<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For Quarter Ended Commission File Number
MARCH 31, 1995 0-1217
VICTORIA FINANCIAL CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 34-1192177
- --------------------------- --------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
5915 LANDERBROOK DRIVE
CLEVELAND, OHIO 44124-4058
-----------------------------------------
(Address of principal executive offices)
(216) 461-3461
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(Registrant's telephone number, including area code)
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Indicate by check mark whether the Registrant (1) has filed all reports
required by Section 13 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding twelve (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 ninety (90) days. Yes X No .
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4,000,724 common shares, $.01 par value, outstanding at March 31, 1995.
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Victoria Financial Corporation
Form 10-Q
March 31, 1995
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INDEX PAGE NO.
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PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. Financial Statements (unaudited)
Consolidated Condensed Balance Sheets --
March 31, 1995 and December 31, 1994 3
Unaudited Consolidated Condensed Statements of Operations --
Three Months Ended March 31, 1995 and 1994 4
Unaudited Consolidated Condensed Statements of Cash Flows --
Three Months Ended March 31, 1995 and 1994 5
Notes to Unaudited Consolidated Condensed Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-12
PART II. OTHER INFORMATION
-----------------
Item 6 (a) & (b) -- Exhibits and Reports on Form 8-K 13
(a) Exhibits
27 - Financial Data Schedule
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<TABLE>
PART 1. FINANCIAL INFORMATION
---------------------
Item I. Financial Statements
Victoria Financial Corporation and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
-as of March 31, 1995 and December 31, 1994-
(dollars in thousands, except per share data)
<CAPTION>
(UNAUDITED)
MARCH 31, 1995 December 31, 1994
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ASSETS
Investments
Fixed maturities held-to-maturity at amortized cost $ 9,084 9,116
Fixed maturities available-for-sale at market 38,739 35,603
------------ -----------
Total fixed maturities 47,823 44,719
Equity securities, at market 2,152 1,973
Short-term investments, at cost which approximates market 13,500 15,350
------------ -----------
Total investments 63,475 62,042
Cash 334 667
Premium balances receivable, net of allowance for doubtful
accounts of $100 in 1995 and $115 in 1994 16,201 15,336
Deferred policy acquisition costs 6,624 6,272
Trade accounts receivable, net allowance for doubtful
accounts of $101 in 1995 and $186 in 1994 1,195 1,050
Reinsurance recoverable 257 430
Accrued investment income 662 857
Furniture and equipment, at cost, net of accumulated
depreciation of $1,406 in 1995 and $1,206 in 1994 2,509 2,734
Goodwill, net of accumulated amortization of $117 in 1995
and $78 in 1994 3,034 3,073
Capitalized software development costs, net of accumulated
amortization of $137 in 1995 and $83 in 1994 1,670 1,087
Deferred federal income taxes --- 55
Other assets 1,613 1,252
------------ -----------
Total assets $ 97,574 94,855
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Losses and loss adjustment expenses payable 24,646 24,522
Unearned premiums 23,448 22,202
Commissions payable 3,274 3,250
Deferred revenue 938 978
Other Liabilities 4,184 4,555
Notes Payable 12,508 12,009
Deferred federal income tax 227 ---
Current federal income taxes payable 67 125
------------ -----------
Total Liabilities 69,292 67,641
------------ -----------
Stockholders' equity
Preferred shares, $.01 par value; authorized 1,000,000
shares; none issued --- ---
Common shares, $.01 par value; authorized 10,000,000
shares; issued 4,000,724 shares in 1995 and 4,000,164 in 1994 40 40
Additional paid-in capital 22,652 22,650
Net unrealized holding (losses) (796) (1,396)
Retained earnings 6,386 5,920
------------ -----------
Stockholders' equity 28,282 27,214
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Commitments
Total liabilities and stockholders equity $ 97,574 94,855
============ ===========
See accompanying notes to Consolidated Condensed Financial Statements
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<TABLE>
Victoria Financial Corporation and Subsidiaries
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1995 and 1994
(dollars in thousands, except per share data)
<CAPTION>
1995 1994
<S> <C> <C>
REVENUES:
Net earned premium $ 12,628 12,945
Net software systems and service revenue 1,714 ---
Net investment income 647 601
Net realized gains (losses) on security sales --- (53)
Other 528 513
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Total revenues 15,517 14,006
--------- ---------
