<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(X) Quarterly report under section 13 or 15(d) of the
Securities Exchange Act of 1934. For the quarter ended
June 30, 1997.
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 36-3263253
(State or other jurisdiction of (IRS Employer
incorporation or organization) 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 11,652,013 shares outstanding of the registrant's
common stock, $0.10 par value, as of June 30,1997.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Index
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of 4
Income
Consolidated Statements of 5
Stockholders' Equity
Consolidated Statements of 6
Cash Flows
Notes to Consolidated 7
Financial Statements
Item 2. Management's Discussion 8-10
and Analysis of
Financial Condition and
Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on 11
Form 8-K
Signatures 12
EXHIBITS:
11. Statement Re Computation of Per
Share Earnings.
27. Financial Data Schedule.
</TABLE>
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1997
(Unaudited)
<S> <C> <C>
ASSETS
INVESTMENTS
Short-term investments......$ 32,196 42,777
Fixed maturities............ 683,211 727,080
Preferred stocks............ 49,555 18,594
764,962 788,451
OTHER ASSETS
Cash........................ 1,137 1,079
Premium and fees receivable. 85,426 58,611
Reinsurance receivables..... 108,488 101,175
Prepaid reinsurance premiums 15,615 9,711
Accrued investment income... 10,702 11,116
Cost in excess of net assets
of purchased subsidiaries,
less accumulated
amortization.............. 23,910 16,244
Furniture and equipment -
at cost, less accumulated
depreciation............... 11,091 9,076
Deferred income taxes....... 48,166 46,459
Other....................... 18,554 16,096
$1,088,051 $1,058,018
LIABILITIES AND STOCKHOLDERS'
EQUITY LIABILITIES
Policy liabilities:
Loss and loss adjustment
expense reserves:
Medical malpractice
liability................$ 618,444 $ 620,673
Life and health.......... 10,550 7,779
Other.................... 2,934 3,121
631,928 631,573
Unearned premium
reserves................. 83,474 55,679
Future life policy
benefits................. 8,569 8,578
723,971 695,830
Accrued expenses and other
liabilities................ 16,210 28,051
Amounts due to reinsurers... 26,671 24,171
Long-term notes
payable.................... 58,000 58,000
824,852 806,052
STOCKHOLDERS' EQUITY
Common Stock, par value $.10 per share:
Authorized shares:
1997 and 1996 - 30,000
Issued and outstanding
shares: 1997 - 11,652;
1996 - 11,625........... 1,165 1,162
Additional paid-in capital... 135,531 135,183
Retained earnings............ 114,702 102,830
Unrealized gains on
investments, net of taxes:
1997 - $6,354; 1996 - $6,887. 11,801 12,791
263,199 251,966
$ $1,088,051 $1,058,018
</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 Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S>
<C> <C> <C> <C>
REVENUES
Insurance premiums earned:
Medical malpractice
liability................... $34,910 $37,690 $75,885 $77,870
Life and health.............. 1,125 1,814 2,426 3,954
36,035 39,504 78,311 81,824
Consulting and fee income....... 13,241 9,258 25,308 15,628
Net investment income........... 11,991 10,680 23,288 21,653
Net realized gains (losses) on
investments.................... 759 (546) 1,630 1,002
TOTAL REVENUES.............. 62,026 58,896 128,537 120,107
LOSSES AND EXPENSES
Losses and loss adjustment
expenses:
Medical malpractice
liability.................. 28,517 31,560 62,094 65,439
Life and health............. 1,058 1,059 2,264 2,286
29,575 32,619 64,358 67,725
Insurance and administrative
expenses.................... 24,083 18,793 47,555 35,786
Interest expense............... 894 852 1,778 1,602
TOTAL LOSSES AND EXPENSES.... 54,552 52,264 113,691 105,113
INCOME BEFORE INCOME TAXES... 7,474 6,632 14,846 14,994
Income taxes................... 661 284 1,326 1,235
NET INCOME................... $ 6,813 $ 6,348 $ 13,520 $ 13,759
Earnings per common and
common equivalent share:
Primary........................ $ .57 $ .62 $ 1.13 $ 1.35
Fully diluted.................. .57 .62 1.13 1.34
........................
