<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934. For the quarter ended September 30, 1996.
or
( ) Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934. For the transition period from
to .
Commission File Number: 1-11920
MMI Companies, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
36-3263253
(IRS Employer
Identification No.)
540 Lake Cook Road, Deerfield, Illinois 60015-5290
(Address of principal executive offices)
(847) 940-7550
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by a 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
There were 11,167,852 shares outstanding of the registrant's common stock,
$0.10 par value, as of September 30, 1996.
Page 1 of 14
<PAGE>
MMI Companies, Inc. and Subsidiaries
Index
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of 8-10
Financial Condition and Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
EXHIBITS:
11. Statement Re Computation of Per Share Earnings.
27. Financial Data Schedule.
</TABLE>
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
INVESTMENTS
Short-term investments $ 73,474 $ 33,550
Fixed maturities 672,448 710,072
Other 16,750 -
762,672 743,622
OTHER ASSETS
Cash 1,470 439
Premium receivable 49,250 36,316
Reinsurance receivables 104,598 105,554
Prepaid reinsurance premiums 11,136 9,925
Accrued investment income 10,807 11,628
Cost in excess of net assets of
purchased subsidiaries,
less accumulated amortization 16,973 8,965
Furniture and equipment - at cost, less
accumulated depreciation 8,784 6,610
Deferred income taxes 46,981 41,203
Other 28,886 18,416
$1,041,557 $ 982,678
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Policy liabilities:
Loss and loss adjustment expense
reserves:
Medical malpractice liability $ 618,633 $ 623,220
Life and health 8,924 11,401
Other 3,402 4,194
630,959 638,815
Unearned premium reserves 63,002 52,951
Future life policy benefits 8,438 8,982
702,399 700,748
Accrued expenses and other liabilities 22,407 21,015
Amounts due to reinsurers 26,001 24,702
Notes payable to stockholders - 750
Long-term notes payable 58,000 49,000
808,807 796,215
STOCKHOLDERS' EQUITY
Common Stock, par value $.10 per share:
Authorized shares: 1996 and 1995 -
30,000
Issued and outstanding shares: 1996 -
11,168; 1995 - 9,675 1,117 967
Additional paid-in capital 122,440 82,645
Retained earnings 102,447 84,361
Unrealized gains on investments, net of
taxes: 1996 - $3,632; 1995 - $9,957 6,746 18,490
232,750 186,463
$1,041,557 $ 982,678
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share data)
Unaudited
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES
Insurance premiums earned:
Medical malpractice liability $ 39,074 $ 41,713 $ 116,944 $ 107,613
Life and health 2,055 1,927 6,009 5,599
41,129 43,640 122,953 113,212
Consulting and fee income 9,416 5,262 25,044 16,913
Net investment income 10,967 11,036 32,620 28,854
Net realized gains (losses) on
investments. (1,188) 160 (186) 504
TOTAL REVENUES 60,324 60,098 180,431 159,483
LOSSES AND EXPENSES
Losses and loss adjustment
expenses:
Medical malpractice liability $ 32,743 $ 35,578 $ 98,182 $ 92,607
Life and health 1,341 1,113 3,627 2,989
34,084 36,691 101,809 95,596
Insurance and administrative
expenses 19,075 16,178 54,861 44,586
Interest expense 896 845 2,498 1,943
TOTAL LOSSES AND EXPENSES 54,055 53,714 159,168 142,125
INCOME BEFORE INCOME TAXES 6,269 6,384 21,263 17,358
Income taxes 93 478 1,328 1,404
NET INCOME $ 6,176 $ 5,906 $ 19,935 $ 15,954
Earnings per common and
common equivalent share:
Primary $ .59 $ .62 $ 1.93 $ 1.74
Fully diluted .59 .59 1.93 1.67
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MI Companies, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(In thousands, except per share data)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Additional
Number Par Number Par Paid-in
of Shares Value of Shares Value Capital
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 - $ - 8,677 $ 868 $66,381
Year ended December 31, 1995
Net income
Issuance of Preferred Stock
in connection with
acquisition of subsidiary 903 18,061 (2,709)
Conversion of Preferred to
