FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[S]
For the transition period from ____ to ____
[S]
Commission File Number 1-7411
[S]
ALLCITY INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
[S]
New York 13-2530665
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
335 Adams Street, Brooklyn, N.Y 11201-3731
(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 such filing requirements for the past 90 days. Yes [X]
No [ ]
On November 8, 1999, there were 7,078,625 shares of Common Stock
outstanding.
<PAGE>
<TABLE>
ALLCITY INSURANCE COMPANY
<S>
INDEX
<C> <C>
PART I Financial Information PAGE
Item 1. Interim Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets - September 30, 1999
and December 31, 1998 1
Consolidated Statements of Operations - Nine months ended
September 30, 1999 and September 30, 1998 2
Consolidated Statements of Operations - Three months ended
September 30, 1999 and September 30, 1998 3
Consolidated Statements of Cash Flows - Nine months
ended September 30, 1999 and September 30, 1998 4
Consolidated Statements of Changes in Shareholders' Equity -
Nine months ended September 30, 1999 and September 30, 1998 5
Notes to Interim Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Interim Results of Operations 8-13
PART II Other Information
Item 6. Exhibits and Reports on Form 8-K 14
Signature Page 15
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<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<S>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and par value amounts)
<CAPTION>
<S>
September 30, December 31,
1999 1998
(Unaudited)
<C> <C>
<S>
ASSETS
Investments:
Available for sale at fair value
(amortized cost of $160,058 in 1999
and $181,214 in 1998) $157,762 $181,905
Held to maturity at amortized cost
(fair value of $483 in 1999 and $498
in 1998) 496 502
Short-term 7,347 20,186
Other invested assets 33,207 31,446
TOTAL INVESTMENTS 198,812 234,039
Cash 1,169 390
Agents' balances, less allowance for
doubtful accounts ($1,895 in 1999 and
$1,817 in 1998) 6,178 10,015
Accrued investment income 1,666 3,662
Reinsurance balances receivable 255,917 295,994
Prepaid reinsurance premiums 24,976 37,691
Deferred policy acquisition costs 3,890 5,365
Deferred income taxes 12,093 11,101
Due from affiliates 9,512 3,010
Other assets 5,305 4,437
TOTAL ASSETS $519,518 $605,704
LIABILITIES
Unpaid losses $327,448 $382,109
Unpaid loss adjustments expenses 43,126 52,123
Unearned premiums 44,428 63,972
Drafts payable 2,573 3,912
Unearned service fee income 1,344 2,240
Reserve for servicing carrier claim exp 1,082 1,730
Reinsurance balances payable 2,159 885
Other liabilities 6,045 5,233
Surplus note 15,707 15,300
TOTAL LIABILITIES 443,912 527,504
SHAREHOLDERS' EQUITY
Common stock, $1.00 par value; 7,368,420
shares authorized; 7,078,625 shares
issued and outstanding in 1999 and 1998 7,079 7,079
Additional paid-in-capital 9,331 9,331
Accumulated other comprehensive (loss)/income,
net of deferred taxes of $(804) and $242
in 1999 and 1998, respectively (1,492) 449
Retained earnings 60,688 61,341
TOTAL SHAREHOLDERS' EQUITY 75,606 78,200
TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY $519,518 $605,704
<S>
See Notes to Interim Consolidated Financial Statements
<S>
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<S>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and per share amounts)
<CAPTION>
<S>
Nine Months Ended
September 30,
1999 1998
<C> <C>
<S>
REVENUES
Net earned premiums $34,474 $52,403
Net investment income 9,336 11,765
Service fee income 1,649 2,623
Net realized securities (losses)/ gains (1,339) 955
Other income 305 449
44,425 68,195
LOSSES AND EXPENSES
Losses 25,025 46,720
Loss adjustment expenses 6,575 5,512
Other underwriting expenses less deferrals
of $6,083 in 1999 and $9,624 in 1998 6,915 6,294
Amortization of deferred policy
acquisition costs 7,558 10,374
Interest on surplus note 407 446
46,480 69,346
LOSS BEFORE FEDERAL INCOME TAXES (2,055) (1,151)
FEDERAL INCOME TAXES
Current tax benefit (1,456) (317)