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(In thousands, except per share data)
<TABLE>
<CAPTION>
Unrealized
Common Stock Additional Gains (Losses) Total
Number Par Paid-In Retained on Investments Stock-
of Shares Value Capital Earnings Net of Taxes holders'
Equity
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31,1995 9,675 $967 $82,645 $84,361 $18,490 $186,463
Year ended
December 31,1996:
Net income...... 21,015 21,015
Issuance of Common
Stock in
connection with
public offering
net of expenses
of $2,866...... 1,626 163 46,162 46,325
Issuance of Common
Stock in connection
with acquisition
of subsidiaries.. 65 7 1,284 1,291
Issuance of Common
Stock in connection
with employee
benefit plans and
exercise of
employee stock
options...... 259 25 5,092 5,117
Change in
unrealized gains,
net of taxes of
$3,070...... (5,699) (5,699)
Common cash
dividends ($.24
per share)... (2,546) (2,546)
Balance at December
31, 1996..... 11,625 1,162 135,183 102,830 12,791 251,966
Six months ended June
30, 1997 (unaudited):
Net income... 13,520 13,520
Issuance of Common
Stock in connection
with acquisition
of subsidiary. 90 9 2,141 2,150
Issuance of Common
Stock in connection
with director
and employee benefit
plans and exercise
of employee stock
options...... 58 6 1,034 1,040
Common Stock
repurchased.. (121) (12) (2,827) (2,839)
Change in
unrealized gains,
net of taxes of
$533........ (990) (990)
Common cash
dividends ($.14
per share).. (1,648) (1,648)
Balance at June
30, 1997
(unaudited).. 11,652 $1,165 135,531 114,702 11,801 263,199
</TABLE> See notes to consolidated financial statements.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Unaudited
<TABLE>
<CAPTION>
Six Months
Ended June 30,
1997 1996
<S>
<C> <C>
OPERATING ACTIVITIES
Net income................................. $ 13,520 $ 13,759
Adjustments to reconcile net income to net
cash used by operating activities:
Increase in policy liabilities........... 28,141 10,919
Change in reinsurance balances........... (10,716) (5,686)
Increase in premium and fees
receivable.............................. (26,431) (19,890)
Increase in deferred income taxes........ (1,223) (42)
Increase in accrued investment
income and other assets................. (1,870) (2,853)
Decrease in accrued expenses and
other liabilities....................... (12,506) (3,987)
Net realized gains on investments........ (1,630) (1,002)
Depreciation and amortization on
investments and goodwill................ 2,421 1,549
Net cash used by operating activities... (10,294) (7,233)
INVESTING ACTIVITIES
Net sale of short-term investments....... 11,720 5,181
Purchases of available-for-sale
investments............................. (184,285) (162,268)
Sales of available-for-sale
investments............................. 171,535 134,530
Maturities of available-for-sale
investments............................. 26,782 33,819
Acquisitions of subsidiaries............. (8,281) (7,958)
Furniture and equipment additions........ (3,672) (2,812)
Net cash provided by investing
activities............................. 13,799 492
FINANCING ACTIVITIES
Issuance of Common Stock................. 1,040 2,904
Repurchases of Common Stock.............. (2,839) -
Payments on notes payable................ - (750)
Proceeds from notes payable.............. - 9,000
Dividends................................ (1,648) (1,179)
Net cash provided (used) by
financing activities................... (3,447) 9,975
Increase in cash......................... 58 3,234
Cash at beginning of period................... 1,079 439
Cash at end of period.................... $ 1,137 $ 3,673
</TABLE>
See notes to consolidated financial statements.
<PAGE>
MMI Companies, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 1997
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 six month period
ended June 30, 1997 are not necessarily indicative of the
results that may be expected for the year ending December
31, 1997. For further information, refer to the
consolidated financial statements and notes thereto
included in the Company's 1996 Annual Report.
2. Acquisition of Equifax Medical Credentials Verification
Services and PRM, Inc.
Effective January 1, 1997 the Company purchased
substantially all of the net assets of Equifax Medical
Credentials Verification Services (EMCVS), a unit of
Atlanta-based Equifax, Inc., and acquired by merger all
of the outstanding stock of Professional Risk Management,
Inc.(PRM), a privately held California third party
administrator that specializes in managing enterprise
liability risk for organizations that self-insure.
Assets acquired, liabilities assumed, and cost in excess
of net assets purchased were as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Cost in excess of net assets purchased........$ 9,177
Cash.......................................... 566
Other assets, principally investments......... 2,570
Other liabilities............................. (689)
$11,624
</TABLE>
These acquisitions were accounted for as purchases, and
the operations of EMCVS and PRM are included in MMI's
consolidated financial statements since their date of
acquisition.