EXPENSES:
Losses and loss adjustment expenses 9,153 10,176
Policy acquisition costs 2,991 3,276
Other operating expenses 1,291 998
Software systems and service expense 1,465 ---
Interest 28 19
--------- ---------
Total expenses 14,928 14,469
Net income (loss) before income taxes 589 (463)
Federal income tax expense (benefit) 123 (116)
--------- ---------
Net income (loss) $ 466 (347)
========= =========
NET INCOME (LOSS) PER COMMON SHARE
PRIMARY $ .11 (.10)
========= =========
FULLY DILUTED $ .11 (.10)
========= =========
See accompanying notes to Consolidated Condensed Financial Statements
</TABLE>
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<TABLE>
Victoria Financial Corporation and Subsidiaries
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
Three Months Ended March 31, 1995 and 1994
(dollars in thousands)
<CAPTION>
1995 1994
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CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:.................... $ 614 265
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease (increase) in short-term investments...... 1,850 (820)
Net (increase) in fixed maturities..................... (2,567) (1,101)
Net (increase) in equity securities.................... (116) (11)
Deductions (additions) to property and equipment....... 22 (138)
Additions to capitalized software...................... (637) ---
------------ -----------
Cash flows used in investing activities......................... (1,448) (2,070)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable............................ 12,500 8,000
Principal payments on notes payable.................... (12,001) (6,000)
Capital contribution................................... 2 ---
------------ -----------
Cash flows provided by financing activities..................... 501 2,000
------------ -----------
Increase (decrease) in cash..................................... (333) 195
------------ -----------
Cash at beginning of period..................................... 667 307
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Cash at end of period........................................... $ 334 502
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest....................................... $ 21 ---
============ ===========
Income taxes.................................... $ 180 300
============ ===========
See accompanying notes to Consolidated Condensed Financial Statements
</TABLE>
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Victoria Financial Corporation and Subsidiaries
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 31, 1995
(in thousands except share data)
(1) Summary of Significant Accounting Policies
(a) General
In the opinion of management, the unaudited consolidated
condensed financial statements furnished herein reflect all
adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the consolidated financial
position of Victoria Financial Corporation ("Victoria", and
together with its subsidiaries, unless the context otherwise
requires, the "Company") as of March 31, 1995 and December 31,
1994 and the results of their operations for the three months
ended March 31, 1995 and 1994, and their cash flows for the
same three month periods. The results of operations for the
period ended March 31, 1995 are not necessarily indicative of
the results expected for the full year. The unaudited
condensed financial statements should be read in conjunction
with the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
(b) Dividends
The Company paid no dividends during the three month periods
ended March 31, 1995 and 1994.
(c) Net Income Per Share
Primary net income per common share amounts are based upon the
weighted average number of common shares outstanding during
the period plus, when dilutive , the net equivalent common
shares to be issued upon the assumed exercise of stock
options. The weighed average common shares outstanding for
the purposes of calculating primary net income per share at
March 31, 1995 and 1994 were 4,179,031 and 3,652,761
respectively. The weighted average common shares outstanding
for the purposes of calculating fully diluted net income per
share at March 31, 1995 and 1994 were 4,182,334 and 3,652,761,
respectively.
(d) Income Tax Expenses
Income tax expense is reported during interim periods on the
basis of the estimated effective tax rate for the full year.
(e) Reclassification
Certain reclassification have been made in the 1994 financial
statements to conform to the 1995 presentation.
<PAGE> 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
The following should be read in conjunction with the Company's Consolidated
Condensed Financial Statements and Notes thereto appearing elsewhere in this
Report, as well as the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
OVERVIEW
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The Company entered the nonstandard private passenger automobile insurance
market in January 1986, when it began writing such insurance in Ohio.