Common Stock (903)(18,061) 941 94 17,967
Issuance of Common Stock in
connection with employee
benefit plans and exercise
of employee stock options 110 10 1,577
Change in unrealized gains,
net of taxes of $13,853
Retirement of Treasury Stock (62) (6) (734)
Common cash dividends ($.20
per share)
Preferred stock dividend 9 1 163
($.18 per share)
Preferred cash dividend ($.14
per share)
Balance at December 31, 1995 - - 9,675 967 82,645
Nine months ended September 30,
1996 (unaudited):
Net income
Issuance of Common Stock in
connection with public
offering, net of expenses of
$2,302 1,250 125 35,385
Issuance of Common Stock in
connection with acquisition
of subsidiaries 65 7 1,284
Issuance of Common Stock in
connection with employee
benefit plans and exercise of
employee stock options 178 18 3,126
Change in unrealized gains,
net of taxes of $6,325
Common cash dividends ($.18
per share)
Balance at September 30, 1996
(unaudited) - $ - 11,168 $1,117 $122,440
</TABLE>
<TABLE>
<CAPTION>
Gains(Losses) Total
Retained Treasury on Investments Stockholders'
Earnings Stock Net ofTaxes Equity
<S> <C> <C> <C> <C>
Balance at December 31, 1994 $ 63,787 $ (740) $ (7,237) $ 123,059
Year ended December 31, 1995
Net income 22,695 22,695
Issuance of Preferred Stock
in connection with
acquisition of subsidiary 15,352
Conversion of Preferred to
Common Stock -
Issuance of Common Stock in
connection with employee
benefit plans and exercise
of employee stock options 1,587
Change in unrealized gains,
net of taxes of $13,853 25,727 25,727
Retirement of Treasury Stock 740 -
Common cash dividends ($.20
per share) (1,827) (1,827)
Preferred stock dividend
($.18 per share) (164) -
Preferred cash dividend ($.14
per share) (130) (130)
Balance at December 31, 1995 84,361 - 18,490 186,463
Nine months ended September 30,
1996 (unaudited):
Net income 19,935 19,935
Issuance of Common Stock in
connection with public
offering, net of expenses of
$2,302 35,510
Issuance of Common Stock in
connection with acquisition
of subsidiaries 1,291
Issuance of Common Stock in
connection with employee
benefit plans and exercise of
employee stock options 3,144
Change in unrealized gains,
net of taxes of $6,325 (11,744) (11,744)
Common cash dividends ($.18
per share) (1,849) (1,849)
Balance at September 30, 1996
(unaudited) $ 102,447 - $ 6,746 $ 232,750
</TABLE>
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Unaudited
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 19,935 $ 15,954
Adjustments to reconcile net income to net
cash provided by operating activities:
Increase in policy liabilities 1,651 43,732
Change in reinsurance balances 1,044 2,219
Increase in premiums receivable (12,934) (9,488)
Deferred income taxes 403 (3,482)
Increase in accrued investment
income and other assets (7,370) (5,088)
Decrease in accrued expenses and
other liabilities (79) (1,890)
Net realized losses (gains) on
investments 186 (504)
Depreciation and amortization on
investments and goodwill 2,568 1,840
Net cash provided by operating
activities 5,404 43,293
INVESTING ACTIVITIES
Net sale (purchases) of short-term
investments (37,385) 40,038
Purchases of available-for-sale
investments (299,555) (456,699)
Sales of available-for-sale
investments 253,099 177,246
Maturities of available-for-sale
investments 47,480 196,939
Acquisition of subsidiaries (8,904) (15,372)
Furniture and equipment additions (4,164) (3,122)
Net cash used by investing
activities (49,429) (60,970)
FINANCING ACTIVITIES
Issuance of Common Stock 38,655 633
Payments on notes payable (750) (250)
Proceeds from notes payable 9,000 20,000
Dividends (1,849) (1,475)
Net cash provided by financing
activities 45,056 18,908
Increase in cash 1,031 1,231
Cash at beginning of period 439 498
Cash at end of period $ 1,470 $ 1,729
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
September 30, 1996
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1996 are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information, refer to the
consolidated financial statements and notes thereto included in the
Company's 1995 Annual Report.
