UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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: 1-9580
AMWEST INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2672141
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5230 Las Virgenes Road
Calabasas, California 91302
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 871-2000
---------------
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 .
As of May 15, 2000, 4,335,754 shares of common stock, $.01 par value,
were outstanding.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
INDEX
Part I. FINANCIAL INFORMATION:
Item 1
Consolidated Statements of Operations and Comprehensive Income for the
three months ended March 31, 2000 and 1999 (unaudited) 3
Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December
31, 1999 4
Consolidated Statements of Cash Flows for the three months ended March 31,
2000 and 1999 (unaudited) 6
Notes to Interim Consolidated Financial Statements 8
Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations 9
Item 3
Quantitative and Qualitative Disclosures about Market Risk
No significant changes from the Company's Annual Report
on Form 10-K for the year ended December 31, 1999
Part II. OTHER INFORMATION:
Item 1
Legal Proceedings 14
Item 2
Changes in Securities 14
Item 3
Defaults Upon Senior Securities 14
Item 4
Submission of Matters to a Vote of Security Holders 14
Item 5
Other Information 14
Item 6
Exhibits and Reports on Form 8-K 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
--------- ---------
<S> <C> <C>
OPERATIONS
Gross written premiums $ 36,673 $ 32,135
Net premiums earned 30,737 26,993
Net investment income 1,877 1,769
Net realized investment gains 1,154 740
Commissions and fees 843 742
--------------------- ---------------------
Total revenues 34,611 30,244
Net losses and loss adjustment expenses 13,548 9,086
Policy acquisition costs 15,253 13,322
General operating costs 4,053 3,939
Interest expense 620 554
--------------------- ---------------------
Total expenses 33,474 26,901
Income before income taxes 1,137 3,343
Provision for income taxes 334 977
--------------------- ---------------------
Net income $ 803 $ 2,366
===================== =====================
Earnings per common share:
Basic $ 0.19 $ 0.55
===================== =====================
Diluted $ 0.19 $ 0.55
===================== =====================
COMPREHENSIVE INCOME (LOSS)
Net income $ 803 $ 2,366
Other comprehensive income (loss):
Unrealized gains (losses) on
securities, net of income taxes
of $195 and $407 for the three
months ended March 31,2000
and 1999, respectively (378) (791)
Reclassification adjustment for gains
included in net income, net of income
taxes of $297 and $188 for the three
months ended March 31, 2000 and 1999,
respectively (578) (364)
--------------------- ---------------------
Comprehensive income (loss) $ (153) $ 1,211
===================== =====================
See accompanying notes to interim consolidated financial statements.
</TABLE>
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------- ---------------------
(unaudited)
<S> <C> <C>
Investments, available-for-sale:
Fixedmaturities, at market value (amortized cost of $99,761 and $104,193 at
March 31, 2000 and December 31, 1999, respectively)
$95,781 $100,892
Common equity securities, at market value (cost of $3,852 and $2,886 at March
31, 2000 and December 31, 1999, respectively)
5,006 4,199
Preferred equity securities, at market value (cost of $4,445 and $4,905 at March
31, 2000 and December 31, 1999, respectively)
3,861 5,073
Other invested assets (cost of $7,805 and $7,725 at March 31,
2000 and December 31, 1999, respectively) 7,970 7,749
Short-term investments 2,767 2,691
--------------------- ---------------------
Total investments 115,385 120,604
Cash and cash equivalents 7,042 15,821
Accrued investment income 1,650 1,654
Agents balances and premiums receivable (less allowance for doubtful accounts of
$1,260 at March 31, 2000 and December 31, 1999,
respectively) 17,873 15,365
Contract settlement funds and collateral receivable 15,004 16,270
Reinsurance recoverable:
Paid loss and loss adjustment expenses 3,432 5,401
Unpaid loss and loss adjustment expenses 26,904 21,903
Ceded unearned premiums 3,959 6,747
Deferred policy acquisition costs 25,150 22,147
Furniture, equipment and improvements, net 5,399 5,635
Current Federal income taxes 810 1,472
Other assets 10,560 8,676
--------------------- ---------------------
Total assets $233,168 $241,695
===================== =====================
</TABLE>
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------- ---------------------
(unaudited)
<S> <C> <C>
Liabilities:
Unpaid losses and loss adjustment expenses $ 54,826 $ 56,466
Unearned premiums 53,762 51,736
Funds held 46,722 50,271
Deferred Federal income taxes 739 494
Bank indebtedness 14,500 14,500
Amounts due to reinsurers (3,236) 2,181
Other liabilities 9,176 9,245
--------------------- ---------------------
Total liabilities 176,489 184,893
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000
Shares authorized; issued and outstanding: none - -
Common stock, $.01 par value, 10,000,000
Shares authorized, issued and outstanding: 4,333,093 at March
31, 2000 and 4,328,592 at December 31, 1999 43 43
Additional paid-in capital 19,754 19,724
Accumulated other comprehensive income (2,142) (1,186)
Retained earnings 39,024 38,221
--------------------- ---------------------
Total stockholders' equity 56,679 56,802
--------------------- ---------------------
Total liabilities and stockholders' equity $233,168 $241,695
===================== =====================
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 803 $ 2,366
Adjustments to reconcile net income to cash provided by operating
activities:
Change in agents' balances and premiums receivable and unearned
premiums (482) (3,078)
Change in accrued investment income 4 (145)
Change in unpaid losses and loss adjustment expenses (1,640) (3,202)
Change in reinsurance recoverable on paid and unpaid losses and
loss adjustment expenses and ceded unearned premiums
(244) (3,087)
Change in amounts due to reinsurers (5,417) 2,188
Change in other assets and other liabilities (685) (1,024)
Change in income taxes, net 1,399 1,001
Change in deferred policy acquisition costs (3,003) (501)
Net realized (gain) on sale of investments (1,155) (740)
Net realized (gain) loss on sale of fixed assets 5 (4)
Provision for depreciation and amortization 460 493
--------------------- ---------------------
Net cash (used) by operating activities (9,955) (5,733)
Cash flows from investing activities:
Cash received from investments sold prior to maturity 1,518 2,761
Cash received from investments matured or called 11,277 14,929
Cash paid for investments acquired (7,869) (17,021)
Amortization of discount on bonds (1) 43
Capital expenditures, net (230) (655)
Acquisition of agencies, net - 259
--------------------- ---------------------
Net cash provided by investing activities 4,695 316
(continued)
<PAGE>
Cash flows from financing activities:
Proceeds from issuance of common stock 30 358
Change in funds held (3,549) 7,298
Dividends paid - (388)
--------------------- ---------------------
Net cash provided (used) by financing activities (3,519) 7,268
--------------------- ---------------------
Net increase (decrease) in cash and cash equivalents (8,779) 1,851
Cash and cash equivalents at beginning of period 15,821 2,431
--------------------- ---------------------
Cash and cash equivalents at end of period $ 7,042 $ 4,282
===================== =====================
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 620 $ 554
Income taxes 2 1
See accompanying notes to interim consolidated financial statements.
</TABLE>
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements
(unaudited)
(1) Basis of Presentation
The interim consolidated financial statements presented herein are
unaudited and, in the opinion of management, reflect all adjustments
necessary for a fair presentation of results for such periods. All such
adjustments are of a normal, recurring nature. The results of
operations for any interim period are not necessarily indicative of
results for the full year. These consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999.