Subsequently, the Company commenced operations in ten additional states and has
acquired licenses to issue insurance policies in another 19 states and the
District of Columbia. The Company limits geographic expansion in any year to
entrance into one or two new states. Initially, when the Company enters a new
state, higher loss ratios are expected due to greater uncertainty in both
pricing accuracy and the agency selection process. The higher loss ratios are
controlled by limiting sales volume until enough actuarial information has been
collected to better position the product. Once enough actuarial information is
gathered, the Company uses these new states to spread geographic risk and
sustain sales volume.
On July 1, 1994, the Company acquired Insurance Automation Systems, Inc. (IAS)
of Beachwood, Ohio in exchange for 421,600 shares of common stock. IAS is an
insurance rating software specialist, with revenues in 1994 of $6.1 million.
On December 18, 1994, Victoria entered into an agreement and plan of Merger
(the Merger Agreement) with USF&G Corporation (USF&G) and a wholly-owned
subsidiary of USF&G (as amended February 9, 1995, making certain technical
changes) pursuant to which Victoria will become a wholly-owned subsidiary of
USF&G (the Merger). In the Merger, all of Victoria's outstanding shares of
common stock (other than shares held by the Company and shares held by USF&G or
subsidiaries of USF&G, all of which will be canceled) will be converted into
shares of common stock of USF&G. The Merger is subject to approval by
Victoria's stockholders and certain regulatory authorities. A special meeting
of shareholders has been scheduled for May 22, 1995 for the purpose of having
the shareholders vote on whether to approve and adopt the Merger Agreement and
the Merger. Management anticipates that the Merger will be consummated
following the special meeting of Victoria's stockholders
During the fourth quarter of 1994 and the first quarter of 1995, the Company
incurred approximately $708,000 of costs in connection with the Merger. At
March 31, 1995, these costs have been deferred and are included in other assets
and will be expensed, along with any additional transaction related expenses
incurred during the second quarter of 1995, upon the completion or termination
of the Merger.
RESULTS OF OPERATIONS
- ---------------------
The operating results for the three month period ended March 31, 1995 are not
necessarily indicative of the results which may be expected for the full year.
WRITTEN PREMIUMS. Direct written premiums increased 1.4% to $14.0 million for
the three month period ended March 31, 1995, compared to $13.8 million for the
same period in 1994. Net written
<PAGE> 8
premiums for the same period were $13.9 million in 1995 and $13.7 million in
1994, an increase of 1.1%. Written premiums remained relatively consistent
for the three months ended March 31, 1995 and 1994.
REVENUES. Total revenues, excluding realized gains (losses) on security sales,
for the three month period ended March 31 were $15.5 million in 1995 and $14.1
million in 1994, an increase of 10.4%. The increase in revenue was a result of
$1.7 million of net software systems and service revenue in 1995. The five
components of the Company's revenues are net earned premiums, net software
systems and service revenue, net investment income, other revenues, and net
realized gains (losses) on security sales.
Net earned premiums for the three month period ended March 31 were $12.6
million in 1995 and $12.9 million in 1994, a decrease of 2.5%. Because premiums
are earned over the term of the policies, changes in net earned premiums lag
corresponding changes in direct written premiums. The 2.5% decrease in the
Company's net earned premiums for the three months ended March 31, 1995 is
primarily attributable to a 6.0% decrease in the Company's net written premiums
for the year ended December 31, 1994.
Net software systems and service revenues for the three months ended March 31,
1995 were $1.7 million and relate to the activities of IAS and are primarily
comprised of sales of insurance rating packages to insurance agencies and
contracts with insurance companies to develop specialized computer systems.
Net investment income, excluding gains on sales of securities, for the three
month period ended March 31 was $647,000 in 1995 and $601,000 in 1994, an
increase of 7.7%. The increase is attributable to higher prevailing interest
rates. Because the Company's most important investment objective is the
preservation of capital, substantially all of the Company's investments are in
a portfolio of investment grade, short and intermediate term fixed income
securities.