Deferred tax expense/(benefit) 54 (83)
(1,402) (400)
NET LOSS $ (653) $ (751)
Per share data, based on 7,078,625 average
shares outstanding in 1999 and 1998:
BASIC AND FULLY DILUTED
LOSS PER SHARE $ (0.09) $ (0.11)
<S>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<S>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except share and per share amounts)
<CAPTION>
Three Months Ended
September 30,
1999 1998
<C> <C>
<S>
REVENUES
Net earned premiums $ 9,496 $16,245
Net investment income 3,157 4,078
Service fee income 483 902
Net realized securities (losses)/ gains (867) 631
Other income 84 142
12,353 21,998
LOSSES AND EXPENSES
Losses 7,339 14,393
Loss adjustment expenses 2,111 1,630
Other underwriting expenses less deferrals
of $1,494 in 1999 and $2,767 in 1998 2,221 2,455
Amortization of deferred policy
acquisition costs 2,079 3,382
Interest on surplus note 136 149
13,886 22,009
LOSS BEFORE FEDERAL INCOME TAXES (1,533) (11)
FEDERAL INCOME TAXES
Current tax benefit (1,516) 60
Deferred tax expense 297 (61)
(1,219) (1)
NET LOSS $ (314) $ (10)
Per share data, based on 7,078,625 average
shares outstanding in 1999 and 1998:
BASIC AND FULLY DILUTED
LOSS PER SHARE $ (0.04) $ (0.01)
<S>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
[S]
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<S>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands)
<CAPTION>
Nine Months Ended
September 30,
1999 1998
<C> <C>
<S>
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (653) $ (751)
Adjustment to reconcile net loss to net
cash used for operations:
Deferred income taxes expense/(benefit) 54 (83)
Amortization of deferred policy acquisition
costs 7,558 10,374
Provision for doubtful accounts 78 (4)
Net realized securities losses/(gains) 1,339 (955)
Policy acquisition costs incurred and
deferred (6,083) (9,624)
Net changes in:
Agents' balances 3,759 394
Reinsurance balances receivable 40,077 (11,356)
Prepaid reinsurance premiums 12,715 10,888
Unpaid losses and loss adjustment
expenses (63,656) 4,201
Unearned premiums (19,545) (15,214)
Drafts payable (1,339) (1,046)
Due to/from affiliates (6,502) (18,135)
Unearned service fees (896) (2,123)
Reserve for servicing carrier claim
expenses (649) (1,396)
Reinsurance balances payable 1,274 (1,274)
Other 3,396 (1,352)
NET CASH USED FOR OPERATING ACTIVITIES (29,073) (37,456)
<S>
NET CASH FLOWS FROM INVESTING ACTIVITIES
Available for sale:
Acquisition of fixed maturities (165,798) (98,543)
Proceeds from sale of fixed maturities 170,079 161,924
Proceeds from maturities of fixed maturities 14,493 12,494
Net change in other invested assets (1,761) (31,310)
Net change in short-term investments 12,839 (7,864)
<S>
NET CASH PROVIDED BY INVESTING ACTIVITIES 29,852 36,701
NET INCREASE/(DECREASE) IN CASH 779 (755)
Cash, at beginning of period 390 2,863
Cash, at the end of period $ 1,169 $ 2,108
<S>
See Notes to Interim Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
<S>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
(In thousands, except par value amounts)
<CAPTION>
Accumulated
Common Other
Stock Additional Comprehensive
$1 Par Paid-in Income/ Retained
Value Capital (Loss) Earnings Total
<C> <C> <C> <C> <C>
<S>
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
gains on investments
(net of deferred tax of $2,602) 4,833 4,833
Less: reclassification of
net securities gains
included in net loss
(net of tax of $334) (621) (621)
<S>
Comprehensive income 3,461
<S>
Balance, September 30, 1998 $7,079 $9,331 $ 5,129 $60,086 $81,625
<S>
Balance, January 1, 1999 $7,079 $9,331 $ 449 $61,341 $78,200
<S>
Comprehensive loss:
Net loss (653) (653)
Other comprehensive loss:
Net change in unrealized
gains/(losses) on investments
(net of deferred tax benefit
of $1,331) (2,473) (2,473)
Less: reclassification of
net securities losses
included in net loss
(net of tax benefit of $286) 532 532
Comprehensive loss (2,594)
Balance, September 30, 1999 $7,079 $9,331 $(1,492) $60,688 $75,606
<S>
See Notes to Interim Consolidated Financial Statements.
