,871
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
| | | | |
|-------------|-------------|--------------|--------------|
| 68,418 | 65,565 | (2,853)| (306)|
| 91,497 | 88,683 | (2,814)| X X X |
| X X X | 71,387 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""4.`Totals"`| (5,667)| (306)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2J - AUTO PHYSICAL DAMAGE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 35,950
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 26,623 | 28,103 | 1,480 | (7,847)|
| 130,025 | 127,563 | (2,462)| X X X |
| X X X | 134,601 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""4.`Totals"`| (982)| (7,847)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2K - FIDELITY/SURETY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 52,747
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 64,760 | 68,494 | 3,734 | 15,747 |
| 28,921 | 39,284 | 10,363 | X X X |
| X X X | 37,505 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""4.`Totals"`| 14,097 | 15,747 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 171
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 159 | 203 | 44 | 32 |
| 63 | 42 | (21)| X X X |
| X X X | 19 | X X X | X X X |
>------------->-------------|--------------|--------------|
" " " " " " " "4.`Totals "`| 23 | 32 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2M - INTERNATIONAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "4. "`1988` | X X X | X X X | 18,581 | 18,142 | 17,663 | 15,821 | 16,002 | 16,042
| "5. "`1989` | X X X | X X X | X X X | 13,397 | 13,678 | 13,166 | 12,957 | 12,682
| "6. "`1990` | X X X | X X X | X X X | X X X | 13,549 | 14,227 | 13,373 | 11,855
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 12,266 | 11,005 | 9,587
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 4,919 | 5,134
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 10,048
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 15,837 | 15,813 | (24)| (229)|
| 12,634 | 12,638 | 4 | (44)|
| 11,729 | 11,791 | 62 | (64)|
| 9,475 | 9,579 | 104 | (8)|
| 4,373 | 3,865 | (508)| (1,269)|
| 10,090 | 8,808 | (1,282)| (1,240)|
| 59,360 | 59,170 | (190)| X X X |
| X X X | 108,525 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| (1,834)| (2,854)|
--------------->-------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2N - REINSURANCE A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#---------------------------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------
| "1. "`1988` | X X X | X X X | 34,100 | 28,393 | 25,499 | 15,105 | 14,671 | 15,673
| "2. "`1989` | X X X | X X X | X X X | 24,435 | 26,489 | 25,917 | 25,756 | 19,376
| "3. "`1990` | X X X | X X X | X X X | X X X | 26,318 | 27,156 | 26,452 | 15,630
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 36,977 | 30,203 | 14,467
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 30,035 | 25,947
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 39,518
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
| | | | |
|-------------|-------------|--------------|--------------|
| 15,892 | 15,472 | (420)| (201)|
| 17,716 | 17,992 | 276 | (1,384)|
| 13,776 | 14,098 | 322 | (1,532)|
| 12,857 | 12,057 | (800)| (2,410)|
| 13,826 | 12,681 | (1,145)| (13,266)|
| 34,997 | 14,310 | (20,687)| (25,208)|
| 44,637 | 33,917 | (10,720)| X X X |
| X X X | 41,879 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""`9.`Totals"| (33,174)| (44,001)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2O - REINSURANCE B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`1988` | X X X | X X X | 21,132 | 18,019 | 15,891 | 8,671 | 8,506 | 9,222
| "2. "`1989` | X X X | X X X | X X X | 20,774 | 20,740 | 19,070 | 19,009 | 17,682
| "3. "`1990` | X X X | X X X | X X X | X X X | 11,804 | 12,076 | 12,087 | 9,180
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 13,104 | 12,164 | 7,008
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 24,398 | 21,163
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 15,174
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 9,254 | 9,012 | (242)| (210)|
| 17,168 | 17,784 | 616 | 102 |
| 8,751 | 8,700 | (51)| (480)|
| 6,216 | 5,819 | (397)| (1,189)|
| 16,675 | 15,544 | (1,131)| (5,619)|
| 15,134 | 10,764 | (4,370)| (4,410)|
| 111,651 | 91,927 | (19,724)| X X X |
| X X X | 46,680 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""`9.`Totals"| (25,299)| (11,806)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2P - REINSURANCE C
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`1988` | X X X | X X X | 0 | 200 | 200 | 200 | 200 | 401
| "2. "`1989` | X X X | X X X | X X X | 0 | 0 | 0 | 0 | 0
| "3. "`1990` | X X X | X X X | X X X | X X X | 0 | 0 | 0 | 0
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 0 | 0 | 0
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 0
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 394 | 394 | 0 | (7)|
| 0 | (405)| (405)| (405)|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | X X X |
| X X X | 1,486 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""`9.`Totals"| (405)| (412)|
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2Q - REINSURANCE D
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 9,841 | 7,555 | 7,683 | 7,667 | 8,023 | 7,841 | 7,637 | 7,234
| "2. "`1986` | 29,813 | 31,455 | 30,817 | 30,500 | 30,668 | 29,981 | 30,341 | 29,586
| "3. "`1987` | X X X | 39,253 | 36,884 | 36,116 | 36,095 | 33,673 | 33,196 | 33,746
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 7,234 | 7,341 | 107 | 107 |
| 29,691 | 29,806 | 115 | 220 |
| 33,752 | 33,613 | (139)| (133)|
>------------->-------------|--------------|--------------|
" " " " " " " "`4.`Totals "| 83 | 194 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 2R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#--------------------------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
|-------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
`| "1. "`Prior` | 64,436 | 88,677 | 110,398 | 121,041 | 138,005 | 152,652 | 157,497 | 171,674
`| "2. "`1986` | 38,882 | 30,746 | 31,467 | 26,974 | 25,628 | 27,465 | 26,830 | 30,128
`| "3. "`1987` | X X X | 31,769 | 30,772 | 32,980 | 34,006 | 29,612 | 28,674 | 32,160
`| "4. "`1988` | X X X | X X X | 21,475 | 22,525 | 28,761 | 18,114 | 19,826 | 23,523
`| "5. "`1989` | X X X | X X X | X X X | 18,447 | 19,272 | 14,518 | 14,585 | 16,861
`| "6. "`1990` | X X X | X X X | X X X | X X X | 13,429 | 11,459 | 11,088 | 11,645
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 10,317 | 11,241 | 12,329
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 7,732 | 6,729
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 7,244
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->------------->------------->------------->------------->------------->------------->------------->------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
- ----------------------------#-----------------------------#
| Development |
#-------------#-------------|--------------#--------------|
| 10 | 11 | 12 | 13 |
| 1994 | 1995 | One Year | Two Year |
| | | | |
|-------------|-------------|--------------|--------------|
| 174,128 | 177,139 | 3,011 | 5,465 |
| 33,872 | 33,622 | (250)| 3,494 |
| 34,264 | 33,958 | (306)| 1,798 |
| 24,635 | 25,235 | 600 | 1,712 |
| 16,836 | 16,561 | (275)| (300)|
| 11,419 | 11,438 | 19 | (207)|
| 14,724 | 15,768 | 1,044 | 3,439 |
| 7,334 | 7,620 | 286 | 891 |
| 6,017 | 6,218 | 201 | (1,026)|
| 4,402 | 3,416 | (986)| X X X |
| X X X | 3,021 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 3,344 | 15,266 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3
| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "4. "`1988` | X X X | X X X | 7 | 12 | 13 | 13 | 13 | 13
| "5. "`1989` | X X X | X X X | X X X | 1 | 12 | 18 | 18 | 20
| "6. "`1990` | X X X | X X X | X X X | X X X | 120 | 239 | 340 | 426
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 208 | 164 | 184
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 91 | 379
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 870
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | (3)|
| 0 | 0 | 0 | 0 |
| 13 | 25 | 12 | 12 |
| 18 | 45 | 27 | 25 |
| 427 | 471 | 44 | 45 |
| 176 | 199 | 23 | 15 |
| 31 | 46 | 15 | (333)|
| 2,778 | 3,038 | 260 | 2,168 |
| 69 | 697 | 628 | X X X |
| X X X | 259 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""12.`Totals"| 1,009 | 1,929 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 2S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!-------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | (294)
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- -------------------->------------->------------->------------->------------->------------->------------->------------->-------------
""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
<C> <C> <C> <C>
#-------------#-------------#--------------#--------------#
| 318 | (29)| (347)| 265 |
| 35 | (1)| (36)| X X X |
| X X X | 29 | X X X | X X X |
>------------->-------------|--------------|--------------|
""""""""`4.`Totals"| (383)| 265 |
--------------->-------------->
</TABLE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 3A - HOMEOWNERS/FARMOWNERS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#--------------------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
| "1. "`Prior` | 000 | 11,951 | 17,935 | 21,350 | 23,102 | 24,669 | 25,074 | 25,701
| "2. "`1986` | 92,590 | 123,363 | 129,682 | 133,986 | 135,731 | 137,420 | 138,265 | 138,720
| "3. "`1987` | X X X | 81,167 | 110,930 | 116,296 | 119,779 | 121,830 | 123,370 | 124,308
| "4. "`1988` | X X X | X X X | 82,160 | 113,632 | 117,560 | 121,324 | 122,770 | 124,064
| "5. "`1989` | X X X | X X X | X X X | 99,281 | 139,429 | 144,266 | 147,076 | 149,106
| "6. "`1990` | X X X | X X X | X X X | X X X | 93,167 | 127,235 | 132,665 | 135,782
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 113,582 | 151,510 | 157,213
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 126,000 | 167,477
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 74,300
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -----------------------------#-------------#-------------#
| 12 | 13 |
- -#-------------#-------------| Number of | Number of |
| | | Claims | Claims |
| 10 | 11 | Closed | Closed |
| 1994 | 1995 | With Loss | Without |
| | | Payment |Loss Payment |
- -|-------------|-------------|-------------|-------------|
| 26,556 | 26,679 | 1,436 | 1,017 |
| 139,292 | 139,435 | 53,633 | 13,774 |
| 124,802 | 124,957 | 48,558 | 13,948 |
| 124,549 | 124,800 | 45,352 | 13,800 |
| 149,971 | 150,451 | 58,030 | 17,009 |
| 138,181 | 139,247 | 50,632 | 16,104 |
| 161,119 | 162,679 | 56,236 | 18,070 |
| 174,935 | 179,036 | 48,876 | 16,304 |
| 95,473 | 100,004 | 40,443 | 14,455 |
| 91,779 | 116,309 | 45,141 | 13,485 |
| X X X | 64,447 | 26,246 | 9,192 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 92,346 | 149,507 | 189,712 | 204,673 | 213,980 | 218,123 | 222,020
| "2. "`1986` | 105,564 | 208,124 | 259,448 | 290,111 | 306,989 | 315,018 | 317,510 | 319,234
| "3. "`1987` | X X X | 104,327 | 201,126 | 250,938 | 281,233 | 295,486 | 299,963 | 305,518
| "4. "`1988` | X X X | X X X | 97,953 | 198,613 | 248,864 | 278,369 | 289,753 | 296,001
| "5. "`1989` | X X X | X X X | X X X | 101,192 | 212,293 | 265,295 | 292,120 | 306,485
| "6. "`1990` | X X X | X X X | X X X | X X X | 104,882 | 213,998 | 254,821 | 286,373
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 108,560 | 216,732 | 277,512
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 85,873 | 171,685
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 83,315
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 224,251 | 226,940 | 14,140 | 6,073 |
| 320,468 | 320,711 | 106,658 | 41,451 |
| 307,167 | 308,177 | 97,846 | 37,903 |
| 300,006 | 301,689 | 93,255 | 35,809 |
| 314,861 | 318,436 | 92,710 | 35,778 |
| 304,196 | 310,254 | 87,107 | 33,560 |
| 309,305 | 321,938 | 78,666 | 32,060 |
| 210,176 | 236,614 | 65,135 | 27,978 |
| 158,817 | 203,719 | 54,724 | 23,526 |
| 78,675 | 150,228 | 48,685 | 22,488 |
| X X X | 79,481 | 34,575 | 18,483 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 132,419 | 208,432 | 256,706 | 282,942 | 296,063 | 306,709 | 310,540
| "2. "`1986` | 66,520 | 148,007 | 214,438 | 255,656 | 283,055 | 294,455 | 301,794 | 304,786
| "3. "`1987` | X X X | 61,095 | 145,291 | 203,988 | 245,594 | 274,061 | 285,955 | 292,793
| "4. "`1988` | X X X | X X X | 60,080 | 139,053 | 201,965 | 243,146 | 260,397 | 268,986
| "5. "`1989` | X X X | X X X | X X X | 51,868 | 127,921 | 193,076 | 229,864 | 248,073
| "6. "`1990` | X X X | X X X | X X X | X X X | 51,439 | 132,153 | 177,937 | 211,206