Other revenues for the three month period ended March 31 were $528,000 in 1995
and $513,000 in 1994, an increase of 2.9%. Other revenues consist of fees
assessed on the installment payments of insurance policies. The total amount
of revenues generated by these fees is a function of premium volume, the
payment plan chosen by the policyholders and the amount of each fee. The
increase in other revenues was a result of (1) additional billing options made
available to the policyholders which increased the number of installment
payments upon which fees were assessed, and (2) selective fee increases.
EXPENSES. The loss and loss adjustment expense (LAE) ratios for the three
month period ended March 31 were 72.5% in 1995 and 78.6% in 1994, a decrease
of 7.8%. The decrease in the Company's loss and LAE ratio for the three month
period ended March 31, 1995 was primarily due to mild winter weather conditions
in the first quarter throughout most of the Company's operating area.
Losses and LAE include claims paid, settlement costs and changes in loss and
LAE reserves. The changes in loss and LAE reserves include changes in
estimates used to determine such reserves. In connection with the
determination of the reserves, management uses historical data and current
<PAGE> 9
business conditions to formulate estimates, including assumptions related to
the ultimate cost to settle claims. These estimates by their nature are
subject to uncertainties. During the years 1989 through 1991, the Company
experienced some reserve deficiencies, predominantly due to inadequate
estimates of the LAE reserves resulting from limited historical data relative
to claims settlement. In response to this, the Company strengthened the LAE
reserves in subsequent periods. As a result, LAE reserves as a percentage of
outstanding loss reserves increased from 16.7% at December 31, 1992 to 23.5% at
March 31, 1995. Management believes that the total loss and LAE reserves as of
March 31, 1995 are adequate to cover the ultimate cost of policy benefits and
related expenses incurred..
For the three months ended March 31, 1995 and 1994, policy acquisition costs as
a percentage of net earned premiums were 23.7% and 25.3%, respectively. Policy
acquisition costs, which relate to initiating insurance policies, are deferred
and charged ratably over a period that does not exceed the policy term. The
Company currently writes three, six and twelve month policies and these
deferred costs are expensed over a maximum of twelve months. The decrease in
policy acquisition costs as a percentage of net earned premiums is a result of
increased operating efficiencies in the sales area and lower net commission
rates.
Other operating expenses consist of those expenses not directly associated with
the settlement of claims or the issuance of insurance policies. They are
generally administrative salaries, rental expenses, legal and accounting fees
and various other administrative expenses. Other operating expenses for the
three months ended March 31 were $1.3 million in 1995 and $1.0 million in 1994.
As a percentage of revenues, these expenses increased to 8.3% during the three
months ended March 31, 1995 from 7.1% during the three months ended March 31,
1994. The increase in 1995 was due to other operating expenses growing faster
than revenues.
EARNINGS. Primarily as a result of the decrease in losses and LAE, net
operating income (loss) was $589,000 for the three months ended March 31, 1995,
as compared to ($410,000) for the three months ended March 31, 1994.
Net realized (losses) from the sales of securities, net of taxes, were
($35,000) for the three months ended March 31, 1994. The losses incurred in
1994 were due to a repositioning of a portion of the investment portfolio to
defend against further interest rate increases and a subsequent drop in market
value of the Company's overall portfolio. The majority of the realized losses
resulted from sales of low-coupon mortgage backed securities (GNMA
pass-throughs) for purchases of U.S. Treasury 10-year notes and 1-year bills.
These trades effectively increased quality, reduced yield, and reduced interest
rate exposure. Quality and liquidity were increased by purchasing U.S.
Treasuries. Interest rate exposure was lowered by reducing the duration of the
instruments by 3.4 years, from 7.7 years to 4.3 years, and by adopting a
strategy that benefits from short-term interest rates rising faster than
long-term interest rates..
Net income (loss) was $466,000 for the three months ended March 31, 1995 and
($347,000) for the three months ended March 31, 1994.