(2) Bank Covenant
The Company has entered into a revolving credit agreement, as amended,
with Union Bank for $15,000,000. At March 31, 2000, $14,500,000 of the
$15,000,000 line is currently utilized leaving $500,000 currently
available. The bank loan has a variable rate of interest based upon
fluctuations in the London Interbank Offered Rate (LIBOR) and has
amortizing principal payments. The first installment is due September
30, 2001. The interest rate at March 31, 2000 was 7.7%. The credit
agreement contains certain financial covenants with respect to capital
expenditures, business acquisitions, liquidity ratio, leverage ratio,
tangible net worth, net profit and dividend payments. The Company is
currently in violation of Section 5.13 of the revolving credit
agreement pertaining to a minimum of $32,500,000 in policyholder
surplus for Amwest Surety Insurance Company and its subsidiaries. The
Company has provided Union Bank with pertinent information regarding
an action plan and is currently seeking a waiver and amendment
regarding this covenanat. Should the Company be unsuccessful in
obtaining a waiver and amendment regarding this covenant, the Company
would be deemed to be in default and all sums then owing shall be due
and immediately payable. In such case, the Company would attempt to
refinance the amounts owed to Union Bank. The Company currently has
$14,500,000 outstanding on a total line of $15,000,000.
(3) Earnings Per Share
Basic EPS is calculated based on the weighted average number of
common shares outstanding and diluted EPS includes the effects of
dilutive potential common shares. The calculation of basic and
diluted EPS for the three months ended March 31, 2000 and 1999 is as
follows:
<TABLE>
<CAPTION>
Three months ended March 31,
Income Shares Per-Share
(Numerator) (Denominator) Amount
($ in thousands) (Dollars)
------------------- -------------------- ----------------
<S> <C> <C> <C>
Basic EPS:
2000 $ 803 4,331,381 $ .19
1999 $ 2,366 4,313,522 $ .55
Effect of Dilutive Securities:
2000 194
1999 21,218
Diluted EPS:
2000 $ 803 4,331,575 $ .19
1999 $ 2,366 4,334,740 $ .55
</TABLE>
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Premiums written increased 14% from $32,135,000 for the three months
ended March 31, 1999 to $36,673,000 for the three months ended March
31, 2000.
The premium growth was primarily due to premium increases in the surety
product lines. Premiums for the surety division increased 15% from
$25,033,000 for the three months ended March 31, 1999 to $28,705,000
for the three months ended March 31, 2000. The increase is attributable
to increased writings in the court and commercial surety operations.
Premiums for the property and casualty division also increased 12% from
$7,102,000 for the three months ended March 31, 1999 to $7,970,000 for
the three months ended March 31, 2000, primarily due to increased
writings in the commercial trucking product, the California specialty
motorcycle program and the Florida homeowners program.
Net premiums earned increased 14% from $26,993,000 for the three
months ended March 31, 1999 to $30,737,000 for the three months ended
March 31, 2000 primarily due to a decrease in premiums ceded resulting
from the nonrenewal, effective January 1, 2000, of the Company's
annual aggregate stop loss treaty with Underwriters Reinsurance Company
(Barbados), Inc. and the quota share reinsurance treaty with
Underwriters Reinsurance Company, a New Hampshire domiciled reinsurer.
The Company's ceded premium was $6,492,000 for the three months ended
March 31, 1999 compared with $1,122,000 for the three months ended
March 31, 2000. The amounts ceded for the 2000 period are related to
the Company's excess of loss and SBA reinsurance programs that remain
in place. Effective April 1, 2000, the Company signed a term sheet
with Underwriters Reinsurance Company (Barbados), Inc. for a three-year
annual aggregate stop loss reinsurance treaty. The Company is currently
evaluating its options with respect to a quota share reinsurance
treaty, as well as, with respect to the benefits of a more
traditional reinsurance program. The Company generally earns
premiums ratably over the assigned bond terms for the surety
operations and the policy term for the specialty property and casualty
operations.
Net investment income increased 6% from $1,769,000 for the three months
ended March 31, 1999 to $1,877,000 for the three months ended March 31,
2000. Although average invested assets decreased from $127,778,000 at
March 31, 1999 to $117,994,000 at March 31, 2000 primarily due to
returns of cash collateral balances during the latter part of the first
quarter of 2000 thereby reducing balances for funds held as collateral
from $50,271,000 at December 31, 1999 to $46,722,000 at March 31, 2000,
the significantly higher investment yields achieved due to general
increases in interest rates more than compensated for this reduction.
Net realized investment gains increased from $740,000 for the three
months ended March 31, 1999 to $1,154,000 for the three months ended
March 31, 2000. The investments sold during the three months ended
March 31, 2000 were primarily equity securities and convertible bonds.