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 43,431 | 104,957 | 151,165
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 31,098 | 73,152
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 25,880
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 313,843 | 314,040 | 8,778 | 4,394 |
| 306,104 | 306,486 | 56,726 | 23,039 |
| 296,674 | 297,924 | 52,093 | 21,733 |
| 277,713 | 279,906 | 47,352 | 19,428 |
| 259,743 | 264,459 | 43,923 | 17,484 |
| 230,879 | 241,591 | 39,775 | 16,613 |
| 182,233 | 200,444 | 31,958 | 14,647 |
| 118,777 | 158,595 | 26,862 | 13,329 |
| 63,242 | 100,923 | 21,805 | 11,106 |
| 27,266 | 65,078 | 19,440 | 9,657 |
| X X X | 28,194 | 12,212 | 6,269 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3D - WORKERS' COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 225,485 | 375,770 | 481,395 | 573,294 | 653,499 | 714,908 | 776,426
| "2. "`1986` | 129,275 | 256,810 | 336,848 | 385,302 | 419,084 | 444,813 | 461,871 | 470,818
| "3. "`1987` | X X X | 127,476 | 262,831 | 330,325 | 378,370 | 419,643 | 440,887 | 453,900
| "4. "`1988` | X X X | X X X | 132,278 | 279,538 | 367,993 | 424,742 | 461,087 | 481,115
| "5. "`1989` | X X X | X X X | X X X | 132,318 | 307,603 | 412,167 | 471,076 | 511,904
| "6. "`1990` | X X X | X X X | X X X | X X X | 131,068 | 279,877 | 365,754 | 420,467
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 102,910 | 208,085 | 270,790
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 66,055 | 137,483
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 30,004
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 840,998 | 898,107 | 25,167 | 4,251 |
| 487,284 | 496,302 | 42,968 | 4,045 |
| 466,879 | 477,517 | 39,651 | 3,988 |
| 497,719 | 513,821 | 42,520 | 4,294 |
| 537,667 | 550,910 | 44,401 | 4,832 |
| 449,608 | 464,146 | 41,273 | 4,608 |
| 309,820 | 327,157 | 35,366 | 4,607 |
| 175,188 | 197,693 | 26,769 | 4,436 |
| 62,080 | 78,291 | 17,494 | 2,906 |
| 21,887 | 53,776 | 12,526 | 2,226 |
| X X X | 25,179 | 5,261 | 952 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3E - COMMERCIAL MULTIPLE PERIL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 55,882 | 103,968 | 137,910 | 169,485 | 185,481 | 196,103 | 204,024
| "2. "`1986` | 64,384 | 98,950 | 119,499 | 136,584 | 148,644 | 158,824 | 170,923 | 175,284
| "3. "`1987` | X X X | 53,661 | 89,211 | 107,156 | 123,977 | 156,006 | 172,963 | 177,270
| "4. "`1988` | X X X | X X X | 76,340 | 144,648 | 174,450 | 214,079 | 243,297 | 263,206
| "5. "`1989` | X X X | X X X | X X X | 107,105 | 191,421 | 249,666 | 292,770 | 326,053
| "6. "`1990` | X X X | X X X | X X X | X X X | 118,896 | 204,136 | 255,940 | 302,906
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 114,986 | 180,550 | 229,123
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 102,008 | 180,206
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 110,882
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 209,335 | 214,899 | 5,004 | 6,211 |
| 177,369 | 181,671 | 24,706 | 12,296 |
| 180,526 | 183,313 | 21,730 | 12,056 |
| 277,784 | 288,373 | 38,099 | 21,421 |
| 349,041 | 363,834 | 51,376 | 28,102 |
| 340,160 | 375,334 | 49,097 | 29,125 |
| 269,987 | 302,707 | 45,342 | 28,771 |
| 221,046 | 258,941 | 40,744 | 27,088 |
| 179,790 | 223,255 | 42,269 | 29,421 |
| 131,051 | 212,733 | 45,931 | 31,303 |
| X X X | 126,684 | 33,313 | 22,403 |
- ->------------->------------->------------->------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 3F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#--------------------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
| "1. "`Prior` | 000 | 12,932 | 24,227 | 32,333 | 38,579 | 40,109 | 43,230 | 45,156
| "2. "`1986` | 7 | 6 | 7 | 8 | 4 | 4 | 4 | 4
| "3. "`1987` | X X X | 7 | 7 | 11 | 17 | 17 | 17 | 17
| "4. "`1988` | X X X | X X X | 0 | 0 | 4 | 38 | 43 | 43
| "5. "`1989` | X X X | X X X | X X X | 8 | 7 | 24 | 24 | 24
| "6. "`1990` | X X X | X X X | X X X | X X X | 0 | 0 | 19 | 358
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 0 | 0 | 35
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 0
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -----------------------------#-------------#-------------#
| 12 | 13 |
- -#-------------#-------------| Number of | Number of |
| | | Claims | Claims |
| 10 | 11 | Closed | Closed |
| 1994 | 1995 | With Loss |Without Loss |
| | | Payment | Payment |
- -|-------------|-------------|-------------|-------------|
| 47,004 | 51,699 | 579 | 689 |
| 4 | 4 | 1 | 1 |
| 17 | 17 | 2 | 3 |
| 176 | 176 | 2 | 2 |
| 168 | 167 | 2 | 2 |
| 429 | 428 | 1 | 3 |
| 132 | 133 | 1 | 0 |
| 16 | 15 | 0 | 0 |
| 0 | 0 | 0 | 1 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 662 | 1,018 | 1,037 | 1,037 | 945 | 945 | 945
| "2. "`1986` | 0 | 10 | 16 | 32 | 32 | 32 | 32 | 32
| "3. "`1987` | X X X | 0 | 0 | 0 | 24 | 24 | 24 | 24
| "4. "`1988` | X X X | X X X | 0 | 1 | 101 | 117 | 120 | 141
| "5. "`1989` | X X X | X X X | X X X | 1 | 9 | 25 | 240 | 255
| "6. "`1990` | X X X | X X X | X X X | X X X | 1 | 10 | 99 | 266
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 0 | 4 | 9
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 3
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 0
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 945 | 945 | 9 | 2 |
| 32 | 32 | 5 | 3 |
| 24 | 24 | 0 | 0 |
| 141 | 219 | 0 | 0 |
| 255 | 257 | 0 | 2 |
| 266 | 265 | 0 | 0 |
| 9 | 15 | 0 | 0 |
| 3 | 38 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 3,764 | 5,659 | 7,625 | 8,406 | 8,949 | 9,118 | 9,472
| "2. "`1986` | 13,767 | 20,949 | 24,613 | 27,333 | 29,370 | 29,415 | 29,450 | 29,187
| "3. "`1987` | X X X | 9,533 | 17,862 | 24,502 | 26,695 | 27,769 | 28,522 | 28,827
| "4. "`1988` | X X X | X X X | 9,231 | 16,454 | 19,180 | 20,912 | 22,588 | 23,225
| "5. "`1989` | X X X | X X X | X X X | 11,402 | 16,737 | 19,342 | 21,705 | 22,545
| "6. "`1990` | X X X | X X X | X X X | X X X | 7,945 | 14,633 | 16,945 | 18,666
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 9,730 | 15,533 | 17,363
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 5,677 | 8,448
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 5,338
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 9,698 | 9,539 | X X X | X X X |
| 29,192 | 29,978 | X X X | X X X |
| 29,388 | 29,648 | X X X | X X X |
| 23,657 | 24,143 | X X X | X X X |
| 22,938 | 23,078 | X X X | X X X |
| 19,327 | 19,434 | X X X | X X X |
| 17,506 | 17,830 | X X X | X X X |
| 9,314 | 10,442 | X X X | X X X |
| 8,613 | 9,913 | X X X | X X X |
| 8,973 | 14,660 | X X X | X X X |
| X X X | 3,486 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 156,152 | 278,883 | 395,072 | 476,465 | 528,961 | 569,210 | 620,144
| "2. "`1986` | 18,393 | 45,614 | 82,671 | 120,553 | 150,472 | 172,690 | 185,334 | 195,092
| "3. "`1987` | X X X | 21,818 | 52,420 | 87,499 | 122,123 | 157,422 | 173,081 | 190,522
| "4. "`1988` | X X X | X X X | 10,761 | 27,514 | 48,724 | 72,687 | 102,251 | 114,779
| "5. "`1989` | X X X | X X X | X X X | 8,733 | 21,122 | 36,345 | 52,958 | 65,520
| "6. "`1990` | X X X | X X X | X X X | X X X | 11,619 | 25,544 | 48,198 | 65,946
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 5,929 | 15,617 | 27,507
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 3,682 | 8,472
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 3,122
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 658,382 | 679,631 | 9,578 | 15,024 |
| 198,340 | 204,777 | 19,682 | 12,443 |
| 198,401 | 203,030 | 16,745 | 11,635 |
| 124,652 | 128,679 | 12,983 | 8,164 |
| 80,578 | 87,768 | 8,385 | 6,116 |
| 75,342 | 86,808 | 8,164 | 7,101 |
| 41,441 | 50,730 | 5,769 | 4,947 |
| 16,937 | 23,619 | 3,146 | 3,091 |
| 9,074 | 17,951 | 2,176 | 2,170 |
| 4,508 | 9,740 | 1,791 | 2,091 |
| X X X | 4,408 | 1,095 | 1,517 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 29 | 40 | 58 | 72 | 90 | 88 | 99
| "2. "`1986` | 0 | 209 | 341 | 389 | 328 | 393 | 367 | 411
| "3. "`1987` | X X X | 0 | 0 | 0 | (6)| (6)| (6)| (6)
| "4. "`1988` | X X X | X X X | 69 | 111 | 218 | 225 | 626 | 626
| "5. "`1989` | X X X | X X X | X X X | 248 | 446 | 640 | 687 | 730
| "6. "`1990` | X X X | X X X | X X X | X X X | 143 | 269 | 285 | 949
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 159 | 234 | 301
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 88 | 854
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 85
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 144 | 160 | 1 | 0 |
| 433 | 454 | 6 | 0 |
| (6)| (6)| 0 | 2 |
| 626 | 627 | 73 | 44 |
| 762 | 793 | 126 | 66 |
| 984 | 984 | 86 | 71 |
| 469 | 644 | 74 | 86 |
| 915 | 936 | 66 | 72 |
| 142 | 235 | 37 | 46 |
| 124 | 697 | 21 | 38 |
| X X X | 123 | 59 | 95 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 3I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#--------------------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 000
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -----------------------------#-------------#-------------#
| 12 | 13 |
- -#-------------#-------------| Number of | Number of |
| | | Claims | Claims |
| 10 | 11 | Closed | Closed |
| 1994 | 1995 | With Loss |Without Loss |
| | | Payment | Payment |
- -|-------------|-------------|-------------|-------------|
| 34,445 | 42,959 | X X X | X X X |
| 55,668 | 75,804 | X X X | X X X |
| X X X | 38,378 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3J - AUTO PHYSICAL DAMAGE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 000
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 13,920 | 16,435 | 9,535 | 2,793 |
| 111,112 | 124,935 | 85,949 | 20,846 |
| X X X | 113,069 | 71,851 | 17,666 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3K - FIDELITY/SURETY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 000
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 36,485 | 54,669 | X X X | X X X |
| 7,357 | 28,377 | X X X | X X X |
| X X X | 11,703 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 000
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 63 | 123 | X X X | X X X |
| 14 | 38 | X X X | X X X |
| X X X | 7 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3M - INTERNATIONAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "4. "`1988` | X X X | X X X | 4,610 | 10,615 | 12,406 | 13,164 | 13,562 | 13,619
| "5. "`1989` | X X X | X X X | X X X | 3,850 | 8,531 | 9,812 | 10,323 | 10,358
| "6. "`1990` | X X X | X X X | X X X | X X X | 3,585 | 8,889 | 10,293 | 10,486
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 4,478 | 6,649 | 7,364
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 1,232 | 2,920
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 355
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 14,006 | 14,105 | X X X | X X X |
| 10,554 | 10,616 | X X X | X X X |
| 10,579 | 10,644 | X X X | X X X |
| 7,495 | 7,599 | X X X | X X X |
| 3,289 | 3,355 | X X X | X X X |
| 4,210 | 5,737 | X X X | X X X |
| 11,028 | 32,217 | X X X | X X X |
| X X X | 29,683 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 3N - REINSURANCE A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#--------------------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
| "1. "`1988` | X X X | X X X | 2,283 | 4,302 | 5,753 | 6,950 | 9,296 | 10,510
| "2. "`1989` | X X X | X X X | X X X | 5,873 | 8,625 | 10,264 | 11,671 | 12,053
| "3. "`1990` | X X X | X X X | X X X | X X X | 4,784 | 6,108 | 9,592 | 9,867
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 1,301 | 4,570 | 5,463
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 6,875 | 2,140
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 1,083
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -----------------------------#-------------#-------------#
| 12 | 13 |
- -#-------------#-------------| Number of | Number of |
| 10 | 11 | Claims | Claims |
| 1994 | 1995 | Closed | Closed |
| | | With Loss |Without Loss |
| | | Payment | Payment |
- -|-------------|-------------|-------------|-------------|
| 11,344 | 11,719 | X X X | X X X |
| 12,706 | 13,374 | X X X | X X X |
| 10,474 | 10,680 | X X X | X X X |
| 6,311 | 6,852 | X X X | X X X |
| 3,467 | 5,319 | X X X | X X X |
| 2,716 | 4,023 | X X X | X X X |
| 1,553 | 5,022 | X X X | X X X |
| X X X | 4,428 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3O - REINSURANCE B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`1988` | X X X | X X X | 1,108 | 2,954 | 3,793 | 4,770 | 5,650 | 6,476
| "2. "`1989` | X X X | X X X | X X X | 10,817 | 11,867 | 12,902 | 13,472 | 13,773
| "3. "`1990` | X X X | X X X | X X X | X X X | 1,567 | 2,232 | 6,826 | 7,073
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 402 | 1,555 | 2,022