LIQUIDITY AND CAPITAL RESOURCES
OPERATIONS. The Company receives substantial cash from premiums and, to a
lesser extent,
<PAGE> 10
investment income, other revenue and reinsurance recoverables. The principal
cash outflows are for the payment of claims, LAE, policy acquisition costs,
operating expenses, and income and other taxes. Substantially all of the
Company's revenue is received by, and expenses are incurred on behalf of,
Victoria Fire and Casualty Company ("Victoria Fire") and IAS, its wholly-owned
subsidiaries. Net cash provided by operations was $357,000 for the three
months ended March 31, 1995 and $265,000 for the three months ended March 31,
1994. The increase in net cash provided by operations was due to a decrease in
the combined operating ratio in 1995. The Company believes its cash resources
are adequate to meet its short-term operating requirements for the next year
and its long-term operating requirements.
INVESTING. Net funds used in investing activities of the Company were $1.2
million for the three months ended March 31, 1995 and $2.1 million for the
three months ended March 31, 1994. The net funds used in investing activities
in 1994 were due to the repositioning of a portion of the portfolio to increase
its quality and liquidity and to defend against further interest rate
increases.
The Company maintains a substantial level of cash and liquid short-term
investments, which are used to meet anticipated payment obligations. As of
March 31, 1995, the Company had cash and short-term investments of
approximately $13.8 million. The Company's remaining investment portfolio on
that date consisted of $49.2 million of long-term securities, which can provide
additional liquidity and cash for operations. Because the Company's most
important investment objective is the preservation of capital, substantially
all of the Company's investments are in a portfolio of investment grade, short
and intermediate-term fixed income securities. The Company's policy is not to
sacrifice investment quality for the purpose of maximizing investment yields.
FINANCING. Net funds provided by financing activities of the Company were
$501,000 for the three months ended March 31, 1995 and $2.0 million for the
three months ended March 31, 1994. The decrease in net funds provided by
financing activities is a result of a change in the use of the credit facility.
Victoria Financial has a bank credit agreement (the "Credit Agreement") which
provides for a $12.5 million revolving credit facility with interest payable on
outstanding balances at the lender's reference rate (the "Reference Rate"),
which was 9.0% at March 31, 1995 and currently is 9.0%. Although the Credit
Agreement expires on July 31, 1996, at any time on or before that date the
entire amount outstanding thereunder may be converted by Victoria into a
four-year term loan. Over time, Victoria has borrowed $12.5 million under the
Credit Agreement and provided such funds to Victoria Fire, in order to augment
Victoria Fire's statutory surplus.
In order to reduce interest expense, it has been Victoria's practice to borrow
funds from Victoria Fire at the Reference Rate, for periods of three months or
less, and to repay borrowings under the Credit Agreement. Although the
outstanding principal amounts under the Credit Agreement as of March 31, 1995
and March 31, 1994 were $12.5 million and $8.0 million, respectively, no
amounts were outstanding for most of the first quarter's 1995 and 1994.
Victoria anticipates that it will continue its practice of borrowing funds from
Victoria Fire from time to time. In the event that the Merger is consummated
as anticipated, Victoria may re-examine this practice. If Victoria determines
to discontinue such practice, or if Victoria is no longer permitted, whether by
its lender or by regulatory authorities, to continue such practice, Victoria
anticipates that it would, in accordance with the terms of
<PAGE> 11
the Credit Agreement, convert borrowings under the Credit Agreement into a
four-year term loan. Such conversion would increase the Company's interest
expense and, to a lesser extent, the Company's interest income, which, in the
aggregate, would decrease net income by approximately $160,000 per year
(assuming the Reference Rate remains at 9.0%). The Company believes,
therefore, that discontinuance by Victoria of its practice of borrowing funds
from Victoria Fire would not have a material adverse effect on Victoria's
liquidity, capital resources or results of operations, or on Victoria Fire's
statutory surplus.
The Credit Agreement currently requires the Company to maintain a minimum net
worth of approximately $21.8 million. This requirement will increase December
31 of each year by 70% of the Company's consolidated net income for each fiscal
year. The Credit Agreement also contains certain other financial and
restrictive covenants. The Company was in compliance with all covenants during
1994 and the first quarter of 1995.