<S>
</TABLE>
<PAGE>
<TABLE>
ALLCITY INSURANCE COMPANY AND SUBSIDIARY
<S>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<S>
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, 1998, which are included in the Company's Annual Report filed
on Form 10-K for such year (the "1998 10-K"). Results of operations for
interim periods are not necessarily indicative of annual results of
operations. The consolidated balance sheet at December 31, 1998 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 1999 presentation.
3. In 1998, the Company adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information", ("SFAS No. 131"). At the time the Company adopted SFAS No.
131, the Company had identified three reportable segments: 1) automobile
lines; 2) commercial lines; and 3) miscellaneous and personal lines.
Beginning in 1999, the Company's business was reorganized into three
segments: 1) Personal Lines and Residual Markets; 2) Mid-Market; and 3)
Small Business. Each of these segments has separate management teams
responsible for all marketing, sales and underwriting decisions within their
units. The reorganization is designed to provide a greater degree of
accountability for underwriting results and to create a closer relationship
with agents and customers of the Company. The Personal Lines and Residual
Market segment will primarily concentrate on personal automobile and
homeowners insurance; the Mid-Market segment will focus on commercial auto,
commercial package and workers' compensation insurance for larger accounts;
and the Small Business segment will primarily focus on commercial package
products for small businesses. Further segment information is provided in
Note 4 in this Report.
<S>
<PAGE>
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 15, 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. In
1999, the Company adopted SOP 97-3; the financial position and operating
results of the Company have not been materially affected.
4. Selected information concerning the Company's segments, as restated (see
Note 3 above) for the three and nine month periods ended September 30, 1999
and 1998 is as follows (in thousands):
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<C> <C> <C> <C>
Net Earned Premiums
Personal Lines &
Residual Markets $ 5,048 $ 9,713 $18,510 $31,093
Mid-Market 2,944 4,853 10,933 16,336
Small Business 1,504 1,679 5,031 4,974
Total Net Earned Premiums $ 9,496 $16,245 $34,474 $52,403
Losses
Personal Lines &
Residual Markets $ 3,967 $ 6,470 $13,522 $24,585
Mid-Market 2,596 6,715 8,838 18,528
Small Business 776 1,208 2,665 3,607
Total Losses $ 7,339 $14,393 $25,025 $46,720
Loss Adjustment Expenses
Personal Lines &
Residual Markets $ 1,159 $ 1,223 $ 3,608 $ 4,137
Mid-Market 746 254 2,325 858
Small Business 206 153 642 517
Total Loss Adjustment
Expenses $ 2,111 $ 1,630 $ 6,575 $ 5,512
</TABLE>
<PAGE>
Item 2.:
[S]
Management's Discussion and Analysis of Financial Condition and Interim Results
of Operations
The following should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the 1998 10-K.
LIQUIDITY AND CAPITAL RESOURCES
During each of the nine month periods ended September 30, 1999 and 1998 the
Company operated at a net loss. For the nine month periods ended September 30,
1999 and 1998, net cash was used for operations principally due to decreased
premium writings from tighter underwriting standards, reunderwriting,
competition, and a decline in the number of assigned risk automobile contracts
under which the Company acquires assigned risk business from other insurance
companies combined with a depopulation of the related assigned risk pools. For
the periods ended September 30, 1999 and 1998, cash required to fund
operations was provided primarily from the maturity of investments available
for sale and short-term investments as well as the sale of fixed maturity
securities.
At September 30, 1999 and 1998, the yield on the Company's fixed maturities
portfolio was 5.84% and 6.09%, respectively, with an average maturity of 2.6
years and 3.5 years, respectively. At September 30, 1999, a significant
portion of the Company's investment portfolio is invested in U.S. Government
and its agencies and other investment grade corporate and industrial issues.
The Company maintains cash, short-term and readily marketable securities and
anticipates that the cash flow generated from investment income and the
maturities and sales of short-term investments and fixed maturities will be
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.
