SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-7411
ALLCITY INSURANCE COMPANY
(Exact name of Registrant as specified in its charter)
New York 13-2530665
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
335 Adams Street, Brooklyn, New York 11201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 422-4000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
Yes [X] No [ ]
On November 5, 1998, there were 7,078,625 shares of Common Stock outstanding.
<PAGE>
ALLCITY INSURANCE COMPANY
INDEX
PART I Financial Information PAGE
Item 1. Interim Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets - September 30, 1998 and December 31, 1997 . . 1
Consolidated Statements of Operations - Nine months ended September 30,
1998 and September 30, 1997 and three months ended September 30, 1998
and September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . 2-3
Consolidated Statements of Cash Flows - Nine months ended September 30,
1998 and September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Changes in Shareholders' Equity - Nine
months ended September 30, 1998 and September 30, 1997 . . . . . . . . . . 5
Notes to Interim Consolidated Financial Statement . . . . . . . . . . . 6-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Interim Results of Operations . . . . . . . . . . . . . . . 8-11
PART II Other Information
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . 12
Signatures Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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<TABLE>
CONSOLIDATED BALANCE SHEETS (Unaudited)
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and par value amounts)
<CAPTION>
September 30, December 31,
1998 1997
(Unaudited)
<C> <C>
<S>
ASSETS
Investments:
Available for sale at fair value
(amortized cost of $192,795 in
1998 and $268,091 in 1997) $200,239 $269,055
Held to maturity at amortized cost
(fair value of $540 in 1998 and
$497 in 1997) 484 485
Short-term (at cost) 9,613 1,749
Equity securities available for sale 447 447
Other invested assets 31,310 -
TOTAL INVESTMENTS 242,093 271,736
Cash 2,108 2,863
Agents' balances, less allowance
for doubtful accounts ($1,557 in 1998
and $1,561 in 1997) 12,719 13,109
Accrued investment income 2,994 2,942
Reinsurance balances receivable 284,636 273,280
Prepaid reinsurance premiums 44,186 55,074
Deferred policy acquisition costs 6,329 7,079
Deferred income taxes 9,277 11,462
Due from affiliates 3,708 -
Other assets 3,921 2,704
TOTAL ASSETS $611,971 $640,249
LIABILITIES
Unpaid losses $369,626 $361,341
Unpaid loss adjustments expenses 52,101 56,185
Unearned premiums 75,593 90,807
Drafts payable 3,937 4,983
Due to affiliates - 14,427
Unearned service fee income 2,416 4,539
Reserve for service carrier claim expenses 2,305 3,701
Reinsurance balances payable 3,551 4,825
Other liabilities 5,661 6,567
Surplus note 15,156 14,710
TOTAL LIABILITIES 530,346 562,085
SHAREHOLDERS' EQUITY
Common stock, par value $1.00; 7,368,420
shares authorized; 7,078,625 shares
issued and outstanding in 1998 and 1997 7,079 7,079
Additional paid-in capital 9,331 9,331
Accumulated other comprehensive income
net of deferred taxes of $2,762 and $494
in 1998 and 1997, respectively 5,129 917
Retained earnings 60,086 60,837
TOTAL SHAREHOLDERS' EQUITY 81,625 78,164
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $611,971 $640,249
<FN>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and per share amounts)
<CAPTION>
Nine Months Ended
September 30,
1998 1997
<C> <C>
<S>
REVENUES
Net earned premiums $52,403 $63,437
Net investment income 11,765 11,684
Service fee income 2,623 5,230
Net securities gains and (losses) 955 (281)
Other income 449 424
68,195 80,494
LOSSES AND EXPENSES
Losses 46,720 53,055
Loss adjustment expenses 5,512 7,388
Other underwriting expenses less deferrals
of $9,624 in 1998 and $11,526 in 1997 6,294 7,080
Amortization of deferred policy acquisition costs 10,374 11,384
Interest on surplus note 446 446
69,346 79,353
(LOSS)/INCOME BEFORE FEDERAL INCOME TAXES (1,151) 1,141
FEDERAL INCOME TAXES
Current (benefit)/ expense (317) 476
Deferred benefit (83) (78)
(400) 398
NET (LOSS)/INCOME $ (751) $ 743
Per share data, based on 7,078,625 average
shares outstanding in 1998 and 1997:
BASIC (LOSS)/EARNINGS PER SHARE $ (0.11) $ 0.10
<FN>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and per share amounts)
<CAPTION>
Three Months Ended
September 30,
1998 1997
<C> <C>
<S>
REVENUES
Net earned premiums $16,245 $20,395