State laws define certain minimum statutory surplus requirements which must be
met in order to retain an insurance license in that particular state. The most
restrictive requirement by any one state in which Victoria Fire is licensed is
$5.0 million of statutory surplus. As of March 31, 1995, Victoria Fire had
approximately $23.4 million of statutory surplus. The Company strives to
maintain a ratio of net written premiums to statutory surplus for Victoria Fire
within an industry maximum guideline of 3 to 1. As of March 31, 1995, such
ratio for Victoria Fire was 2.2 to 1. Periodically, additional capital is
required by Victoria Fire in order to increase its volume of net written
premiums.
As a holding company, Victoria is partially dependent on dividends from
Victoria Fire to meet its cash obligations. Victoria Fire is subject to Ohio
insurance regulatory restrictions that limit the payment of dividends to
Victoria without the approval of the Ohio Superintendent of Insurance. The
maximum dividends that may be paid under Ohio law during any calendar year,
without prior approval, are the greater of 10% of statutory surplus as of the
preceding calendar year or the statutory net income of the same preceding year.
Dividends which may be paid by Victoria Fire to Victoria during 1995 are
limited by these restrictions to approximately $2.7 million.
Management believes that the Company's operating cash flows, short-term
investments and the Credit Agreement will provide sufficient sources of
liquidity and capital to meet the Company's anticipated needs for the next
several years.
RECENT ACCOUNTING PRONOUNCEMENTS. Statement of Financial Accounting Standards
No. 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, ("SFAS No.
107") was issued by the Financial Accounting Standards Board ("FASB") in
December 1991. SFAS No. 107 requires disclosure about the fair value of
financial instruments and is effective for financial statements issued for
fiscal years ending after December 15, 1995 for entities with less than $150
million in total assets.
SFAS No. 119, DISCLOSURE ABOUT DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE
OF FINANCIAL INSTRUMENTS was issued by the FASB in October 1994. SFAS No. 119
requires disclosure about derivative financial instruments and amends existing
requirements of SFAS Nos. 105 and 107. SFAS No. 119 is effective for
financial statements issued for fiscal years ending after December 15, 1995 for
entities with less than $150 million in total assets. The Company currently
does not invest in
<PAGE> 12
derivatives as defined by SFAS No. 119.
<PAGE> 13
PART II. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act for 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VICTORIA FINANCIAL CORPORATION
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Date: May 12, 1995 By: /s/ Kenneth R. Rosen
------------------------------------- ----------------------------------------------------------
Kenneth R. Rosen
President and Chief Executive Officer
Date: May 12, 1995 By: /s/ Tab A. Keplinger
------------------------------------ ---------------------------------------------------------
Tab A. Keplinger
Vice President Finance,
Chief Financial Officer
and Chief Accounting Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000720479
<NAME> VICTORIA FINANCIAL CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 38,739
<DEBT-CARRYING-VALUE> 9,084
<DEBT-MARKET-VALUE> 9,197
<EQUITIES> 2,152
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 63,475
<CASH> 334
<RECOVER-REINSURE> 257
<DEFERRED-ACQUISITION> 6,624
<TOTAL-ASSETS> 97,574
<POLICY-LOSSES> 24,646
<UNEARNED-PREMIUMS> 23,448
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 12,508
<COMMON> 40
0
0
<OTHER-SE> 28,242
<TOTAL-LIABILITY-AND-EQUITY> 97,574
12,628
<INVESTMENT-INCOME> 647
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 2,242
<BENEFITS> 9,153
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<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 589
<INCOME-TAX> 123
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 466
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
<RESERVE-OPEN> 24,092
<PROVISION-CURRENT> 6,168
<PROVISION-PRIOR> 18,220
<PAYMENTS-CURRENT> 3,597
<PAYMENTS-PRIOR> 5,258
<RESERVE-CLOSE> 24,388
<CUMULATIVE-DEFICIENCY> (614)
</TABLE>