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 10,626 | 10,354
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 485
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 6,912 | 7,171 | X X X | X X X |
| 14,103 | 14,429 | X X X | X X X |
| 7,516 | 7,617 | X X X | X X X |
| 2,525 | 2,523 | X X X | X X X |
| 10,995 | 11,438 | X X X | X X X |
| 1,922 | 3,389 | X X X | X X X |
| 4,276 | 37,046 | X X X | X X X |
| X X X | 9,432 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3P - REINSURANCE C
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`1988` | X X X | X X X | 0 | 200 | 200 | 200 | 200 | 401
| "2. "`1989` | X X X | X X X | X X X | 0 | 0 | 0 | 0 | 0
| "3. "`1990` | X X X | X X X | X X X | X X X | 0 | 0 | 0 | 0
| "4. "`1991` | X X X | X X X | X X X | X X X | X X X | 0 | 0 | 0
| "5. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 0 | 0
| "6. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 0
| "7. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "8. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 394 | 394 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| 0 | 0 | X X X | X X X |
| X X X | 213 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3Q - REINSURANCE D
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 6,141 | 6,934 | 7,341 | 7,724 | 7,838 | 7,637 | 7,234
| "2. "`1986` | 8,482 | 20,448 | 24,661 | 26,542 | 27,789 | 28,421 | 29,168 | 28,682
| "3. "`1987` | X X X | 9,028 | 20,313 | 25,654 | 27,625 | 28,886 | 29,549 | 29,830
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 7,234 | 7,299 | X X X | X X X |
| 28,894 | 28,927 | X X X | X X X |
| 30,416 | 30,535 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 3R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#--------------------------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PAID LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTED)
| |-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993
| Incurred | | | | | | | |
| | | | | | | | |
|--------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|------------
| "1. "`Prior` | 000 | 20,183 | 42,046 | 65,468 | 86,967 | 102,602 | 112,821 | 118,803
| "2. "`1986` | 535 | 1,397 | 3,706 | 8,522 | 13,765 | 18,809 | 21,089 | 24,179
| "3. "`1987` | X X X | 1,046 | 3,165 | 6,478 | 13,019 | 19,099 | 22,219 | 23,955
| "4. "`1988` | X X X | X X X | 168 | 2,599 | 6,118 | 10,643 | 12,598 | 15,102
| "5. "`1989` | X X X | X X X | X X X | 375 | 2,727 | 5,374 | 8,197 | 11,508
| "6. "`1990` | X X X | X X X | X X X | X X X | 459 | 1,290 | 2,326 | 4,785
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 434 | 1,152 | 4,246
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 205 | 559
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 1,218
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -----------------------------#-------------#-------------#
| 12 | 13 |
- -#-------------#-------------| Number of | Number of |
| 10 | 11 | Claims | Claims |
| 1994 | 1995 | Closed | Closed |
| | | With Loss |Without Loss |
| | | Payment | Payment |
- -|-------------|-------------|-------------|-------------|
| 120,996 | 127,253 | 1,349 | 5,689 |
| 25,311 | 26,129 | 671 | 734 |
| 26,482 | 27,303 | 559 | 652 |
| 16,285 | 17,632 | 428 | 449 |
| 12,860 | 13,539 | 490 | 476 |
| 7,087 | 7,916 | 469 | 459 |
| 6,632 | 9,737 | 296 | 303 |
| 1,724 | 3,276 | 169 | 283 |
| 1,751 | 2,428 | 125 | 100 |
| 53 | 188 | 45 | 57 |
| X X X | 63 | 23 | 25 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | 000 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0 | 0 | 0
| "4. "`1988` | X X X | X X X | 1 | 5 | 13 | 13 | 13 | 13
| "5. "`1989` | X X X | X X X | X X X | 0 | 4 | 18 | 18 | 18
| "6. "`1990` | X X X | X X X | X X X | X X X | 20 | 170 | 291 | 427
| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 21 | 55 | 167
| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X | 7 | 31
| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 20
|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 13 | 21 | 5 | 3 |
| 18 | 37 | 2 | 1 |
| 427 | 430 | 5 | 3 |
| 176 | 176 | 6 | 7 |
| 31 | 32 | 1 | 5 |
| 560 | 1,213 | 17 | 35 |
| 28 | 123 | 10 | 32 |
| X X X | 1 | 1 | 2 |
- ->------------->------------->------------->------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 3S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
!--------------------#-------------#-------------#-------------#-------------#-------------#-------------#-------------#------------
| "1. "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | 000
| "2. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
| "3. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X | X X X | X X X
- --------------------->------------->------------->------------->------------->------------->------------->------------->------------
<C> <C> <C> <C>
- -#-------------#-------------#-------------#-------------#
| (331)| (538)| X X X | X X X |
| 9 | 9 | X X X | X X X |
| X X X | 0 | X X X | X X X |
- ->------------->------------->------------->------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 4A - HOMEOWNERS/FARMOWNERS
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------------
| 1 |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITTE
| |---------------#---------------#---------------#---------------#---------------#---------------#-----
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|-----
| "1. " "`Prior` | 6,469 | 3,568 | 2,007 | 826 | 974 | 444 |
| "2. " "`1986` | 26,818 | 8,442 | 6,075 | 3,916 | 2,588 | 1,079 |
| "3. " "`1987` | X X X | 34,155 | 14,953 | 10,076 | 6,872 | 2,075 |
| "4. " "`1988` | X X X | X X X | 26,295 | 8,421 | 5,420 | 2,061 |
| "5. " "`1989` | X X X | X X X | X X X | 29,666 | 7,917 | 3,082 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 23,709 | 5,481 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 23,758 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------------------------------------------------------#
D) |
- ----------#---------------#---------------#---------------|
| | | |
8 | 9 | 10 | 11 |
1992 | 1993 | 1994 | 1995 |
| | | |
- ----------|---------------|---------------|---------------|
368 | 214 | 246 | 262 |
763 | 516 | 318 | 324 |
1,617 | 1,208 | 1,229 | 1,149 |
1,322 | 716 | 837 | 696 |
2,177 | 918 | 1,051 | 795 |
3,249 | 1,085 | 1,342 | 1,069 |
5,380 | 2,233 | 2,246 | 1,503 |
21,121 | 4,065 | 3,128 | 1,958 |
X X X | 13,203 | 3,855 | 2,507 |
X X X | X X X | 9,823 | 4,031 |
X X X | X X X | X X X | 12,586 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 58,012 | 23,991 | 15,084 | 8,784 | 4,735 | 2,609 |
| "2. " "`1986` | 100,936 | 44,891 | 25,891 | 8,780 | 4,734 | 2,021 |
| "3. " "`1987` | X X X | 103,906 | 47,311 | 24,405 | 12,642 | 4,094 |
| "4. " "`1988` | X X X | X X X | 96,297 | 47,988 | 24,379 | 7,878 |
| "5. " "`1989` | X X X | X X X | X X X | 112,102 | 54,484 | 19,139 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 135,932 | 57,289 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 154,555 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
8,862 | 10,875 | 4,720 | 6,743 |
6,250 | 4,162 | 1,704 | 1,938 |
6,719 | 4,856 | 1,834 | 1,318 |
12,097 | 8,460 | 1,680 | 1,526 |
11,678 | 5,459 | 2,674 | 2,232 |
23,091 | 11,912 | 5,933 | 5,000 |
65,941 | 28,461 | 11,805 | 7,276 |
105,163 | 48,488 | 16,977 | 7,361 |
X X X | 81,218 | 29,932 | 12,937 |
X X X | X X X | 70,286 | 33,508 |
X X X | X X X | X X X | 63,996 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 107,747 | 42,926 | 17,659 | 12,166 | 7,057 | 7,528 |
| "2. " "`1986` | 202,473 | 112,979 | 51,470 | 15,808 | 21,272 | 4,655 |
| "3. " "`1987` | X X X | 248,615 | 133,340 | 59,272 | 29,793 | 9,555 |
| "4. " "`1988` | X X X | X X X | 149,682 | 82,498 | 51,411 | 15,394 |
| "5. " "`1989` | X X X | X X X | X X X | 178,608 | 70,725 | 39,054 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 152,903 | 89,729 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 151,345 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
7,725 | 6,826 | 2,656 | 1,237 |
3,884 | 3,241 | 1,630 | 649 |
6,531 | 7,344 | 5,760 | 2,649 |
8,560 | 5,279 | 3,144 | 1,959 |
23,430 | 11,156 | 5,226 | 2,942 |
45,468 | 18,673 | 6,206 | 4,443 |
82,415 | 37,215 | 12,740 | 6,265 |
119,462 | 52,964 | 18,052 | 10,384 |
X X X | 84,090 | 41,406 | 19,934 |
X X X | X X X | 62,293 | 37,785 |
X X X | X X X | X X X | 61,959 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4D - WORKERS' COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 202,960 | 127,221 | 113,943 | 142,967 | 252,935 | 258,959 |
| "2. " "`1986` | 284,035 | 159,978 | 86,215 | 60,885 | 67,514 | 62,374 |
| "3. " "`1987` | X X X | 241,685 | 124,486 | 69,265 | 87,101 | 72,384 |
| "4. " "`1988` | X X X | X X X | 240,532 | 113,291 | 129,212 | 98,149 |
| "5. " "`1989` | X X X | X X X | X X X | 257,388 | 168,478 | 164,927 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 302,452 | 167,879 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 201,174 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
306,624 | 331,525 | 230,763 | 220,911 |
58,951 | 76,351 | 59,369 | 48,842 |
63,395 | 83,342 | 65,764 | 58,514 |
82,500 | 86,842 | 72,401 | 62,224 |
122,043 | 118,277 | 99,698 | 90,534 |
139,459 | 125,937 | 106,344 | 95,222 |
171,488 | 104,600 | 91,620 | 82,112 |
111,171 | 80,128 | 62,847 | 62,154 |
X X X | 67,534 | 49,724 | 40,880 |
X X X | X X X | 55,310 | 40,769 |
X X X | X X X | X X X | 66,973 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4E - COMMERCIAL MULTIPLE PERIL
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 72,507 | 47,054 | 34,855 | 27,684 | 19,980 | 18,541 |
| "2. " "`1986` | 70,183 | 33,146 | 21,992 | 18,627 | 13,659 | 10,074 |
| "3. " "`1987` | X X X | 79,374 | 34,475 | 27,072 | 42,558 | 8,503 |
| "4. " "`1988` | X X X | X X X | 181,058 | 117,500 | 83,612 | 47,275 |
| "5. " "`1989` | X X X | X X X | X X X | 272,787 | 184,073 | 117,913 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 240,641 | 194,651 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 234,305 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
11,717 | 11,708 | 13,864 | 12,166 |
6,226 | 4,622 | 4,350 | 3,185 |
12,476 | 10,554 | 7,004 | 6,122 |
42,361 | 29,455 | 25,471 | 22,009 |
70,317 | 57,597 | 41,504 | 32,722 |
139,082 | 91,692 | 58,644 | 52,970 |
176,395 | 123,218 | 81,495 | 62,760 |
225,071 | 146,435 | 91,681 | 68,081 |
X X X | 181,370 | 128,112 | 92,740 |
X X X | X X X | 188,526 | 130,738 |
X X X | X X X | X X X | 187,862 |
- ---------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 4F - SECTION 1 - MEDICAL MALPRACTICE - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------------
| 1 | BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPEN
| |---------------#---------------#---------------#---------------#---------------#---------------#-----
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|-----
| "1. " "`Prior` | 27,170 | 16,524 | 13,263 | 10,106 | 9,483 | 5,707 |
| "2. " "`1986` | 68 | (4)| 0 | 1 | 0 | 0 |
| "3. " "`1987` | X X X | 0 | 96 | 1 | 0 | 0 |
| "4. " "`1988` | X X X | X X X | 165 | 4 | 9 | 0 |
| "5. " "`1989` | X X X | X X X | X X X | 2 | 4 | 0 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 5 | 0 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 3 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------------------------------------------------------#
SES AT YEAR END ($000 OMITTED) |
- ----------#---------------#---------------#---------------|
| | | |
8 | 9 | 10 | 11 |
1992 | 1993 | 1994 | 1995 |
| | | |
- ----------|---------------|---------------|---------------|
3,594 | 6,233 | 6,243 | 2,556 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
88 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
X X X | 0 | 0 | 0 |
X X X | X X X | 0 | 0 |
X X X | X X X | X X X | 4 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4F - SECTION 2 - MEDICAL MALPRACTICE - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 0 | 134 | 1 | 0 | 0 | 0 |
| "2. " "`1986` | 0 | 4 | 4 | 0 | 0 | 0 |
| "3. " "`1987` | X X X | 0 | 0 | 94 | 88 | 64 |
| "4. " "`1988` | X X X | X X X | 0 | 163 | 280 | 0 |
| "5. " "`1989` | X X X | X X X | X X X | 161 | 129 | 0 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 73 | 30 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 212 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
55 | 24 | 64 | 64 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
200 | 97 | 125 | 122 |
177 | 135 | 2 | 65 |
X X X | 40 | 36 | 48 |
X X X | X X X | 0 | 0 |
X X X | X X X | X X X | 0 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4G - SPECIAL LIABILITY (OCEAN MARINE, AIRCRAFT
(ALL PERILS), BOILER AND MACHINERY)