Commissions and fees increased 14% from $742,000 for the three months
ended March 31, 1999 to $843,000 for the three months ended March 31,
2000. The increase is primarily due to an increase in fee income on the
funds control business.
<PAGE>
Net losses and loss adjustment expenses increased 49% from $9,086,000
for the three months ended March 31, 1999 to $13,548,000 for the three
months ended March 31, 2000. The loss ratio for the surety operations
increased from 26% for the three months ended March 31, 1999 to 35% for
the three months ended March 31, 2000 due to a number of significant
losses in the contract and commercial surety product line during the
first quarter. The loss ratio for the property and casualty operations
also increased from 63% for the three months ended March 31, 1999 to
72% for the three months ended March 31, 2000 due to continued reserve
strengthening in the commercial trucking line of business and a
decrease in ceded losses. The net losses reflect the benefit of the
annual aggregate stop loss reinsurance treaty in place for the 1997
to 1999 accident years. For the three months ended March 31, 2000,
additional losses and loss adjustment expenses ceded to this treaty
were $6,356,000 for the 1999 accident year and $448,000 for the 1998
accident year.
Policy acquisition costs increased as a percentage of net premiums
earned from 49%, or $13,322,000 to 50%, or $15,253,000 for the three
months ended March 31, 1999 and 2000, respectively. The increase is
primarily attributable to increased commission expense on the surety
business.
General operating costs decreased as a percentage of net premiums
earned at 15%, or $3,939,000 for the three months ended March 31, 1999
to 13%, or $4,053,000 for the three months ended March 31, 2000.
The decrease is due to increase in earned premium as described above.
Interest expense increased from $554,000 for the three months ended
March 31, 1999 to $620,000 for the three months ended March 31, 2000.
This increase is attributable to an increase in average funds held on
which the Company pays interest from $34,191,000 for the three months
ended March 31, 1999 to $48,497,000 for the three months ended March
31, 2000.
Income before income taxes decreased from $3,343,000 for the three
months ended March 31, 1999 to $1,137,000 for the three months ended
March 31, 2000 due to the factors outlined above.
The effective tax rate was 29% for the three months ended March 31,
1999 a nd for the three months ended March 31, 2000. The primary
reason for the variance from the corporate income tax rate of 34%
is tax-advantaged income received on a portion of the Company's
investment portfolio offset by certain non-deductible expenses.
Net income decreased from $2,366,000 for the three months ended March
31, 1999 to $803,000 for the three months ended March 31, 2000 due
to the factors outlined above.
Liquidity and Capital Resources
As of March 31, 2000, the Company held total cash and cash equivalents
and invested assets of $122,427,000. This amount includes an aggregate
of $46,722,000 in funds held as collateral which is shown as a
liability on the Company's consolidated balance sheets. As of March 31,
2000, the Company's invested assets consisted of $95,781,000 in fixed
maturities, held at market value, $5,006,000 in common equity
securities, $3,861,000 in preferred equity securities, $7,970,000 in
other invested assets and $2,767,000 in short-term investments,
including certificates of deposit with original maturities less than
one year.
<PAGE>
Because the parent company depends primarily on dividends from its
insurance subsidiaries for its net cash flow requirements, absent other
sources of cash flow, it cannot pay dividends materially in excess of
the amount of dividends that could be paid by the insurance
subsidiaries to the parent company. The State of Nebraska regulates,
through the Office of the Insurance Commissioner, the amount of
dividends which can be paid by a domestic insurance company utilizing
various formula methodology.