<PAGE>
RESULTS OF OPERATIONS-NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED
TO THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1998.
[S]
Net earned premium revenues were $34,474,000 and $52,403,000 for the nine
month periods ended September 30, 1999 and 1998, respectively, and $9,496,000
and $16,245,000 for the three month periods ended September 30, 1999 and 1998,
respectively. Net earned premiums declined in all lines of business, the most
significant reductions were in assigned risk automobile and voluntary private
passenger automobile lines. Starting in 1998, the Company began to issue fewer
assigned risk automobile policies, both as a result of losing contracts for
this business to competitors and, with respect to those contracts entered into
with other insurance companies, as a result of a general depopulation of the
underlying assigned risk automobile pools. The Company's underwriting results
in this line of business have also been poor in recent years. As a result of
its reduced volume in this line of business and poor operating results, the
Company will no longer seek to enter into new assigned risk contracts with
other insurance companies. The Company is currently evaluating the possible
disposition of its remaining assigned risk premium obligations. Net written
and earned premiums for the assigned risk automobile business were
approximately $2,190,000 and $4,560,000, respectively, for the nine month
period ended September 30, 1999 and approximately $503,000 and $1,131,000 for
the three month period ended September 30, 1999.
The decline in voluntary private passenger automobile premiums results from
the Company's tighter underwriting standards and increased competition. The
Company expects that this trend will continue as it reunderwrites private
passenger automobile policies at their renewal date, which in many cases may
result in the insured not renewing the policy to avoid premium increases.
Additionally, the Company discontinued accepting new voluntary private
passenger automobile policies from certain agents who have historically had
poor underwriting results. Net earned premiums for the voluntary private
passenger business were approximately $7,790,000 and $13,875,000 for the nine
month periods ended September 30, 1999 and 1998, respectively, and
approximately $2,109,000 and $4,432,000 for the three month periods ended
September 30, 1999 and 1998, respectively.
The Company has experienced declines in written and earned premiums in all
other lines of business, due to reunderwriting its book of business in
selected lines, the termination of a number of agency relationships due to
<PAGE>
poor underwriting results and competition. Over the past year the Company
has invested its resources to enhance and market its products, to upgrade
the quality of customer service and to provide its agents with the ability to
process applications, receive price quotes and obtain other policy and claim
information via the Internet. While the Company expects these efforts will
continue and be successful, no assurances can be given that the Company
will be able to profitably grow its premium volume in the future.
Net investment income was $9,336,000 and $11,765,000 for the nine month
periods ended September 30, 1999 and 1998, respectively, and $3,157,000 and
$4,078,000 for the three month periods ended September 30, 1999 and 1998,
respectively. The decline in both periods was principally the result of a
lower overall invested asset base principally due to lower premium volume,
and lower current period yields due to current market conditions.
Service fee income was $1,649,000 and $2,623,000 for the nine month periods
ended September 30, 1999 and 1998, respectively, and $483,000 and $902,000
for the three month periods ended September 30, 1999 and 1998, respectively.
The decreases in both periods are largely the result of the decline in the
Company's assigned risk premium discussed above.
Losses incurred were $25,025,000 and $46,720,000 for the nine month periods
ended September 30, 1999 and 1998, respectively, and $7,339,000 and
$14,393,000 for the three month periods ended September 30, 1999 and 1998,
respectively. These decreases are primarily the result of lower earned
premium volume in the current year, increased reserve strengthening recorded
in 1998 for prior accident years and lower current accident year loss ratios
resulting from product mix and improved underwriting.
Other underwriting expenses and the amortization of deferred policy
acquisition costs were $14,473,000 and $16,668,000 for the nine month periods
ended September 30, 1999 and 1998, respectively, and $4,300,000 and
$5,837,000 for the three month periods ended September 30, 1999 and 1998,
respectively. The net decrease in both periods primarily relates to the
decline in premium revenue coupled with a reduction in operating expenses.
While the Company has reduced expenses during the current year, they have
not been reduced at the same rate as the decline in premium volume, due in
part to expenditures related to the installation of new information systems
and providing Internet access to agents. During the fourth quarter, the
<PAGE>
Company will implement further expense reductions in all areas of the Company
in order to improve its underwriting results. However, the expense reductions
alone are not expected to result in underwriting profits, and any further
erosion in premium volume would necessitate further expense reductions in
the future.