2. Acquisition of Management Science Associates, Inc.
Effective April 1, 1996 the Company purchased substantially all of the
net assets of Management Science Associates, Inc. (MSA). MSA provides
employee relations and human resource consulting services to healthcare
organizations and had revenues of approximately $6.6 million in 1995. The
purchase price for MSA, including expenses, was $8,353,000 in cash which
was funded principally by an increase in borrowings under the Company=s
credit agreement.
Assets acquired, liabilities assumed, and the excess of cost over net
assets purchased were as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Excess of cost over net assets purchased $ 6,403
Cash 395
Other assets, principally receivables 2,133
Other liabilities (578)
$ 8,353
</TABLE>
The operations of MSA are included in MMI=s consolidated financial
statements since the date of acquisition.
3. Public stock offering
On September 19, 1996, the Company completed a public offering of
2,508,000 shares of its Common Stock at $30.25 per share of which
1,250,000 shares were sold by the Company and 1,258,000 shares were sold
by selling stockholders. The net proceeds to the Company were $35,510,000
after deduction of underwriters discount and offering expenses.
On October 10, 1996, the underwriters exercised the over-allotment
option for 376,000 shares of Common Stock. Net proceeds to the Company for
the over-allotment option were $10,815,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Nine Months Ended September 30, 1996 compared to Nine Months Ended
September 30, 1995.
Revenues. Gross premiums written were relatively unchanged, totaling
$170,516,000 for the nine months ended September 30, 1996 from $170,378,000
for the 1995 period. Net premiums written increased by 1.5% to $131,737,000
from $129,838,000, and net premiums earned increased by 8.6% to $122,953,000
from $113,212,000. For the three months ended September 30, 1996 gross
premiums written decreased by 24.2% to $39,108,000 from $51,609,000, net
premiums written decreased by 17.1% to $31,512,000 from $38,017,000, and net
premiums earned decreased by 5.8% to $41,129,000 from $43,640,000.
Medical malpractice premiums earned increased by 8.7% to $116,944,000 for
the nine months ended September 30, 1996 from $107,613,000 for the 1995
period and decreased by 6.3% to $39,074,000 from $41,713,000 for the three
month period. The Company=s quarterly written and earned premiums can vary
significantly from quarter to quarter due to one-time premiums, such as prior
acts coverage for new insureds. The decrease in premiums earned for the
three months ended September 30, 1996 is due to such one-time premiums
recognized in the third quarter of 1995. Pricing for healthcare systems has
remained stable and pricing for physician groups has increased modestly. The
Company's pricing is heavily influenced by the loss history of the insured
over time. Life and health premiums earned increased by 7.3%, to $6,009,000
for the nine months ended September 30, 1996 from $5,599,000 for the 1995
period and increased by 6.6% to $2,055,000 from $1,927,000 for the three
month period.
Consulting and fee income increased by 48.1% to $25,044,000 for the nine
months ended September 30, 1996 from $16,913,000 for the 1995 period and
increased by 78.9% to $9,416,000 from $5,262,000 for the three month period.
The growth in consulting and fee income is attributable to growth in fees
generated by the Healthcare Services Group and the inclusion of the results
of Management Science Associates, Inc. (MSA) from the date of its
acquisition, April 1, 1996. Consulting and fee income as a percentage of net
premiums earned and consulting and fee income was 16.9% for the nine months
ended September 30, 1996 compared to 13.0% in 1995.
Net investment income increased by 13.1% to $32,620,000 for the nine
months ended September 30, 1996 from $28,854,000 for the 1995 period and
decreased by .6% to $10,967,000 from $11,036,000 for the three month period.