Net investment income 4,078 3,958
Service fee income 902 1,453
Net securities gains and (losses) 631 (145)
Other income 142 165
21,998 25,826
LOSSES AND EXPENSES
Losses 14,393 17,779
Loss adjustment expenses 1,630 2,182
Other underwriting expenses less deferrals
of $2,767 in 1998 and $3,690 in 1997 2,455 1,850
Amortization of deferred policy acquisition cost 3,382 3,792
Interest on surplus note 149 149
22,009 25,752
(LOSS)/INCOME BEFORE FEDERAL INCOME TAXES (11) 74
FEDERAL INCOME TAXES
Current expense 60 81
Deferred benefit (61) (56)
(1) 25
NET (LOSS)/INCOME $ (10) $ 49
Per share data, based on 7,078,625 average
shares outstanding in 1998 and 1997:
BASIC (LOSS)/EARNING PER SHARE $ (0.01) $ 0.01
<FN>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
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<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands)
<CAPTION>
Nine Months Ended
September 30,
1998 1997
<C> <C>
<S>
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss)/income $ (751) $ 743
Adjustments to reconcile net (loss)/income to
net cash used for operations:
Provision for deferred tax benefits (83) (78)
Amortization of deferred policy acquisition costs 10,374 11,384
Provision for doubtful accounts (4) 120
Net securities (gains)/losses (955) 281
Policy acquisition costs incurred and deferred (9,624) (11,526)
Net change in:
Agents' balances 394 1,104
Reinsurance balances receivable (11,356) (11,138)
Prepaid reinsurance premiums 10,888 8,446
Unpaid losses and loss adjustment expenses 4,201 10,393
Unearned premiums (15,214) (9,665)
Drafts payable (1,046) (1,179)
Due to/from affiliates (18,135) 3,943
Unearned services fees (2,123) (172)
Reserve for servicing carrier claim expenses (1,396) (1,543)
Reinsurance balances payable (1,274) (1,009)
Other (1,352) (2,033)
NET CASH USED FOR OPERATING ACTIVITIES (37,456) (1,929)
NET CASH FLOWS FROM INVESTING ACTIVITIES
Available for sale:
Acquisition of fixed maturities (98,543) (93,262)
Acquisition of other invested assets (31,310) -
Proceeds from sales of fixed maturities 161,924 75,759
Proceeds from maturities of fixed maturities 12,494 3,487
Net change in short-term investments (7,864) 14,825
NET CASH PROVIDED BY INVESTING ACTIVITIES 36,701 809
NET DECREASE IN CASH (755) (1,120)
Cash at beginning of period 2,863 2,232
Cash at the end of period $ 2,108 $ 1,112
<FN>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except par value amounts)
<CAPTION>
Common Accumulated
Shares Additional Other
$1 Par Paid-in Comprehensive Retained
Value Capital Income/(Loss) Earnings Total
<C> <C> <C> <C> <C>
<S>
Balance, January 1, 1997 $7,079 $9,331 $(1,672) $60,920 $75,658
Comprehensive income:
Net income 743 743
Other Comprehensive
income:
Net change in
unrealized (loss) on
investments (net of
deferred tax of $805) 1,496 1,496
Less: reclassification
of net securities
losses included in
net income (net of
tax benefit of $98) 183 183
Balance,
September 30, 1997 $7,079 $9,331 $ 7 $61,663 $78,080
Balance, January 1, 1998 $7,079 $9,331 $ 917 $60,837 $78,164
Comprehensive income:
Net loss (751) (751)
Other Comprehensive
income:
Net change in
unrealized gain on
investments (net of
deferred tax of $2,602) 4,833 4,833
Less: reclassification
of net securities gains
included in net income
(net of tax of $334) (621) (621)
Balance,
September 30, 1998 $7,079 $9,331 $ 5,129 $60,086 $81,625
<FN>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
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ALLCITY INSURANCE COMPANY AND SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited interim consolidated financial statements, which reflect all
adjustments (consisting only of normal recurring items) that management
believes necessary to fairly present interim results of operations, should be
read in conjunction with the Notes to Consolidated Financial Statements
(including the Summary of Significant Accounting Policies) included in the
Company's audited consolidated financial statements for the year ended
December 31, 1997, which are included in the Company's Annual Report filed on
Form 10-K for such year (the "1997 Form 10-K"). Results of operations for
interim periods are not necessarily indicative of annual results of
operations. The consolidated balance sheet at December 31, 1997 was extracted
from the audited annual financial statements and does not include all
disclosures required by generally accepted accounting principles for annual
financial statements.