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 1,839 | 689 | 480 | 248 | 22 | 2 |
| "2. " "`1986` | 8,647 | 3,035 | 1,998 | 1,619 | 823 | 165 |
| "3. " "`1987` | X X X | 11,245 | 5,428 | 3,595 | 1,491 | 367 |
| "4. " "`1988` | X X X | X X X | 11,836 | 3,750 | 1,624 | 353 |
| "5. " "`1989` | X X X | X X X | X X X | 7,701 | 1,995 | 617 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 6,682 | 1,759 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 5,660 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
13 | 12 | 12 | 33 |
125 | 215 | 188 | 217 |
383 | 863 | 767 | 630 |
189 | 771 | 1,038 | 619 |
294 | 453 | 556 | 582 |
1,050 | 189 | 170 | 319 |
2,064 | 318 | 224 | 228 |
4,727 | 547 | 248 | 207 |
X X X | 3,631 | 1,048 | 628 |
X X X | X X X | 6,389 | 1,725 |
X X X | X X X | X X X | 4,990 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4H - SECTION 1 - OTHER LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 253,584 | 170,641 | 135,256 | 108,639 | 85,955 | 103,961 |
| "2. " "`1986` | 218,982 | 188,844 | 140,570 | 76,095 | 49,571 | 43,325 |
| "3. " "`1987` | X X X | 255,083 | 201,512 | 128,329 | 87,279 | 61,191 |
| "4. " "`1988` | X X X | X X X | 188,732 | 130,153 | 145,770 | 66,435 |
| "5. " "`1989` | X X X | X X X | X X X | 124,748 | 104,146 | 82,543 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 125,630 | 109,041 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 99,252 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
117,379 | 164,651 | 170,922 | 148,677 |
41,594 | 35,822 | 26,568 | 22,787 |
63,292 | 42,081 | 32,233 | 27,816 |
61,503 | 36,881 | 32,617 | 26,484 |
55,293 | 41,007 | 32,690 | 27,434 |
90,026 | 55,009 | 39,034 | 39,440 |
88,196 | 55,756 | 43,133 | 38,355 |
67,953 | 48,984 | 36,142 | 29,524 |
X X X | 52,753 | 43,097 | 34,025 |
X X X | X X X | 51,975 | 43,282 |
X X X | X X X | X X X | 52,208 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4H - SECTION 2 - OTHER LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | 0 | (27)| (33)| (25)| (44)| (9)|
| "2. " "`1986` | 0 | 34 | (21)| (52)| (208)| (91)|
| "3. " "`1987` | X X X | 2 | 0 | 0 | 0 | 0 |
| "4. " "`1988` | X X X | X X X | 40 | 30 | 23 | 162 |
| "5. " "`1989` | X X X | X X X | X X X | 116 | 83 | 32 |
| "6. " "`1990` | X X X | X X X | X X X | X X X | 99 | 45 |
| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 217 |
| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
(57)| 58 | 79 | 142 |
20 | 31 | 88 | 93 |
0 | 3 | 187 | 720 |
0 | 3 | 30 | 1,381 |
20 | 0 | 44 | 668 |
45 | 119 | 0 | 753 |
98 | 174 | 80 | 605 |
348 | 212 | 164 | 249 |
X X X | 303 | 127 | 382 |
X X X | X X X | 1,215 | 374 |
X X X | X X X | X X X | 1,787 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 4I - SPECIAL PROPERTY (FIRE, ALLIED LINES, INLAND MARINE,
EARTHQUAKE, GLASS, BURGLARY AND THEFT)
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------------
| 1 | BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPEN
| |---------------#---------------#---------------#---------------#---------------#---------------#-----
| Years in Which | | | | | | |
| Losses Were | 2 | 3 | 4 | 5 | 6 | 7 |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|-----
| "1. " "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X |
| "2. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
| "3. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------------------------------------------------------#
SES AT YEAR END ($000 OMITTED) |
- ----------#---------------#---------------#---------------|
| | | |
8 | 9 | 10 | 11 |
1992 | 1993 | 1994 | 1995 |
| | | |
- ----------|---------------|---------------|---------------|
X X X | 19,135 | 13,510 | 12,061 |
X X X | X X X | 7,631 | 2,204 |
X X X | X X X | X X X | 9,175 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4J - AUTO PHYSICAL DAMAGE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#-----
| "1. " "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X |
| "2. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
| "3. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
- ------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->-----
<C> <C> <C> <C>
- ----------#---------------#---------------#---------------#
X X X | 11,851 | 7,171 | 7,597 |
X X X | X X X | 2,171 | 1,209 |
X X X | X X X | X X X | 2,559 |
- ---------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4K - FIDELITY/SURETY
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "2. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "3. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
X X X | 27,192 | 8,164 | 3,874 |
X X X | X X X | 16,053 | 4,528 |
X X X | X X X | X X X | 23,189 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4L - OTHER (INCLUDING CREDIT, ACCIDENT AND HEALTH)
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "2. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "3. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
----------------------------->--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
X X X | 4 | 4 | 2 |
X X X | X X X | 9 | 1 |
X X X | X X X | X X X | 2 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4M - INTERNATIONAL
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior | 0 | 0 | 0 | 0 | 0 | 0 |
`| "2. " "`1986` | 0 | 0 | 0 | 0 | 0 | 0 |
`| "3. " "`1987` | X X X | 0 | 0 | 0 | 0 | 0 |
`| "4. " "`1988` | X X X | X X X | 6,976 | 4,332 | 3,098 | 1,388 |
`| "5. " "`1989` | X X X | X X X | X X X | 4,930 | 2,760 | 1,775 |
`| "6. " "`1990` | X X X | X X X | X X X | X X X | 5,303 | 3,754 |
`| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 5,740 |
`| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
1,425 | 1,694 | 1,280 | 1,289 |
1,523 | 1,444 | 1,383 | 1,365 |
2,259 | 958 | 840 | 875 |
3,247 | 1,728 | 1,573 | 1,593 |
2,293 | 1,735 | 893 | 409 |
X X X | 4,466 | 3,344 | 1,673 |
X X X | X X X | 31,206 | 12,458 |
X X X | X X X | X X X | 37,856 |
- ----------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 4N - REINSURANCE A
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#----------------------------------------------------------------------------------------------------
| | BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPE
| 1 |---------------#---------------#---------------#---------------#---------------#---------------#----
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|----
`| "1. " "`1988` | X X X | X X X | 29,167 | 20,669 | 16,864 | 5,599 |
`| "2. " "`1989` | X X X | X X X | X X X | 14,575 | 13,294 | 13,088 |
`| "3. " "`1990` | X X X | X X X | X X X | X X X | 17,082 | 17,746 |
`| "4. " "`1991` | X X X | X X X | X X X | X X X | X X X | 32,597 |
`| "5. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "6. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "7. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "8. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------------------------------------------------------#
NSES AT YEAR END ($000 OMITTED) |
- -----------#---------------#---------------#---------------|
| | | |
8 | 9 | 10 | 11 |
1992 | 1993 | 1994 | 1995 |
| | | |
| | | |
- -----------|---------------|---------------|---------------|
3,332 | 3,611 | 3,268 | 3,109 |
11,443 | 4,941 | 3,073 | 3,335 |
15,433 | 5,074 | 2,651 | 2,399 |
23,320 | 6,916 | 4,601 | 4,208 |
23,417 | 18,544 | 8,047 | 6,076 |
X X X | 34,972 | 29,485 | 8,402 |
X X X | X X X | 39,946 | 26,126 |
X X X | X X X | X X X | 32,234 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4O - REINSURANCE B
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`1988` | X X X | X X X | 18,119 | 12,928 | 10,228 | 2,583 |
`| "2. " "`1989` | X X X | X X X | X X X | 6,987 | 5,714 | 4,607 |
`| "3. " "`1990` | X X X | X X X | X X X | X X X | 5,534 | 5,443 |
`| "4. " "`1991` | X X X | X X X | X X X | X X X | X X X | 11,230 |
`| "5. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "6. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "7. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "8. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
----------#---------------#---------------#---------------#
1,598 | 1,815 | 1,581 | 1,525 |
3,651 | 2,163 | 1,683 | 2,398 |
4,686 | 1,822 | 978 | 841 |
9,210 | 4,051 | 2,801 | 2,789 |
13,383 | 8,784 | 5,030 | 3,439 |
X X X | 11,992 | 11,012 | 5,506 |
X X X | X X X | 80,513 | 41,682 |
X X X | X X X | X X X | 30,696 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4P - REINSURANCE C
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`1988` | X X X | X X X | 0 | 0 | 0 | 0 |
`| "2. " "`1989` | X X X | X X X | X X X | 0 | 0 | 0 |
`| "3. " "`1990` | X X X | X X X | X X X | X X X | 0 | 0 |
`| "4. " "`1991` | X X X | X X X | X X X | X X X | X X X | 0 |
`| "5. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "6. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "7. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "8. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
0 | 0 | 0 | 0 |
0 | 0 | 0 | (405)|
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 0 |
X X X | 0 | 0 | 0 |
X X X | X X X | 0 | 0 |
X X X | X X X | X X X | 1,044 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4Q - REINSURANCE D
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior` | 7,296 | 935 | 369 | 125 | 195 | 2 |
`| "2. " "`1986` | 15,706 | 7,079 | 3,446 | 2,206 | 1,663 | 814 |
`| "3. " "`1987` | X X X | 20,805 | 10,661 | 6,768 | 5,997 | 2,624 |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
0 | 0 | 0 | 18 |
590 | 442 | 332 | 384 |
2,139 | 2,492 | 1,960 | 2,023 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 4R - SECTION 1 - PRODUCTS LIABILITY - OCCURRENCE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#----------------------------------------------------------------------------------------------------
| |BULK AND INCURRED BUT NOT REPORTED RESERVES ON LOSSES AND ALLOCATED EXPENSES AT YEAR END ($000 OMITT
| 1 |---------------#---------------#---------------#---------------#---------------#---------------#----
| | | | | | | |
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7 |
| Losses Were | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 |
| Incurred | | | | | | |
| | | | | | | |
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------|----
`| "1. " "`Prior` | 25,271 | 21,534 | 19,630 | 13,740 | 19,936 | 25,234 |
`| "2. " "`1986` | 26,221 | 19,150 | 16,072 | 9,372 | 5,213 | 4,975 |
`| "3. " "`1987` | X X X | 24,856 | 18,904 | 15,562 | 11,129 | 6,489 |
`| "4. " "`1988` | X X X | X X X | 17,164 | 13,768 | 14,915 | 4,998 |
`| "5. " "`1989` | X X X | X X X | X X X | 13,345 | 9,827 | 5,407 |
`| "6. " "`1990` | X X X | X X X | X X X | X X X | 10,345 | 7,066 |
`| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 7,951 |
`| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------------------------------------------------------#
ED) |
- -----------#---------------#---------------#---------------|
| | | |
8 | 9 | 10 | 11 |
1992 | 1993 | 1994 | 1995 |
| | | |
| | | |
- -----------|---------------|---------------|---------------|
30,423 | 36,161 | 37,324 | 30,567 |
3,763 | 4,275 | 5,013 | 3,853 |
4,705 | 5,581 | 6,108 | 5,204 |
5,183 | 5,022 | 4,682 | 4,051 |
3,061 | 3,546 | 2,410 | 2,152 |
5,154 | 4,032 | 2,607 | 2,577 |
6,021 | 4,756 | 3,787 | 3,542 |
6,687 | 4,483 | 3,316 | 2,712 |
X X X | 5,486 | 3,296 | 2,758 |
X X X | X X X | 3,916 | 2,271 |
X X X | X X X | X X X | 2,808 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4R - SECTION 2 - PRODUCTS LIABILITY - CLAIMS-MADE
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior` | 0 | 0 | 0 | 0 | 0 | 0 |
`| "2. " "`1986` | 0 | 0 | 0 | 0 | 0 | 0 |
`| "3. " "`1987` | X X X | 0 | 0 | 0 | 0 | 0 |
`| "4. " "`1988` | X X X | X X X | 2 | 2 | 0 | 0 |
`| "5. " "`1989` | X X X | X X X | X X X | 0 | 2 | 0 |
`| "6. " "`1990` | X X X | X X X | X X X | X X X | 29 | 19 |
`| "7. " "`1991` | X X X | X X X | X X X | X X X | X X X | 52 |
`| "8. " "`1992` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "9. " "`1993` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`10. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`|`11. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
0 | 0 | 0 | 0 |
0 | 3 | 0 | 0 |
0 | 0 | 0 | 0 |
0 | 0 | 0 | 4 |
0 | 2 | 0 | 8 |
14 | 0 | 0 | 22 |
31 | 12 | 0 | 23 |
24 | 348 | 0 | 15 |
X X X | 0 | 767 | 466 |
X X X | X X X | 17 | 224 |
X X X | X X X | X X X | 91 |
- ----------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 4S - FINANCIAL GUARANTY/MORTGAGE GUARANTY
<S> <C> <C> <C> <C> <C> <C> <C>
!-----------------------------#---------------#---------------#---------------#---------------#---------------#---------------#----
`| "1. " "`Prior` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "2. " "`1994` | X X X | X X X | X X X | X X X | X X X | X X X |