Net investment income attributable to Health Providers Insurance Company
(HPIC) was $5,262,000 for the nine months ended September 30, 1996 compared
to $3,128,000 for the 1995 period. The Company had net realized losses on
investments of $186,000 for the nine months ended September 30, 1996 compared
to net realized gains of $504,000 for the 1995 period. For the three month
period, the Company had net realized losses of $1,188,000 in 1996 compared to
net realized gains of $160,000 in 1995.
Losses and expenses. Losses and loss adjustment expenses ("LAE")
increased by 6.5% to $101,809,000 for the nine months ended September 30,
1996 from $95,596,000 for the 1995 period and decreased by 7.1% to
$34,084,000 from $36,691,000 for the three month period. Medical malpractice
liability losses and LAE increased by 6.0% to $98,182,000 for the nine months
ended September 30, 1996 from $92,607,000 for the 1995 period and decreased
by 8.0% to $32,743,000 from $35,578,000 for the three month period due to a
decrease in premiums earned in the third quarter and a reduction in the
property and casualty loss ratio. The property and casualty loss ratio
decreased to 83.2% from 85.4% for the respective nine month periods and
decreased to 83.2% from 84.4% for the three month period. Life and health
benefit costs increased by $638,000 or 21.3% to $3,627,000 for the nine
months ended September 30, 1996 from $2,989,000 for the 1995 period.
Underwriting results for the Company's life and health segment are variable
due to the relatively small volume of business written.
Insurance and administrative expenses increased by 23.0% to $54,861,000
for the nine months ended September 30, 1996 from $44,586,000 for the 1995
period and increased by 17.9% to $19,075,000 from $16,178,000 for the three
month period. The increase in administrative expense is attributable to
increased consulting and fee income, increased commission expense due to a
greater percentage of business acquired through brokers and the inclusion of
the results of acquired businesses, including HPIC from its acquisition in
May 1995 and MSA in April 1996.
<PAGE>
Interest expense increased by 28.6% to $2,498,000 for the nine months
ended September 30, 1996 from $1,943,000 for the 1995 period and increased by
6.0% to $896,000 from $845,000 for the three month period and is due
principally to an increase in outstanding debt.
Income taxes. Income taxes were $1,328,000 for the nine months ended
September 30, 1996 compared to $1,404,000 for the 1995 period and for the
three month period were $93,000 in 1996 compared to $478,000 in 1995.
Net income. Net income increased by 25.0% to $19,935,000 for the nine
months ended September 30, 1996 from $15,954,000 for the 1995 period and
increased 4.6% to $6,176,000 from $5,906,000 for the three month period.
Operating income, which excludes net realized gains (losses) on investments,
net of taxes, increased by 28.4% to $20,056,000 for the nine months ended
September 30, 1996 from $15,626,000 for the 1995 period and increased 19.8%
for the three month period to $6,948,000 from $5,802,000.
Net income per share. Fully diluted net income per common and common
equivalent share increased to $1.93 for the nine months ended September 30,
1996 from $1.67 for the 1995 period. Included in these amounts are $.01 in
net realized losses, net of tax, in 1996 and $.03 in net realized gains, net
of tax, in 1995. Fully diluted earnings per common and common equivalent
share before realized gains, net of taxes, increased to $1.94 for the nine
months ended September 30, 1996 from $1.64 for the 1995 period. Fully
diluted weighted average shares and equivalents outstanding increased due to
the issuance of capital stock in connection with the acquisition of HPIC in
May, 1995 and a public offering of stock by the Company in September, 1996.
For the three month period fully diluted net income per common and common
equivalent share was unchanged at $.59. This amount includes net realized
losses, net of tax, of $.07 in 1996 and net realized gains, net of tax, of
$.01 in 1995. Fully diluted earnings per common and common equivalent share
before realized gains (losses), net of taxes, increased to $.66 from $.58 for
the three month period.