2. Certain amounts for prior periods have been reclassified to conform with
the 1998 presentation.
3. As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Comprehensive Income" ("SFAS No. 130"), which establishes
standards for the reporting and disclosure of comprehensive income and its
components (revenue, expenses, gains and losses). SFAS No. 130 requires that
all items required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. Comprehensive income
excludes net investment gains. The new standard requires additional disclosures
in the consolidated financial statements and does not affect the Company's
financial position or results of operations.
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information" ("SFAS No. 131"), which establishes standards for the way public
business enterprises report information about operating segments in annual
financial statements and interim financial reports issued to shareholders.
SFAS No. 131 also establishes standards for related disclosures about products
and services, geographic areas and major customers. In connection with the
adoption of SFAS No. 131, the Company has identified three reportable segments
based on products and services: 1) automobile lines; 2) commercial lines; and 3)
miscellaneous and personal lines. The financial position and operating results
of the Company are not expected to be materially affected by this statement.
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<PAGE>
The following pronouncements are for future implementation:
Statement of Financial Accounting Standards No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("SFAS No. 132") was issued in
February, 1998 and revises current disclosure requirements for employers'
pensions and other retiree benefits. SFAS No. 132 will have no effect on the
financial position or results of operations of the Company. SFAS No. 132 is
effective for financial statements as of and for the period ended
December 31, 1998.
In January, 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 97-3,
"Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments" ("SOP 97-3"), which is effective for fiscal years beginning after
December 31, 1998, and provides guidance for determining when an insurance
company should recognize a liability for guaranty-fund and other insurance
related assessments and how to measure that liability. The financial position
and operating results of the Company are not expected to be materially affected
by this statement.
Statement of Financial Accounting Standards No. 133,"Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133") was issued in June, 1998
and requires that all derivative financial instruments be recognized as either
assets or liabilities in the statement of financial position. SFAS No. 133
will be effective for fiscal years beginning after June 15, 1999, with initial
application as of the beginning of the first quarter of the fiscal year. The
Company is currently evaluating the impact to its financial statements.
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<PAGE>
Item 2:
Management's Discussion and Analysis of Financial Condition and Interim Results
of Operations
The following should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in the
Company's 1997 Form 10-K.
LIQUIDITY AND CAPITAL RESOURCES
For the nine month periods ended September 30, 1998 and 1997, the Company
experienced negative cash flow from operating activities principally due to the
settlement of balances payable to Empire Insurance Company under the terms of
the intercompany pooling agreement; decreased premium writings from tighter
underwriting standards, re-underwriting and competition; and a decline in the
number of assigned risk contracts under which the Company acquires assigned risk
business from other insurance companies combined with a depopulation of the
related assigned risk pools. Cash required to fund operations was principally
provided from the sale proceeds of investments available for sale.
The Company maintains cash, short-term and readily marketable securities in an
amount sufficient to satisfy its anticipated cash needs. The Company does not
presently anticipate paying dividends in the near future and believes it has
sufficient capital to meet its currently anticipated level of operations.
At September 30, 1998 and 1997, the yield on the Company's fixed maturities
portfolio was 6.09% and 5.91%, respectively, with an average maturity of 3.5
years for each period. At September 30, 1998 and 1997, 92% and 99%,
respectively, of the Company's investment portfolio was invested in U.S.
Government and its agencies and other investment grade corporate and industrial
investment issues.
-8-
<PAGE>
RESULTS OF OPERATIONS - Nine and three month periods ended September 30, 1998
compared to the nine and three month periods ended September 30, 1997.