3. Accounting Change
In February, 1997, the Financial Accounting Standards
Board issued Statement No. 128, Earnings Per Share, which
is required to be adopted on December 31, 1997. At that
time, the Company will be required to change the method
currently used to compute earnings per share and to
restate all prior periods. Under the new requirements
for calculating primary earnings per share, the dilutive
effect of stock options will be excluded. The impact is
expected to result in an increase in primary earnings per
share for the quarters ended June 30, 1997 and 1996 of
$.02 per share, and for the six months ended June 30,
1997 and 1996 of $.03 and $.06 per share, respectively.
The impact of Statement 128 on the calculation of fully
diluted earnings per share for these quarters is not
expected to be material.
<PAGE>
4. Pending Acquisition of Unionamerica Holdings plc
On June 25, 1997, MMI announced the signing of an
Acquisition Agreement in connection with the proposed
acquisition of Unionamerica Holdings plc (Unionamerica) by
MMI in a stock for stock transaction. Under the terms of
the Agreement, which has been approved by the Boards of
Directors of MMI and Unionamerica, MMI will make a share for
share offer to acquire the whole of the issued share capital
of Unionamerica (the "Offer"). Under the terms of the
Offer, MMI will offer to acquire each American Depository
Share (ADS), representing one Ordinary Share of
Unionamerica, for 0.836 shares of MMI Common Stock through a
tender offer. The Offer will be made only pursuant to a
tender offer and Prospectus at such time as a registration
statement covering MMI's Common Stock is declared effective
by the Securities and Exchange Commission. A Registration
Statement on Form S-4 was filed with the Securities and
Exchange Commission on July 25, 1997. It is contemplated
that the proposed acquisition will be accounted for as a
pooling-of-interests for accounting purposes. Under this
accounting treatment, the accounts of MMI and Unionamerica
will be combined for all past and future periods after the
Offer becomes or is declared unconditional in all respects.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Six Months Ended June 30, 1997 compared to Six Months
Ended June 30, 1996.
Revenues. Gross premiums written decreased by 0.7% to
$130,497,000 for the six months ended June 30, 1997 from
$131,408,000 for the 1996 period. Net premiums written
decreased by 0.3% to $99,960,000 from $100,225,000, and net
premiums earned decreased by 4.3% to $78,311,000 from
$81,824,000. For the three months ended June 30, 1997 gross
premiums written decreased by 5.8% to $35,012,000 from
$37,186,000, net premiums written decreased by 11.9% to
$23,805,000 from $27,025,000 and net premiums earned
decreased by 8.8% to $36,035,000 from $39,504,000.
Medical malpractice premiums earned decreased by 2.5% to
$75,885,000 for the six months ended June 30, 1997 from
$77,870,000 for the 1996 period and decreased by 7.4% to
$34,910,000 from $37,690,000 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. A
substantial contributor to the decrease in written and
earned premiums for the six months ended June 30, 1997 is a
result of a higher one-time premiums in the 1996 period.
Adjusting for the decrease in one-time premiums results in
an increase in gross written, net written and net earned
premium for the six months ended June 30, 1997 of 4.0%,6.6%
and 4.6%, respectively. Healthcare system premium rates
were generally unchanged, and pricing for physician groups
increased modestly. Pricing of healthcare system insurance
is strongly influenced by the loss experience of the
insured. Life and health premiums earned decreased by
38.6%, to $2,426,000 for the six months ended June 30, 1997
from $3,954,000 for the 1996 period and decreased by 38.0%
to $1,125,000 from $1,814,000 for the three month period.
The Company's small volume of life and health premiums
resulted in a large percentage decrease in premium volume as
a result of the non-renewal of a large client due to pricing
considerations.
Consulting and fee income increased by 61.9% to $25,308,000
for the six months ended June 30, 1997 from $15,628,000 for
the 1996 period and increased by 43.0% to $13,241,000 from
$9,258,000 for the three month period. The growth in
consulting and fee income is primarily attributable to the
inclusion of the results of EMCVS and PRM from their
date of acquisition, January 1, 1997 and the inclusion
of the results of Management Sciences Associates, Inc. (MSA)
from its date of acquisition, April 1, 1996.
Net investment income increased by 7.6% to $23,288,000
for the six months ended June 30, 1997 from $21,653,000 for
the 1996 period and increased by 12.3% to $11,991,000 from
$10,680,000 for the three month period. For the three month
period, the Company had net realized gains on investments of
$759,000 in 1997 compared to net realized losses of $546,000
in 1996.