Liquidity And Capital Resources
As a holding company, the Company's assets consist primarily of the stock
of its subsidiaries. The principal sources of funds are management fees and
dividends from subsidiaries. In the nine month period ended September 30,
1996 the Company received dividends of $8,250,000 from its subsidiaries,
compared to $3,750,000 in 1995. The Company received management fees from
its subsidiaries of $17,400,000 for the nine months ended September 30, 1996,
compared to $13,375,000 in 1995.
On a consolidated basis, the Company's principal sources of operating
funds are premiums, investment income, fees and recoveries from reinsurers.
Funds are used to pay claims, operating expenses, reinsurance premiums,
acquisition related expenses, debt service requirements, taxes and dividends
to stockholders.
Cash provided by operating activities was $5,404,000 for the nine months
ended September 30, 1996 compared to $43,293,000 for the nine months ended
September 30, 1995. Cash from operations decreased primarily due to increased
paid losses during the first nine months of 1996. Because of variability
related to the timing of payment of claims, cash from operations for a
casualty insurance company can vary substantially from quarter to quarter.
Cash used by investing activities was $49,429,000 for the nine months
ended September 30, 1996 compared to $60,970,000 for the nine months ended
September 30, 1995. The decrease in cash provided by operating activities
reduced cash available for investing activities. The Company has no material
commitments for capital expenditures.
Cash provided by financing activities was $45,056,000 for the nine months
ended September 30, 1996 compared to $18,908,000 for the nine months ended
September 30, 1995 and is due principally to proceeds from the Company's
public stock offering as well as borrowings under the Company's credit
facility related to the acquisitions of MSA in 1996 and HPIC in 1995.
The Company invests in investment grade fixed income securities and
preferred stocks. The estimated fair value of preferred stocks was 2.2% of
fair value of total invested assets as of September 30, 1996. The carrying
value of the Company's short-term, fixed maturity and preferred stock
investments was $762,672,000 as of September 30, 1996 compared to
$743,622,000 as of December 31, 1995. The September 30, 1996 amount includes
net unrealized gains of $10,378,000, which represent the amount by which the
estimated fair value of the investment portfolio exceeds amortized cost.
Unrealized gains as of December 31, 1995 were $28,447,000. The decrease in
unrealized gains during the first nine months of 1996 was due to an increase
in the general level of interest rates in 1996. The Company maintains a
portion of its investment portfolio in high quality, short-term securities to
meet its short-term operating liquidity
<PAGE>
requirements, including the payment of claims and expenses. Short-term
investments totaled $73,474,000 or 9.6% of invested assets at September 30,
1996. The Company believes that all of its invested assets are readily
marketable.
Long-term and short-term debt totaled $58,000,000 as of September 30, 1996
compared to $49,750,000 as of December 31, 1995. In January 1996, the
Company obtained an increase in its available credit line to $85,000,000.
The loan bears interest at a fixed rate equal to the London Interbank Offered
Rate for periods of up to one year plus a margin ranging from 5/8% to 7/8%.
The Company has entered into interest rate swap agreements that result in a
fixed interest rate of 5.4% through 1997 on the LIBOR component for
$44,500,000 of the $58,000,000 in outstanding principal. The loan is secured
by the capital stock of American Continental Insurance Company and HPIC. As
of September 30, 1996, the unused commitment under the credit facility was
$27,000,000.
Stockholders' equity was $232,750,000 as of September 30, 1996 compared to
$186,463,000 as of December 31, 1995. In September, 1996, the Company
completed a public offering of its common stock which resulted in an increase
in stockholders' equity of $35,510,000 from the proceeds, net of expenses.
In addition to the offering, changes in stockholders' equity are attributable
to net income of the Company, reduced by dividends to stockholders and the
decrease in unrealized gains on investments, net of taxes, in 1996 of
$11,744,000. Dividends to stockholders were $1,849,000 for the nine months
ended September 30, 1996.
Acquisition of Management Science Associates, Inc.