Year 2000 and Information Technology Systems
The Company continues to evaluate 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. As a result, before
the end of 1999, computer hardware and software may need to be upgraded with
new hardware and software which can distinguish 21st century dates from 20th
century dates.
As more fully described in the 1998 10-K, since 1996, the Company has been
evaluating its year 2000 readiness. At that time, 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's policy management system has been successfully
migrated into production for all new and renewal business. The Company's
accounting system was also successfully migrated into production during the
first quarter of 1999.
During September and October 1999, a substantial portion of the Company's
non-compliant historical claims system was converted to its new year 2000
compliant policy management system. The Company will convert the remaining
information to its new policy management system during the fourth quarter of
1999. If the remaining portion of the conversion is not successful, the
Company will maintain the necessary information in a simplified database file
and in hard copy.
The Company formed a year 2000 readiness team to further increase the
Company's state of readiness. The team, which meets regularly, is
<PAGE>
evaluating contingency plans to address any actual failures that may occur
thereby minimizing any outages in operational functions. The Company expects
to finalize these plans during the fourth quarter of 1999.
The Company has made inquiries of third parties with whom it has material
relationships as to the year 2000 compliance of such third parties. Many of
such parties have reported plans to be fully compliant by the end of 1999
and most had reported substantial progress at the end of 1998. However,
at this time the Company cannot predict the effect of the year 2000 issue on
its material third parties or the impact any deficiency in the year 2000
readiness of such parties could have on the Company.
Through September 30, 1999, expenses incurred by the Company in connection
with the year 2000 issue (excluding expenses related to the Company's
acquisition of new systems, which was not motivated by year 2000 concerns) did
not exceed $100,000. Based upon current information, 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.
Cautionary Statement for Forward-Looking Information
Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Interim 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 (including year 2000
compatibility), 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
Results of Interim Operations, 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
<PAGE>
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,
weather related conditions that may affect the Company's operations, the
difficulty in identifying hardware and software that may not be year 2000
compliant, the lack of success of third parties to adequately address the year
2000 issue, vendor delays and technical difficulties affecting the Company's
ability to upgrade or replace its hardware and/or software for year 2000
compliance, and changes in 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's Discussion and Analysis of Financial Condition
and Results of Interim Operations or to reflect the occurrence of
unanticipated events.
<PAGE>
[S]
Part II - Other Information
[S]
Item 6. Exhibits and Reports on Form 8-K
[S]
a) Exhibits
The following exhibit is filed herewith:
Exhibit Number Description of Document
27 Financial Data Schedule
[S]
b) Report on Form 8-K
There were no reports on Form 8-K filed for the three and nine
month periods ended September 30, 1999.
<PAGE>
SIGNATURE
[S]
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.
[S]
ALLCITY INSURANCE COMPANY
Registrant
Date: November 12, 1999 By: /s/Francis M. Colalucci
Francis M. Colalucci
Executive Vice President, CFO and
Treasurer
(Principal Financial and Accounting
Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<DEBT-HELD-FOR-SALE> $157,586
<DEBT-CARRYING-VALUE> 496
<DEBT-MARKET-VALUE> 483
<EQUITIES> 176
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 198,812
<CASH> 1,169
<RECOVER-REINSURE> 255,917
<DEFERRED-ACQUISITION> 3,890
<TOTAL-ASSETS> 519,518
<POLICY-LOSSES> 370,574
<UNEARNED-PREMIUMS> 44,428
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 7,079
<OTHER-SE> 68,527
<TOTAL-LIABILITY-AND-EQUITY> 519,518
34,474
<INVESTMENT-INCOME> 9,336
<INVESTMENT-GAINS> (1,339)
<OTHER-INCOME> 1,954
<BENEFITS> 31,600
<UNDERWRITING-AMORTIZATION> 7,558
<UNDERWRITING-OTHER> 6,915
<INCOME-PRETAX> (2,055)
<INCOME-TAX> (1,402)
<INCOME-CONTINUING> (653)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (653)
<EPS-BASIC> $ (0.09)
<EPS-DILUTED> $ (0.09)
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