Losses and expenses. Losses and loss adjustment expenses
("LAE") decreased by 5.0% to $64,358,000 for the six months
ended June 30, 1997 from $67,725,000 for the 1996 period and
decreased by 9.3% to $29,575,000 from $32,619,000 for the
three month period. Medical malpractice liability losses
and LAE decreased by 5.1% to $62,094,000 for the six months
ended June 30, 1997 from $65,439,000 for the 1996 period and
decreased by 9.6% to $28,517,000 from $31,560,000 for the
three month period. Life and health benefit costs decreased
by $22,000 or 1.0% to $2,264,000 for the six months ended
June 30, 1997 from $2,286,000 for the 1996 period. The
insurance group loss ratio decreased slightly to 82.2%
from 82.8% for the six month period and decreased to 82.1%
from 82.6% for the three month period ended June 30, 1997.
Insurance and administrative expenses increased by 32.9%
to $47,555,000 for the six months ended June 30, 1997 from
$35,786,000 for the 1996 period and increased by 28.1% to
$24,083,000 from $18,793,000 for the three months ended June
30, 1997. Almost one-half of the increase in administrative
expense is attributable to the inclusion of the results of
acquired businesses, including MSA in April 1996 and EMCVS
and PRM in January 1997.
Interest expense increased by 11.0% to $1,778,000 for the
six months ended June 30, 1997 from $1,602,000 for the 1996
period and increased by 4.9% to $894,000 from $852,000 for
the three month period.
Income taxes. Income taxes were $1,326,000 for the six
months ended June 30, 1997 compared to $1,235,000 for the
1996 period and for the three month period were $661,000 in
1997 compared to $284,000 in the prior year.
Net income. Net income decreased by 1.7% to $13,520,000
for the six months ended June 30, 1997 from $13,759,000 for
the 1996 period and increased 7.3% to $6,813,000 from
$6,348,000 for the three month period.
Net income per share. Fully diluted net income per common
and common equivalent share decreased to $1.13 for the six
months ended June 30, 1997 from $1.34 for the 1996 period.
Fully diluted earnings per common and common equivalent
share before realized gains, net of taxes, decreased to
$1.04 for the six months ended June 30, 1997 from $1.28 for
the 1996 period. Fully diluted weighted average shares and
equivalents outstanding increased primarily due to a public
offering of stock by the Company in September, 1996.
For the three months ended June 30, 1997, fully diluted
net income per common and common equivalent share decreased
to $.57 from $.62 for the prior period. This amount
includes net realized gains, net of tax, of $.04 in 1997 and
net realized losses, net of tax, of $.03 in 1996. Fully
diluted earnings per common and common equivalent share
before realized gains (losses), net of taxes, decreased to
$.53 from $.65 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 six month periods ended June 30, 1997
and 1996 the Company received dividends of $5,500,000 from
its subsidiaries. The Company received management fees from
its subsidiaries of $13,025,000 for the six months ended
June 30, 1997, compared to $10,100,000 in 1996.
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 used by operating activities was $10,294,000 for the
six months ended June 30, 1997 compared to $7,233,000
used by operations for the six months ended June 30, 1996.
Cash from operations decreased primarily due to
increased receivables during the first six months of 1997.
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 provided by investing activities was $13,799,000 for
the six months ended June 30, 1997 compared to cash provided
of $492,000 for the six months ended June 30, 1996. The
increase in cash provided by investing activities was
primarily due to securities sold to fund first quarter
acquisitions.
Cash used by financing activities was $3,447,000 for the
six months ended June 30, 1997 compared to cash provided by
financing activities of $9,975,000 for the six months ended
June 30, 1996 and is due principally to the repurchase of
the Company's stock during the first and second quarter of
1997 and proceeds from an increase in notes payable in the
second quarter of 1996.
<PAGE>
The Company invests in investment grade fixed income
securities and preferred stocks. The estimated fair value
of preferred stocks was 6.5% of fair value of total invested
assets as of June 30, 1997. The estimated fair value of the
Company's investment portfolio was $764,962,000 as of June 30,
1997 compared to $788,451,000 as of December 31, 1996. The
June 30, 1997 amount includes net unrealized gains of $18,155,000,
which represent the amount by which the estimated fair value of
the investment portfolio exceeds amortized cost. Unrealized
gains as of December 31, 1996 were $19,678,000. Due to the
stable level of interest rates in 1997, unrealized gains
were relatively unchanged during the first six months of
1997. The Company maintains a portion of its investment
portfolio in high quality, short-term securities to meet its
short-term operating liquidity requirements, including the
payment of claims and expenses. Short-term investments
totaled $32,196,000 or 4.2% of invested assets at June 30,
1997, compared to $42,777,000 or 5.4% of invested assets as
of December 31, 1996. The Company believes that all of its
invested assets are readily marketable.