Effective April 1, 1996 the Company purchased substantially all of the net
assets of MSA. MSA provides employee relations and human resource consulting
services to healthcare organizations and had revenues of approximately
$6,600,000 in 1995. The purchase price for MSA, including expenses, was
$8,353,000 in cash which was funded principally by an increase in borrowings
under the Company=s credit agreement.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
11.Statement Re Computation of Per Share Earnings.
27.Financial Data Schedule.
B. Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter.
<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.
MMI Companies, Inc.
(Registrant)
Date: November 12, 1996 /s/B. Frederick Becker
B. Frederick Becker
Chairman and Chief Executive
Officer
Date: November 12, 1996
/s/Paul M. Orzech
Executive Vice President and
Chief Financial Officer
<PAGE>
MMI Companies, Inc and Subsidiaries
Exhibit 11 - Statement re Computation of Per Share Earnings
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PRIMARY
Weighted average shares
outstanding 10,030 8,910 9,871 8,723
Net effect of dilutive stock
options based on the treasury
stock method using average
market price 464 358 432 259
Weighted average number of common
and commmon equivalent shares 10,494 9,268 10,303 8,982
Net income $ 6,176 $ 5,906 $19,935 $15,954
Less preferred stock dividends - 164 - 294
Net income available to common
stockholders $ 6,176 $ 5,742 $19,935 $15,660
Earnings per common and
common equivalent share $ .59 $ .62 $ 1.93 $ 1.74
FULLY DILUTED
Weighted average shares
outstanding 10,030 8,910 9,871 8,723
Net effect of dilutive stock
options based on the treasury
stock method using ending
market price, if higher than
average. 464 417 463 416
Assumed conversion of dilutive
convertible preferred stock - 685 - 410
Weighted average number of common
and common equivalent shares 10,494 10,012 10,334 9,549
Net income $ 6,176 $ 5,906 $19,935 $15,954
Earnings per common and
common equivalent share $ .59 $ .59 $ 1.93 $ 1.67
</TABLE>
<PAGE>
Exhibit 27
[ARTICLE] 7
[LEGEND] This schedule contains summary financial information extracted from
the consolidated financial statements of MMI Companies, Inc. and subsidiaries
for the nine month period ended September 30, 1996, and is qualified in its
entirety by reference to such financial statements.
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1996
[PERIOD-START] JAN-01-1996
[PERIOD-END] SEP-30-1996
[DEBT-HELD-FOR-SALE] 672,448
[DEBT-CARRYING-VALUE] 0
[DEBT-MARKET-VALUE] 0
[EQUITIES] 16,750
[MORTGAGE] 0
[REAL-ESTATE] 0
[TOTAL-INVEST] 762,672
[CASH] 1,470
[RECOVER-REINSURE] 7,203
[DEFERRED-ACQUISITION] 6,776
[TOTAL-ASSETS] 1,041,557
[POLICY-LOSSES] 639,397
<UNEARNED PREMIUMS> 63,002
[POLICY-OTHER] 0
[POLICY-HOLDER-FUNDS] 0
[NOTES-PAYABLE] 58,000
[COMMON] 1,117
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 231,633
[TOTAL-LIABILITY-AND-EQUITY] 1,041,557
[PREMIUMS] 122,953
[INVESTMENT-INCOME] 32,620
<INVESTMENT-LOSSES> (186)
[OTHER-INCOME] 25,044
[BENEFITS] 101,809
[UNDERWRITING-AMORTIZATION] 10,255
[UNDERWRITING-OTHER] 44,606
[INCOME-PRETAX] 21,263
[INCOME-TAX] 1,328
[INCOME-CONTINUING] 19,935
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 19,935
[EPS-PRIMARY] 1.93
[EPS-DILUTED] 1.93
[RESERVE-OPEN] 0
[PROVISION-CURRENT] 0
[PROVISION-PRIOR] 0
[PAYMENTS-CURRENT] 0
[PAYMENTS-PRIOR] 0
[RESERVE-CLOSE] 0
[CUMULATIVE-DEFICIENCY] 0
</TABLE>
14