The Company has entered into a revolving credit agreement, as amended,
with Union Bank for $15,000,000. At March 31, 2000, $14,500,000 of the
$15,000,000 line is currently utilized leaving $500,000 currently
available. The bank loan has a variable rate of interest based upon
fluctuations in the London Interbank Offered Rate (LIBOR) and has
amortizing principal payments. The first installment is due September
30, 2001. The interest rate at March 31, 2000 was 7.7%. The credit
agreement contains certain financial covenants with respect to capital
expenditures, business acquisitions, liquidity ratio, leverage ratio,
tangible net worth, net profit and dividend payments. The Company is
currently in violation of Section 5.13 of the revolving credit
agreement pertaining to a minimum of $32,500,000 in policyholder
surplus for Amwest Surety Insurance Company and its subsidiaries. The
Company has provided Union Bank with pertinent information regarding
an action plan and is currently seeking a waiver and amendment
regarding this covenant. Should the Company be unsuccessful in
obtaining a waiver and amendment regarding this covenant, the Company
would be deemed to be in default and all sums then owing shall be due
and immediately payable. In such case, the Company would attempt to
refinance the amounts owed to Union Bank. The Company currently has
$14,500,000 outstanding on a total line of $15,000,000.
The Company, effective January 1, 1997, entered into an annual
aggregate stop loss reinsurance treaty with Underwriters Reinsurance
Company (Barbados), Inc. which treaty was renewed for the 1998 and 1999
accident years. For the 1997 accident year, the treaty covers surety
losses and allocated loss adjustment expenses in excess of 25.9% of
surety earned premium. For the 1998 accident year, the treaty has
separate attachment points for surety and non-surety lines of business.
On the surety line of business, when losses and loss adjustment
expenses exceed 32.8% of net earned premiums and for all other lines
when losses and loss adjustment expenses exceed 67% of net earned
premiums, the reinsurer becomes liable for losses up to 7% of surety
earned premiums. For the 1999 accident year, the treaty covers losses,
excluding loss adjustment expenses, for all lines of business in excess
of 26.5% through 28% of net earned premium and for losses in excess of
31% up to 39.7%. The Company has signed a term sheet with Underwriters
Reinsurance Company (Barbados), Inc. for a three-year annual aggregate
stop loss reinsurance treaty which becomes effective on April 1, 2000.
Further, the Company has agreed to remove all remaining limits for the
1998 and 1999 accidents years, which amounted to $4,395,000 and
$564,000, respectively as of March 31, 2000. In exchange for the
partial commutation, losses previously ceded under these contracts will
become a fixed obligation of the reinsurers.
The quota share reinsurance treaty in effect at December 31, 1999 cedes
15% of net surety written premium for all surety written through
Amwest Surety on a pro rata basis. This treaty provides statutory
surplus enhancement for the Company due to the ceding commission
received by the Company. The Company is currently evaluating its
options with respect to a quota share reinsurance treaty, as well
as, with respect to the benefits of a more traditional reinsurance
program.
The Company is a party to a lease with ACD2 for its corporate
headquarters. This lease has a term of 15 years and contains provisions
for scheduled lease charges. The Company's minimum commitment with
respect to this lease in 2000 is approximately $670,000. The Company
has the option to purchase this home office building and land
commencing on April 27, 2000 and extending for a six month period at a
predetermined rate for the building, with the value of land based on
then existing market rates. The Company is currently exploring the
potential exercise of such option.
<PAGE>
Other than the Company's obligations with respect to funds held as
collateral and the Company's obligation to pay claims as they arise,
the Company's commitments to pay principal and interest on the bank
debt and lease expenses as noted above, the Company has no significant
cash commitments.
The Company believes that its cash flows from operations and other
present sources of capital are sufficient to sustain its needs for at
least the remainder of 2000.
The Company used $5,733,000 in cash from operating activities for the
three months March 31, 1999 as compared to using $9,955,000 for the
three months ended March 31, 2000. The Company generated $316,000
in cash for investing activities for the three months ended March 31,
1999 as compared to generating $4,695,000 for the three months ended
March 31, 2000. The Company generated $7,268,000 in cash from
financing activities for the three months ended March 31, 1999 as
compared t using $3,519,000 for the three months ended March 31,
2000. The cash used for operating activities in 2000 increased
primarily due to increases in reinsurance recoverables and timing of
premium payments to reinsurers. The increase in reinsurance
recoverables is attributable to increased loss payments made during
the quarter.
Other Matters
Year 2000 issues:
The Company did not experience material Year 2000 problems and does not
expect to incur any significant additional costs related to Year 2000
matters.