Long-term debt at June 30, 1997 remained unchanged at
$58,000,000 from December 31, 1996.
Stockholders' equity was $263,199,000 as of June 30, 1997
compared to $251,966,000 as of December 31, 1996. Dividends
to stockholders were $1,648,000 for the six months ended
June 30, 1997.
Acquisition of EMCVS and PRM
Effective January 1, 1997 the Company purchased
substantially all of the net assets of EMCVS and all of the
outstanding stock of PRM. EMCVS provides credentials
verification services to the healthcare industry via on-line
data access to a comprehensive credentials database. PRM is
a third party administrator that specializes in managing
enterprise liability risk for organizations that self-
insure. The combined purchase price for these two
transactions, which together had total revenues in 1996 of
approximately $7,000,000, was $11,624,000 including
expenses.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual stockholders meeting on April
17, 1997. The following directors were elected at the
meeting: K. James Ehlen, M.D., William M. Kelley, Gerald L.
McManis and Joseph D. Sargent. The following additional
matters were voted upon and passed at the meeting: i)
proposal to approve an amendment to the 1993 Employee Stock
Plan to increase by 500,000 the maximum number of shares
that may be issued; ii) proposal to approve an amendment to
the 1993 Non-Employee Directors' Formula Stock Option Plan
to increase by 50,000 the maximum number of shares that may
be issued; and iii) proposal to ratify the appointment of
Ernst & Young LLP as independent auditors.
The following table sets forth the number of votes cast
for, against or withheld, and number of abstentions and
broker non-votes for each matter voted upon at the meeting
(in thousands):
<TABLE>
<CAPTION>
Abstentions
Against or and broker
Matter For withheld non-votes
<S> <C> <C> <C>
Election of directors:
K. James Ehlen, M.D......... 8,733 477 -
William M. Kelley........... 8,733 476 -
Gerald L. McManis........... 8,733 476 -
Joseph D. Sargent........... 8,733 476 -
Approval to amend the 1993
Employee Stock Plan......... 6,139 2,993 78
Approval to amend the 1993
Non-Employee Directors'
Formula Stock Option Plan.. 7,757 1,376 76
Ratification of Ernst &
Young LLP................... 9,131 70 8
</TABLE>
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.
On June 17, 1997, the Company filed a report on Form
8-K relating to the adoption of a Shareholder Rights
Plan.
On June 25, 1997, the Company filed a report on Form
8-K relating to the signing of an Acquisition
Agreement in connection with the proposed
acquisition of Unionamerica by MMI in a stock for
stock transaction.
<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: October 20, 1997
/s/B. Frederick Becker
B. Frederick Becker
Chairman and Chief
Executive Officer
Date: October 20, 1997
/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 Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
PRIMARY
Weighted average shares
outstanding.................. 11,646 9,851 11,666 9,791
Net effect of dilutive stock
options based on the treasury stock
method using average market
price........................ 279 427 329 416
Weighted average number of
common and common equivalent
shares....................... 11,925 10,278 11,995 10,207
Net income................... $ 6,813 $ 6,348 $ 13,520 $13,759
Earnings per common and
common equivalent share...... $ .57 $ .62 $ 1.13 $ 1.35
FULLY DILUTED
Weighted average shares
outstanding.................. 11,646 9,851 11,666 9,791
Net effect of dilutive stock
options based on the treasury
stock method using ending
market price, if
higher than average......... 332 464 341 485
Weighted average number of
common and common equivalent
shares....................... 11,978 10,315 12,007 10,276
Net income................... $ 6,813 $ 6,348 $ 13,520 $13,759
Earnings per common and
common equivalent share...... $ .57 $ .62 $ 1.13 $ 1.34
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> This schedule contains summary financial information
extracted from the consolidated financial statements of MMI
Companies, Inc. and subsidiaries for the six month period ended
June 30, 1997, and is qualified in its entirety by reference to
such financial statements.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<DEBT-HELD-FOR-SALE> 683,211
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
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0
0
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78,311
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</TABLE>