`| "3. " "`1995` | X X X | X X X | X X X | X X X | X X X | X X X |
------------------------------>--------------->--------------->--------------->--------------->--------------->--------------->----
<C> <C> <C> <C>
- -----------#---------------#---------------#---------------#
X X X | 168 | 652 | 513 |
X X X | X X X | 26 | (10)|
X X X | X X X | X X X | 29 |
- ----------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5A - HOMEOWNERS/FARMOWNERS
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!--------------------#---------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND
| 1 |---------------#----------------#----------------#----------------#----------------#---------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|---------------
`| "1.`Prior` | 12,671 | 13,458 | 13,757 | 13,913 | 13,998 | 14,045
`| "2.`1986` | 45,097 | 52,914 | 53,325 | 53,486 | 53,557 | 53,586
`| "3.`1987` | X X X | 39,976 | 47,812 | 48,267 | 48,430 | 48,502
`| "4.`1988` | X X X | X X X | 36,822 | 44,675 | 45,104 | 45,245
`| "5.`1989` | X X X | X X X | X X X | 45,458 | 57,281 | 57,762
`| "6.`1990` | X X X | X X X | X X X | X X X | 41,802 | 49,957
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 48,078
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->---------------
<C> <C> <C> <C>
- ---------------------------------------------------------------------#
ASSUMED AT YEAR END |
- -#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
- -|----------------|----------------|----------------|----------------|
| 14,061 | 14,079 | 14,096 | 14,107 |
| 53,607 | 53,621 | 53,628 | 53,633 |
| 48,530 | 48,547 | 48,554 | 48,558 |
| 45,299 | 45,334 | 45,345 | 45,352 |
| 57,874 | 57,978 | 58,019 | 58,030 |
| 50,378 | 50,533 | 50,609 | 50,632 |
| 55,537 | 56,026 | 56,169 | 56,236 |
| 38,390 | 48,132 | 48,712 | 48,876 |
| X X X | 34,684 | 40,139 | 40,443 |
| X X X | X X X | 40,553 | 45,141 |
| X X X | X X X | X X X | 26,246 |
- ->---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 1,342 | 613 | 324 | 159 | 71 | 41
`| "2.`1986` | 5,403 | 558 | 241 | 127 | 62 | 46
`| "3.`1987` | X X X | 5,333 | 535 | 268 | 121 | 67
`| "4.`1988` | X X X | X X X | 5,142 | 531 | 202 | 91
`| "5.`1989` | X X X | X X X | X X X | 7,258 | 466 | 202
`| "6.`1990` | X X X | X X X | X X X | X X X | 5,587 | 524
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 6,035
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 32 | 22 | 11 | 6 |
| 25 | 12 | 5 | 0 |
| 38 | 17 | 8 | 6 |
| 60 | 27 | 19 | 9 |
| 140 | 73 | 35 | 22 |
| 255 | 138 | 72 | 42 |
| 688 | 273 | 145 | 61 |
| 8,030 | 671 | 267 | 160 |
| X X X | 4,769 | 420 | 181 |
| X X X | X X X | 3,932 | 439 |
| X X X | X X X | X X X | 4,079 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 61,390 | 66,812 | 67,150 | 67,315 | 67,363 | 67,393
`| "3.`1987` | X X X | 56,274 | 61,804 | 62,281 | 62,410 | 62,476
`| "4.`1988` | X X X | X X X | 52,745 | 58,575 | 58,953 | 59,063
`| "5.`1989` | X X X | X X X | X X X | 65,825 | 74,342 | 74,788
`| "6.`1990` | X X X | X X X | X X X | X X X | 60,292 | 66,197
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 68,967
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 67,400 | 67,405 | 67,406 | 67,407 |
| 62,491 | 62,505 | 62,506 | 62,509 |
| 59,113 | 59,141 | 59,154 | 59,160 |
| 74,924 | 75,009 | 75,045 | 75,061 |
| 66,580 | 66,704 | 66,752 | 66,778 |
| 73,856 | 74,221 | 74,331 | 74,367 |
| 58,905 | 64,711 | 65,183 | 65,340 |
| X X X | 51,745 | 54,835 | 55,079 |
| X X X | X X X | 56,372 | 59,065 |
| X X X | X X X | X X X | 39,517 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5B - PRIVATE PASSENGER AUTO LIABILITY/MEDICAL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 36,968 | 44,639 | 47,761 | 49,533 | 50,317 | 50,670
`| "2.`1986` | 72,986 | 98,697 | 103,274 | 105,302 | 106,116 | 106,448
`| "3.`1987` | X X X | 66,518 | 89,677 | 94,642 | 96,687 | 97,425
`| "4.`1988` | X X X | X X X | 61,655 | 86,173 | 90,680 | 92,355
`| "5.`1989` | X X X | X X X | X X X | 61,005 | 86,393 | 90,431
`| "6.`1990` | X X X | X X X | X X X | X X X | 59,749 | 81,622
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 53,801
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 50,860 | 50,963 | 51,027 | 51,108 |
| 106,547 | 106,614 | 106,644 | 106,658 |
| 97,635 | 97,768 | 97,821 | 97,846 |
| 92,843 | 93,101 | 93,198 | 93,255 |
| 91,686 | 92,317 | 92,588 | 92,710 |
| 84,881 | 86,275 | 86,853 | 87,107 |
| 72,787 | 76,474 | 78,054 | 78,666 |
| 44,100 | 60,770 | 63,953 | 65,135 |
| X X X | 38,477 | 52,190 | 54,724 |
| X X X | X X X | 36,292 | 48,685 |
| X X X | X X X | X X X | 34,575 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 12,523 | 5,778 | 2,923 | 1,505 | 730 | 468
`| "2.`1986` | 25,244 | 6,231 | 2,565 | 1,276 | 545 | 216
`| "3.`1987` | X X X | 22,254 | 5,316 | 2,606 | 1,078 | 430
`| "4.`1988` | X X X | X X X | 22,424 | 5,395 | 2,213 | 920
`| "5.`1989` | X X X | X X X | X X X | 23,512 | 4,956 | 2,122
`| "6.`1990` | X X X | X X X | X X X | X X X | 20,334 | 4,588
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 20,267
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 331 | 275 | 229 | 184 |
| 136 | 63 | 33 | 18 |
| 233 | 101 | 50 | 26 |
| 500 | 217 | 125 | 53 |
| 1,181 | 533 | 238 | 111 |
| 2,336 | 1,134 | 486 | 226 |
| 5,704 | 2,675 | 1,168 | 544 |
| 19,021 | 4,859 | 2,055 | 984 |
| X X X | 15,838 | 3,925 | 1,731 |
| X X X | X X X | 14,252 | 3,484 |
| X X X | X X X | X X X | 13,420 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 126,317 | 143,196 | 145,873 | 147,429 | 147,837 | 148,000
`| "3.`1987` | X X X | 114,514 | 130,019 | 133,886 | 135,158 | 135,572
`| "4.`1988` | X X X | X X X | 108,730 | 125,144 | 127,743 | 128,686
`| "5.`1989` | X X X | X X X | X X X | 108,679 | 124,875 | 127,371
`| "6.`1990` | X X X | X X X | X X X | X X X | 104,497 | 117,879
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 97,067
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 148,072 | 148,107 | 148,120 | 148,127 |
| 135,679 | 135,733 | 135,757 | 135,771 |
| 128,952 | 129,038 | 129,100 | 129,116 |
| 128,201 | 128,461 | 128,555 | 128,599 |
| 119,928 | 120,632 | 120,803 | 120,893 |
| 108,394 | 110,426 | 111,061 | 111,270 |
| 83,442 | 92,196 | 93,572 | 94,097 |
| X X X | 72,252 | 78,990 | 79,981 |
| X X X | X X X | 68,826 | 74,657 |
| X X X | X X X | X X X | 66,478 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 20,806 | 25,570 | 27,553 | 28,623 | 29,160 | 29,369
`| "2.`1986` | 39,218 | 52,112 | 54,597 | 55,757 | 56,312 | 56,550
`| "3.`1987` | X X X | 35,760 | 47,498 | 50,102 | 51,222 | 51,746
`| "4.`1988` | X X X | X X X | 32,367 | 43,509 | 45,796 | 46,733
`| "5.`1989` | X X X | X X X | X X X | 29,515 | 40,455 | 42,481
`| "6.`1990` | X X X | X X X | X X X | X X X | 27,836 | 37,026
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 22,678
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 29,472 | 29,540 | 29,568 | 29,584 |
| 56,652 | 56,701 | 56,716 | 56,726 |
| 51,920 | 52,025 | 52,075 | 52,093 |
| 47,043 | 47,226 | 47,314 | 47,352 |
| 43,243 | 43,610 | 43,833 | 43,923 |
| 38,475 | 39,194 | 39,600 | 39,775 |
| 29,366 | 30,875 | 31,596 | 31,958 |
| 18,109 | 24,645 | 26,142 | 26,862 |
| X X X | 15,273 | 20,657 | 21,805 |
| X X X | X X X | 14,664 | 19,440 |
| X X X | X X X | X X X | 12,212 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 8,365 | 4,160 | 2,235 | 1,095 | 504 | 271
`| "2.`1986` | 11,214 | 3,728 | 1,978 | 1,059 | 508 | 234
`| "3.`1987` | X X X | 10,261 | 3,375 | 1,800 | 921 | 412
`| "4.`1988` | X X X | X X X | 9,402 | 3,217 | 1,536 | 787
`| "5.`1989` | X X X | X X X | X X X | 9,352 | 2,848 | 1,498
`| "6.`1990` | X X X | X X X | X X X | X X X | 8,573 | 2,638
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 7,227
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 173 | 99 | 65 | 47 |
| 116 | 58 | 30 | 19 |
| 231 | 119 | 65 | 44 |
| 453 | 244 | 133 | 83 |
| 859 | 464 | 217 | 98 |
| 1,579 | 854 | 425 | 212 |
| 2,725 | 1,466 | 777 | 366 |
| 7,938 | 2,750 | 1,440 | 726 |
| X X X | 6,367 | 1,917 | 980 |
| X X X | X X X | 5,781 | 1,876 |
| X X X | X X X | X X X | 5,101 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 65,266 | 76,724 | 78,538 | 79,389 | 79,612 | 79,711
`| "3.`1987` | X X X | 60,005 | 70,607 | 72,732 | 73,456 | 73,700
`| "4.`1988` | X X X | X X X | 54,430 | 64,425 | 65,982 | 66,582
`| "5.`1989` | X X X | X X X | X X X | 50,018 | 59,320 | 60,790
`| "6.`1990` | X X X | X X X | X X X | X X X | 47,449 | 54,839
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 39,977
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 79,758 | 79,773 | 79,779 | 79,784 |
| 73,787 | 73,838 | 73,858 | 73,868 |
| 66,736 | 66,816 | 66,850 | 66,862 |
| 61,246 | 61,399 | 61,475 | 61,505 |
| 56,035 | 56,413 | 56,559 | 56,600 |
| 45,540 | 46,490 | 46,841 | 46,971 |
| 34,817 | 39,749 | 40,584 | 40,917 |
| X X X | 29,401 | 33,136 | 33,891 |
| X X X | X X X | 27,685 | 30,973 |
| X X X | X X X | X X X | 23,582 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5D - WORKERS' COMPENSATION
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 23,471 | 31,724 | 36,244 | 39,743 | 42,089 | 43,952
`| "2.`1986` | 21,911 | 34,793 | 38,212 | 40,227 | 41,341 | 41,964
`| "3.`1987` | X X X | 18,908 | 31,571 | 35,369 | 37,233 | 38,288
`| "4.`1988` | X X X | X X X | 20,028 | 34,236 | 38,381 | 40,363
`| "5.`1989` | X X X | X X X | X X X | 19,741 | 35,896 | 40,477
`| "6.`1990` | X X X | X X X | X X X | X X X | 19,249 | 34,078
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 17,031
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 45,263 | 46,514 | 47,710 | 48,638 |
| 42,318 | 42,583 | 42,813 | 42,968 |
| 38,826 | 39,210 | 39,475 | 39,651 |
| 41,270 | 41,823 | 42,245 | 42,520 |
| 42,305 | 43,316 | 44,007 | 44,401 |
| 37,769 | 39,684 | 40,725 | 41,273 |
| 29,009 | 32,839 | 34,548 | 35,366 |
| 11,380 | 22,486 | 25,526 | 26,769 |
| X X X | 8,151 | 15,640 | 17,494 |
| X X X | X X X | 7,097 | 12,526 |
| X X X | X X X | X X X | 5,261 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 18,710 | 12,738 | 9,371 | 7,858 | 6,422 | 5,467
`| "2.`1986` | 13,723 | 5,864 | 3,441 | 2,281 | 1,439 | 1,025
`| "3.`1987` | X X X | 13,008 | 5,734 | 3,473 | 2,094 | 1,321
`| "4.`1988` | X X X | X X X | 14,481 | 6,706 | 3,546 | 2,055
`| "5.`1989` | X X X | X X X | X X X | 17,171 | 6,963 | 3,593
`| "6.`1990` | X X X | X X X | X X X | X X X | 15,274 | 6,262
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 13,786
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 4,858 | 4,205 | 3,519 | 3,014 |
| 830 | 625 | 478 | 365 |
| 961 | 688 | 499 | 367 |
| 1,441 | 1,035 | 697 | 494 |
| 2,299 | 1,504 | 944 | 645 |
| 3,677 | 2,173 | 1,295 | 842 |
| 6,298 | 3,258 | 1,799 | 1,140 |
| 13,165 | 4,880 | 2,444 | 1,409 |
| X X X | 8,770 | 3,016 | 1,533 |
| X X X | X X X | 6,318 | 2,333 |
| X X X | X X X | X X X | 5,366 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 37,431 | 43,552 | 44,924 | 46,102 | 46,523 | 46,837
`| "3.`1987` | X X X | 33,562 | 40,062 | 42,174 | 42,911 | 43,348
`| "4.`1988` | X X X | X X X | 36,462 | 44,202 | 45,575 | 46,342
`| "5.`1989` | X X X | X X X | X X X | 39,142 | 46,631 | 48,338
`| "6.`1990` | X X X | X X X | X X X | X X X | 36,715 | 43,982
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 33,106
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 47,067 | 47,189 | 47,306 | 47,377 |
| 43,639 | 43,814 | 43,931 | 44,004 |
| 46,771 | 47,023 | 47,184 | 47,308 |
| 49,103 | 49,486 | 49,722 | 49,878 |
| 45,523 | 46,185 | 46,529 | 46,723 |
| 39,069 | 40,361 | 40,842 | 41,113 |
| 26,820 | 31,289 | 32,214 | 32,614 |
| X X X | 18,601 | 21,352 | 21,933 |
| X X X | X X X | 14,939 | 17,085 |
| X X X | X X X | X X X | 11,579 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5E - COMMERCIAL MULTIPLE PERIL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| |CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 9,690 | 11,737 | 12,922 | 13,653 | 14,097 | 14,327
`| "2.`1986` | 17,140 | 22,607 | 23,424 | 24,053 | 24,374 | 24,540
`| "3.`1987` | X X X | 14,503 | 19,897 | 20,712 | 21,195 | 21,466
`| "4.`1988` | X X X | X X X | 24,852 | 34,936 | 36,453 | 37,211
`| "5.`1989` | X X X | X X X | X X X | 34,267 | 47,797 | 49,650
`| "6.`1990` | X X X | X X X | X X X | X X X | 34,043 | 45,818
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 32,875
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
|
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 14,525 | 14,608 | 14,667 | 14,694 |
| 24,622 | 24,662 | 24,688 | 24,706 |
| 21,597 | 21,668 | 21,700 | 21,730 |
| 37,607 | 37,865 | 38,020 | 38,099 |
| 50,368 | 50,890 | 51,224 | 51,376 |