Net earned premium revenues were $52.4 million and $63.4 million for the nine
month periods ended September 30, 1998 and 1997, respectively, and $16.2
million and $20.4 million for the three month periods ended September 30, 1998
and 1997, respectively. The decreases of $11.0 million (17%) and $4.2 million
(21%) in net earned premiums for the nine and three month periods ended
September 30, 1998, respectively, compared to similar periods ended September
30, 1997, principally relate to the Company's automobile lines which were
adversely affected by competition in the assigned risk market resulting in a
decline in the number of assigned risk contracts under which the Company
acquires assigned risk business from other insurance companies combined
with a depopulation of the related assigned risk pools, and a reduction in
voluntary automobile lines due to tighter underwriting standards,
re-underwriting and increased competition. Additionally, the Company's
commercial lines, principally workers' compensation and commercial package,
were also affected by tighter underwriting standards, re-underwriting and
increased competition. Additionally, earned premium revenues were reduced for
the nine and three month periods ended September 30, 1998 by $0.6 million and
$0.3 million, respectively, to record premiums due under retrospectively rated
reinsurance contracts written for 1995 and prior accident years. The Company
re-estimated the premium due based upon its current estimate of loss ratios for
1995 and prior accident years.
The net income of the Company decreased $1.5 million for the nine months ended
September 30, 1998 compared to the nine month period ended September 30, 1997.
The decline is principally due to the 1998 period reflecting higher levels of
reserve strengthening for prior accident years ($2.4 million). Also affecting
the current period net income was lower service fee income of $2.6 million due
to a decrease in the number of assigned risk contracts under which the Company
acquires assigned risk business from other insurance companies, pool
depopulation, and lower New York Public Automobile Pool ("NYPAP") net service
fee income due to lower volume as a result of the Company's cessation as a
servicing carrier for the NYPAP. These items were partially offset by lower
underwriting expenses which were driven by lower premium volume and lower taxes
due to the decline in taxable income.
The Company operated at a slight loss for the three month period ended
September 30, 1998 compared to a slight profit for the comparable period in
1997. The $4.2 million reduction in earned premiums for the period was
partially offset by a $3.9 million reduction in loss and loss adjustment
expenses primarily due to lower earned premium volume. Service fee income was
$0.6 million lower due to a decline in the number of assigned risk contracts
under which the Company acquires assigned risk business from other insurance
companies combined with a depopulation of the related assigned risk pools.
Additionally, the Company incurred higher operating expenses as part of its
reunderwriting effort covering a major portion of its business. These higher
expenses were partially offset by increased capital gains totaling $0.8
million.
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<PAGE>
Net investment income was $0.1 million higher in each of the nine and three
month periods ended September 30, 1998 and 1997. Although average invested
asset balances in 1998 were lower than the prior year, net investment income
increased slightly as a slightly greater portion of the Company's assets were
invested in higher yielding asset classes thereby mitigating the impact of
lower balances. The Company continues to maintain a high quality investment
portfolio comprised primarily of publicly traded fixed income securities with a
relatively short duration.
Losses incurred for the nine months ended September 30, 1998 and 1997 were
$46.7 million and $53.1 million, respectively, and $14.4 million and $17.8
million for the three months ended September 30, 1998 and 1997, respectively.
The decline in losses incurred is generally the result of the reduced volume of
business written. Losses incurred reflect $2.4 million and $0.8 million,
respectively, for the nine and three month periods ended September 30, 1998
compared to the same periods in 1997 of additional reserve strengthening for
prior accident years in the commercial auto, workers' compensation, and
commercial package lines of business, which resulted from continued unfavorable
claims development.
Loss adjustment expenses incurred for the nine months ended September 30, 1998
and 1997 were $5.5 million and $7.4 million, respectively, and $1.6 million
and $2.2 million for the three months ended September 30, 1998 and 1997,
respectively. The decreases were mainly attributable to the decrease in
premium revenues.
The combination of other underwriting expenses and the amortization of
deferred policy acquisition costs for the nine month period ended September 30,
1998 was $1.8 million lower than the comparable period ended September 30, 1997
and was largely the result of lower operating costs related to reduced premium
revenues. For the three month period ended September 30, 1998 the combination
of other underwriting expenses and the amortization of deferred policy
acquisition costs was $0.2 million higher than for the comparable period ended
September 30, 1997 principally due to higher operating expenses in connection
with the tighter underwriting and reunderwriting efforts coupled with slightly
higher taxes and assessments.
Year 2000 and Information Technology Systems
The Company has evaluated its information technology systems to determine the
potential impact of the year 2000. The year 2000 issue is the result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000, which
could result in miscalculations or system failures. In 1996, the Company began
to evaluate its information technology systems and their ability to support
future business needs. This led to a decision to acquire new policy management
and accounting systems. These systems provide enhanced functionality and
improved processing for underwriting, claims, billing, collection, reinsurance,
reporting and accounting and are designed to be year 2000 compliant. The
Company anticipates that these new systems will be fully implemented in 1999.