Other issues:
Certain statements contained in this Form 10-Q regard matters that are
not historical facts and are forward-looking statements. Because such
forward-looking statements include risks and uncertainties, actual
results may differ materially from those expressed in or implied by
such forward- looking statements. Factors that could cause actual
results to differ materially include, but are not limited to: the
ineffectiveness of the recently modified commercial transportation
products, a deterioration in premiums written or losses incurred in the
Company's surety and other specialty businesses, the ability to achieve
increased percentage writings of commercial surety and court products,
the lack of adherence by branch personnel to Company underwriting
guidelines, failure of the Company to improve its leverage which could
result in a reduction in the ratings from A.M. Best and other industry
ratios agencies, the ability of the Company to obtain a waiver or
amendment regarding a covenant included in the Company's revolving
bank credit agreement, the ability of the Company to negotiate a quota
share reinsurance treaty, a reduction in the investment yield earned
on the Company's investment portfolio, or a general economic
decline. The Company undertakes no obligation to release publicly the
results of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
The table on the next page shows, for the periods indicated, the gross
premiums written, net premiums earned, net losses and loss adjustment
expenses and loss ratios for the Company's specialty property and
casualty operations and surety operations.
<PAGE>
TABLE 1
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
SUMMARY OF PREMIUMS AND LOSSES BY PRODUCT LINE
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended Year ended
March 31, December 31,
Type of Bond 2000 1999 1999 1998
------------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Total Surety
Gross premiums written $ 28,703 $ 25,033 $ 108,184 $ 102,270
Net premiums earned 23,608 21,500 85,500 84,166
Net losses and loss adjustment expenses 8,380 5,641 31,175 23,262
Loss and loss adjustment expense ratio 35% 26% 37% 28%
Property & Casualty
Gross premiums written $ 7,970 $ 7,102 $ 28,304 $ 30,549
Net premiums earned 7,129 5,493 25,044 21,805
Net losses and loss adjustment expenses 5,168 3,445 17,135 17,569
Loss and loss adjustment expense ratio 72% 63% 68% 81%
Total Company
Gross premiums written $ 36,673 $ 32,135 $ 136,488 $ 132,819
Net premiums earned 30,737 26,993 110,544 105,971
Net losses and loss adjustment expenses 13,548 9,086 48,310 40,831
Loss and loss adjustment expense ratio 44% 34% 44% 39%
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
Items 1-4: LEGAL PROCEEDINGS, CHANGE IN SECURITIES, DEFAULTS UPON
SENIOR SECURITIES,SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS,
None
Items 5: OTHER INFORMATION
Effective May 10, 2000, Steven R. Kay resigned as the
Company's Executive Vice President and Chief Financial
Officer and as a member of its Board of Directors. He
also resigned from all positions with the Company's
subsidiaries in order to pursue other business interests.
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See the Exhibit Index on page 15.
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during
the three months ended March 31, 2000.
<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.
AMWEST INSURANCE GROUP, INC.
Date: May 19, 2000 by: /s/ JOHN E. SAVAGE
-------------------------------------
John E. Savage
President, Chief Executive Officer
and Chief Operating Officer
(Principal Executive Officer)
by: /s/ PHILLIP E. HUFF
-------------------------------------
Phillip E. Huff
Senior Vice-President,
Treasurer
(Principal Financial and
Principal Accounting Officer)
<PAGE>
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Number
Description Location
2 Plan of acquisition, reorganization, arrangement,
liquidation or succession None
4 Instruments defining the rights of securityholders,
including indentures Not required
11 Statement re computation of per share earnings Page 8, Note 3
15 Letter re unaudited interim financial information None
18 Letter re change in accounting principles None
19 Previously unfiled documents None
20 Report furnished to security holders None
23 Published report regarding matters submitted to
vote of security holders None
24 Consents of experts and counsel None
25 Power of attorney None
28 Additional exhibits None
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000780118
<NAME> SIOBHAN HORTON
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 95,781
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0
0
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30,737
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</TABLE>