| 47,250 | 48,208 | 48,763 | 49,097 |
| 42,311 | 43,954 | 44,838 | 45,342 |
| 27,460 | 38,308 | 39,918 | 40,744 |
| X X X | 30,305 | 40,596 | 42,269 |
| X X X | X X X | 35,637 | 45,931 |
| X X X | X X X | X X X | 33,313 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 5,700 | 4,152 | 2,415 | 1,615 | 1,132 | 839
`| "2.`1986` | 4,711 | 1,951 | 1,447 | 857 | 533 | 354
`| "3.`1987` | X X X | 4,466 | 1,699 | 1,165 | 741 | 403
`| "4.`1988` | X X X | X X X | 8,054 | 2,961 | 1,872 | 1,239
`| "5.`1989` | X X X | X X X | X X X | 10,955 | 3,372 | 2,100
`| "6.`1990` | X X X | X X X | X X X | X X X | 10,570 | 3,516
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 10,404
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 480 | 336 | 246 | 193 |
| 224 | 134 | 93 | 70 |
| 272 | 180 | 119 | 68 |
| 791 | 445 | 285 | 201 |
| 1,539 | 920 | 544 | 303 |
| 2,709 | 1,703 | 1,034 | 576 |
| 3,973 | 2,479 | 1,512 | 821 |
| 12,539 | 3,805 | 2,327 | 1,351 |
| X X X | 12,580 | 3,702 | 2,166 |
| X X X | X X X | 13,229 | 3,990 |
| X X X | X X X | X X X | 13,016 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 29,221 | 35,026 | 36,109 | 36,607 | 36,842 | 36,951
`| "3.`1987` | X X X | 26,158 | 32,067 | 33,088 | 33,511 | 33,664
`| "4.`1988` | X X X | X X X | 45,414 | 56,392 | 58,076 | 58,824
`| "5.`1989` | X X X | X X X | X X X | 62,447 | 76,273 | 78,279
`| "6.`1990` | X X X | X X X | X X X | X X X | 63,343 | 75,395
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 62,272
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 36,996 | 37,030 | 37,055 | 37,071 |
| 33,768 | 33,818 | 33,836 | 33,851 |
| 59,335 | 59,498 | 59,644 | 59,721 |
| 79,114 | 79,478 | 79,690 | 79,781 |
| 77,414 | 78,293 | 78,662 | 78,798 |
| 71,964 | 73,856 | 74,637 | 74,934 |
| 56,581 | 66,855 | 68,585 | 69,183 |
| X X X | 62,888 | 72,260 | 73,856 |
| X X X | X X X | 72,468 | 81,224 |
| X X X | X X X | X X X | 68,732 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - OCCURRENCE
SECTION 1A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| |CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND ASSUMED AT YEAR END
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 181 | 344 | 477 | 592 | 669 | 697
`| "2.`1986` | 0 | 0 | 0 | 0 | 1 | 1
`| "3.`1987` | X X X | 1 | 1 | 1 | 2 | 2
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 2
`| "5.`1989` | X X X | X X X | X X X | 1 | 1 | 2
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
|
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 725 | 744 | 755 | 760 |
| 1 | 1 | 1 | 1 |
| 2 | 2 | 2 | 2 |
| 2 | 2 | 2 | 2 |
| 2 | 2 | 2 | 2 |
| 0 | 1 | 1 | 1 |
| 0 | 1 | 1 | 1 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| |NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YEAR END
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 747 | 536 | 350 | 229 | 122 | 88
`| "2.`1986` | 1 | 1 | 1 | 1 | 0 | 0
`| "3.`1987` | X X X | 0 | 2 | 1 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 1 | 2 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 1 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 1 | 1
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 68 | 67 | 92 | 90 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 1 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 2 | 2 | 2 | 2 | 2 | 2
`| "3.`1987` | X X X | 3 | 5 | 5 | 5 | 5
`| "4.`1988` | X X X | X X X | 0 | 1 | 4 | 4
`| "5.`1989` | X X X | X X X | X X X | 2 | 4 | 4
`| "6.`1990` | X X X | X X X | X X X | X X X | 1 | 3
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 2 | 2 | 2 | 2 |
| 5 | 5 | 5 | 5 |
| 4 | 4 | 4 | 4 |
| 4 | 4 | 4 | 4 |
| 3 | 4 | 4 | 4 |
| 0 | 1 | 1 | 1 |
| 0 | 0 | 0 | 0 |
| X X X | 1 | 1 | 1 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5F - MEDICAL MALPRACTICE - CLAIMS-MADE
SECTION 1B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 0 | 3 | 8 | 9 | 9 | 9
`| "2.`1986` | 3 | 4 | 4 | 5 | 5 | 5
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 9 | 9 | 9 | 9 |
| 5 | 5 | 5 | 5 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 11 | 7 | 1 | 0 | 0 | 0
`| "2.`1986` | 4 | 1 | 1 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 1 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 8 | 8 | 8 | 8 | 8 | 8
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 2 | 2 | 2
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 8 | 8 | 8 | 8 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 2 | 2 | 2 | 2 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5H - OTHER LIABILITY - OCCURRENCE
SECTION 1A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 10,054 | 13,808 | 16,076 | 17,484 | 18,380 | 18,896
`| "2.`1986` | 11,614 | 16,593 | 17,751 | 18,532 | 19,080 | 19,376
`| "3.`1987` | X X X | 9,884 | 14,181 | 15,216 | 15,909 | 16,285
`| "4.`1988` | X X X | X X X | 7,926 | 11,426 | 12,049 | 12,462
`| "5.`1989` | X X X | X X X | X X X | 5,143 | 7,267 | 7,717
`| "6.`1990` | X X X | X X X | X X X | X X X | 5,273 | 7,222
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 3,951
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 19,130 | 19,341 | 19,488 | 19,632 |
| 19,518 | 19,603 | 19,648 | 19,682 |
| 16,509 | 16,643 | 16,712 | 16,745 |
| 12,721 | 12,870 | 12,943 | 12,983 |
| 7,980 | 8,184 | 8,311 | 8,385 |
| 7,644 | 7,891 | 8,074 | 8,164 |
| 5,102 | 5,451 | 5,644 | 5,769 |
| 1,931 | 2,794 | 3,020 | 3,146 |
| X X X | 1,401 | 2,024 | 2,176 |
| X X X | X X X | 1,259 | 1,791 |
| X X X | X X X | X X X | 1,095 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 14,492 | 8,148 | 3,985 | 2,669 | 1,698 | 1,101
`| "2.`1986` | 4,315 | 2,602 | 1,992 | 1,410 | 764 | 464
`| "3.`1987` | X X X | 3,899 | 2,185 | 1,657 | 1,032 | 657
`| "4.`1988` | X X X | X X X | 2,551 | 1,456 | 1,062 | 722
`| "5.`1989` | X X X | X X X | X X X | 2,080 | 1,015 | 839
`| "6.`1990` | X X X | X X X | X X X | X X X | 2,133 | 995
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 1,582
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 925 | 872 | 850 | 1,002 |
| 290 | 213 | 140 | 111 |
| 396 | 239 | 159 | 133 |
| 436 | 265 | 166 | 124 |
| 624 | 380 | 237 | 150 |
| 842 | 576 | 370 | 245 |
| 888 | 661 | 459 | 296 |
| 1,226 | 612 | 422 | 294 |
| X X X | 793 | 411 | 335 |
| X X X | X X X | 817 | 383 |
| X X X | X X X | X X X | 905 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED AT YEAR END
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 22,016 | 28,795 | 30,567 | 31,433 | 31,752 | 31,966
`| "3.`1987` | X X X | 19,496 | 25,692 | 27,214 | 27,863 | 28,163
`| "4.`1988` | X X X | X X X | 15,108 | 19,531 | 20,466 | 20,908
`| "5.`1989` | X X X | X X X | X X X | 10,476 | 13,281 | 14,048
`| "6.`1990` | X X X | X X X | X X X | X X X | 11,887 | 14,352
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 8,597
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
|
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 32,065 | 32,159 | 32,189 | 32,236 |
| 28,326 | 28,417 | 28,465 | 28,513 |
| 21,079 | 21,169 | 21,225 | 21,271 |
| 14,397 | 14,538 | 14,612 | 14,651 |
| 15,030 | 15,299 | 15,424 | 15,510 |
| 10,180 | 10,694 | 10,898 | 11,012 |
| 4,934 | 6,082 | 6,379 | 6,531 |
| X X X | 3,428 | 4,381 | 4,681 |
| X X X | X X X | 3,518 | 4,265 |
| X X X | X X X | X X X | 3,517 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5H - OTHER LIABILITY - CLAIMS-MADE
SECTION 1B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 2 | 2 | 3 | 3 | 3 | 3
`| "2.`1986` | 0 | 0 | 3 | 4 | 5 | 5
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 56 | 71 | 72 | 72
`| "5.`1989` | X X X | X X X | X X X | 103 | 118 | 124
`| "6.`1990` | X X X | X X X | X X X | X X X | 72 | 81
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 60
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 3 | 3 | 3 | 3 |
| 5 | 5 | 6 | 6 |
| 0 | 0 | 0 | 0 |
| 73 | 73 | 73 | 73 |
| 125 | 126 | 126 | 126 |
| 82 | 84 | 85 | 86 |
| 69 | 71 | 73 | 74 |
| 49 | 61 | 66 | 66 |
| X X X | 29 | 34 | 37 |
| X X X | X X X | 14 | 21 |
| X X X | X X X | X X X | 59 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 4 | 4 | 3 | 3 | 3 | 3
`| "2.`1986` | 8 | 8 | 5 | 4 | 3 | 3
`| "3.`1987` | X X X | 2 | 1 | 1 | 1 | 1
`| "4.`1988` | X X X | X X X | 37 | 9 | 6 | 4
`| "5.`1989` | X X X | X X X | X X X | 39 | 12 | 6
`| "6.`1990` | X X X | X X X | X X X | X X X | 29 | 5
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 39
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 3 | 3 | 3 | 3 |
| 3 | 3 | 2 | 2 |
| 1 | 1 | 1 | 1 |
| 2 | 2 | 2 | 2 |
| 5 | 4 | 4 | 2 |
| 4 | 2 | 1 | 0 |
| 13 | 6 | 3 | 2 |
| 38 | 12 | 5 | 4 |
| X X X | 45 | 29 | 24 |
| X X X | X X X | 30 | 10 |
| X X X | X X X | X X X | 133 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 8 | 8 | 8 | 8 | 8 | 8
`| "3.`1987` | X X X | 3 | 3 | 3 | 3 | 3
`| "4.`1988` | X X X | X X X | 119 | 119 | 119 | 119
`| "5.`1989` | X X X | X X X | X X X | 194 | 194 | 194
`| "6.`1990` | X X X | X X X | X X X | X X X | 157 | 157
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 162
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 8 | 8 | 8 | 8 |
| 3 | 3 | 3 | 3 |
| 119 | 119 | 119 | 119 |
| 194 | 194 | 194 | 194 |
| 157 | 157 | 157 | 157 |
| 162 | 162 | 162 | 162 |
| 142 | 142 | 142 | 142 |
| X X X | 107 | 107 | 107 |
| X X X | X X X | 69 | 69 |
| X X X | X X X | X X X | 287 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - OCCURRENCE
SECTION 1A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 351 | 632 | 886 | 1,193 | 1,447 | 1,528
`| "2.`1986` | 173 | 317 | 368 | 464 | 537 | 584
`| "3.`1987` | X X X | 153 | 262 | 326 | 410 | 471
`| "4.`1988` | X X X | X X X | 74 | 217 | 277 | 363
`| "5.`1989` | X X X | X X X | X X X | 230 | 352 | 405
`| "6.`1990` | X X X | X X X | X X X | X X X | 281 | 398
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 171
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 1,578 | 1,632 | 1,678 | 1,700 |
| 612 | 630 | 655 | 671 |
| 499 | 523 | 543 | 559 |
| 395 | 416 | 422 | 428 |
| 439 | 468 | 483 | 490 |
| 413 | 443 | 459 | 469 |
| 224 | 257 | 278 | 296 |
| 78 | 114 | 143 | 169 |
| X X X | 82 | 119 | 125 |
| X X X | X X X | 25 | 45 |
| X X X | X X X | X X X | 23 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 2,169 | 2,051 | 1,926 | 1,831 | 919 | 328
`| "2.`1986` | 227 | 257 | 306 | 268 | 154 | 105
`| "3.`1987` | X X X | 166 | 265 | 262 | 160 | 124
`| "4.`1988` | X X X | X X X | 163 | 143 | 163 | 97
`| "5.`1989` | X X X | X X X | X X X | 154 | 100 | 87
`| "6.`1990` | X X X | X X X | X X X | X X X | 131 | 66
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 70
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 313 | 322 | 527 | 547 |
| 78 | 77 | 67 | 55 |
| 96 | 92 | 98 | 58 |
| 74 | 61 | 57 | 35 |
| 54 | 43 | 27 | 17 |
| 67 | 53 | 42 | 27 |
| 68 | 79 | 66 | 42 |
| 79 | 62 | 56 | 29 |
| X X X | 45 | 19 | 17 |
| X X X | X X X | 31 | 9 |
| X X X | X X X | X X X | 15 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3A
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 544 | 862 | 1,066 | 1,232 | 1,291 | 1,333
`| "3.`1987` | X X X | 439 | 760 | 945 | 1,015 | 1,087
`| "4.`1988` | X X X | X X X | 299 | 599 | 747 | 804
`| "5.`1989` | X X X | X X X | X X X | 576 | 811 | 892
`| "6.`1990` | X X X | X X X | X X X | X X X | 671 | 843
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 408
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 1,358 | 1,400 | 1,443 | 1,460 |
| 1,134 | 1,197 | 1,251 | 1,269 |
| 838 | 880 | 902 | 912 |
| 925 | 958 | 974 | 983 |
| 889 | 929 | 948 | 955 |
| 509 | 582 | 622 | 641 |
| 306 | 403 | 459 | 481 |
| X X X | 186 | 232 | 242 |
| X X X | X X X | 88 | 111 |
| X X X | X X X | X X X | 63 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 5R - PRODUCTS LIABILITY - CLAIMS-MADE
SECTION 1B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS CLOSED WITH LOSS PAYMENT DIRECT AND A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 0 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 3 | 3 | 4 | 4
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 1
`| "6.`1990` | X X X | X X X | X X X | X X X | 2 | 2
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 1
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
SSUMED AT YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 5 | 5 | 5 | 5 |
| 1 | 1 | 1 | 2 |
| 3 | 5 | 5 | 5 |
| 3 | 4 | 6 | 6 |
| 0 | 1 | 1 | 1 |
| X X X | 0 | 11 | 17 |
| X X X | X X X | 7 | 10 |
| X X X | X X X | X X X | 1 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | NUMBER OF CLAIMS OUTSTANDING DIRECT AND ASSUMED AT YE
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | 0 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 5 | 2 | 1 | 1
`| "5.`1989` | X X X | X X X | X X X | 2 | 2 | 1
`| "6.`1990` | X X X | X X X | X X X | X X X | 7 | 6
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 8