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<PAGE>
The Company does not expect that the year 2000 issue will have a material
effect on its consolidated financial position or consolidated results of
operations. However, the year 2000 issue may affect other entities with which
the Company transacts business. The Company is currently assessing whether
third parties with whom it has material relationships are year 2000 compliant.
At this time the Company can not predict the effect of year 2000 issue on
such entities.
Cautionary Statement for Forward-Looking Information
Statements included in this Management Discussion and Analysis of Financial
Condition and Interim Results of Operations may contain forward-looking
statements. Such forward-looking statements are made pursuant to the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements may relate, but are not limited, to projections of revenues,
income or loss, capital expenditures, fluctuations in insurance reserves,
plans for growth and future operations, competition and regulation as well as
assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot be
predicted or quantified. When used in this Management's Discussion and
Analysis of Financial Condition and Interim Results of Operation the words
"estimates", "expects", "anticipates", "believes," "plans", "intends" and
variations of such words and similar expressions are intended to identify
forward-looking statements that involve risks and uncertainties. Future
events and actual results could differ materially from those set forth in,
contemplated by or underlying the forward-looking statements. The factors that
could cause actual results to differ materially from those suggested by any
such statements include, but are not limited to, those discussed or identified
from time to time in the Company's public filings, including general economic
and market conditions, changes in domestic laws, regulations and taxes, changes
in competition and pricing environments, regional or general changes in asset
valuation, the occurrence of significant natural disasters, the inability to
reinsure certain risks economically, the adequacy of loss reserves, prevailing
interest rate levels and changes in the composition of the Company's assets and
liabilities through acquisitions or divestitures. Undue reliance should not be
placed on these forward-looking statements, which are applicable only as of the
date hereof. The Company undertakes no obligation to revise or update these
forward-looking statements to reflect events or circumstances that arise after
the date of this Management Discussion and Analysis of Financial Condition and
Interim Results of Operations to reflect the occurrence of unanticipated events.
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<PAGE>
Part II - Other Information
Item 5. Other Information
During the first quarter, 1998 Mr. Richard G. Petitt, a Director, Chairman of
the Board, President and Chief Executive Officer of the Company, announced his
retirement. Mr. Petitt resigned his positions as Chairman of the Board,
Director, President and Chief Executive Officer of the Company on August 17,
1998. The Company appointed Mr. Robert V. Toppi as Director, President and
Chief Executive Officer of the Company effective August 17, 1998. Mr. Toppi
has over 30 years experience in the property and casualty insurance business,
including New York City, primarily with the Aetna Casualty and Surety Company
("Aetna"). His most recent position with Aetna was as a Resident Vice President
of the Greater New York district which included the five boroughs. Mr. Toppi
was also a member of the Board for the New York Property Insurance Underwriting
Association and the New York Fire Underwriter's Association.
Effective October 26, 1998 the Company relocated its corporate office to
Brooklyn Renaissance Plaza, 335 Adams Street, Brooklyn, New York 11201.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
The following exhibit is filed herewith:
Exhibit Number Description of Document
27-27* Financial Data Schedule
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended
September 30, 1998.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLCITY INSURANCE COMPANY
Registrant
Date: 11/13/98 By: Francis M. Colalucci
Francis M. Colalucci
Senior Vice President, CFO and Treasurer
(Principal Financial and Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 209,852
<DEBT-CARRYING-VALUE> 484
<DEBT-MARKET-VALUE> 540
<EQUITIES> 447
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 242,093
<CASH> 2,108
<RECOVER-REINSURE> 284,636
<DEFERRED-ACQUISITION> 6,329
<TOTAL-ASSETS> 611,971
<POLICY-LOSSES> 421,727
<UNEARNED-PREMIUMS> 75,593
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 7,079
<OTHER-SE> 74,546
<TOTAL-LIABILITY-AND-EQUITY> 611,971
52,403
<INVESTMENT-INCOME> 11,765
<INVESTMENT-GAINS> 955
<OTHER-INCOME> 3,072
<BENEFITS> 46,720
<UNDERWRITING-AMORTIZATION> 10,374
<UNDERWRITING-OTHER> 6,294
<INCOME-PRETAX> (1,151)
<INCOME-TAX> (400)
<INCOME-CONTINUING> (751)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (751)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