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
AR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 1 | 1 | 1 | 0 |
| 5 | 1 | 1 | 1 |
| 4 | 2 | 0 | 0 |
| 4 | 0 | 0 | 0 |
| X X X | 80 | 39 | 30 |
| X X X | X X X | 41 | 22 |
| X X X | X X X | X X X | 9 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3B
<S> <C> <C> <C> <C> <C> <C>
!--------------------#----------------------------------------------------------------------------------------------------
| | CUMULATIVE NUMBER OF CLAIMS REPORTED DIRECT AND ASSUMED A
| 1 |---------------#----------------#----------------#----------------#----------------#----------------
| Years | | | | | |
| in Which | 2 | 3 | 4 | 5 | 6 | 7
| Premiums Were | | | | | |
| Earned and | | | | | |
| Losses Were | | | | | |
| Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|--------------------|---------------|----------------|----------------|----------------|----------------|----------------
`| "1.`Prior` | X X X | X X X | X X X | X X X | X X X | X X X
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 8 | 8 | 8 | 8
`| "5.`1989` | X X X | X X X | X X X | 3 | 3 | 3
`| "6.`1990` | X X X | X X X | X X X | X X X | 9 | 9
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 13
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
--------------------->--------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
T YEAR END |
#----------------#----------------#----------------#----------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| | | | |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| X X X | X X X | X X X | X X X |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 8 | 8 | 8 | 8 |
| 3 | 3 | 3 | 3 |
| 9 | 9 | 9 | 9 |
| 13 | 13 | 13 | 13 |
| 6 | 6 | 6 | 6 |
| X X X | 82 | 82 | 82 |
| X X X | X X X | 64 | 64 |
| X X X | X X X | X X X | 12 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 6C - COMMERCIAL AUTO/TRUCK LIABILITY/MEDICAL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 226,730 | 261,097 | 256,731 |
| X X X | X X X | 203,931 | 225,938 |
| X X X | X X X | X X X | 203,380 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 28,432 | 30,643 | 30,562 |
| X X X | X X X | 26,988 | 27,312 |
| X X X | X X X | X X X | 32,930 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 6D - WORKERS' COMPENSATION
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 383,393 | 450,093 | 449,328 |
| X X X | X X X | 305,089 | 336,272 |
| X X X | X X X | X X X | 287,567 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 247,003 | 279,294 | 278,587 |
| X X X | X X X | 187,596 | 200,669 |
| X X X | X X X | X X X | 125,082 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 6E - COMMERCIAL MULTIPLE PERIL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 601,227 | 616,773 | 615,632 |
| X X X | X X X | 620,126 | 634,647 |
| X X X | X X X | X X X | 646,600 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 2,069 | 5,552 | 5,551 |
| X X X | X X X | 2,674 | 5,236 |
| X X X | X X X | X X X | 3,737 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 6H - OTHER LIABILITY - OCCURRENCE
SECTION 1A
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 104,194 | 109,176 | 111,780 |
| X X X | X X X | 98,152 | 102,403 |
| X X X | X X X | X X X | 115,156 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2A
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 7,981 | 13,699 | 13,692 |
| X X X | X X X | 12,234 | 16,039 |
| X X X | X X X | X X X | 25,848 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 6H - OTHER LIABILITY - CLAIMS-MADE
SECTION 1B
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`|``1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`|``2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`|``3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`|``4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`|``5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`|``6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`|``7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`|``8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`|``9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 1,709 | 2,146 | 1,557 |
| X X X | X X X | 2,280 | 2,035 |
| X X X | X X X | X X X | 3,652 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2B
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`|``1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`|``2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`|``3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`|``4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`|``5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`|``6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`|``7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`|``8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`|``9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 472 | 483 | 483 |
| X X X | X X X | 469 | 436 |
| X X X | X X X | X X X | 405 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 6M - INTERNATIONAL
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`|``1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`|``2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`|``3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`|``4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`|``5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`|``6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`|``7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`|``8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`|``9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 10,941 | 27,440 | 28,689 |
| X X X | X X X | 60,136 | 104,403 |
| X X X | X X X | X X X | 86,445 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`|``1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`|``2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`|``3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`|``4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`|``5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`|``6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`|``7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`|``8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`|``9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 6N - REINSURANCE A
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "2.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "3.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "4.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "5.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "6.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`| "7.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`| "8.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 56,564 | 64,071 | 64,882 |
| X X X | X X X | 45,979 | 93,343 |
| X X X | X X X | X X X | 27,904 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "2.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "3.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "4.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "5.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "6.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`| "7.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`| "8.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 18,617 | 21,649 | 21,977 |
| X X X | X X X | 20,786 | 40,950 |
| X X X | X X X | X X X | 12,836 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 6O - REINSURANCE B
SECTION 1
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "2.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "3.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "4.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "5.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "6.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`| "7.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`| "8.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 277,773 | 304,346 | 307,323 |
| X X X | X X X | 199,868 | 228,154 |
| X X X | X X X | X X X | 221,762 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "2.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "3.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "4.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "5.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "6.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`| "7.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`| "8.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 326,064 | 349,038 | 352,293 |
| X X X | X X X | 68,226 | 72,533 |
| X X X | X X X | X X X | 209,613 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - OCCURRENCE
SECTION 1A
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 5,762 | 9,975 | 10,004 |
| X X X | X X X | 3,942 | 4,742 |
| X X X | X X X | X X X | 4,674 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2A
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 675 | 3,782 | 3,776 |
| X X X | X X X | 61 | 214 |
| X X X | X X X | X X X | 579 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE P - PART 6R - PRODUCTS LIABILITY - CLAIMS-MADE
SECTION 1B
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED DIRECT AND ASSUMED AT YEA
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
R END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 107 | 107 | 107 |
| X X X | X X X | 64 | 97 |
| X X X | X X X | X X X | 44 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2B
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | CUMULATIVE PREMIUMS EARNED CEDED AT YEAR END
| Years in |---------------#---------------#---------------#---------------#---------------#---------------
| Which Premiums | | | | | |
| Were Earned | 2 | 3 | 4 | 5 | 6 | 7
| and Losses | | | | | |
| Were Incurred | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1.`Prior` | 000 | 0 | 0 | 0 | 0 | 0
`| "2.`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3.`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4.`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5.`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6.`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7.`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8.`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9.`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10.`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11.`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| | | | |
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| X X X | 0 | 0 | 0 |
| X X X | X X X | 0 | 0 |
| X X X | X X X | X X X | 0 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 7A - PRIMARY LOSS SENSITIVE CONTRACTS
($000 OMITTED)
SECTION 1
<S> <C> <C>
!---------------------------------------------------------------------------------------------#---------------#---------------
| | 2 | 3
| | | Net Losses
| | Total Net | and Expenses
| Schedule P - Part 1 | Losses and | Unpaid on
| | Expenses |Loss Sensitive
| | Unpaid | Contracts
|---------------------------------------------------------------------------------------------|---------------|---------------
`| "1.`Homeowners/Farmowners` | 75,359 | 0
`| "2.`Private`Passenger`Auto`Liability/Medical` | 395,086 | 0
`| "3.`Commercial` Auto/Truck`Liability/Medical` | 344,119 | 2,830
`| "4.`Workers'`Compensation` | 1,745,051 | 254,804
`| "5.`Commercial`Multiple`Peril` | 1,114,197 | 6,302
`| "6.`Medical`Malpractice`-`Occurrence` | 6,496 | 0
`| "7.`Medical`Malpractice`-`Claims-made` | 624 | 0
`| "8.`Special`Liability` | 26,219 | 0
`| "9.`Other`Liability`-`Occurrence` | 655,001 | 36,649
`|`10.`Other`Liability`-`Claims-made` | 11,485 | 16
`|`11.`Special`Property` | 69,692 | 0
`|`12.`Auto`Physical`Damage` | 37,295 | 1
`|`13.`Fidelity/Surety` | 52,747 | 0
`|`14.`Other` | 116 | 0
`|`15.`International` | 116,230 | 57,518
`|`16.`Reinsurance`A` | X X X | X X X
`|`17.`Reinsurance`B` | X X X | X X X
`|`18.`Reinsurance`C` | X X X | X X X
`|`19.`Reinsurance`D` | X X X | X X X
`|`20.`Products`Liability`-`Occurrence` | 104,798 | 3,318
`|`21.`Products`Liability`-`Claims-made` | 2,895 | 0
`|`22.`Financial`Guaranty/Mortgage`Guaranty` | 695 | 0
`|---------------------------------------------------------------------------------------------|---------------|---------------
`|`23.`Totals` | 4,758,105 | 361,438
---------------------------------------------------------------------------------------------->--------------->---------------
<C> <C> <C> <C>
#---------------#---------------#---------------#---------------#
| 4 | 5 | 6 | 7 |
| | | | |
|Loss Sensitive | Total Net | Net Premiums |Loss Sensitive |
| as Percentage | Premiums | Written on | as Percentage |
| of Total | Written |Loss Sensitive | of Total |
| | | Contracts | |
|---------------|---------------|---------------|---------------|
| 0.0 | 152,121 | 0 | 0.0 |
| 0.0 | 288,988 | 0 | 0.0 |
| 0.8 | 200,275 | 1,976 | 1.0 |
| 14.6 | 190,401 | 22,191 | 11.7 |
| 0.6 | 679,569 | 377 | 0.1 |
| 0.0 | 22 | 0 | 0.0 |
| 0.0 | 0 | 0 | 0.0 |
| 0.0 | 19,226 | 0 | 0.0 |
| 5.6 | 104,227 | 4,459 | 4.3 |
| 0.1 | 5,124 | 0 | 0.0 |
| 0.0 | 121,909 | 2 | 0.0 |
| 0.0 | 221,458 | 97 | 0.0 |
| 0.0 | 145,546 | 0 | 0.0 |
| 0.0 | (969)| 0 | 0.0 |
| 49.5 | 137,983 | 0 | 0.0 |
| X X X | X X X | X X X | X X X |
| X X X | X X X | X X X | X X X |
| X X X | X X X | X X X | X X X |
| X X X | X X X | X X X | X X X |
| 3.2 | 5,374 | (534)| (9.9)|
| 0.0 | 56 | 0 | 0.0 |
| 0.0 | 0 | 0 | 0.0 |
|---------------|---------------|---------------|---------------|
| 7.6 | 2,271,310 | 28,568 | 1.3 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YE
| |---------------#---------------#---------------#---------------#---------------#---------------
| Year in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1. "`Prior` | 0 | 0 | 0 | 0 | 0 | 0
`| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4. "`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5. "`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6. "`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
AR END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 90,001 | 78,964 | 67,964 |
| 0 | 114,281 | 114,004 | 114,145 |
| 0 | 130,647 | 131,535 | 129,055 |
| 0 | 169,221 | 168,833 | 166,520 |
| 0 | 175,335 | 172,712 | 171,241 |
| 0 | 124,716 | 126,758 | 125,451 |
| 0 | 68,332 | 66,980 | 68,319 |
| 0 | 34,267 | 41,073 | 40,915 |
| X X X | 10,221 | 24,258 | 24,340 |
| X X X | X X X | 10,781 | 21,569 |
| X X X | X X X | X X X | 12,934 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | BULK AND INCURRED BUT NOT REPORTED RESERVES FOR LOSSES AND ALLOCATED
| |---------------#---------------#---------------#---------------#---------------#---------------
| Year in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1. "`Prior` | 0 | 0 | 0 | 0 | 0 | 0
`| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4. "`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5. "`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6. "`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
EXPENSES AT YEAR END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| 0 | 27,506 | 27,781 | 32,093 |
| 0 | 9,613 | 9,855 | 9,380 |
| 0 | 13,102 | 13,695 | 12,978 |
| 0 | 17,462 | 18,750 | 19,139 |
| 0 | 42,245 | 38,661 | 37,931 |
| 0 | 28,366 | 27,344 | 25,722 |
| 0 | 13,847 | 12,399 | 12,708 |
| 0 | 6,958 | 7,168 | 7,062 |
| X X X | 3,460 | 8,428 | 6,764 |
| X X X | X X X | 6,586 | 10,064 |
| X X X | X X X | X X X | 7,813 |
>--------------->--------------->--------------->--------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 7A - PRIMARY LOSS SENSITIVE CONTRACTS (Continued)
SECTION 4
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | NET EARNED PREMIUMS REPORTED AT YEAR END ($0
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | 27,575 | 7,619 | 4,560 | 2,457 | 961 | 1,185
`| "2. "`1986` | 81,073 | 99,214 | 103,513 | 106,927 | 113,774 | 113,688
`| "3. "`1987` | X X X | 95,683 | 121,539 | 130,080 | 157,125 | 156,940
`| "4. "`1988` | X X X | X X X | 99,606 | 137,018 | 172,380 | 179,405
`| "5. "`1989` | X X X | X X X | X X X | 110,075 | 243,172 | 258,138
`| "6. "`1990` | X X X | X X X | X X X | X X X | 65,665 | 151,443
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 46,279
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
00 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 1,262 | (196)| (532)| 789 |
| 113,790 | 112,071 | 111,911 | 111,798 |
| 154,196 | 153,219 | 152,148 | 151,014 |
| 179,407 | 170,575 | 166,055 | 162,437 |
| 260,315 | 241,159 | 234,700 | 233,818 |
| 153,830 | 152,233 | 146,977 | 146,270 |
| 78,614 | 85,812 | 82,036 | 79,668 |
| 31,891 | 53,456 | 52,873 | 51,917 |
| X X X | 28,188 | 38,469 | 31,837 |
| X X X | X X X | 16,738 | 28,174 |
| X X X | X X X | X X X | 17,957 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 5
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | NET RESERVE FOR PREMIUM ADJUSTMENTS AND ACCRUED RETROSPECTIVE PRE
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | 0 | 0 | 0 | 0 | 0 | 0
`| "2. "`1986` | 0 | 0 | 0 | 0 | 0 | 0
`| "3. "`1987` | X X X | 0 | 0 | 0 | 0 | 0
`| "4. "`1988` | X X X | X X X | 0 | 0 | 0 | 0
`| "5. "`1989` | X X X | X X X | X X X | 0 | 0 | 0
`| "6. "`1990` | X X X | X X X | X X X | X X X | 0 | 0
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X | 0
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
MIUMS AT YEAR END ($000 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| 0 | 0 | 0 | 0 |
| 0 | 254 | 0 | 0 |
| 0 | 5,769 | 3,820 | 2,661 |
| 0 | 10,723 | 5,793 | 2,296 |
| 0 | 15,923 | 8,392 | 5,690 |
| 0 | 18,197 | 7,484 | 5,661 |
| 0 | 10,273 | 3,330 | 463 |
| 0 | 4,198 | 5,327 | 2,038 |
| X X X | 1,617 | 2,784 | 2,620 |
| X X X | X X X | 1,678 | (549)|
| X X X | X X X | X X X | 1,213 |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 7B - REINSURANCE LOSS SENSITIVE CONTRACTS
($000 OMITTED)
SECTION 1
<S> <C> <C>
!---------------------------------------------------------------------------------------------#---------------#---------------
| | 2 | 3
| | | Net Losses
| | Total Net | and Expenses
| Schedule P - Part 1 | Losses and | Unpaid on
| | Expenses |Loss Sensitive
| | Unpaid | Contracts
|---------------------------------------------------------------------------------------------|---------------|---------------
`| "1.`Homeowners/Farmowners` | 75,359 |
`| "2.`Private`Passenger`Auto`Liability/Medical` | 395,086 |
`| "3.`Commercial` Auto/Truck`Liability/Medical` | 344,119 | 1,113
`| "4.`Workers'`Compensation` | 1,745,051 | 0
`| "5.`Commercial`Multiple`Peril` | 1,114,197 |
`| "6.`Medical`Malpractice`-`Occurrence` | 6,496 |
`| "7.`Medical`Malpractice`-`Claims-made` | 624 |
`| "8.`Special`Liability` | 26,219 |
`| "9.`Other`Liability`-`Occurrence` | 655,001 | 752
`|`10.`Other`Liability`-`Claims-made` | 11,485 |
`|`11.`Special`Property` | 69,692 |
`|`12.`Auto`Physical`Damage` | 37,295 |
`|`13.`Fidelity/Surety` | 52,747 |
`|`14.`Other` | 116 |
`|`15.`International` | 116,230 |
`|`16.`Reinsurance`A` | 100,984 |
`|`17.`Reinsurance`B` | 113,247 |
`|`18.`Reinsurance`C` | 868 |
`|`19.`Reinsurance`D` | 3,999 |
`|`20.`Products`Liability`-`Occurrence` | 104,798 |
`|`21.`Products`Liability`-`Claims-made` | 2,895 |
`|`22.`Financial`Guaranty/Mortgage`Guaranty` | 695 |
`|---------------------------------------------------------------------------------------------|---------------|---------------
`|`23.`Totals` | 4,977,203 | 1,865
---------------------------------------------------------------------------------------------->--------------->---------------
<C> <C> <C> <C>
#---------------#---------------#---------------#---------------#
| 4 | 5 | 6 | 7 |
| | | | |
|Loss Sensitive | Total Net | Net Premiums |Loss Sensitive |
| as Percentage | Premiums | Written on | as Percentage |
| of Total | Written |Loss Sensitive | of Total |
| | | Contracts | |
|---------------|---------------|---------------|---------------|
| 0.0 | 152,121 | | 0.0 |
| 0.0 | 288,988 | | 0.0 |
| 0.3 | 200,275 | 886 | 0.4 |
| 0.0 | 190,401 | | 0.0 |
| 0.0 | 679,569 | | 0.0 |
| 0.0 | 22 | | 0.0 |
| 0.0 | 0 | | 0.0 |
| 0.0 | 19,226 | | 0.0 |
| 0.1 | 104,227 | 693 | 0.7 |
| 0.0 | 5,124 | | 0.0 |
| 0.0 | 121,909 | | 0.0 |
| 0.0 | 221,458 | | 0.0 |
| 0.0 | 145,546 | | 0.0 |
| 0.0 | (969)| | 0.0 |
| 0.0 | 137,983 | | 0.0 |
| 0.0 | 45,532 | | 0.0 |
| 0.0 | 40,369 | | 0.0 |
| 0.0 | (638)| | 0.0 |
| 0.0 | X X X | X X X | X X X |
| 0.0 | 5,374 | | 0.0 |
| 0.0 | 56 | | 0.0 |
| 0.0 | | | 0.0 |
|---------------|---------------|---------------|---------------|
| 0.0 | 2,356,573 | 1,579 | 0.1 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 2
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | INCURRED LOSSES AND ALLOCATED EXPENSES REPORTED AT YE
| |---------------#---------------#---------------#---------------#---------------#---------------
| Year in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
------------------------------>--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
AR END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | 52 | 209 | |
| X X X | X X X | 402 | 1,112 |
| X X X | X X X | X X X | 494 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 3
<S> <C> <C> <C> <C> <C> <C>
!-----------------------------#-----------------------------------------------------------------------------------------------
| 1 | BULK AND INCURRED BUT NOT REPORTED RESERVES FOR LOSSES AND ALLOCATED
| |---------------#---------------#---------------#---------------#---------------#---------------
| Year in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-----------------------------|---------------|---------------|---------------|---------------|---------------|---------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
----------------------------->--------------->--------------->--------------->--------------->--------------->---------------
<C> <C> <C> <C>
- ----------------------------------------------------------------#
EXPENSES AT YEAR END ($000 OMITTED) |
#---------------#---------------#---------------#---------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|---------------|---------------|---------------|---------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | 52 | 209 | 209 |
| X X X | X X X | 102 | 801 |
| X X X | X X X | X X X | 494 |
>--------------->--------------->--------------->--------------->
</TABLE>
<TABLE>
<CAPTION>
Form 2
COMBINED ANNUAL STATEMENT FOR THE YEAR 1995 OF
THE UNITED STATES FIDELITY AND GUARANTY COMPANY
AND ITS AFFILIATED FIRE AND CASUALTY INSURERS
SCHEDULE P - PART 7B - REINSURANCE LOSS SENSITIVE CONTRACTS (Continued)
SECTION 4
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | NET EARNED PREMIUMS REPORTED AT YEAR END ($0
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
00 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | 69 | 275 | 275 |
| X X X | X X X | 527 | 1,450 |
| X X X | X X X | X X X | 641 |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 5
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | NET RESERVE FOR PREMIUM ADJUSTMENTS AND ACCRUED RETROSPECTIVE PRE
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
MIUMS AT YEAR END ($000 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | | | |
| X X X | X X X | | |
| X X X | X X X | X X X | |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 6
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | INCURRED ADJUSTABLE COMMISSIONS REPORTED AT YEAR E
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
ND ($000 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | | | |
| X X X | X X X | | |
| X X X | X X X | X X X | |
>---------------->---------------->---------------->---------------->
</TABLE>
<TABLE>
<CAPTION>
SECTION 7
<S> <C> <C> <C> <C> <C> <C>
!-------------------#-----------------------------------------------------------------------------------------------------
| 1 | RESERVES FOR COMMISSION ADJUSTMENTS AT YEAR END
| |----------------#----------------#----------------#----------------#----------------#----------------
| Years in Which | 2 | 3 | 4 | 5 | 6 | 7
| Policies Were | | | | | |
| Issued | 1986 | 1987 | 1988 | 1989 | 1990 | 1991
|-------------------|----------------|----------------|----------------|----------------|----------------|----------------
`| "1. "`Prior` | | | | | |
`| "2. "`1986` | | | | | |
`| "3. "`1987` | X X X | | | | |
`| "4. "`1988` | X X X | X X X | | | |
`| "5. "`1989` | X X X | X X X | X X X | | |
`| "6. "`1990` | X X X | X X X | X X X | X X X | |
`| "7. "`1991` | X X X | X X X | X X X | X X X | X X X |
`| "8. "`1992` | X X X | X X X | X X X | X X X | X X X | X X X
`| "9. "`1993` | X X X | X X X | X X X | X X X | X X X | X X X
`|`10. "`1994` | X X X | X X X | X X X | X X X | X X X | X X X
`|`11. "`1995` | X X X | X X X | X X X | X X X | X X X | X X X
-------------------->---------------->---------------->---------------->---------------->---------------->----------------
<C> <C> <C> <C>
- --------------------------------------------------------------------#
($000 OMITTED) |
#----------------#----------------#----------------#----------------|
| 8 | 9 | 10 | 11 |
| | | | |
| 1992 | 1993 | 1994 | 1995 |
|----------------|----------------|----------------|----------------|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| X X X | | | |
| X X X | X X X | | |
| X X X | X X X | X X X | |
>---------------->---------------->---------------->---------------->
</TABLE>
<PAGE>
